
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 11, 1990                   TAG: 9004110079
SECTION: BUSINESS                    PAGE: C4   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Short

40-YEAR BAILOUT BONDS SOLD

The government sold $3.5 billion of 40-year bonds Tuesday to finance the bailout of the savings and loan industry, only the second time in 35 years it has sold paper of more than 30 years' maturity.

The bonds were sold at an average yield of 8.89 percent, up from 8.60 percent at the last auction Jan. 23. They will carry a coupon interest rate of 8 7/8 percent with a $10,000 bond selling for $9,983.40.

The Resolution Funding Corp., or Refcorp, received bids totaling $8.90 billion, compared with $8.17 billion in bids in January for what was a larger issue of $5 billion.

Nevertheless, traders said the bonds were poorly received. The government could not sell all of the bonds at the low bid of 8.86 percent and had to sell some for as much as 8.94 percent.

Economist Robert Brusca of Nikko Securities Co. International Inc. said bond buyers were worried about the extra interest rate risk of the longer maturity. They were fearful that the S&L problem is worse than anticipated and the government will have to flood the market with borrowing, he said.

by CNB