The company said it could not make the payment because it was in technical default on its senior bonds.

As of Jan. 25, senior bonds were trading at $1.18 and juniors at 71 cents.

Buying back the more senior bonds would have relieved cash-flow problems in the short term, but the company chose to take a long-term view.

The company's 12.75 percent debentures due in 1997, which are the most senior bonds, fell $6, to $20, for each $100 of face value.

For B-1 senior bonds priced at par, yields are 7.20 percent for an issue due 2009 and 7.30 percent in 2018.

The company's more senior bonds turned in a mixed performance yesterday.

The first bond holders in line to be paid are those holding what is called senior bonds.

Therefore, subordinated bonds usually have a lower credit rating than senior bonds.

Bank of New England's senior bonds have not been trading actively.

Moreover, Macy must begin paying back part of the principal on its most senior bonds in 1994.