The fund, which had a tax-equivalent yield of 9.68 percent, had borrowed 35.5 percent of its net asset value of $981 million as of the end of last year.

Still, the tax-equivalent yield on a 10-year municipal bond is 5.34 percent, more than one full percentage point higher than the 10-year Treasury yield.

Because the Federal tax burden is much bigger, the tax-equivalent yield gives muni funds the advantage right now.

For an investor in the top 36 percent tax bracket proposed by Mr. Clinton, the bond's tax-equivalent yield would be 9.011.

"When you look at tax-equivalent yields, you're getting a much better deal."

The tax-equivalent yield on the municipal bond is 8.91 percent for those in the top tax bracket.

The tax-equivalent yield is nearly a full percentage point higher than the yield on five-year taxable Treasury bonds.

That translates into a tax-equivalent yield of 5.33 percent for someone in the 25 percent tax bracket and 6.15 percent in the 35 percent bracket.

For investors in the 28 percent bracket, the tax-equivalent yield is 7.8 percent.

(Put another way, the tax-equivalent yield of that muni for this investor is 7.25 percent.)