For people in a 31 percent income tax bracket, "that's roughly equal to the 7.50 percent yield they might get with a taxable security," he said.

On Wednesday, the city is expected to sell $1.17 billion worth of tax-free and taxable securities, the largest debt offering in the city's history.

Austin, Minn., $995,000 of taxable securities with maturities running from 1991 to 2008.

Willmar, Minn., $365,000 of taxable securities with maturities running from 1991 to 1998.

The average number of days that taxable securities are held in portfolios remained 54, the same as in the previous week.

It restricts cities' ability to invest the proceeds of tax-exempt bonds in taxable securities.

At these rates, a taxable security would have to yield around 11 percent to compete with a municipal bond yielding 7 percent.

The average days to maturity of taxable securities held in managers' portfolios fell to 43 from 45.

Elsewhere, the State of California for the first time yesterday issued taxable securities.

The average days to maturity of taxable securities held in money managers' portfolios remained unchanged at 45.