A ministry official said the Government planned to sell approximately $7 billion worth of long- and medium-term bonds next month.

They also recommend short- or medium-term bonds, which have lower rates but more stability than long-term bonds.

A bond trader who asked not to be identified said that several issues of Marriott's medium-term bonds dropped by three to four points each yesterday.

The product being offered is investment in medium-term bonds, focusing on Europe, with all investments hedged back into dollars to avoid currency risk.

The debt market remains uncertain about the course of interest rates and many institutional and retail investors have been buying shorter- and medium-term bond issues, instead of issues with longer maturities.

Mr. Cacciapaglia joins the unit of Paine Webber Group Inc. from CS First Boston, where he was chief operating officer of short- and medium-term bond trading.

Joyce Culbert, an analyst at the Chicago Corporation, an investment firm, said most property-and-casualty insurers held their assets in the form of medium-term bonds, on which interest rates have not fallen nearly as much as short-term rates.

In addition while many investors remain loyal to bond funds, they typically have been moving their money out of bond funds containing long-term bonds and into ones containing short- and medium-term bonds, whose rates are lower but whose prices tend to be more stable than the long-term securities, Mr. Ludsin said.