Full text of H.16 Capital Market Developments : April 12, 1956

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Not f o r P u b l i c a t i o n

DECONTROLLED

AFTER SIX MONTHS

H.lU

April 12, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of p u b l i c l y sold s e c u r i t y i s s u e s was very
• l a r g e l a s t week, but i s expected t o be more moderate during t h e
r e s t of A p r i l . Large corporate i s s u e s t o t a l i n g $2l±9 m i l l i o n were
e i t h e r sold or had s u b s c r i p t i o n r i g h t s expire during the week ending April 6, while l a r g e S t a t e and l o c a l bond i s s u e s aggregating
^19 m i l l i o n were f l o a t e d . This week a |U0 m i l l i o n corporate debenture i s s u e and
m i l l i o n of S t a t e and l o c a l bonds are scheduled f o r s a l e .
Bond y i e l d s - Yields on a l l types of outstanding bonds
increased f u r t h e r l a s t week, e s t a b l i s h i n g new highs f o r t h e y e a r .
Daily data i n d i c a t e i n c r e a s e s through Tuesday of t h i s week f o r
corporate and U. S. Government (old s e r i e s ) y i e l d s . S t a t e and
l o c a l government and U. S. Government bond y i e l d s l a s t week were
at the highest l e v e l since l a t e 1953* At week-end, corporate
Baa-rated bond y i e l d s were the h i g h e s t s i n c e . e a r l y 195k, but Aaa
y i e l d s were s t i l l s l i g h t l y below the 1955 high.
Yields on newly issued 30-year f i r s t mortgage e l e c t r i c
u t i l i t y bonds increased somewhat l a s t week, as shown i n Exhibit G.
The spread between y i e l d s on t h e two new i s s u e s and y i e l d s on simi l a r outstanding ...bonds was 23 and 26 b a s i s p o i n t s , about t h e same
as t h e spread a week e a r l i e r . Tuesday of t h i s week, a new i s s u e
of t h i s type, but with s l i g h t l y s h o r t e r m a t u r i t y , was o f f e r e d a t
the even higher y i e l d of 3=6? per cent.
Stock p r i c e s - Common stock p r i c e s increased to a.new
high l a s t week and, as measured by the SEC index of 265 s t o c k s ,
were 290.8 on April 6. P r i c e s declined on Monday of t h i s week
and- then broke sharply on Tuesday, closing a t about t h e mid-March
l e v e l s . There was some recovery Wednesday.
More d e t a i l e d „ i n f o r m a t i o n concerning r e c e n t market developments i s presented i n t h e attached e x h i b i t s .

Business Finance and C a p i t a l Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of t h e Federal Reserve System.




EXHIBIT A

H I G H - G R A D E BOND YIELDS
Weekly

- Per c e n t p e r o n n u m

CORPORATE A a a

U. S. GOVERNMENT:

i STATE AND LOCAL
| GOVERNMENT A a a

1953

1954

1955

long-term <z/

u. s .

Date

Corporate
Aaa'1/

Old s e r i e s

New serids

1956

Spread between
State.and
U. 5l» Govt,
local govt. (old series) and
CorporateIState and
Aaa 3 /
Aaa
Jlocal Aaa

(Per cent)
1953 - High
Low
195L - High
1955 - High
Low
1956 - High
Low
March
March
March
March
April

9
16
23
30
6

3.1t2
2.99
3.09
2.85
3.17
2.91
3.16
3.07

(6/19)
(1/9)
(V8) .
U/23)
(12/23)
(1/7)
(L/6)
(3/2)

3.08
3.10
3.12
3-lU
| 3-16

3.15
2.78
2.71
2.1*
2.9U
2.62
3.03
2.80

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)
<V6)
(2/17)

2.86
2.89
2.93
2.96
3.03

1/ Weekly average of daily figures.

n.a.

3.03
2.89
3.07
2.92
2.96
2.97
2.99
3-01
3.07

(8/5)
(6/10)
(it/6)
(2/3)

2.73
1.98
2.21
1.90
2.3U
2.05
2.38
2.17
2.18
2.25
2.27
2.33
2.38

(6/25) <
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(l*/5)
(2/23)

-38
.19
.1*3
32
• 31*
.13
.28
.13

.81*
• 30
.61
.29
•70
•51*
.68
•56

.22
.21
.19
.18
.13

.68
.6U
.66
•63
.65

Average term of bonds included i s 25-26

2/ Weekly averages of daily figures. The old series includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t callable a f t e r 12 years through
September 1955# and those due or callable in 10-12 years thereafter; the average
term to f i r s t c a l l of the bonds included declined from lU years in early 1953 to
11 1/2 years in early 1956 • The new series i s comprised of the 3 per cent bond
of 1995 and the 3 l A per cent bond of 1978-83*
3/ Thursday figures. Only general obligation bonds are included; average
term Ts 20 years.
Note.—Highs and lows are for individual series and may be on d i f f e r e n t dates
for d i f f e r e n t s e r i e s .




L O W E R - GRADE B O N D YIELDS

Per cent per annum

CORPORATE B a a

STATE AND LOCAL GOVT. B a a

STATE AND LOCAL GOVT. REVENUE

\W-LU

Date

Corporate
Baa 1 /

State and
l o c a l govt.
rev. 3/ .

State and
l o c a l gcrvt.
Baa V
(Per cent)

1953 - High
Low
195k - High
Low
1955 - High
Low
1956 - High
Low
March
March
March
March
April

9
16
23
30
6

3.89 (9/18)

iS MS

3.Ui
3.63
3.L5
3.6U
3.58

(12/31)
(12/30)
(1M)
(U/6)
(3/9)

3.79 (6/25)

2.96 (1/8)

3-32 (1/7)
2.93 (8/5)
3.26 (12/29)

3.02 (1/6)
3-33 (U/5)
3.20 (3/8)

3.58
3.59

3.20

3.62

3.29
3-33

3.60

3.61

3.26

.

3.27
2.71
3.00
2.72
2.99
2.76
3.01
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(L/6)
(2/2U)

2.91
2.96
2.98
3.00
3.01

1/ Weekly average of daily, f i g u r e s . Average term of bonds
included i s 25-26 years.
.
2/ Thursday f i g u r e s . Only general obligation bonds are
included; average term i s 20 years.
j
3/ Friday f i g u r e s . Average rating of bonds included i s
between Baa and Aj average term i s 20 years.
Note.—Highs and lows are f o r individual s e r i e s and may
be on d i f f e r e n t dates f o r d i f f e r e n t s e r i e s .
FRASER

Digitized for


STOCK MARKET

Date

Stock price

Common
Trading
volume 2 /
(millions y i e l d s j /
of shares) (per cent)

Stock market customer credit
Customers'
debit bal- loans to
ances ti/ "others" 5 /
(Millions of dollars)

1956 - High
Low

167.1
U*l*.0
221.U
156.5
270.7
217.U
290.8
257.U

February
March
March 23
March 30
April 6

266.3
283-2
288.1*
287.8
290.8

1953 - High
Low
195U - High
Low
1955 - High

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(I/Hi)
(l*/6)
(1/20)

2.5
0.9
3-7
1.1*
1*.6
1.5
3.1
2.0

5.75
5-15
5-33
1*.20
U.22
3.78
1*.08
3.68

2,1*5
2,055
3,1*36
2,U05
L,030 .
3,537
lt,0U0
3,991

1,665
1,31k
2,388
1,653
2,805
2,517
2,786
2,71*0

780
66b
1,01.8
71*6
1,21*1
1,018
1,267
1,21*9

2.3
2.7
2.8
2.8
2.8

3-93
3.68

3,991

2,71*0

in.a.

n.a.

1,251
1,252
1,252
1,252
n.a.

3.68
n.a.

'

n.a.-'-Not available.
V SEC index of 26$ common stocks, treekly closing prices, 1939-100; converted
to 1967-1*9*100 by Federal Reserve. The conversion factor i s 123.91.
2 / Averages of daily trading volume on the New York Stock Exchange.
~V Moody's 200 common stocks; end of month figures.
U/ End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government obligations.
$J Wednesday figures f o r weekly reporting member banks. Excludes loans for
purchasing or carrying U. S> Government securities at banks in New York and Chicago.
Weekly reporting banks account for about 72 per cent of loans t o others.
Note.—Highs and lows are for individual series and may be on different dates
for d i f f e r e n t s e r i e s .




Exhibit D
Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and placements
( I n m i l l i o n s of d o l l a r s )

1956
January
February
March

L8?
708
e/8?5

April
May
June

e/800

Corporate
1
1955
1
546.
1I36
1,261
U9U
903
697 .

New c a p i t a l
1956

5U7
126
635

aoa
e/650
e/375

535
312
5#

396
a n
565

197
6#
ea'2

e/350

U27
350
6U1

73a
?as
853

a 70
ao6

279
261
6a9

919
658
aos

59a
a23
877

1,385
i,ais
1,12a
1,98a
5,911

1,372
2,33a
1,188
1,89a
6,789

July
August
September

#3
65L
680

October
November
' December..

1,207
631
921

1,003
'290
60U

2,2U3
2,094
1,917 2,760
9,OIL

1,608
1,995
1,991
1,896
7,190

1st quarter
2nd q u a r t e r
-' 3rd q u a r t e r
. Uth q u a r t e r
Year

e/2,070

1st quarter
2nd q u a r t e r
- 3rd q u a r t e r
Uth q u a r t e r
Year

e/1,670

.

S t a t e and l o c a l
1
1955
1

195U

909
335
7U7

21x9

e/l,U25

195a

Excluding f i n a n c e companies 2 /
1,791
1,912
l,Wil
2,619
7,762

1,527
1,927
1,911
1,%%
7,158

.

1 / I n c l u d e s $637*2 m i l l i o n AT&T c o n v e r t i b l e d e b e n t u r e i s s u e .
• 2 / T o t a l new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and p e r s o n a l f i n a n c e
companies.
• N o t e . — D e t a i l s may n o t add t o t o t a l s due t o rounding.




.

H.12*

Exliibit E
Large P u b l i c S e c u r i t y I s s u e s f o r New C a p i t a l
(Other than U. S. Treasury) 1 /
Proceeds of Large I s s u e s O f f e r e d
( b i l l i o n s of d o l l a r s )

Month

1955 - March
April
May
J une
July
August
September
October
November
December
1956 - January
February
March

Corporate

|
|
I

750
173
U83
175
101
I4O5
328
805
221
263
95
212
278

S t a t e and
l o c a l government

Other 2 /
__

337
238
152
h03
278
65
23lt
716
396
205
192
h33
163

.

15

25
50
—%

Large I n d i v i d u a l I s s u e s O f f e r e d A p r i l 2 through 6

Issuer

Type 3 /

Amount
Coupon
(millions M a t u r i t y r a t e o r
Offering
of
net i n t e r yield
dollars)
est cost

Rating

CORPORATE
Bank of America
S c o t t Paper
P l a n t a t i o n P i p e Line
F l o r i d a Power & Light
Duquesne L i g h t
C a t e r p i l l a r Tractor

Com s t k .
Conv. deb.
SF deb.
Istmtg.bds.
Istmtg.bds.
Com. s t k .

56.0
98.7
25.0
15.0
20.0

Rev.
L.L.

7.0
12.0

1971
1986
1986
1986

3h-h

3
3 1/2
3 5/8
3 1/2

3.00
3.50
3-57
3-UO

A
A
A
Aaa

"

STATE & LOCAL GOVERNMENT
Escanaba, Michigan
La. S t a t e Bldg. Auth.

None




1959-67),/
1960-85-

3-i

3.00-3.80
2.90-3.00

Baa

-E-2
. 1 / Includes corporate and other s e c u r i t y o f f e r i n g s of $15 m i l l i o n
and over; S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of-$5 m i l l i o n
and over.
£ / Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Recons t r u c t i o n and Development i s s u e s .
3/ In t h e case of S t a t e and l o c a l government s e c u r i t i e s , G.O.
denotes general o b l i g a t i o n ; Rev., revenue bonds; G.R., general o b l i gations a d d i t i o n a l l y secured by f a c i l i t i e s revenues; L.L., l i m i t e d
l i a b i l i t y o b l i g a t i o n s secured by pledge of designated revenues.
U/ For 1961-66 m a t u r i t i e s only; 1967-85 not r e o f f e r e d .




Exhibit F

H.1U

Forthcoming Large P u b l i c S e c u r i t y O f f e r i n g s f o r New C a p i t a l
(Other than U. S. Treasury) l /
Expected Proceeds from Forthcoming Large I s s u e s
Date of
computation
1955 - Mar. 31
Apr. 29
May 31
J u n e 30
J u l y 29
Aug. 31
S e p t . 30
Oct. 31
Nov. 30
Dec. 30
1956 - J a n . 31
Feb. 29
Mar. 30

During month f o l l o w i n g
d a t e shorn
Corporate I S t a t e and | Other 2/
1 l o c a l govt.1
211
125
160
67
U07
222
805
202
215
70
176
123
380

208
116
339

922
1,111
850
830
1,135
920
909

3hh

"

100
18U
-843
330
205
121
327
220
132

Subsequent t o
d a t e shovm
Corporate j S t a t e and Other 2/
| l o c a l govt.

/

h!2

50
——
——

230
85
376
2%
1,013

2,009
1,917
1,861
1,81:5
2,018
1,971
2,205
1,650
756
618
917
785
811

•
•

50
—*
——

Forthcoming Large O f f e r i n g s , as of A p r i l 6
Amount
Approximate d a t e
(millions
of o f f e r i n g
of d o l l a r s ) !
CORPORATE
Columbia Gas
Southern C a l i f o r n i a Edison
Wisconsin E l e c t r i c Power
Westcoast Transmission L t d .
Duke Power
General Telephone

1*0.0
Deb.
1st & r e f . mtg. bds. iiO.O
1 s t mtg. b d s .
30.0
Sub. deb.
20.5
1st & r e f . mtg. bds. 30.0
Convo deb. .
53.0

^General American T r a n s p o r t a t i o n

Conv. deb.

23.8

^ C a l i f o r n i a Oregon Power
General E l e c t r i c
American Telephone and Telegraph

1 s t mtg. b d s .
Deb.
Deb.

16.0

300.0

250.0

A p r i l 10
A p r i l 17
A p r i l 2k
. April
May 7
May. 7
(rights expire)
May 9
( r i g h t s expire)
May
Spring
June

STATE AND LOCAL GOVIMENT
P h i l a d e l p h i a dchool D i s t r i c t , Pa.
S t a t e of M a s s a c h u s e t t s
D e t r o i t , Michigan
Omaha P u b l i c Power D i s t . , Neb.




G.O.
G.O.
G.O.
Rev.

12.0

18.0
5.U
15.0

April
April
April
April

10
10
10
H

H.lU

-

F-2
Forthcoming Large Offerings, as of April 6 (Cont'd)
Type

Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s )

STATE AND LOCAL GOVERBENT (Cont'd)
^Florida Development Commission
State of Ohio
Philadelphia,"Pennsylvania
^••Territory of Hawaii
-^Allegheny County Sanitary Auth., Pa.
^Pasadena, C a l i f .
Georgia Rural Roads Authority
Chesapeake Bay Ferry Commission
Florida S t a t e Turnpike Auth.
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
S a l t River P r o j e c t , Arizona
.. Inter-American Center Auth., F l a .

Rev.
Rev.
Rev.

227.0

Rev.

70.0

April 2b
April 25
April 25
April 26
May 1
May 8
May
Spring
Summer
1956
1956
1956
1956
1956

50.0

April 22

Rev.
G.O.
G.O.
G.O.
Rev.
G.O.
Rev.

5-5
50.0
12.3
7-5
25.0

11.0

15.5
20.0
209.0

65.0

62*0

11.0

OTHER
-^Ontario Hydro-Electric Commission

Deb.

*—Included in table f o r f i r s t time.
n.a.—Not a v a i l a b l e .
' 1 / Includes corporate and other i s s u e s of $15 million and over; State and
local"government issues of $5 million and over.
2 / Includes foreign government and I n t e r n a t i o n a l Bank f o r Reconstruction
and Development i s s u e s .




Exhibit G
Yields on Mew and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A l /

Date

1952
1953
195h
1955

average
average
average
average

19$6 - January
February
March 8
16
23
30
April U
U

Aa-rated o f f e r i n g y i e l d s
A-rated o f f e r i n g v i e I d s
Amount above
Actual
Actual I Amount above
(per cent) seasoned y i e l d s (per cent) (seasoned y i e l d s
[(basis points)
(basis points)
3.16
3.16
3.03
3-23

7

13
16
3
9

3.78
3.12
3.33

12
26
-3
12

—

None

—

None
*3.1$
3.19

3
. 5

3.37

18

3.35

.

-

3.23
3.32

7

3 . #

25
23

3.57
3.60

*

26

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage bonds, as reported i n Moody's Bond
Survey. Except where i n d i c a t e d , the a c t u a l y i e l d f i g u r e and the amount above
seasoned y i e l d s are averages of o f f e r i n g s during the i n d i c a t e d period and of
the d i f f e r e n c e s between t h e s e new. o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r the same day. The number of new i s s u e s included in the
monthly averages v a r i e s from 2 to U except f o r October 195U when 6 A-rated
i s s u e s were included. Average maturity f o r the seasoned i s s u e s v a r i e s from 26
to 28 y e a r s .