Full text of H.16 Capital Market Developments : April 2, 1958

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Not for Publication

Hilii

'

DECONTROLLED AFTER SIX MOUTHS

:

April 2, 1958.

CAPITAL MARKET DEVELOPMENTS

The volume of large public security offerings for new capital
continues to be moderate. During the week ending March 28, corporations
sold large issues totaling $U0 million and State.and local governments
offered issuesjgith aggregate proceeds of $106 million. Another State
and local government issue scheduled for sale last week was not sold.
The State of Iowa received no bids for its $25 million Aaa-rated veterans
bonus bond issue because of a 2 1/2 per cent limitation on interest
cost. This week, corporate issues are expected to total $101 million
and State and local government issues totaling $60 million are scheduled
for sale. A foreign government issue for $75 million is also expected.
Bond yields - Changes in yields on outstanding bonds were
mixed> but minor last week. Yields on corporate and Baa-rated State
and local government bonds increased, while those on State and local
government Aaa's remained stable. U. S. Government bond yields declined.
Two new Aa-rated, first mortgage electric utility bond issues
were offered to the public on Tuesday and Wednesday of this week, one
to yield 3.98 per cent and the other it.00 per cent as compared with a
similar offering made last week at it.05 per cent.
Stock prices - Stock prices, as measured by the Standard
and-Poor's index of 500 common stocks, declined last week, closing at
1|2.20 on March 28. Prices declined further in the early part of this
week.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




EXHIBIT A
HIGH-GRADE

BOND

YIELDS

/ V

V/V

Date

State and
local govt.
Aaa y

Spre<id between
U. S. Govt, and
Corporate 1 State and
Aaa
(local Aaa

Corporate
Aaa 1/

0. S. Govt,
long-term 2/

3.1*2 (6/19)

3.19 (6/5)
2.7k (12/31)
2.71* (1/8)
2.1*5 (8/6)
2.97 (8/5)
2.61* (1/7)
3.1*5 (12/28)
2.81* (2/17)
3.76 (10/08)
3.18 (2/8)
3.28 (1/31)
3.20 (1A0)

2.73 (6/25)
1.98 (1/8)
2.21 (6/10)
1.90 (9/2)
2.31* (9/8)
2.05 (5/26)
3.05 (12/27)
2.17 (2/23)
3.1*5 (8/29)
2.76 (2/21)
2.86 (1/9)
2.65 (1/23)

.38
.20
.1*3
.30
.27
.11
.1*1
.12
.60
.27
.1*6
.28

.83
• 33
.62
.30
.76
.57
.71
.32
.1*7
.15
.62
.31*

3.27
3.27
3.27
3.21*
3.21

2.76
2.78
2.78
2.79
2.79

.33
.35
.35
.39
.1*3

.51
.1*9
.1*9
.1*5
.1*2

(Per cent)
1953 - High
Low
195k - High
1955 - High
Low
1956
High
Low
1957 - High
Low
1958 - High
Low

2.99
3.09
2.85
3.17
2.91
3.79
3.07
U.l1*
3.66
3.68
3.56

February 28
March 7
March ll*
March 21
March 28

3.60
3.62
3.62
3.63
3.61*

(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(12/28)
(3/2)
(9/27)
(k/12)
(1/3)
(1/31)

/

1/ Weekly average of daily figures. Average term of botida included is 25-26 years.
2/ Weekly average of dally figures. The series Includes bonds due or callable in
10 years or more.
y Thursday figures. Only general obligations bonds are includedj average term is
20 years.
Note.—Highs and lows are for individual series and may be on different dates for
different series.




EXHIBIT B
LOWER - GRADE

BOND

YIELDS

CORPORATE Baa

\/i

I STATE AND LOCAL GO^

A/

V\

1953

1954

1955

Corporate
Baa 1/

Date

1956

.

5

State and
local govt.
Baa 2/

(Per cent)

1958 - High
Low

3.89
3.50
3.7k
3.a
3.63
3.U5
4.41
3.58
5.10
4.42
4.96
J*.6U

February 28
March 7
March lit
March 21
March 28

It. 65
4.66
4.67
4.68
4.69

. 1953 - High
1954 - High
Low
1955 - High
1956 - High
1957 - High

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/14)
(12/28)
(3/9)
(11/29)
(4/12)
(1/3)
(2/21)

3.79 (6/25)
2.96 (1/8)
3.32(1/7)
2.93(8/5)
3.26 (12/29)
3.02 (1/6)
4.22 (12/27)
3.20 (3/8)
4.51 (8/29)
3.90 (2/21)
3.92 (1/2)
3.73 (1/23)
.3.85
3.85
3.86
3.89
3.90

M

1957

5

1958

5

Spread between
Aaa and Baa
|State and
Corporate
1local govt.
—
.69
.42
.68
.52
.54
.45
.63
.42
1.27
.64
1.28
1.04
1.05
1.04
1.05
1.05
1.05

1.21
x l S
.93
1.03
.87
1.17
.89
1.21
1.04
1.11
1.02

'

1.09
1.07
1.08
1.10
1.11

1/ Weekly average of daily figures. Average term of bonds includes is
25-2oyears.
2/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
N o t e . — H i g h s and lows are for individual series and may be on different
dates for different series.




.

STOCK MARKET

Stock price

Trading
Common
Stock market customer credit
Customers'
Bank
volume 2/
(millions yields y
Total debit bal- loans to
of shares) (per cent)
ances h/ "others" 5/
(Millions of dollars)

1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High

26.51* (1/2)
22.95 (9/18)
35.98 (12/31)
21*.93 (1/8)
1*5.69 (12/9)
35.28 (1/11.)
1*9.61* (8/3)
1*3.22 (1/20)
1*9.08 (7/12)
39.1*8 (12/20)
1*2.1*2 (3/21)
1*0.37 (Vio)

2.5
0.9
3.7
1.1*
I*.6
1.5
3.1
1.5
1*.2
1.1* •
2.5
1.7

January
February
March lii

1*1.12
1*1.26
1*2.33
1*2.1*2
1*2.20

2.3
2.0
2.1*
2.3
2.2

6.25
5.38
5.82
. a. 32
' 1*. 1*2
3.61*
U-35
3.82
1*.72
3.91
U.58
1**33
1*.1*8
1*.1*9
l*.3l*
1*.33
1*.35

2,1*55

m

M30,
3,537

•5®

U.031
3,576

1,665
1,3114
2,368
1,653
2,ti05
2,517
2,823

2,7LO

JS

2,887
2,1*82
2,580
2,1*87

3,551
3,679

2,1*87
2,580

780

661

1,01*8
•71*6
1,21*1
1,018
1,267
1,155
1,163
1,051*
1,117
1,051
1,067
1,09?

1,106

1>U7

n.a.—Not available.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 191*1-1*3-10. Monthly data are averages of daily figures rather than of
Fridays' only. Higha and lows are for Fridaj's data only.
2/ Averages of daily trading volume on the New -York Stock Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
h/ 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..
5/ Wednesday figures for weekly reporting member banks. Excludes loans for
purchasing or carrying U. S. Government securities at banks in New York and
Chicago. Weekly reporting hanks account for about 70 per cent of loans to others.
For further detail see Bulletin.
- Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital

1958
January
February
March
April
May

e/ 800

s/875,
e/ 1,5002/
e/ 900

October
November
December
quarter
quarter
quarter
quarter

1957

92U
771
1,189

818 .
1,1U6

1958

State and local 1/

1

1957

1

1956

7U2
572
506

aoa
696
378

a9o

8Ul :

765
516
393

838

k3±

529
58L

aos
206
357

7 h.5
1,089 3/

633

698

639
3a?

792
1,086

1,088

3,L79
3,18U2,878
2,933

2,102
2,805
2,556
2,922

III

1st half
Three quarters
Year

1956
573
712
817

1,055

e/ 3,175

1

1,063
1,071
1,3^

991
91U
973

July
August
September

1st
2nd
3rd
lith

Corporate
1

1,907
7,to
10,381*

810
9Wi
e/550
e/700

e/2,30L

390

735

698

ao9

1,820

1,U90

l,70a
1,5a

1,603
971

2,029

1,395

3,521

3,093
a, 06a
5,a59

5,069
7,099

Excluding finance companies hj
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

e/ 2,875

Year

3,268
2,92b
2,560
2,788

1,617
2,511
2,216
2,826

11,5^3

9,260

1/ Data through June 1956 are Bond Buyer data classified as new capital by
Federal Reserve; later data are from the Investment Bankers Association of America
and are somewhat more complete as to coverage than the earlier data, particularly
for Federal Government loans.
2/ Includes £718.3 mill ion AT&T convertible debenture issue.
V Includes $571-5 million AT&T common stock issue.
%/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




Exhibit E

H.lU

Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1957 - February
March
April
May

State and
local government

671
788
h77
329
877
525
526
537
57a
a20
399
318
605

July
August
September
October
November
December
1958 - January
February

Other 2/

306
19a
h99
2kQ
176
265
357
185
a35
386
a39
506
629

50
125
25
39
25
30
75
215
15

•

JL
Large Individual Issues Offered March 1 through 28

Issuer

Type y

Amount
Coupon
Offering
(millions
Maturity
of
net inter- yield
dollars)
est cost

Hating

CORPORATE
Baltimore Gas & Elec. Co. lst&ref.mtg.bds.30.0
1st mtg.bds. liO.O
Ohio Edison Co.
. Union Electric Co.
1st mtg.bds. 35.0
Columbia Gas System, Inc.
Deb.
30.0
Pub. Service Elec. & Gas
Pfd. stk.
25.0
Sylvania Elec. ProductsJha
S.F. deb.
20.0
Sylvania Elec. Products lac Conv. sub. deb.20.0
Conv. deb. 718.3
American Tel. & Tel. Co.
Miss. River Fuel Corp.
Deb.
30.0
1st mtg. bds. 16.0
Chi.,Rock Is. & Pacific RR
1st
mtg.
bds.
20.0
Carolina Pwr. & Lt. Co.
Pfd. stk.
20.0
Tenn. Gas Trans. Co.
1st mtg. bds. 25.0
Texas Eastern Trans. Co.
1st mtg. bds. 2h.O
Georgia Power Co.
1st mtg. bdd. 20.0
Florida Power & Light Co.
Gen'l. Telephone Co. of
1st mtg. bds. 20.0
California




1993
1988
1988
1983

h
U iA
h 3/8
h 3/8

3.9k

a.15

a.22

a.ao

1980
1983
1973
1978
1983
1988

U 1/2

i:g
fcg

a i/8

U.oo

1978
1988
1988

h 1/8

1988

a i/8

h 3/U

hl/h
h 3/U
5 1/2

5.50

a.92

a.07

a. 05
a.io

Aa"
Aa
A
Baa
Ba
Aa
Baa
Baa
Aa
Baa
A
Aa

Large Individual Issues Offered March 1 through 28 (Cont'd)

Type 3/

•Amount
Coupon
rate or Offering
(millions
Maturity net interyield
of
dollars)
est cost

Rating

STATE AND LOCAL GOVERNMENT
Rev=-Utc
Seattle, Washington
Miami, Florida
G,0.
G.O.
State of Mississippi
Harrisburg Swge. Auth.3Pa Rev.-Rent.
Newark, New Jersey
G.O.
G.O.
Cuyahoga Co., Ohio
.Milwaukee, Wisconsin
Rev.-Ut.
Rev.-Ut.
Lafayette, Louisiana
St. Paul, Minnesota
G.O.
State of West Virginia
Rev.-S,T.
State of Ohio
Rev.-S.T.
Rev.-Q.Ut.
Indiana University
Orlando Utilities Comm.Fla. Rev.-Ut.
State of New York
G.O.
Rev.-Ut.
hoboken, New Jersey
State of Louisiana
G.O.
Providence, Rhode Island
G.O.
Fort Worth I, S. D., Tex,
G.O.
Harris Co,, Texas
G.O.
Buffalo, New York
G.O.
Rev.-Q.Ut.
Los Angeles, California
OTHER

20.0
12.7
20.0
7.2
15.0
5.3
10.0
8.0
5.4
• 8.7
32.0
6.1
12.5
49.5
7.3
7.5
6.7
5.0
7.0
10.6
7.8

1960-68/68
1960-bti
1959-73
1961-83/63
1959-78
1959-73
1959-86/68
1960-87/63
1959-88
" 1959-68
1958-72
.1960-87
1961-84/68
1959-78
1959-98/68
1963-93/68
' 1959-82
1959-82
1959-78
1959-73
1993

3.63 1.75-3.75
3.11 1.80-4.25, z
2.68 1.10-2.85-^
3.01 1.70-3=50
3.09 1.30-3.35
2.55 1.10-2.85
3.12 1.25-3.25 t/
4.13 2.40-4.202/
2.93 1.10-3.00
2.38 1.10-2.60
2.56 1.00-2.80
n.a.
3.21 1.70-3.30
2.42 0.90-2.70
4.34 1.50-4.35
3.34 2.00-3.90
3.24 1.10-3.50,,
3.00 1.10-3.252/
2.90 1.10-3.207/
2.22 1.85-2.60
n.a.
5.27

A
A
Aa
Aa
A
Aa
Aa
Baa
Aa
A
Aa
Aa
Aaa
Baa
A
A
A
A

n.a.—Not available.
. 1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $5 million and over,
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case-of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilitiesj Rev.-Q.Ut., revenue bonds secured by revenue of quasi-utilities3
Rev.-3.T., .revenue bonds secured by revenue from specific taxes only; Rev,-Rent,>
revenue bonds secured solely by lease payments.
4/ 1972-73 maturities not reoffered,
5/ 1987 maturity not reoffered.
0/ 1981-82 maturities not reoffered.
7/ 1978 maturity not reoffered.
'




ii-iH
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury)
Expected Proceeds from Forthcoming Large Issues

During month following
' date shown
State and
Other 2/
Corporate
local govt.

Bate of
computation

1957 - Mar. 29
Apr. 30
May 31
June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
1958 — Jan. 3I
Feb. 28
Mar. 31

1*61
187
525
370
526
578
576
1*58
383
378
1*98
1,123
552

290
179
97
172
252
2L3
370
369
387
383
1*29
175
3U0

25
25
25
30
30
18
.150
110

Subsequent to
date shown
C o i P o r a t e ^ t ^ n d J o t h e r g/

1*86
258
525
1*15
811
81*5,
61*7
815
1,193
1,161
1,378
1,208
670

862
396
388
1*98
511*
1*39
587
573
589
61k
51*6
389
372

25
25
25
30
15
1*5
63
165

110

Forthcoming Large Offerings, as of March 28
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Wisconsin Electric Power Co.
General American Transportation Co.
General Telephone Corp.
Pacific Petroleum Ltd.
Duquesne Light Co.
Joseph E. Seagram & Sons, Inc.
American Can Co.
Douglas Aircraft Co.
Aluminum Co. of America .
Richfield Oil Corp.
Commonwealth Edison Co.
-^Diamond Gardner Corp.
Mississippi Power & Light Co.
Consolidated Edison Co. of New York
-^Southern Counties Gas Co.
Commerce Oil Refining Corp.
Natural Gas Pipeline Co. of America
Tennessee Gas Transmission Co.




1st nrtg. bds.
Equip, tr. cert.
Common stk.
S.F. deb.
1st mtg. bds.
Deb.
Deb.
S.F. deb.
Deb.
Conv. sub. deb.
1st mtg. bds.
S.F. deb.
1st mtg. bds.
1st ref. mtg. bds.
1st mtg. bds.
Deb.,bds. & common
1st mtg. bds.
Deb.

30.0
20.0

21. U

30.0
15.0

1*0.0
1*0.0

60.0

125.0
19.0
50.0

25.0
15.0
50.0

15.0
1*5.0

1*0.0
30.0

Apr. 1
Apr. 3
Apr. 3
Apr. 3
Apr. 10
Apr. 10
Apr. 10
Apr. 11
Apr. 11
Apir. lit
(rights expire)
Apr. 16
Apr. 16
Apr. 17
Apr. 23
Apr. 2k
1958
1958
1958

F-2
Forthcoming Large Offerings, as of March 28 (Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Texas-Veterans Land Board
G.O. „
G.O.
Commonwealth of Puerto Rico
Los Angeles, California
Rev.-Ut.
Lafayette Par. Sch. Dist."""No. 1, La.
G.O.
Tampa, - Florida
Rev.-Ut. .
Anne Arundel Co., Maryland
G.O.
Chicago, Illinois
G.O.
State of Maryland
. G.O.
/*Erie Co. Wti*. Auth., N. Y.
Rev.-Ut.
State of Massachusetts
G.O.
Louisiana State University
Rev.-Q.Ut.
State of California
- G.O.
-"-Philadelphia, Pa.
G.O.
::-State of Ohio •
Rev.-S.T.

12.5 '
18.3
13.5 .
7.0
8.U
5.0
7.5
2L6
6.5
96.9
7.5
100.0
31.9 .
32.0

Apr. 1
Apr. 1
Apr. 2
Apr. 2
Apr. 3
Apr. 8
Apr. 9
Apr. 9
Apr. 10
. Apr. 16
Apr. 17
Apr. 23
Apr. 30
May 20

OTHER
Ontario, Canada
Edmonton, Alberta, Canada
-x-Belgian Congo

Ext. deb.
Ext. deb.
Ext. loan bds.

75.0
20.0
15.0

Apr. 2
Apr. h
Apr. 17

*--Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State and
-local government issues of §5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
Note.-—Deletions for reasons other than sale of'issue: State of Iowa
^2h.l million general obligation issue — n o bids received.




Exhibit G
Yields cn iNew and Outstanding
Electric Power Bonds, hated Aa and A 1/
Aa-ratcfl offering yields
Actual
I Amount above

1952 - 1956
High
Low

it. 30(12/12/56)
2.93(3/31/5it)

19^7 - January
February
March
April
May
June
July
August
September
October
November
December

it.itit
it. 25
None
Wt.29
it.itit
it.71
-it. 66.
*5.oo
it. 83 .
*it.78 ,
•it-it. 30

62
-3
57
Wt

>

50
58
81
57
75
5it
hS
U9
lit

1958 - January 8
9
17

21

23
February 5
lit

20
21

25
26
28
March it
5

6

12
19

A-rated offering yields
Amount above
Actual
seasoned yields
(per cent)
(basis points)

it.58(12/6/56)
3.00(3/17/51)
it. 62

61t

It. 50
it.55
it. 80

it5
5it
79

1 :&/

None
*5.10
l:°2&

106

70,
51
U6

66

*it.itO

it

3.85

9
13
-3

3.90

-3

3.92

-3

iUo
It. 25

1

3.80
3.60

70
-15

-8.

3.80
3.80

13
12

3.95
it.00

28
33

it.15
a.22
it. 00
it. 00

itit
50
28
26

21
it.07
-7
25
it.05
31
* — S i n g l e observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, the actual yield figure and the amount above
seasoned yields are averages of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned issues of
similar quality for the same day. Average maturity for the seasoned issues varies
from 26 to 28 years.
2/ Providesfor a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Monthly averages so marked include one or more
issues with such a provision. Other averages and issues have no such provision.