Full text of H.16 Capital Market Developments : August 1, 1957

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Not for Publication DECONTBOLLED AFTER SIX MONTHS
H.lli

August 1, 1957
CAPITAL MARKET DEVELOPMENTS

The volume of large publicly- offered securities was large last
weeks particularly for corporate securities, but is expected to be
somewhat smaller this week. During the week ending July 26, corporations sold large issues totaling $255 million, including the expiration
of subscription rights for First National City. Bank of New York's
stock issue. State and local governments floated large issues totaling
$88 million. The State and local government financing total includes a
$10 million school district bond issue which was sold at a net interest
cost of 3.97 per cent. This issue had been postponed in late June
after the district rejected all bids received ~ the best one at that
time designated a 3.99 per cent interest cost for the A-rated bonds.
The calendar for this week includes two large corporate
issues totaling $78 million, one of which is a subscription issue, and
State and local government offerings amounting to $67 million.
Bond yields - Yields on all categories of outstanding bonds
increased last week. Corporate bond yields reached new highs for the
year, while yields on U. S, Government and State and local government
bonds remained below their peaks of late June.
Offering yields on new issues also continued to increase.
Oregon State's issue of Aa-rated veterans' welfare bonds was offered
to investors this week at a net interest cost of. 3.65 per cent — U7
basis points above a similar issue sold in mid-April. During this 3month period, yields on outstanding Aa-rated bonds have increased 35
points.
Oregon Veterans' Welfare Bonds .
Issued in 1957
Amount
(millions
of dollars)
^April 18
July 29

10.0

15.0

Maturity

Average
term
(years)

Net
interest
cost

1967-70
1971

13 y
13 2/3

3.65

3.18

Yield
New issue I Outstanding 1/
3.02-3.05
3.45-3.50

l/ As measured by Moody's Aa municipal bond yield averages.




3.13
3.18

Estimated August volume - Corporate security issues for new
capital during August are expected to total $900 million. This volume
is 10 per cent below the estimated. July volume, but represents the
, largest volume for any August in the postwar period and exceeds last
year's August volume by three-eighths. Most of the estimated volume
is comprised of issues to be publicly offered; take-downs of private
placements are expected to be seasonally low.
State and local government bond offerings for August are
estimated at $375 million — one-fifth below the previous month, but
seven-eighths above the volume in August last year and one-half above
August 1955.
Stock prices - Stock prices, as measured by the SEC index of
common stocks declined last week, closing at 290.1 on July 26. Trading
activity also declined with the daily volume averaging 1.8 million
shares. Daily indexes this week indicate a sharp decline in prices on
Monday with little change on Tuesday and Wednesday.
More detailed information1 concerning recent capital market
developments is presented in the attached exhibits.

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




EXHIBIT A
HIGH-GRADE

BOND

YIELDS

1954

1953

long-term 0J
Date

Corporate

series

New series

Spread between
State and
U. S. Govt,
local govt. (old series) and
Corporate(State and
Aaa J/
Aaa
1local Aaa

(Per cent)
3.12 (6/19) 3.15 (6/6)
2.99 (1/9) 2.78 (12/26)
3.09 (1/8) 2.7k (1/9)
2.85 (V23) 2.1*1* (8/7)
(8/5)
1955 - High 3.17 (12/23) 2.9h
Low
2.91 (1/7) 2.62 (1/7)
1956 - High 3.79 (12/28) 3.19 (12/21)
Low
3.07 (3/2) 2.80 (2/17)
1957 - High ' lwOl (7/26) 3.70 (6/21)
Low
3.66 (ii/12) 3.15 (2/8)
1953 - High
Low
195b - High

June 28

July 26

3.97
1*.00
3.97
3.96
1.01

3.68
3.61
3.53
3.63
3.66

n.a.

3.03
2.89
3.39
2.92
3.62
3,22
3.60
3:56
3.56
3.57
3.61

2.73 (6/25)
1.98 (1/8)
2.21 (6/10)
1.90 (9/2)
(8/5) 2.31 (9/8)
(6/10) 2.05 (5/26)
(12/28)3.05 (12/27)i
(2/3) 2.17 (2/23)
(6/21) 3.23 (6/27)
(2/8) 2.76 (2/21)
3.23
3 ill
3.1U
3.22

.13
.a
.13
.51
.25

.81*
.30
.61
.29
.70
.5k
.68
.32
.1*9
.26

.29
.39
.39
.35
.33

•1*5 .
.1*1
.1*7
.1*9
.1*6 .

.38
>19
.13 •
.32

• 3h

1/ Weekly average of daily figures. Average term of bonds included is 25-26
2/ Weekly averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cent bonds due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to first call of the bonds included declined from lU years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/U per cent bond of 1978-83.
y Thursday figures. Only general obligation bonds are included; average
term is 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




LOWER - GRADE BOND YIELDS

V

Corporate
Baa 1/

State and
local govt..
Baa 2/

State and
local govt,
rev. y

(Per cent)
1953 - High
Low
195k - High
Low
1955 - High
1956 - High
1957 - Ki--h
Low
June
July
July
July
July

28
5
12
19
26

3.89 (9/18)
3.50 (1/2)
3.71*. (1/8)
l.hh (12/31)
3.63 (12/30)
3.15 (1/llt)
U.hl (12/28)
3.58(3/9)
U.7U (7/26)
h.hZ (U/12)

3.79
2.96
3.32
2.93
3.26
3.02
li.22
3.20
L.35
3.90

L68

U.35
lt.33
I4.2U
in 28
14.30

h.71

14.72
1.72
. U.714

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/27)
(3/8)
(6/27)
(2/21)

3.27
2.71
3.00
2.72
2.99
2.76
3.98
2.89
3.98
3.70

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/28)
(2/21)
(1/W
(2/22)

V

1/ Weekly average of daily figures. Average -term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are included; average term is 20 years.
3/ Friday figures. Average, rating of bonds included is
between Baa and A; average term is 20 years.
h/ Series discontinued, as of March 15Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

STOCK MARKET CREDIT

Date

Stock price
index 1/

Trading
Common
volume 2/
(millions
yields J/
of shares) (per cent

Stock market customer credit
Customers'
debit bal- loans to
ances h/ "others" 5/

Total

(Millions of dollars)
1953 - High
1951 - High
1955 - High
1956 - High
1957 - High
Low
May
July 12
July 19 July 26

167.1
llilnO
221.14
156.5
270.7
217.it
295.5
257.U
291.6
260.3

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/lU)
(8/3)
tl/20)
(7/12)
(2/8)

381.2
286.2
291.6
291.3
290.1

1.5
3.1
1.5
.. 2.7
1.6

5.88
5.15
5.19
L.09
It.23
3.59
It.13
3.65
It.28
3.67

?.h
2.2
2.6
2.2
1.8

3.82
3-79
3.67
3.69
3.69

2.5
0.9
3.7
1-1*

h.e

2,1*1*5
2,055
-3,1*36
2,1*05
It,030
3,537
lt,0lt7
3,9U*
it,031
3,832

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,7ltO
2,667
1,713

780
661*
1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163
1,117

3,921*
it,031

2,791*
2,887

n.a. •

n.a.

1,130
1,11*2*
1,135
1,132
n.a.

'

n.a.—Hot available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted
to 19li7-li9-100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume' on the "ew i-ork Stock Exchange.
Ji/- Moody's 125 industrial stocks; weekly data based on.Friday.
it/ 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 meriber 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 to others.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit. D

H.Ik

Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1957
January
February
March
April
May
June
July
August
September

1st half
Three quarters
Year

Corporate
1956
I

New Capital
1955

1957

State and local
1 1955
1 1956

1,063
1,071
1,3^

573
712
817

535
1*07
1,223

685
566
1*99

l*ol*
696
390

535
312
538

e/1,350

818
1,11,6
8la

1*78
886
687

762
e/$S0
e/380

378
1*90
735

1*27
350
61*2

1,063
651
838

597
6hh
670

e/l*B0
e/375

376
199
333

. 1*70
2U9
h06

6bS
311
126

919
658
. 1*08

e/1,000
e/900

October
November
December
1st quarter
2nd quarter
3rd quarter
itth quarter

1

3,1*79
e/3,050

e/6,529

71*5 .
1,0892/
1,088

1,1621/
632
900

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

2,165
2,052
1,911
2,695

1,907
7,1,63
10,38k

It, 216
6,127
8,821

1,750
e/1,692

e/3,1*1*2

1,1*90
1,603
908
1,382

1,385
1,1*18
1,121*
1,981*

3,093
14,001
5,383

2,803
3,927
5,911

Excluding finance companies %/
1st quarter
2nd quarter
3rd quarter
lith quarter

3,268
e/2,800

Year

1,617
2,51*1
2,2U6
2,826 ,

1,727
1,870
1,1*1*1*
2,551*

9,259

7,595

e/ Estimated.
1/ Includes $637.2 million AT&T convertible debenture issues.
2j Includes $571.5 million AT&T common stock issues.
2/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




;

H.1U

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

Corporate

1956 - June
July
August
September
October
November
December
1957 - January
February
Marph
April
May
June

State and
local government

185
592
217
#9
386
701
- i*30
567
671
788
U77
329
877

Other %/

20

U63
16U
35
181*
383
135
201
386
306
19U
U99
21*8
176

37
35
100
50
125
25
39

Large Individual Issues Offered July 1 through 26
^

Issuer

Type J/

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

CORPORATE
Southern Calif. Edison Co, 1st ref. mtg. bds. IiO.G
Rochester Gas & Elec. Co. 1st mtg. bds. 15.0
Timken Roller Bearing Co.
Common stk. 19.4
Central Illinois Light Co. 1st mtg. bds. 15.0
Wisconsin Telephone Co.
Deb.
30.0
Washington Water Power Co. 1st mtg. bds. 30.0
West Penn Power Co.
1st mtg. bds. 20.0
Associates Investment Co.
Deb.
20.0
Texas Electric Service Co. 1st mtg. bds; 16.0
Jersey Central Pwr. &Lt. Co. 1st mtg. bds* 15.0
Inland Steel Co.
1st mtg. bds. 50.0
First National City Bank
of New York
Capital stk. 120.0
Pacific Gas & Elec. Co.
1st & ref.
mtg. bds. 60.0
Tennessee
Gas.
Trans.
Co.
Deb.
25.0
for FRASER
Sears Roebuck Accept. CorpJ
Deb.
.50.0

Digitized


1982
1987

h 3/4
4 7/8

U.70
U.80

Aa
A

1987
1992
1987
1987
1977
1987
1987
1987

4
4
4
4
5
4
5
4

1.57
h.h3
li.88
4.75
5.75
U.65
U.90
U.38

Aa
Aaa
A
Aa

5/8
1/2
7/8
7/8
3/4
3/4
3/8

1989 5 '
1977 6
1982 . 5

4.95
6.08
5.00

Aa
A
Aa

Aa
Baa

9

H.llf

E-2 .
Large Individual Issues Offered July 1 through 26 (Cont'd)
Coupon
Amount
Offering Rating
Type 3/ (millions Maturity rate or
net inter- yield
of
dollars)
est cost

Issuer

STATE AND LOCAL GOVERNMENT
Salt River Agric. Impr. &
G.O.
Power Dist., Arizona
Fresno U.S.D., California
G.O.
Metro. Wtr. Dist. of So.
California
Rev.
Port of New York Auth,
Airport rev.
Cook Co. S. D. Nb. 20$, 111. G.O.
G.O.
Philadelphia S. D., Penna.
State of Minnesota
Highway rev.
G.O.
Atlanta, Georgia
G.O.
St. Louis Co., Missouri
G.O.
State of Louisiana
G.O.
Westport, Connecticut
^Georgia Rural Roads Auth.
Rev.
W-lilwaukee, Wisconsin
V/ater rev.
East Baton Rouge Par. S.D.,
Louisiana
G.O.
State of California
G.O.

'5.0
7.0

1960-87
1960-77

1.29
3.31

3.20-L25 A
2.70-3.35 Aa

15.0
28.8
5.5
12.0
12.0
15.5
6.8
10.0
•5.14
17.5
10.0

1958-69
1958-75
1959-76
1959-82
1960-73
1958-86
1958-77
I96I4-66
1958-77'
1959-7 y68
1959-86/67

3.20
3.66
li.U9
3.55
2.89
3.39
3.28
3.20
3.50
it.08
3.62

2.50-3.20 Aa
2.70-3.70 A
3.10-1*. hO Baa
2.60-3.60 A
2.I4O-2.9O Aa
2.UO-3.U5 Aa
2.30-3.30, Aa
3.10-3.203Z 2.50-3.50 Aa
3.00-1.05 A
2.65-3.70 Aa

10.0
5o.o

1958-77
3.97
1959-78/73 3.58

2.60-1.00 A
2.75-3.55

OTH&R
Montreal, Quebec

| S.F. deb.

25.0

1977

5

1A

5,70.

A

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
obligation; Rev., revenue bonds%G.R., general obligations additionally secured by
facilities revenues; L.L., limited liability obligations secured by pledge of
designated revenues.
h/ Part not reoffered.

#



H.lL

Exhibit F
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues

Date of
computation
1956 - June 29
July 31
Aug. 31
Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31
Feb. 28
Mar*, 29
Apr. 30
May 31
June 28

Subsequent to
During month following
date shown
date shown
Corporate State and Other 2/ Corporate State and Other 2/
local govt.
local govt.
1*37
21*7
36 9
315
683
136
1*76
591
7i+0
461
187
525
370

81
131
359
162
1*8
280
153
153
290
179
97
172

37

23
100
35
25 25
25

567
1,096
1,202
1,009
990
1*81
796
#6
795
1*86
258
• 525
.1*15

690
726
958
1,197 955
979
763
61*8
631
862
396
388
1*98

__

37

23
100
35
25
25
25

Forthcoming Large Offerings, as of July 26
Type

Minneapolis-Honeywell Regulator Co.

Amount
(millions Approximate date
_ of dollars) of offering

Common stk.

28.2

•^Associates Investment Co.
^General Motors Acceptance Corp.
Northern States Power Company
J. Ray McDermott and Co.

Deb.
Deb.
1st mtg. bds.
Conv. sub. deb.

5o.o
100.0
18.0
20.3

^Pacific Telephone & Telegraph Co.
^Thompson Products, Inc.
x

Deb.
Conv. sub. deb.

90.0
19.7

American Telephone & Telegraph Co.




250.0

August 1
(rights expire)
August 2
August 8
August ll*
August 20
(rights expire)
August 21
August 27
(rights expire)
October 29

H.llt

F-2
Forthcoming Large Offerings, as of July 26 (Cont'd)
Issuer

, Type

Amount
Approximate date
(mill ions
of offering
of dollars)

STATE AND IOCAL GOVERNMENT
G.O.
State of Oregon
G.O.
State of New York
G.O.
Phoenix, Arizona
" ..
• Rev.
Kansas Turnpike Authority
G.R.
frState of Connecticut
G.O.
#Du Page Co. H.S.D. No. 88, HI.
G.O.
Sacramento Unif. Sch. Dist., Calif.
G.O.
Los Angeles City Sch. Dists., Calif.
G.O.
#Dade County, Florida
G.O.
-xDade Co., Spec. Tax. S.D. No. 1, Fla.
Highway rev.
State of Ohio
G.O.
San Diego Unified Sch. Dist., Calif.
G.O.
State of Texas
Utilities rev.
Jacksonville, Florida
Rev.
University System Bldg- Auth., Ga.
Rev.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth., Fla.
G.O.
New York State Thruway Authority
Rev.
Oklahoma Turnpike Authority

15.0
27.9
6.0
18.0
35.0
7.9
7.0
Ui.O
7.5
9.5
31.0
10.0
12.5
30.0
12.0
62.0
20.0
50.0
65.0

July 29
July 30
July 31
Aug. 1
Aug. 6
Aug . 6
, Aug. 7
Aug. 13
Aug. 15
Sept. li
Sept. 10
Oct. 15
1957
1957
1957
1957
1957
1957
1957

OTHER
None
*—Included in table for first time.
1/ Includes corporate and other issues of $lf> million and over; State and
local government issues of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issue: Public Service
Electric and Gas Company's §2$ million preferred stock issue - withdrawn from
registration.