Full text of H.16 Capital Market Developments : August 10, 1959

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

DECONTROLLED AFTER SIX MONTHS
August 10, 1959.

. vH.lit
CAPITAL MARKET DEVELOPMENTS

D u r i n g t t h e week ending August 7, l a r g e S t a t e and l o c a l governm e n t bond i s s u e s | t o t a l i n g $lU6 m i l l i o n were s o l d and a $15 m i l l i o n
c o r p o r a t e b o n d - i s s u e p u b l i c l y o f f e r e d . This week, l a r g e c o r p o r a t e s e c u r i t y
f i n a n c i n g , i n c l u d i n g e x p i r a t i o n of s u b s c r i p t i o n r i g h t s , i s e x p e c t e d t o
t o t a l $98 m i l l i o n w h i l e S t a t e and l o c a l government i s s u e s f o r $66 m i l l i o n
were s c h e d u l e d f o r s a l e .
Bond y i e l d s - Y i e l d s on a l l t y p e s of seasoned bonds, e x c e p t
B a a - r a t e d c o r p o r a t e o b l i g a t i o n s , d e c l i n e d l a s t week. A a a - r a t e d S t a t e
and l o c a l government bond y i e l d s are c u r r e n t l y 10 b a s i s p o i n t s below t h e
J u l y peak, w h i l e l o n g - t e r m U. S . government and h i g h - g r a d e c o r p o r a t e bond
y i e l d s are 5 b a s i s p o i n t s below t h i s J u l y h i g h s . An A a - r a t e d , f i r s t
mortgage e l e c t r i c u t i l i t y bond i s s u e was p u b l i c l y o f f e r e d t o y i e l d U . 3 5
per c e n t l a s t week, 8 b a s i s p o i n t s l e s s than t h e . y i e l d on t h e l a s t comparable
i s s u e , an o f f e r i n g made on J u l y 1 0 .
Mortgage r e c o r d i n g s - Recordings during May incned down as a
s l i g h t d e c l i n e i n F e d e r a l l y - u n d e r w r i t t e n mortgages recorded exceeded a
small r i s e i n conventional a c t i v i t y .
In A p r i l s e a s o n a l l y a d j u s t e d r e c o r d i n g s remained a t the r e c o r d $ 3 2 . 2 b i l l i o n annual r a t e e s t a b l i s h e d a month
earlier.
Through May o v e r 1 . 5 m i l l i o n mortgages of $ 2 0 , 0 0 0 or l e s s were
recorded f o r a t o t a l amount of more t h an $ 1 2 . 7 b i l l i o n , o r an average of
n e a r l y $ 8 , 5 0 0 per l o a n . Although t h e number of r e c o r d i n g s was U per c e n t
below t h e number f o r t h e same p e r i o d i n 1955, p r i c e s and l o a n terms have
changed s i n c e then t o such an e x t e n t t h a t t h e ' a v e r a g e amount per l o a n
recorded was 18 per c e n t h i g h e r i n 1959 and t h e t o t a l amount of l o a n s
recorded was 13 per c e n t h i g h e r .
Stock p r i c e s - Common s t o c k p r i c e s d e c l i n e d l a s t week i n
moderate t r a d i n g volume. Standard and P o o r ' s 500 stock i n d e x c l o s e d a t
5 9 . 8 7 F r i d a y , O.6I1 p o i n t s below t h e c l o s e a week e a r l i e r .
More d e t a i l e d i n f o r m a t i o n c o n c e r n i n g r e c e n t c a p i t a l market
developments i s p r e s e n t e d i n t h e a t t a c h e d e x h i b i t s .

C a p i t a l Markets S e c t i o n ,
D i v i s i o n of Research and S t a t i s t i c s ,
Board of Governors of t h e F e d e r a l Reserve System.




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




h.i4

kxii.i.uit a
Tables l'or Exhibit A
ltiph-gxade Hond Yields

Date

Corporate
Aaa 1 /

U. S. Govt,
long-term 2 /

Spread between
U, S. Govt, and
Corporate State and
Aaa
l o c a l Aaa

S t a t e and
l o c a l govt.
Aaa 1 /

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low
July
July
July
July
Aug.

10
17
24
31
7 e/

2.85
4.14
4.13
3.55
4.48
1.09

(4/23)
(9/27)
(10/10)
(5/2) x
(7/10)
(1/9)

4.48
4.47
4.46
4.45
4.43

2.1.5
3.76
3.84
3.07
£13
3.83

(8/6)
(10/18)
(12/26)
(4/25)
(7/10)
(1/2)

4.13
4.08
4.10
4.10
4.08

1.90
3.45
3.31
2.64
3.54
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(7/2)
(3/26)

3.52
3.51
3.48
3.48
3.44

.30
.60
.51
.22
.39
.16

.30
.47
.72
.34
.92
.57

.35
• .39
.36
.35
.35

.61
.57
.62
.62
.64

.

Lower-grade Bond Yields

Date

Corporate
Baa 1 /

State and
l o c a l govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
l o c a l govt.

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
5.09
4.83

July
July
July
July
Aug.

5.07
5.09
5.09
5.07
5.08

10
17
24
31 .
7 £/

(12/31)
(11/29)
(1/3)
(7/11)
(7/24)
(4/17)

2.93(8/5)
4 . 5 1 (0/29)
4.34 ( 9 / 1 1 )
3.64 (5/1)
4.46 ( 7 / 2 )
3.92 ( 3 / 2 6 )
4.45
4.45
4.39
4.39
4.37

.52
1.27
1.20
.77
.77
.56
.59
.62
.63
.62
.65

.96
1.21
1.11
.93
.98
.86
.93 .
.94
.91
.91
.93

2 / I'reliminary.
1 / Weekly average of d a i l y f i g u r e s . Average term of bonds included i s 25-26 y e a r s .
2 / Weekly average of daily f i g u r e s . The s e r i e s includes bonds due or c a l l a b l e in
10 years or more.
J / Thursday f i g u r e s . Only general obligation bondc are included; average term
i s ?0 years.
Note.—liiphs 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
different series.




STOCK

MARKET

STOCK

MORTGAGE

RECORDINGS AND




LOANS

MARKET

CREDIT

Exhibit

D - T a b l e : ; f o r h'xhibiiu C
Stock Market

Date

1 9 5 3 - 1 9 5 8 - High.
Low
IV55 - H i g h
Low
May
| June
:July
July
July
Aug.

Stock p r i c e
index 1/

51i.ll
22.95
60.51
54.37

(12/24/58)
(9/18/53)
(7/31)
(2/6)

57.96
57.16
59.19
59.65
60.51
59.87

1?
24
31
7 g/

Trading
Common
volume 1 /
yields 2/ (millions
(per cent) of shares)

Stock market customer c r e d i t
Customers1
Bank
debit balloans to
ances 4 /
"others" 5 /
( M i l l i o n s of d o l l a r s )

Total

3.30
6.25
3-08
3.31

4.9
0.9
4.3
2.6

4,492
2,o55
4,721
4,527

3,285
1,3114
3,M l
3.253

1 ,317
669
1 ,332
1 ,210

3.20
3.23
3.14
3.12
3.08
3.10

3.4
2.9
3.1
3.0
3.0
2.6

4,711
4,692

3,385
3,368

1,326
1,30k

•

1,256
1,271
1,274
n.a.

n.a.
n.a.
n.a.

n.a.—Not a v a i l a b l e .
g / Preliminary.
1 / Standard and Poor's Tmposlte index of 500 common s t o i k s , weekly closing p r i c e s , 1941-43=10. Monthly data
are averages of daily f i g u r e s rather than of Fridaya* only. Highs and lows are f o r Fridays' data only.
2/ Standard and Poor's composite stock y i e l d based on Wednesday data converted t o weekly closing prices by
Federal Reserve. Yields shown are f o r da tea on which price index reached i t s high or low.
3/ Averages of daily trading volume on the New York Stock Ebcolwnge.
4 / End of month f i g u r e s f o r member firms of the New York Stock Excharge which carry margin accounts; excludes
balances secured by U. S. Government o b l i g a t i o n s .
5/ Wednesday f i g u r e s for weekly reporting member banks. Excludes loans for purchasing or carrying U. 5.
i Government s e c u r i t i e s • Prior to July 1, 1959, such loans are excluded only a t banks in New York and Chicago,
i Weekly reporting banks account f o r about 70 p e r oent of loans t o o t h e r s . For f u r t h e r d e t a i l see Bulletin.
;

Nonfarm Mortgage R e c o r d i n g s and Loans 1 /

Date

1 9 5 8 - May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
1959 - Jan.
Feb.
Mar.
AprMay

Unadjusted
Total
Seasonally
VA
Unadjusted
FHA
adjusted 2/
( M i l l i o n s oi ' d o l l a r s )
2,087
2,192
2,291
2,ii3
2,488
2,56?
2,652
2,629
2,677
2,631
2,683
E/2,683
n.a.

2,151
2,275
2,543
2,535
2,#6
2.*857
2,432
2,629
2,353
2,21,5
2,586
g/2,776
2/2,768

311
343
368
371
480
501
457
510
585
506
530
490
478

73
98
127
156
189
239
216
257
276
238
261
231
212

Conv.

1,767
1,835
2,048
2,007
1,927
2,116
1,759
1,861
1,491
1,500
1,796
E/2,055
B/2,079

n.a.—Not a v a i l a b l e .
1/ Total recordings data are estimates based on reports from about 450 areas and include •
mortgages of $20,000 or l e s s secured by nonfarm r e a l e s t a t e , primarily r e s i d e n t i a l p r o p e r t i e s .
FHA-insured loans represent gross amount of insurance w r i t t e n , and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a r e s i d u a l , although t o t a l
recordings and VA and FHA loans ure not s t r i c t l y comparable i n concept or timing.
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Sourcei Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.




t l
H.lli

Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In m i l l i o n s of dollars)

1959
January
Februa zy
March

BhQ
71*5
631

Corporate 1 /
1
1950 / 1

New c a p i t a l
1957

1959

720
857
1,5533/

1,060
1,065
1,320

636
856
61*1*

State and l o c a l 2/
1
1958
1 1957
812
953 .
511

71*2
572
506

April
May
June

p/826
£5/806
e/950

1,11*0
597
887

931
765
1,1*53

July
August
September

e/550
e/650

1,107
51*0
1,111*

1,003
921*
973

862
518
920

1,090
789
1,076

3,139
2,623
2,760
2,300

3,1*1*5
3,11*9
2,899
2,951*

2,136
9/2,502

2,276
2,21,1*
1,860
1,365

1,820
1,70)* 1,51*1*
2,029

5,762
8,522
10,823

6,591*
9,1*93
12,1*1*7

9/^,638

1*,520
6,380
7,71*6

3,521*
5,069
7,099

October
November
December
1st
2nd
3rd
l*th

quarter
quarter
quarter
quarter

1 s t half
Three quarters
Year

2,216
g/2,582:

e/l*,798

"

930
592
E/980

798
895
551

765
51*6
393

•

e/l*75
500

806
1*03
651

529
581*
1*31

1*56
1*71*
1*35

698
633
698

Excluding: finance companies h /
1st
2nd
3rd
Lth

quarter
quarter
quarter
quarter

2.011
e/2,332

Year

2,899
2,506
2,731
2,213

3,237
2,889
2,582
2,810

10,129

11,518

e / Estimated.
g / Preliminary.
*
1 / S e c u r i t i e s and Exchange Commission estimates of net proceeds.
2 / Investment Bankers Association of America estimates of p r i n c i p a l amounts.
3 / Includes #713.2 m i l l i o n AT&T convertible debenture i s s u e ,
5 / Total 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 consumer finance
companies.




Exhibit F

Hi ill

Other S e c u r i t y O f f e r i n g s 1 /
( I n m i l l i o n s of d o l l a r s )
Long-term
Foreigr government 2 /
Federal agency 3 /
1959
1
1958
I
1957
1959
1
1958
1 1957
January
February
March

77
59
2

197
5k

56
50

139
200.
120

81*
k9
30

199
175

1,163
251

72

—

—

123
1*8
.1*2

523

125

—

60

9
'..5
17

28
7
30

161*

October
November
December

57
123
7k

k

220

60
1

Year

992

507

April
May
June
July
August
September

—

Short-t

215

—

100
—

—

2,321
Federal agency 3 / "

190

233
1*60
273

326
1*55
11*7

359
500
1*89

371
208
11*1*

638
1*30
565

563
fall

357
351*
261+

205
337
153

1*86
675
289,

209
161
329

336
1*69
5t>l

July
August
September

289
1*23
369

272
272
252

727

1*37
206
330

221*
370
512

October
November
December

231
1*15
21*3

303
91*
1*59

1*51*
111*
137

1,238
255
116

3,910

3,271*

January
February
March
April
May
June

•

E./213

Tear

'

572

3,098

5,51*3

jd/ P r e l i m i n a i y .
l / Data p r e s e n t e d i n t h i s e x h i b i t d i f f e r from t h o s e i n E x h i b i t E i n t h a t refundi n g i s s u e s , a s w e l l as new c a p i t a l i s s u e s , are i n c l u d e d . Long-term s e c u r i t i e s are d e f i n e d a s t h o s e maturing i n more than one y e a r .
2 / Includes s e c u r i t i e s o f f e r e d i n t h e United S t a t e s by f o r e i g n governments and
t h e i r s u b d i v i s i o n s and by i n t e r n a t i o n a l o r g a n i z a t i o n s . Source: S e c u r i t i e s and Exchange Commission.
y I s s u e s n o t guaranteed by the U. S. Government. Source: long-term, S e c u r i t i e s
and Exchange Commission$ short-term, Federal Reserve.
k j P r i n c i p a l l y t a x and bond a n t i c i p a t i o n n o t e s , warrants or c e r t i f i c a t e s and P u b l i c
Housing Authority n o t e s . In some i n s t a n c e s PttA n o t e s included may have a somewhat
Digitized
l o nfor
g e r FRASER
t e r n than one year. Source: Bond Buyer.



H.Ik

Exhibit G
Large Long-term Public S e c u r i t y I s s u e s f o r New Capital
(Other than U. S. Treasury). 1 /
Proceeds of Large I s s u e s Offered

*

( M i l l i o n s of d o l l a r s )
Month

Corporate

1958 - July
August
September
October
November
December
1959 - January
February
March
April
May
June
July

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

771
209
825
259
227
305
369
3ii0
215
359
3U2
26b
110

Other 2/
la.

275
109
288
172
259
229
335
551
369
563
258
635
19k

18
209
100
79
17 U
35
176
20
50
60
50

Large Individual I s s u e s Offered August 1 through 7

Type J /

Issuer

Amount
(millions
of
dollars)

Coupon
r a t e or O f f e r i n g
Maturity n e t i n t e r - y i e l d
Rating
est- c o s t

CORPORATE
Pennsylvania E l e c t r i c Co.

lst.xntg.bds. .

15.0

1989

U.85

STATE AMD LOCAL GOVERNMENT
Commonwealth of Penna.
Los Angeles Sch. D i s t . , Cal
OTHER
None




G.O.
G.O.

120.0
26.0

1 9 6 2 - 7 7 0 3-UO
1960-61 3 . 7 2

2.75-3.36

2.50-3.80

Aa
Aa

H.U

G-2
Footnotes

n.a.—Not Available.
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 over3
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 #10 m i l l i o n and over.
2 / 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 Reconstruction and
Development i s s u e s and non-guaranteed i s s u e s by Federal a g e n c i e s .
3 / In the c a s e of S t a t e and l o c a l government s e c u r i t i e s , G. 0 . denotes general
o b l i g a t i o n s j R e v . - U t . , revenue o b l i g a t i o n s secured only by income from public
u t i l i t i e s j R e v . - Q . U t . , revenue bonds secured only by revenue from q u a s i - u t i l i t i e s j
R e v . - S . T . , revenue bonds secured by revenue f r o m s p e c i f i c t a x e s only; R e v . - R e n t . ,
revenue bonds secured s o l e l y by l e a s e , payments.




ii.lll
Foi*thcomirig Laiye Long-tenn Public S e c u r i t y O f f e r i n g s f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large I s s u e s
Subsequent t o
During month f o l l o w i n g
date shown
date shown
S t a t e and
S t a t e and
Corporate l o c a l govt. Other 2 / Corporate l o c a l g o v t . Other 2 /

computation
1958 . July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31

161
785
113
204
301
210
270
198
396
21+6
287
165
238

__

55
2la
#5
258
229
261
551^
292
550
254
247
146
356

71
75
45

381
914
216
326
4oi
370
365
279
476
346
332
272
305

'

20
50
50
—

125
435
524
675
683
515
856
481
761
517
761
500
406

__

.
71
75
45
20
50
50
—

Forthcoming Large O f f e r i n g s , as of August 7
Issuer

Type

Amount
Ikpproxima t e date
( m i l l i o n s | oi oi f e rint:
of d o l l a r s )

CORPORATE
Northern S t a t e s Power Co.

Com. s t k .

20.9

Let
Conv. suo. ceb.

30.0
47.0

1 s t mtr. bds.
1 s t ntg. bus.
1 s t & r e f . mtg. ods.
' Conv.. j r . deb.
L e b . , c o s . ei common

35.0
*5.0
.65.0
22.5
45-. 0

Michigan B e l l Telephone Co.
Pan American World Airways, Inc.
Consumers Power Co.
Houston Lighting & Power Co.
P a c i f i c Gas & E l e c t r i c Co.
American and t o r e i r n Power Co.
Commerce Oil Refining Corp.

!
'

AU[;. 11
( r i g h t s e xpire)
12
12
ire)
a:.. .
llf.

Suni'".i
Sunn t:

20
25

STATE ANL LOCAL X'VriiNHbNT
S t a t e of Ohio
Texas Water Development Board
Nassau Co., New York
New York Thruway Autnority
vLos Angeles, Calii ornia
(State of C a l i f o r n i a
Chesapeake Bay Ferry Commission




G.O.
0.0.

G.O.
Rev.—Ut,
G.O.
G.O.
Rev.-Ut.

30.0
10.0
26.2
50.0
12.5
50.0
190.0

11
An,". 3 2
12
lull! . 19
Sept. 1
Sent. 10
ounmmr

j-.iii'.

h.li*

H-2
Forthcoming Large O f f e r i n g s , as of August 7 (Cont'd)

Issuer

Type

Amount
(millions
of d o l l a r s )

Approximate date
of o f f e r i n g

OTHER
None
*—Included i n t a b l e f o r f i r s t ,ime.
1 / Includes corporate and o t h e r i s s u e s of $15 m i l l i o n and over; S t a t e and
l o c a l government i s s u e s of $10 m i l l i o n and over.
2 / 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 Reconstruction
and Development i s s u e s and non-guaranteed i s s u e s by Federal a g e n c i e s .
N o t e . — D e l e t i o n s f o r reasons other than s a l e of i s s u e : None.




Exhibit I
Y i e l d s on New and Outstanding
E l e c t r i c Power bonds, hated Aa anu A 1 /

-

Date

195? - 1958
High
Low
1959 - Jan. 7
20
28
Feb. 18
Mar. 11
25
26
31
Apr. 3
15
16
29
May 1
13
Ik
20
21
26
17
26
July 9
10
15
30
Aug. 5

A-rated o f f e i i n g y i e l d s
Aa-rated o f f e ring y i e l d s
Amount above
Amount above
Actual
Actual
seasoned
y
i
e
l
d
s
(per cent) seasoned y i e l d s
(per c e n t )
(
basis points)
(basis points)
5.00 ( 9 A V 5 7 )
2.93 (3/31/5W
i4.60
it.65 ,
h
do!/
k.kl
b.h3
k.kl

87
-3

5.50 (11/7/57)
3 . 0 0 (3/17/51*)
k.i$y

. 23

u.67

18

L.85
5.06

17
13

' 5.13

27

k.9?y
5.10
5.10

6
2k
19

5.10
5.00

19
13

3k
liO
k
11
9
9
13

h.60

!:&/

22
21
7

1.95
1.95

38
3h

5.00
L95

38
29

L93

31

ii.85

2k

123
-15

* — S i n g l e o b s e r v a t i o n , not an average.
1 / Covers only 30-year f i r s t mortgage bonds, a s 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 trn-.se 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. Averape maturity f o r trie seasoned i s s u e s
v a r i e s from 26 to 28 years.
2 / Provides f o r a 5-year period during which i s s u e may not be c a l l e d f o r
refunding a t a lower coupon r a t e . Monthly averages so marked i n c l u d e one or
more i s s u e s with such a p r o v i s i o n . Other i s s u e s have no such p r o v i s i o n .
3/ Provides f o r a 7 - y e a r period during which i s s u e may not be c a l l e d f o r
refunding a t a l o v e r munon r a t e .