Full text of H.16 Capital Market Developments : August 18, 1955

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Not f o r Publication
DECONTROLLED AFTER SIX MONTHS
H.llj.

August 18, 195£
CAPITAL I.IARKET DEVELOPIIENTS

Corporations publicly o f f e r e d two large coranon stock
issues with t o t a l proceeds of 66 million d o l l a r s f o r new c a p i t a l
purposes, and S t a t e and l o c a l governments f l o a t e d o f f e r i n g s t o t a l ing 13 million d o l l a r s during t h e week ending August 12. This
week two large issues are scheduled for offering—200 m i l l i o n d o l l a r s of debentures by General Motors Acceptance Corporation and one
S t a t e and l o c a l government i s s u e f o r 18 m i l l i o n .
Both bids on the 1*0 m i l l i o n d o l l a r Cook County, I l l i n o i s
expressway issue were r e j e c t e d l a s t , week. The i n t e r e s t cost of the
lowest bid was about 2.68 per c e n t . Apparently cne f a c t o r i n the
r e j e c t i o n of these bids was t h e reduction of the i s s u e ' s r a t i n g by
Moody's Investors Service from Aa t o ,A s h o r t l y before the o f f e r i n g
date.
Bond y i e l d s - S t a t e and l o c a l government Aaa bond y i e l d s
rose f i v e b a s i s points during t h e week ending August 12. Yields
on corporate Aaa bonds increased one b a s i s p o i n t , and U. S . Government- long-term bend y i e l d s decreased one b a s i s p o i n t .
Yields on t h e corporate Baa bonds increased one basis
p o i n t . S t a t e and l o c a l government Baa and revenue bend yields did
not change.
Daily y i e l d s on the corporate and Treasuzy obligations r e mained steady during the f i r s t p a r t of t h i s week.
Stock market credit - Customers' debit balances, excluding
c r e d i t extended on U. S. Government obligations, of member firms
of t h e New York Stock Exchange, rose 23 million d o l l a r s l a s t month
t o t o t a l 2,73k million a t the end of J u l y . Money borrowed by member firms on c o l l a t e r a l other than U. S. Government s e c u r i t i e s decreased 17 million d o l l a r s .
The table on the f o i l owing page shows these and other
data on stock market .credit f o r June and July.




lUlh

-2-

End of month
June | J u l y

Change

(Millions of d o l l a r s )
Customer c r e d i t
Excluding U. S. Govt, s e c u r i t i e s - Total
Net d e b i t balances
Bank loans t o others
Net d e b i t balances secured by U. S . Govt, s e c u r i t i e s
Bank loans t o others f o r purchasing or carrying
U. S. Govt, s e c u r i t i e s
Broker and dealer c r e d i t
Money borrowed except on U. S. Govt, s e c u r i t i e s
Money borrowed on U. S . Govt, s e c u r i t i e s
Customers' n e t f r e e c r e d i t balances

3,871
2,711
1,160
he

3,911
27m
1,177
hs

+L0
+23
+17
-1

31

29

-2

2,020
73
917

2,003
77
918

-17
+1
+1

Stock p r i c e s - Stock p r i c e s , as measured by the SEC index
of 265 common s t o c k s , decreased one p o i n t during t h e week ending
August 12 i n the lowest average t r a d i n g volume so f a r t h i s y e a r .
Daily indexes i n d i c a t e f u r t h e r a decline in p r i c e s on
Monday and Tuesday of t h i s v;eek b u t a s l i g h t i n c r e a s e on Wednesday,
More d e t a i l e d information concerning r e c e n t c a p i t a l market developments w i l l be found i n t h e a t t a c h e d e x h i b i t s .

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




EXHIBIT A

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

—

U.S.OOVMNMINT
Uee-ter*. l«x«fcU

STATE A N D I O C A I

ms

Date

Corporate
Aaa 1/

U. S . Govt,
long-term 2 /

State and l o c a l
g o v t . , Aaa 3/

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

(Per cent)
1952 - High
Loir
1953 - High
• 1954 - High
Low
1955 - High
Low-

3.03 ( V W
2 . 9 1 (2/15)
3.1*2 (6/19)
2.99 (1/9)
3.09 (1/8)
2.85 (ii/23)
3.10 (8/12)
2.91(1/7)

2.79
2.56
3.15
2.78
2.74
2.44
2.94
2.62

July 15
July 22
July 29
August 5
August 12

3.05
3.05
3.07
3.09
3.10

2.83
2.90
2.94
2.9k
2.89

(12/27)
(5/17)
(6/6)
(12/26)
(1/9)
(8/7) •
(8/5)
(1/7)

2.00
1.65
2.73
1.98
2.21
1.90
2.34
2.05
2.23
2.24
2.27
2.29
, 2.34

(10/23)
(5/D
(6/25)
(1/8)
(6/10)
(9/2)
(8/11)
(5/26)

.37
.19
.38
.19
.43
.32
.34
.13

1.02
.71
.84
.30
.61
.29
.70
.54

.22
.15
.13
.15
.21

.60
.66
.67
.65

.55

1 / Weekly average of daily f i g u r e s . Average term of bonds included i s 2$-26
years.
2/ Weekly average of d a i l y f i g u r e s ; old s e r i e s ; Average term to f i r s t c a l l
of bonds included i s 13-14 years.
2 / Thursday f i g u r e s . Only general obligation bonds are included; average
term i s 20 years.
Note.—Highs and lows are for individual s e r i e s 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 .




•
EXHIBIT B

LOWEK-GRADE BOND YIELDS
Weekly

v " X STATE A N D LOCAL GOVT. B«<

V

1952

1953

Corporate.
Baa 3 /

Date

i

T*"i

1954

State and
l o c a l govt.
Baa V

I

•

1955

State and
l o c a l govt,
rev. 1/

(Per cent)
1952 - High
Low
1953 - High

3.63
3.1*8
3.89
3.50

3.7k (1/8)

19$k - High

3 . a (12/31)
3.56 (8/12)
3-U5 (1/14)

1955 - High
LewJuly 15
July 22
July 29
August 5
August 32

(1A)
(5/16)
(9/18)
(1/2)

^

3.52
3.52
3.53
3.55
3.56

2.98 (10/23)
2.1*8 (1*/17)
3.79 (6/25)
2.96 ( 1 / 8 )
3.32 (1/7)
• 2.93 (8/5)
3.21.(8/11)
3.02 ( 1 / 6 )
3.17
3.17
3.18
3.21
3.21

2.69
2.27
3.27
2.71
3.00
2.72
2.90
2.76

(12/19)
(V25)
(6/26)
(1/2)
(1/1)
(8/13)
(8/12)
(1/7)

2.81*
2.87
2.90
2.90
2.90

~
1 / Weekly average of daily f i g u r e s . Average terra of bonds
included i s 25-26 years.
2 / Thursday f i g u r e s . Only general obligation bends are
included; average term i s 20 years.
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 for individual s e r i e s and may
be cn 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 .




M -

STOCK MARKET

Stock p r i c e
index 1 /

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

Stock market customer c r e d i t
Customers'
loans t o
; 5 "others" 5 /
(Millions of d o l l a r s )

1952 - High
Lor
1953 - High
195b - High
Low
1955 - High
Low

165.3
151.7
167.1
144.0
221.4
156.5
259.9
217.4

July
July 29
August 5
August 12

257.3
259.9
25U-7
253.7

(22/26)
(10/24)
(1/2)
(9/18)
(12/31)
(1/6)
(7/29)
(1/lii)

2a.5

2.0
0.9
2.5
0.9
3.7
i.zv
4.6
1.7

5.77
5.13
5.75
5.15
5-33
4.20
4.22
3.78

1,986
1,804
2,445
2,055
3,436
. 2,405
3,911
3,537

1,332
1,241
1,665
1,314
2,388
1,653
2,734
2,517

656
552
780
664
1,048
746
1,177
1,018

2.7
2.4
2.2
2.1
1.7

3.87
3.78

r/3,871
3,911

r/2,711
2,734

1,160
1,177
1,177
1,164.

r / Revised.
n . a . Not a v a i l a b l e .
V SEC index of 265 common s t o c k s , weekly c l o s i n g p r i c e s , 1939-100; converted
t o 1947-U9-100 by Federal Reserve. The conversion f a c t o r i s 123.91.
2 / Averages of d a i l y trading volume on t h e New l a r k Stock Exchange.
3/ Moody's 200 common s t o c k s ; end of month f i g u r e s .
4/ End of month f i g u r e s far member firms of t h e New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government o b l i g a t i o n s .
£ / Wednesday f i g u r e s f a r weekly reporting member banks. Excludes a l l loans
f o r purchasing or carrying U. S. Governments f o r 1952; since 1953 only these loans
a t banks i n New York and Chicago a r e excluded. Weekly reporting banks account f o r
about 72 per cent of loans t o o t h e r s .
Note.—Highs and lows are f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t dates
for different series.




H.lii

Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(In millions of d o l l a r s )
-Nev c a p i t a l

State and l o c a l
1 1954
1

1955

Corporate
1 1954
1

1953

1955

January
February
March

546
136
1,261

547
426
635

623
623
666

535
312
#8

396
411
565

390
360
426

April
MayJune

e/500
e/900
2/675

497 '
656
842 .

779
675
1,123

427
e/350
e / 630

734
748
853

329
649
434

e/UOO
g/650

909
335
747

483
325
753

e/460
e.225

279
261
649

519.
259
475

1,003
290
604 .

577
429 n /
1,438 3 /

594
423
877

453
408
774

1,608
1,995
1,991
1,896
7,490

1,912
1,385
e/1,405
2,578
1,561 ,
2,444 y
8,495

1,372
2,334
1,188
1,894
6,789

1,176
1,412
1,253
1,636
5,477

' July
August
September
October
November
December .
1st quarter
2nd quarter
3rd quarter
4th quarter
Year

2,243
e/2,075

•

1953

Excluding finance companies 2 /
1st quarter
2nd quarter
3rd quarter
i+th quarter
Year

1,791
e/2,000

1,527
1,927
1,911
1,792
7,158

1,669
1,991
1,223
2,344
7,227

2 / Total nev c a p i t a l issues excluding o f f e r i n g s of s a l e s and personal finance
companies *
e / Estimated,
Note.—Details may not add t o t o t a l s due t o rounding«




.

H.14

Exhibit E

%

Large Public Security I s s u e s f o r Nevr C a p i t a l
(Other than U. S . Treasury) 1 /
Proceeds of Large I s s u e s Offered
(l2.li.ions of d o l l a r s )
Month

Corporate

1954 - July
August
September
October
November
December
1955 - January
February
March
April
May
June
July
.

411
75
36U
433
0
121
141
63
750
175
483
182
101

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

'

Other 2 /

92
86
455
388
268
#9
341
107
337
238
152
409
278

—
— •

30
35
15

Large I n d i v i d u a l Issues Offered August 1 through 12

Issuer

Type 3 /

Amount
Coupon
(millions Maturity r a t e or
Offering Rating
of
yield
net i n t e r dollars)
e s t cost

CORPORATE
Consumer Power
Goodyear Tire & Rubber
Western Union Telegraph

Coiimon s t k .
Common s t k .
Comon s t k .

16.9
45*6
20.7

Rev.
G.O.
Rev.

14.5
7.1
5.8

STATE AND LOCAL GOVERNMENT
Mobile, Alabama
F a i r f a x Co., V i r g i n i a
S p r i n g f i e l d , Ohio
OTHER
None




1995
1958-89
1959-87

3.80
3.18
3.09

3.70
2.00-3.20
2:20-3.10

Ba
Baa
A

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 l £ mil
l i o n a o l l a r s 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 in g s of $ 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 .
3 / I n the 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 g a t i o n s 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; and, 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 r e v
enues.




H.lU

Exhibit F
Forthcoihing Large Public S e c u r i t y O f f e r i n g s f o r lieu C a p i t a l
(Other than U. S. Treasury) 1 /
Expected Proceeds from. Forthcoming Large Issues

Date of
computation
195k - J u l y 30
Aug. 31
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1955 — J a n . 31
Feb. 28
Mar. 31
• Apr. 29
May 31
June 30
J u l y 29

During month following
date shown
S t a t e and Other 2 /
Corporate
l o c a l govta
100
33h
3h3
15
9b
1%
16
710
211
1*25
160
67
h07

$h
3 CO
383
£ 36
661
567
682
521
208
116
339
31*1*
100

Subsequent t o
date s h a m
S t a t e and
Corporate
l o c a l govt.

—

30
——

—
—

303
608
lah
135
2h6
216
122
1,395
922
1,11*1
850
830
1,135

other

1,553
1,876
2,158
1,957
2,682
2,mi*
1,961
1,978
2,009
1,917
1,861
1,81*5
2,018

2 /

—

30
30
35

Forthcoming Large O f f e r i n g s , a s of August 12
Type

General '."otors Acceptance Corp.
American N a t u r a l ' Gas
P a c i f i c Telephone and Telegraph
S t . Louis-San Francisco Railway
. Utah Power and Light
-"-Ohio Paver
^Public Service' E l e c t r i c and Gas
American Telephone and Telegraph
•RPublic Service E l e c t r i c and Gas
Southern C a l i f o r n i a Gas
Freedom Insurance Company

Deb.
Common stock •
Deb.
1st n t g . bds.
1 s t mtg. b d s .
1 s t mtg. .bds.
Pfd." stock
Conv. deb.
Deb.
Bonds
Common stock

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

200.0
35,7
67.0
19.5
15.0
17.0
25.0
635.0
35.0
1:0.0
22.0

, August 17
August 23
August 23
August 2It
September 13
September 20
October h
.October 13
October
1955
1955

. STATE AND LCCAL GOVERIONT
Amarillo, Texas
Duval County, F l o r i d a
F l o r i d a S t a t e Board- of Education
Los Angeles, C a l i f o r n i a




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

5.2
8.0
10.6
12.0

August
. August
August
August

17
22
23
23

H.lk

F-2
• Forthcoming Large O f f e r i n g s , as of August 12 (Cont'd)
Issuer

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

Type

STATE AMD I.CCAL G0VERK5NT (Cont'd)
Chicago, I l l i n o i s , 3 d . of Education
Denver, Colorado
*lMeces County, Texas
*Essex County, New Jersey
•^Buffalo, New York
Los Angeles, C a l i f o r n i a
Richmond-Petersburg Turnpike Auth.
Connecticut Expressway
Inter-American Center Auth., F l a .
. Michigan Turnpike Auth o i l t y
S t a t e of Louisiana
I l l i n o i s Turnpike Authority
Texas Turnpike Company
C a l i f o r n i a T o l l Bridge Authority
Louisiana Turnpike Commission
C a l i f o r n i a T o l l Bridge Authority
Nevr York S t a t e Thruway Authority
Oklahoma Turnpike Authority
Washington S t a t e Toll Bridge Auth.

G.O.
n.a.
n.a.
n.a.
Rev.
Rev.
Rev.
Rev.
Rev.
n.a.
Rev.
Rev.
Rev.
• Rev.
Rev.
G.R.
Rev.
Rev.

12.5

,

6.6
8.8
12.8
18.0
67.5
100.0
25.0
186.0
80.0
390.0
UjO.O
235.0
100.0
1*3.0
125.0
=
146.0
227.0

August 2k
August 30
September
September
September
September
September
1955
1955
-1955
1955
1955
1955
1955
1955
1955
1955
•1955
1956

1
8
12
21

OTHER
-None
1/ Includes corporate and other i s s u e s of 15 m i l l i o n d o l l a r s and over; S t a t e
and l o c a l government i s s u e s of 5 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 .
n . a . Not a v a i l a b l e .
'
-Included i n t a b l e f o r f i r s t t i m e .