Full text of H.16 Capital Market Developments : August 18, 1958

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)

• .
Not for Publication DECONTROLLED A F T E R S I X M O N T H S
H.lii

! :

August 18, 1958

CAPITAL MARKET DEVELOPMENTS

The volume of public security financing was small last week
and is expected to be only slightly larger this week. During the week
ending August 15, one large corporate issue for $1*5 million was sold,
while the sale of two other issues originally scheduled for last week
was postponed until later this month. No large State and local government issues were offered last week. This week, corporations are expected to sell large issues totaling $96 million. Only one State and
local government issue for $22 million is scheduled for sale.
Bond yields - Yields increased sharply last Week for all categories of outstanding bonds. Yields for all types of bonds, except
those for corporate Baa-rated bonds, again rose to new highs for the
year.
Stock market credit - Customer credit in the stock market
(excluding that for U. S. Government securities) rose further to a new
record level in July, although the increase was not as large as in
earlier months of the year. Such credit totaled #!*,25l million at the
end of last month, 20 per cent higher than when margin requirements
were reduced in January. The $25 million increase in July reflected
a $91 million rise in net debit balances which was partially offset by
a $66 million decline .in bank loans to "others."
Borrowing by member firms of the NYSE maintaining margin accounts (excluding borrowing on U. S. Government securities) declined
last month. Customers' net free credit balances continued to increase,
totaling $1,080 million at the end of the month. These and other data
on stock market credit are shown in the following table.

Customer credit
Excluding- U. S. Government securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Government securities
r
Broker and dealer credit
Money borrowed except on U. S. Government securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances
rj Revised.




End of month
July
I June

Change

It, 251
3,020
1,231
lii9

L,226
- 2,929
1,297
2l*0

+25
+91
-66
-91

113

81*

+29

1,9031,591
306
1,080

r/L,930
1,591
r/l*68
1,01*7

-27
+3
-162
+33

— 2 —

Stock prices - Stock prices declined last week, after increasing in each of the previous seven weeks. Standard and Poor's index of .
500 common stocks closed at U7.50 on August 15, one per cent lower than
the high for the year reached last Monday. Trading activity also declined last week averaging 2.9 million shares a day. In each of the
three preceding weeks volume exceeded 3.7 million shares a day.
More detailed informtion 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.




HIGH-GRADE BOND YIELDS

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L O W E R - G R A D E B O N D YIELDS




CORPORATE Boo

/**

I

• I—STATE AND LOCAL O.OVT. Boo,

T\

..

H.l4
Tables for Exhibit A
High-grade Bond Yields

Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

3.42
2.85
4.14
3.83
3.55

(6/19)
(U/23)
(9/27)
(8/15)
(5/2)

3.19
2.15
3.76
3.61
3.07

3.67
3.70
3.71
3.77
3.83

"

3.39
3.38
3 .44
3.53
3.61

Spread between
U. S. Govt, and
Corporate State and
Aaa
local Aaa

State and
local govt.
Aaa y

(Per cent)
1953
1954
1957
1958

-

High
Low
High
High
Low

July
July
Aug.
Aug.
Aug.

18
25
1
8
15 e/

(6/5)
(8/6)
(10/18)
(8/15)
(4/25)

2.73
1.90
3.45
3.04
2.64

(6/25) (9/2)
(8/29)
(8/14)
(5/1)

2.78
2.78
2.84
2.91
3.04

.38
.30
.60
.51
.22

.83
.30
.47
.62
.34

.28
.32
.27
.24
.22

.62
.60
.60
.62
.57

Lower-grade Bond Yields

Date

Corporate
Baa 1/

High
Low
High
High
Low

3.89
3.44
5.10
4.96
4.51

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953
1954
1957
1958

-

July
July
Aug.
Aug.
Aug.

18
25
*1
8
15 2/

(9/18)
(12/31)
(11/29)
(1/3)
(7/11)

4.52
4.55
4.56
4.60
4.66

3.79
2.93
4.51
4.03
3.64
3.83
3.82
3.83
3.92
4.03

(6/25)
(8/5)
(8/29)
(8/14) •
(5/1)

• 69
.52
1.27
1.28
.83

1.21
.96
1.21
1.11
.99

.85
.85
.85
.83
.83

1.05
1.04
.99
1.01
.99

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




STOCK M A R K E T




Exhibit D
Table for Exhibit C
Stock Market

Date

Stock price
index 2/

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

Stock market customer credit
Bank
Customers
debit bal- loans to
ances 1*/ "others" 5/

Total

(Millions of dollars)
1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
June
July
Aug. 1
Aug. 8
Aug. 15 e/

26.5U
22.95
35.98
21.93
1*5-89
35.28
to.6k

(1/2)
(9/18)
(12/31)
(1/8)
(12/9)
(l/ll*)
(8/3)

1*9.08
39.1*8
1*8.05
1*0.37

(7/12)
(12/20)
(8/8)
(1/10)

1*3.22 (1/20)

1*1*.75
1*5.98
1*7.1*9
1*8.05
1*7.50

2.5
0.9
3.7
1.1*
lt.6
1.5
3.1
1.5
1*.2
1.1*
3.8
1.7
2.7
3.2
3.8
3.7
2.9

5.38
6.25
1*.32
5.82
U.08
!*.!*!
3.82
l*.3l*
3.91
1*. 72
3.71*
1*,58

2,1*55
2,055
3,1*36
2,1*05
1*,030
3,537
l*,0l*7
3,911*
1**031
3,576
l*,25l
3,551*

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82
3,020
2,1*87

780
661*
" 1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163
1,051*
1,317
1,051

1*.07
3.97
3.81*
3.71*
3.79

1*,226
l*,25i
n.a.
n.a.
n.a.

2,929
3,020
n.a.
n.a.
n.a.

1,297
1,231
1,231
1,199
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19l*l-l*3"10. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Friday's data only.
2/ Averages of daily trading volume on the New York Stock Exchange.
J/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. Yields shown are for dates
on which price index reached its high or low. "
i±/ 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.
£/ 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 banks 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 E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1958
January
February
March
April
May
June
July
August
September

New capital
Corporate 1/
State and local 2/
1
1956
1
1957
1958
1
1956
1
1957

723
.

J i b /
l.Uil
600
. 891
e/1,150
e/600

October
November
December
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

3,135
2,622

5,757

1,060
1,065
1,320

573
712
817

765
1,153

818 1,146
841-

1,003
921*
973 .

1,063
651
. 838

1,090
789
1,076

1,088

3,445
3,119
2,899
2,951

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

6,59k
9,U93
12,447

7,^63
10,381

au
i s
798

IU
E/627
e/300

2,276
2,213

4,489

742
572
506

404
696
390

765
546
393

378
490
735

529
584
431

408
206
357

698
633
#8

63?
347
409

1,820
1,704
1,544
2,029
3,524
5,069
7,099

.

1,490
1,603
971
1,395
4,064
5,459

Excluding finance companies %/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

2,89k
e/2,572

Year
~~

3,237
2,889
2,582
2,810
11,518

1,647
2, Shi
2,2h6
2,826
9,260

e/ Estimated.
g/ Preliminary.
1/ Securities and Exchange Commission estimates of net proceeds.
2/ 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.
3/ Includes $718.3 million AT&T convertible debenture issue. •
4/ Includes $571.5 million AT&T common stock issue.
5/ Total new capital issues excluding offerings of sales and consumer i'inance
companies.




^ Exhibit F

H.lU,

Other Security Offerings 1/
(In millions of dollars)
Long-term
Federal agency 3/
Foreign government 2/
19^5
I
1 9 # " ^ 195b
I
1957
I
1935"
January
February
March

196
53

April..
May
June

139
198
120

'

8U
h9
30

37

123
1*8
1*2

50

July
August
September

28
7
30

October*
November
December

1*
60
1

Year

507

8

1,163
251

72

523

125

60

95
2
39

109
215

• --

1*1*
5
21

100

300

169

572

Short-term
State and local government h/
January
February'
"March

60

Federal agency 3/

233
160
273

326
1*55
11*7

196
357
21*9

371
208
11*1*

6#
1*30
505

380
220
283

357
32k
£/26U

205
337
153

125
252
176

.209
161
329

#6
1*60
501

323
31k
260

July
August'
September

272
272
252

" 195
207
179

601

221*
370
512

222
U25
273

October
November
December

303
9h
159

29h
328
11*8

.1,236
255
116

U07
222
128

3,271

2,706

5,5U3

3,1*57

vApril
May
June

Year

e/ Estimated.
2/ Preliminary.
1/ Data presented in this exhibit differ from those In Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in moro than one year.
2/ Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission.
J / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
ij/ FRASER
Principally tax and bond anticipation notes, warrants or certificates and Public
Digitized for
Housing Authority notes. In some instances PHA notes included may have a somewhat
http://fraser.stlouisfed.org/
longer term than one year. Source: Bond Buyer.

Federal Reserve Bank of St. Louis

Exhibit G

H.ll]

Large Long-term Public Security Issues for New Capital
(Other than U. 5. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Corporate

Month

1957 - July
August
September
October
November
December
1958 - January
February
March
April
May

State and
local government

22li
266
133
393
3UU
J4OU
I4IO
553
182
300
505
195
275

525
526
537
571
i|20
399.
318,
#5
1,093
725
356
281
771

July

Other 2/

25
21*5
15k
1,357
266
-

653
161*
86
hi

Large Individual Issues Offered August 1 through 15

Issuer

Type y

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

Rating

CORPORATE
Consolidated Nat. Gas Co.

S.F. deb.

1*5.0

1983

h 3/8

it.30

STATE AND LOCAL GOVERNMENT
Philadelphia Sch. D±st.,Pa.
G.O.
Rev.-Rent.
Georgia Rural Rds. Auth.

12.0
21.0

1960-83
3.28
1960-79/68 3.72

l.W-3.50^A
1.70-3.70 A

None
1/ Includes corporate and other security offerings of *15 million and over;
State and local government security offerings of %H0 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-gtiaranteed issues by Federal agencies.
2/ In the case of State and local government securities, G.O., denotes general
obligationsj R e v . r U t . , revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilities; Rev.-S.T.,
revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,revenue bonds
secured solely by lease payments.
h / The 3.50 per cent yield is for the 1981-82 maturities. The 1/lts of 1 9 8 3
were
Digitized for reoffered
FRASER to yield L.00 per cent.



H.lU

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

Date of
computation

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

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

Subsequent to
date shown
State and
Corporate local govt. Other 2/

370
526
578
576
158
383
378
498
1,123
555
356
266
768
161

415
811
8^5
647
815
1,193
1,161
1,378 1,208
670
561
1»6U
1,018
381

153
218
183
33b
339
363
345
370
134
298
493
177
225
55

25
30
30
18
150
110
150
. 36
—

U79
U71
379
551
543
558
564
487
341
330
493
208
235
125

25
30
15
45
63
165
110
150
36
—

Forthcoming Large Offerings, as of August 1$

'

Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Houston Corp.
Public Service Electric & Gas Co.
Southern California Edison Co.
Universal-Cyclops Steel Corp.
Montana Power Co.
Commerce Oil Refining Corp.
Standard Oil Co. of California
Martin Co.

Deb. & common stk.
36.2
1st ref. mtg. bds.
60.0
1st ref. mtg. bds.
50.0
S.F. deb.
22.5
1st mtg. bds.
20.0
Deb., bds. & common 45*0
Deb.
150.0.
S.F. deb.
25.0

Aug. 19
Aug. 21
Aug. 26
Aug. 27
Aug. 27
1958
1958
1958

STATE AND LOCAL GOVERNMENT
Los Angeles, California
New York, New York
Detroit, Michigan
San Carlos, California
Indiana State Office Bldg. Comm.
San Diego Unif. Sch. Dist., Calif.
State of Ohio
State of.California
Chesapeake Bay Ferry Comm.

OTHER
http://fraser.stlouisfed.org/
None
Federal Reserve Bank of St. Louis

G.O.
G.O.
Rev.
G.O.
Rev.
G.O.
Rev.-S.T.
G.O.
Rev.-Ut.

• 21.5
32.4
10.6
10.7
30.0
10.0
30.0
50.0
144.0

Aug. 19
Aug. 26
Aug. 26
August
Sept. 9
Sept. 10
Sept. 18
Oct. 22
October

H.llt

H-2

*—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of *10 million and over.
2/ Includes foreign government and International Bank for Reconstruction, and
Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None..




H.lU

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
A-rated ojFfering yields
Aa-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
seasoned yields
(per cent) (basis points) (per cent) (basis points)

Date

1952 - 1957
High
Low

5.00(8/11/57)
2.93(3/31/51)

1958 - January
February
March U
5
6
. 1 2
.
19
21
25
April 1
2
17
23
29
May 7
13
15
16
20
21
22
28
June 10
17
25
. July 2
9
18
23

.

*3.60
3.892/

!
j
1

5.50(11/7/57)
3.00(3/17/51)

87
-3
-8
22

U.15 . .
1.22
LOO
LOO

lilt
50
28
26

L05
3.98
Loo

31
23
25

-

3.75

5

3.90

21

3.85
3.85

16
16

3.85
3.82
3.95

17
12
2U

Loo

25
29

3.96^/
U.07
U.25

123
-15
3
9
6

U.07

-7

3.98

5

LOU
Loo

11
3

U.07
U.35

U
32

LOO
3.95

-1
-6

-

.

3.98^

1

L352/

31

Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey e/ E^ccept 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/ Provides for 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 issues have no such provision.