Full text of H.16 Capital Market Developments : August 22, 1956

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/ A /

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

August 22, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of large publicly offered securities was
moderate during the week ending August 1?. One corporate bond
offering f o r $U0 million, one local government issue for $9 million and a $37 million Canadian issue were f l o a t e d l a s t week. The
calendar f o r the week aiding August 2hf indicates a substantial
volume of offerings. Three corporate debenture issues totaling
$133 million and two State and local offerings f o r $13 million are
scheduled for sale.
Postponements - Recently several additional postponements of scheduled offerings have been announced. The &20 million
debenture issue of General Acceptance Corporation, originally expected t h i s week, has been reduced to $10 million and postponed
u n t i l August 28. The Associates Investment Company's debenture
issue was reduced from $50 million to $30 million. On August 16,
the Consolidated Natural Gas Company announced withdrawal from
registration with the Securities and Exchange Commission of i t s
#30 million debenture issue which had been scheduled f o r sale l a t e r
t h i s month. The company stated t h a t i t would use previously a r ranged bank loans to finance i t s 1956 capital expenditures.
In the State and local government market, the Washington
Toll Bridge Authority on August 21 rejected the only bid, which
designated a U.50 per cent coupon,for i t s revenue bond issue of $5
million.
Bond yields - Yields on a l l types.of outstanding bonds
continued to increase sharply l a s t week, establishing new highs
f o r the year in every category.
On August 22, Pacific Telephone & Telegraph Company's
new Aa-rated debenture issue f o r $78 million was reoffered to yield
it.23 per cent, 50 basis points higher than the yield on a similar
new offering by AT&T on July 11.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, declined moderately l a s t week, closing a t
291.it on August 17. Daily figures through Wednesday of t h i s week
indicate a sharp decline in prices, bringing them back to the levels
of early July.
More detailed information concerning recent capital market
developments i s presented in the attached exhibits.

Business Finance and Capital Markets Section,
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 BOND YIELDS

CORPORATE

YJ
\

U. S. GOVERNMENT - A /

V

STATE ANP LOCAL
GOVERNMENT Aon

. a . Oovt., long-term
series

New s e r i e s

S t a t e and
l o c a l govt
Aaa 3 /

Spread between
0 . S . Govt.
( o l d a e r i e s ) and
C o r p o r a t e ( S t a t e and
Aaa
l l o c a l Aaa

iE' ill61
IlliMlI
SB lit ill

.81*

2.21 (6/10)

a

3.28

3.02
3.06
3.09
3.1U

3.U2

1/ Weekly average o t d a i l y f i g u r e s .

-r
tora

SrXVJirS:

3.05
3.10

• 3U

a

.13

.1*5

1

2.U1
2.U5
2.147
2.53

Average t e r n of Bonos included i s

- *<*«.=«,

=nd lows a r e 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 d a t e s

for different series.




LOWER-GRADE

BOND

YIELDS

I

I

Per cent per annum

I

STATE AND LOCAL GOVT. Baa
/\
I Moody's |
• I

STATE AND LOCAL GOVT. REVENUE

Date

Corporate
Baa V

State and
local govt.
Baa 2/

State and
local govt,
rev. 3 /

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low

3.89
3.50
3.7k
3.kk
3.63
3.U5
3.9U
3.58

July 20
July 27
August 3
August 10
August 17

3.79
3.82
3.85
3.90
3.9k

(9A8)
(1/2)
(1/8)
(12/31)
(12/30)
(1/lU)
(8/17)
(3/9)

.

8 ! 8 8

3.27
2.71
3.00
2.72
2.99
2.76
3.31
2.89

3.35
3.37
3.12
3.U6
3.5U

3.08
3.11
3.16
3.22
3.31

3-7? (6/25)
2.96 ( 1 / 8 )
3.26
3.02
3.5U
3.20

(12/29)
(1/6)
(8/16)
(3/8)

(6/26)
(1/2)
(1/1)
(8A3)
(12/30)
(1/7)
(8/16)
(2/2li)

inclucfed is 25-26 years.
J
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.
Ifote.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock price
index 1/

(millions yields j /
of shares) (per cent)

Stock market customer credit.
Customers'
Total debit
"others" 5 /
(Minions of dollars)

1953 - High
Lor
195U - High
Loir
-1955 - High
Low
1956 - High
Low

August 10
August 17

167.1
lto.O
221.lt
156.5
270.7
217.1.
295*5
257.U

(1/2)
(9/16)
(12/31)
(1/6)
(12/30)
(1M)
(8/3)
d/20)

275-5
290.1
295.5
293-3.
' 291.1.

1,665

2.5
0.9
3.7
1.1.
U.6
1.5
3.1
1.6

5.75
5.15
5.33
It. 20
lt.22
3.78
It. 21
3.86

2,Wt5
^ 2,055
3,k36
2,lt05
U,0J0
3,537
3*991

2,388
1,653
2,805
2,517
2,810
2,71*0

1.8

lt.01
3.87

It,009
It,026

2,786
2,812

2.3
2.3
1.8

1,M

780
66lt
1,01,8

7U6

1,21a
1,018
1,267
1,201*
1,223
l,211t
1,211
l,20lt

n.a.—Not available#
V SEC Index of 265 common atocka, weekly closing prices, 1939-100; converted
to 1957-U9-100 by Federal Reserve. The conversion factor i s 123*91*
2 / Averages of dally trading volume on the New York Stock Exchange.
~y
Moody's 200 common atocka; end of month f i g u r e s .
%/ End of month figures f o r member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by 0. S. Government obligations.
$f Wednesday figures for weekly reporting member banks. Excludes loans for
purchasing or carrying 0. S. Government securities a t banks in New Tork and Chicago.
Weekly reporting banks account f o r about 72 per cent of loans to others.
Note.—Highs and lows are f o r individual series and may be on d i f f e r e n t dates
for different series.




H.lk '

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

1956
.January
February
March
April
May
June
July
August.
September

kok
696
390

535
312
538

396
kll
565

886
687

h78

k97'
656
8U2

377
k90
e/730

127
350
6 la

73k
7k8
853

597
6a
670

909
• 335

e/380
e/200

k06

k70
2h9

279
261
6 h9

1,162 y
632
900

1,003
"290
60k

919
658
406 .

59k
k23
877

2,165 ,
2,052
1,911
2,695
8,821

1,608
1,995
1,991
1,896
7,1*90

1,223

816
l,lkk
830
e/1,120 "
e/oOO;

2,073
2,790

195 U

5k7
k 26
635

535

#9
70k
790

October
November
December
1st quarter
2nd quarter
3rd .quarter
"Uth quarter
Year

New ca p i t a l
State and lot :al
Corporate
1955" i
1
1955
T
1955 T • 1954
.

ho?

7h7

1,190
e/1,597

1,385
1,248
1,12k
1,98k
5,911

1,372
2,33k
1,188
1,89k
6,789

Excluding finance companies _2/
1st quarter
2nd quarter
3rd quarter
kth quarter
Year

1,617
e/2,590-

1,727
1,870
l,k3k
2,55k
7,569

-

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

e/ Estimated.
1/ Includes $637.2 million AT&T convertible debenture issue.
2/ Total new capital issues excluding offerings of sales and personal finance
companies.
Note.—Details may not add to t o t a l s due to rounding.




Exhibit E

H.lU

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

Month

State and
local government

101
1*05
328
805
221
263
95 .
212
278
395
623
185
592

1955 - July
August
September
October
November
December
1916 - January
February
March
April
May
June
July

Other 2/

278
65
23U
716
iiOl
227
192

25
50

hhh

'

• —

163
157
233
1|63
16U

50
20

Large Individual Issues Offered August 1 through August 10
Issuer

.

Type

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

CORPORATE
El Paso Natural.Gas Co.
Consumers Power Co.

Pfd. stk.
1st mtg. bds,

25.0
UO.O

1986

G.O.

9.3

1957-81

Deb.

36.5

j.9U

Aaa

STATE & LOCAL GOVERNMENT
Suffolk Co., New York

2.95

2.00-3.00

A

1961-86 u-h 1/8

1.90-2.22

A

OTHER
Metropolitan Toronto

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 f o r Reconstruction and
Development issues.
3/ In the case of State and local government s e c u r i t i e s , G.O. denotes general
^obligation; Rev., revenue bonds; G.R., general obligations additionally secured
by f a c i l i t i e s revenues; L.L., limited l i a b i l i t y obligations secured by pledge of
designated revenues.




K.11*

Exhibit F

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
State and
Corporate
Other 2 /
l o c a l govt.

Date of
computation
1955 - July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30Apr. 30
May 31
June 30
July 31

1*07
222
805
202
215
70
176
123
380
568
198
1*37
21*7

100
181*
81*3
330
205
121
327
220
132
173
332
81

50
——
—

37

Subsequent t o
date shown
State and
Corporate
Other 2/
l o c a l govt.
1,135
920
909
1*12
230
85
376
233
1,013
818
14*8
567
1,096

2,018
1,971
2,205
1,650
756
618
917
785
811
832
91*1
690
726

50
•ww

37

Forthcoming Large O f f e r i n g s , as of August 17
Issuer

Type

Amount
Approximate date
(millions
of o f f e r i n g
of dollars)

CORPORATE
P a c i f i c Telephone & Telegraph Co.
Minneapolis-Honeywell Co.
Associates Investment Co.
Mack Trucks, Inc.
Gulf S t a t e s U t i l i t i e s Co.
^General Telephone Co. of C a l i f .
Northern States Power CoDetroit Edison Co.

Deb.
S.F. deb.
. Deb. '
S.F. deb.

78.0
25.0
30.0
19.2

1st.mtg. bds.
1 s t mtg. bds.
1st mtg. bds.
Conv. deb.

15.0
20.0
15.0
59.8

Worth American Aviation, Inc.

Cap. s t k .

1*0.0

New England Tel. & Tel. Co.

Cap. s t k .

18.9

American Tel. & Tel. Co.'3/

Common s t k .

575.0

,J. P. Stevens & Co.

S.F. deb.




28.7

August 22
August 22
August 23
August 30
( r i g h t s expire)
September 10
September 10
September 12
September ll*
( r i g h t s expire)
September 2l*
( r i g h t s expire)
September- 28
( r i g h t s expire)
November 5
( r i g h t s expire)
1956

H.lU

F-2
Forthcoming Large Offerings, as of August 17 (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of offering
of dollars)

CORPORATE (Cont'd)
CIT Financial Corp.
P a c i f i c Finance Corp.
Michigan Wisconsin Pipe Line Co.
Southern Calif. Edison Co.
Commercial Credit Co.

Deb.
Deb.
1 s t mtg. bds.
1st mtg. bds.
Notes

75.0
25.0
25.0
liO.O
50.0

1956
1956
1956
1956
1956

G.O.
G.O.
G.O.
. G.O.
G.O.
Rev.
Elec. rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
G.O.

7.0
6.k
12.0

August 21
August 23
August 28
September 11
September 18
September
September
Fall
Fall
1956
1956
1956
1956
1956
1956

STATE AND LOCAL GOVERNMENT
State of Delaware
-K-Yonkers, New York
Chicago, 111., Park D i s t r i c t
Oakland Unified School D i s t . , Calif,
•frios Angeles School D i s t s . , Calif.
Jacksonville Expressway Authority
Memphis, Tennessee
Washington State Toll Bridge Auth.
Florida State Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New Jersey Highway Authority
New York State Thruway Authority

10.0

29.0
1*2.0
135.0
5.U
185.0

65.0

62.0
227.0
70.0
25.0
50.0

OTHER

*—Included in table f o r f i r s t time.
1/ Includes coiporate and other issues of $15 million and over; State and
l o c a l government issues of $5 million and over.
2/ Includes foreign government and International Bank f o r Reconstruction
and Development issues.
3/ Subject to stockholders' approval on September 5, 1956.