Full text of H.16 Capital Market Developments : August 4, 1955

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Not f o r Publication
H.lii

DECONTROLLED AFTER SIX"MONTHS

August U, 1955

CAPITAL MARKET DEVELOPMENTS
S t a t e and l o c a l governments offered 67 million d o l l a r s
. of l a r g e s e c u r i t y issues, and a manufacturing company f l o a t e d 35
million d o l l a r s of sinking fund debentures during the week ending
July 29. The volume of large issues i n t h i s week's t o t a l of newc a p i t a l i s bO m i l l i o n d o l l a r s and includes a common stock i s s u e ,
subscription r i g h t s f o r which expire August
August estimates - The corporate estimate f o r the volume
of new c a p i t a l i n August i s 650 m i l l i o n d o l l a r s , almost twice as
large as the t o t a l in the same month l a s t y e a r . About m e - t h i r d
of t h e proceeds w i l l come frcm the General Motors Acceptance Corporation 200 m i l l i o n d o l l a r debenture i s s u e , which i s scheduled
f o r f l o t a t i o n on August 17. Pacific Telephone and Telegraph w i l l
o f f e r 67 million d o l l a r s of debentures, and a t l e a s t four large
common stock issues are expected during the f i r s t half of the month.
The August volume of S t a t e and l o c a l government i s s u e s i s estimated a t 300 million d o l l a r s , the smallest monthly volume
since August 195h. This i s l a r g e l y because t h e volume of large
• i s s u e s expected f o r o f f e r i n g during the month was smaller a t the
beginning of August than at any time i n the l a s t twelve months.
Bond y i e l d s r i s e - Yields on outstanding high-grade bonds
rose t o 1955 highs during the week ending July 29—corporate Aaa
y i e l d s increased two basis p o i n t s , and y i e l d s cn U. S. Government
long-term obligations and S t a t e and l o c a l government Aaa bonds i n creased four and t h r e e b a s i s points r e s p e c t i v e l y . These y i e l d s are
the highest since mid-January 19$h f o r corporates, since September
1953 f o r U. S. Governments, and since October 1953 f o r S t a t e and
l o c a l Governments.
Lower-grade bond y i e l d s also reached new highs f o r 1955*
Yields on corporate Baa and S t a t e and l o c a l government Baa bonds
rose one b a s i s point each, and State and l o c a l government revenue
yields increased t h r e e basis points l a s t week.
Daily f i g u r e s indicate some f u r t h e r increase during the
f i r s t p a r t of t h i s week f o r the corporate and Treasury bond y i e l d s .
Stock p r i c e s reach new high - The SEC index of 265 common
stocks r o s e s l i g h t l y t o a new high of 259.9 during the week ending
July .29. A sharp drop occurred on August 1, but sane small gains
were indicated by d a i l y indexes on Tuesday and Wednesday of t h i s
week.
. Here d e t a i l e d information concerning recent c a p i t a l market developments w i l l be found in t h e attached e x h i b i t s .
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
Weekly

Per cent p e r a n n u m

V-V

1952

Date

1953

Corporate
Aaa y

1954

U. S . Govt.
long-term 2 /

1955

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

(Per cent)

1955 - High
Low-

3.03
2.91
3.12
2.99
3.09
2.85
3.07
2.91

July
July
July
July
July

3.05
3.05
3.05
3.05
3.07

1952 - Higfr
Low
1953 - High
Low
1954 - High

1
8
15
22
29

(1/ii)
(2/15)
(6/19)
(1/9)
(1/8)
(4/23)
(7/29)
(1/7)

.

2.79
2.56
3.15
2.78
2.74
2.44
2.94
2.62

(12/27)
(5/17)
(6/6)
(12/26)
(1/9)
(8/7)
(7/29)
(1/7)

2.81
2.82
2.83
2.90
2.94

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

.2.00
1.65
2.73
1.98
2.21
1.90
2.27
2.05
2.lit
2.19
2.23
2.24
2.27

(10/23)
(5/D
(6/25)
(1/8)
(6/10)
(9/2)
(7/28)
(5/26)

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

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

.24
.23
,22
.15
.13

.67
.63
.60
.66
.67

Average term of bonds included i s 25-26

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 t o f i r s t c a l l
of bends included i s 13-14 y e a r s .
3 / Thursday f i g u r e s . Only general obligation bonds are included; average
term i s 20 y e a r s .
"
Note.—Highs 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
for d i f f e r e n t s e r i e s .




10WE1-6IADE BON» YIILIS
Weekly

;

!

\ STATE A N D LOCAL GOVT.

\

,

-

Meed,'.

,

STATE A N D LOCAL GOVT. REVENUE

Corporate
Baa y

State and
l o c a l govt.
Baa 2 /

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

(Per cent)
1952 - High
1953 - Higfr
1954 - Higfc
Loir
1 9 # - Higfr
Loir

July 1

July
July
July
July

8
15
22
29

3.63
3.48
3.89
3.50
3.74
3. a
3.53
3.45
3.51
3.51

33
3.53

(1/4)
(5/16)
(9/18)
(1/2)
(1/8)
(12/31)
(7/29)
(1/14)

2.98 (10/23)
2.48 (4/17)
3.79 (6/25)

2.96 (1/8)

3.32 (1/7)
2.93 (8/5)
3.18 (7/28)

3.02 (1/6)
3.11
3.14
3.17
3.17
3.18

2.69
2.27
3.27
2.71

(12/15)
(4/25)
(6/26)
(1/2)

3.00 (1/1)

2.72 (8/13)
2.90 (7/29)
2.76 (1/7)

2.8k
2.84

2.84
2.87
2.90

.

E

Weekly average of d a i l y f i g u r e s . Average term of bonds
d i s 25-26 years.
2 / Thursday f i g u r e s . Only general obligation bonds are
included; average term i s 20 years.
3 / Friday f i g u r e s . Average rating of bends included i s
between Baa and Aj average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on 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 .




Bate

Stock price
index 1 /

Trading
Common
volume 2 /
(millions yields 3 /
of shares) (per cent)

Stock market customer credit
Customers1
debit bal- loans to
ances 4 / "others" 5 /

Total

(Millions of dollars)
1952 - High
Lew
1953 - High
195it - High
1955 - High
Low
May
July 15
July 22
July 29

165.3
151.7
167.1
144.0
221.4
156.5
259.9
217.4

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

233.3
244.5
256.8
259.1
259.9

2.0
0.9
2.5
0.9
3.7
1.4
4.6
2.0

5.77
. 5.13
5.75
5.15
• 5.33
4.20
4.22
3.87

2.2
2.7
2.3
2.3
2.2

4.14
3.87

1,986
1,804
2,445
2,055
3,436.
2,405
3,872
3,537

1,332
1,241
1,665
1,314
2,388
1,653
2,712
2,517

3,787 - 2,684
3,872
2,712

656
552
780
664
1,048
746
1,174
1,018
1,103
l,l6o 1,169 ;
1,174

n . a . Not available.
V SEC index of 26$ common stocks, weekly closing prices, 1939=100; converted
to 19u7-49-100 by Federal Reserve. The conversion factor i? 123.91.
2 / Averages of daily trading volume on the New York "Stock Exchange.
3 / Moody's 200 common stocks; end of month figures.
5 / End of month figures for menber 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 member banks. Excludes a l l loans
for purchasing or carrying U. S. Governments for 1952; since 1953 cnly these loans
at banks in New York and Chicago are excluded. Weekly reporting banks account for
about 72 per cent of loans to others.
Note.—Highs and lews are for individual series and may be on different dates
for different s e r i e s .




Exhibit D
Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of d o l l a r s )

1955

1

Corporate
1952:
1

. Net / c a p i t a l
1953

1955

January
February
March

S&6
H36
1,261

547
426
6#

s
666

535
312
538

April
May
June

e/500
e/900
E/675

497
656
842

779
675
1,123

427
e/350
e/630

July
August
September

e/hOO
e/650

909
335
747

483
325
753

e/460
e/300

October '
November
December
1st quarter
2nd q u a r t e r
3rd quarter
4th quarter
Tear

1,003
290
60k

577
429
1,438 y

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

2,243
e/2,075

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

S t a t e and l o c a l
1
1954
1
396

%

1953
390
360
426

3
853

329
64 9
434

279
261
649

519
259
475

594
423
877

453
408
774

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

1,176
1,412
1,253
1,63.6
5,477

Excluding f i n a n c e companies 2 /
1st quarter
2nd q u a r t e r
3rd quarter
4th 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 / T o t a l netr c a p i t a l i s s u e s e x c l u d i n g o f f e r i n g s of s a l e s and p e r s o n a l f i n a n c e
companies.
e / Estimated.
N o t e . — D e t a i l s may n o t add t o t o t a l s due t o r o u n d i n g .




H«lii

Exhibit E
Large Public Security Issues f o r New Capital
(Other than U. S, Treasury) 1/
Proceeds of Large Issues Offered
(ilillions of d o l l a r s )
Month

Corporate

19$k - July
August
September
October
November
December
1955 - January
February
March
April
May
June
July

State and
l o c a l government

Itll
75
36U
1*33
0
121
1U
63
750
175
m
182
101

92
86
455
#8
268
689
31+1
107
337
238
. 152
409
278

Other 2/

30
35

V

:

15
.—

Large Individual Issues Offered during July
Issuer

Type 3 /

A; neurit
Coupon
(miHions
r a t e or
Offering
Maturity
Rating
of
net i n t e r yield
dollars)
est cost

CORPORATE
I l l i n o i s B e l l Tel. Co.
1st mtgebds.
Texas Eastern Transmission Pfd. stock
P a c i f i c Finance
Deb,
Container Corp0 of America
SF deb.

30.0
16.0
20.0
35*0

1995

3 1/4

3.17

1965
1980

3 1/2
3.30

3.56
3.30

Aaa
••

A

STATE AND LOCAL GOVERM.ENT
Tulsa, Oklahoma
Alabama Highway Authority
L o u i s v i l l e , Kentucky
Pierce Co., Washington,
Tacoma School-District
State of Ohio
Public Housing Authorities




G.O.
Rev.
Rev.

5.4
15.0
8.0

1958-80
1957-75
1960-84

2.6?
2.73
2 .44

1.80-3.05
1.60-2.80
1.75-2.60

A
A
. Aaa

G.O.
L.L.

8.3
52.0

1957-75
1956-72

2.59
2.31

1.60-2.85
1.25-2.35

A
Aa

121.5

1956-96

2.55

1.20-2.70

Aaa

—

Holii

E-2
Large Individual Issues Offered during July (Cont'd)

Issuer

Type 3 /

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

STATE AMD ' LOCAL GOVERNMENT
"(Cont'd)
Chicago^ I l l i n o i s
Los Angeles, C a l i f .
Norfolk, Virginia
Denver, Colorado

G.O.
G.O.
G.O.
G.O.

25.3
25.0
5oO

12.0

1956-75
1956-80
1956-80
1956-75

2.45
2 49
2.63

2.16

1.30-2.55
1.30-2.55
1,35-2o75
1.25-2.25

A
Aa
A
Aa

OTHER

~y
Includes corporate and other security o f f e r i n g s of 15 million d 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 i n g s of.5 million and over.
2/ Includes foreign 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 / In 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 gene r a l obligation; Rev., revenue bonds; G.R., general obligations 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., limited l i a b i l i t y obligations secured
by pledge of designated revenues.




H.14

Exhibit :

- Forthcoming Largo Public Security Offerings f o r New C a p i t a l
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During mouth f o l i a t i n g
date shmn
State and other 2J/
l o c a l govt-

Date of
computation

Corporate

195k - July 30
Aug. 31
Sept. 30
Oct. 29
Nov. 30
Dec. 31
1 9 # - Jan. 31
Feb. 28
Bar. 31
Apr. 29
May 31
June 30
July 29

100
33k
3k3
15
9k
*18U
16
710
211
k2$
160
67
k07

•5k
300
383
136
661
5&7
682
52k
208
lib
339
3 kh
100

Subsequent t o
date shown
S t a t e and other 2 /
Corporate
l o c a l govt a
j
303
608

30

135/
2146
216
422
1,395
922
1,12:1
850
830
1,135

1,553

1,876

2,158

30
30
35

2,682
2,ia

1,961

1,978
2,009
1,917

1,861

1,815

2,018

Forthcoming Large Offerings, as of July 29
Issuer

!

Type

Amount
(millions Approximate date
of offering
of d o l l a r s )

CORPORATE
Consumer Power
Goodyear Tire and Rubber
"."e stern Union Telegraph
American Natural Gas
•^-General Motors Acceptance Corp.
P a c i f i c Telephone and Telegraph
S t . Louis-San Francisco Railway
*Utah Power and Light
American Telephone and Telegraph
Southern C a l i f o r n i a Gas
Freedom Insurance Company

Common stock
Common stock
Common stock
Common stock
Deb,
Deb.
1st mtg. bds.
1st mtg. bds.
Conv. deb.
Bonds
Common stock

16.9
L5.6
20.7
37.0
. 200.0
67.0
19,5
15(0
650.9
1*0,0
22.0

August 5
August 8
August 8
August 12
August 17
August 23
August 2k
September 13
1955
1955
1955

STATE AND LCCAL GOVERNLSNT
Calcasieu Parish, Louisiana
Llobile, Alabama
Fairfax County, Virginia
•^Springfield, Ohio




j

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

8.2
liu5
7.1
5.8

August
August
August
August

3
3
10
11

H.m

F-2
Forthcoming Large Offerings, as of July 29 (Cont'd)
Issuer

Type

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

•STATE AND LOCAL GOVERMTSKT (Cont'd)
*Cdok County, I l l i n o i s
Los Angeles, C a l i f o r n i a
Chicago, I l l i n o i s , B d . o f Education
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 Authority
S t a t e of Louisiana
I l l i n o i s Turnpike Authority
Texas Turnpike Company
California Toll Bridge Authority
•^Louisiana Turnpike Commission
C a l i f o r n i a Toll Bridge Authority
*Nen York State Thrmmy Authority
^-Oklahoma Turnpike Authority
Washington State Toll Bridge Auth.

G,0.

Rev.
Rev.
Rev.
Rev. .
n.a.
Rev.
Rev.
Rev.
Rev.
Rev.
G.R.
Rev.
Rev.

40.0
12 oO
12.5
18.0
67.5
100.0
60.0
186.0
80.0
390.0
lil-OaO
235.0
100.0
43.0
125.0
146.0
227.0

August 16
August 23
August 2k
September
September
Summer
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955
1956

OTHER
None
1/ Includes corporate and other issues of 15 m i l l i o n d o l l a r s and over; State
and l o c a l government issues of 5 million 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«—Hot 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 time.