Full text of H.16 Capital Market Developments : August 4, 1958

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DECONTROLLED AFTER SIX MONTHS

'

L.

'

August U, 1958.

H.lli
CAPITAL MARKET DEVELOPMENTS

The volume of new public security financing was small last week
and will continue to be so this week. Subscription rights expired on
two large corporate issues with proceeds of $U6 million.last week, and
a $U0 million State and local government bond issue was sold. This week
two large State and local.government issues totaling $33.million are
. scheduled for sale, while no large corporate issues are expected.
Bond yields T Yields on all types of bonds increased last week;
the increase was slight for corporate and Baa-rated State and local
government bonds, but sharp for U. S. Government and Aaa-rated State
and local bonds. Highrgrade bond yields are currently at the highest
level in over six months and well above the lows established this spring;
yields on U. S. Government bonds are the highest since late November 1957,
yields on Aaa-rated corporate bonds the highest since the last week of
December, and high grade municipal yields the highest.since early January.
In contrast, lower-grade State and local government bond yields, while
20 basis points above their spring low, are still 9 basis points below
• the early January level, and yields on'Baa-rated corporate bonds only
slightly above their early July low and W basis points lower than at
the first,of the year.
August financing - The volume of new security financing in
August is expected to be much smaller than last month, and well below
that of August 19^7, when the usual summer lull in financing did not
occur.
Corporate security financing is estimated at $600 million,
only slightly more than one-half that of July and one-third smaller than
a year ago. The calendar of large public offerings currently totals only
$160 million.
August sales of State and local government bonds are expected
to amount to $300 million, nearly 50 per cent less than last month and in
August 1957.
Stock prices - Common stock prices increased sharply again last week
in continued heavy trading volume„.- Standard and Poor's price index closed
at h7.k9, a new high for the year.. Stock prices have risen in each of the
past six weeks.
More detailed information 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

CORPORATE Aao

lv

\

i I i I/ W

\ U . S. GOVERNMENT/

I

.

STATE AND LOCAL
GOVERNMENT Aoo

LOWER - GRADE BOND YIELDS




CORPORATE Boo

-I—STAT

D LOCAL GOVT. Bai

Exhibit B

H.lU

Tables for Exhibit A
High-grade Bond Yields
Corporate
Aaa \J

U. S. Govt,
long-term 2/

1953 - High
1954 - Low
1957 - High
1958 - High.
Low

3.42 (6/19
2.85 (4/23)
ii.lU (9/27)
3.71 (8/1)
3.55 (5/2)

3.19
2.15
3.76
3.Wt
3.07

July It
July 11
July 18 July 25
Aug.. 12/

3.62
3.63
3.67
3.70
3.71

3.31
3.39
3.38
3.4U

State and
local govt.
Aaa y

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

(Per cent)
(-6/5)
(8/6)
(10/18)
(8/1)
(4/25)

3.26

2.73 (6/25)
1.90(9/2)
3.1*5 (8/29)
2.86 (1/9)
2.6k (5/1)

.38
.30
.60
.51
.27

.83
.30
.U7
.62
.34

2.78
2.78
2.78
2.78
2.8b

.36
.32
.28
.32
.27

.52
.62
.60
.60

M

Lower-grade Bond Yields

fete

Corporate
Baa 1/

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953 - High
1954 - Low
1957 - High
1958 - High
Low

3.89 (9/18)
3.44 (12/31)
5.10 (11/29)
1.96 (1/3)
U.51 (7/11)

3.79
2.93
4.51
3.92
3.61i

July
July
July
July
Aug.

4.53
4.51
4.52
4.55
4.56

3.81
3.85
3.83
3.82
3.83

h
11
18
25
1%/

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

.69
. .52
1.27
1.28
.85

1.21
.96
1.21
1.11
.99

.91
.88
.85
.85
.85

1.06
1.07
1.05
1.0k
.99

£/ Preliminary.
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.
y Thursday figures. Only general obligations bonds are included; average term
is 20 years.
Note.—Highs and lows are for individual series and may be on different dates for
different series.




EXHIBIT C

STOCK MARKET

r:t:

i. vJ..




Exhibit D
Table for Exhibit C
Stock Market

Date

Stock price
index 1/

Common
Stock market customer credit
Trading
stock
Customers' Bank
volume 2/
(millions yields V
Total debit bal- loans to
ances 1*/ "others" 5/
of shares) (per cent)
(Millions of dollars)

26. Sh (1/2)

1953 - High
Low ,
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

1*7.1*9 (8/1)
1*0.37 (1/10)

3.8
1.7

May
June
July 18
July 25
Aug. lg/

1*3.70
1*1*. 75
1*5.77
1*6:97
1*7.1*9

2.6

22.95
35.98
21.93
U5.89
35.28

2.5
0.9

(9/18)
(12/31)
(1/8)
(12/9)
(1/lU) 1.5

8

1*9.61* (8/3)

1*3.22 (1/20)

%

1*9.08 (7/12) 1*.2
39.1*8 (12/20) 1.1*

2.7
3.1
3.7
3.8

2,1*55

s

5.82

1*.08

1*.1*1

3.82
1*.3U

23/

$
2,li05
u,030
3,537
U.Oltf
3.91U

3.81*

1*,226

1*.58

3,551*

1*.17
1*.07
3.98

1*,069

3.88

3.81*

1*,226

n.a.
ri.a.
n.a.

1,665
1,311*
1^653
2,805
2,517
2,823
2,71*0
2,887
2,1*82
2,929
2,1*87
2,856
2,929

780

661*
1,01*8
71*6
1,21*1

1,018
1,26?
1,155

!:SS
1,317
1,051
1,213
1,297
,1,291*
1,251
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
. prices, 191*1-1*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.
2/ 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.
h/ 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

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

723

1,060
1,065
1,320

573
712
817

£/l,12U
E/621I
e/800

931
76 5
-l,li53

818
1,11*6
81*1

July
August
September

1,003
921*
973

1,063
651*
838

October
November
December

1,090
789
1,076

1,088

3,135
e/2,5U8

3,1*1*5
3,U9
2,899
2,951*

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

e/5,683

6,59k
9,1*93
12,1*1*7

7^63
10,381*

January
February
March
April
May

1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

812
953
511

71*2
572
506

1*01*
696
390

797
871
fi/532

765
5U6
393

378
1*90
735

|8§

529
581*
1*31

1*08
206
357

698
633
698

3
U09

2,276
JD/2,2QO

1,820
1,701*
1,5W*
2,029

1.U9Q
1,603
971
1,395

EA,1*?6

3,521*
5,069
7,099

3,093
li,06U
S,US9

Excluding finance companies
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

Year

2,891
e/2,1*98

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

1,61*7
2,51*1
2,2li6
2,826 .
9,260

e/ Estimated.
_
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.
G/ Includes $571.5 million AT&T common stock issue;
Total new capital issues excluding offerings of sales and consumer finance
companies.




,

11. I l l

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-term
Federal agency 3/
Foreign government 2/
1958
I
1957
I
195b
1
1957
I
1956

January
February
March

196
53

6h
1*9
30

37

April
May
June

139
197

123
1*8
1*2

50

8

1,163
251

72

523

125

28
7
30

—

215

October
November
December

1*
60
1

1*1*
5
21

100

2
39

109

300

507

April
May .

233.
1460
273
s
p/26h

326
1*55
11*7
205
337
153

July
August
September

272
272
252

October
November
December

=8

Year

169

572

Short-1
State and local government h/
January
February
March

60

60

95

July
August
September

Year

1955"

Federal agency 3/

196
' 357
2li9

371s
208
11*1*

638
loo
505

380
220
283

125
252
176

161

209

336
1*69
501

323
311*.
260

195
207
179

221;
370
512

222
1*25
273

29k

1,238
255

1*07
222
128

.

328

1*59

.11*8

3,27k

2,706

329

116

5,5U3 '

3,1*57

e/ Estimated.
jg/ 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 more 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 Commissionj short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing
Authority notes. In some instances PHA notes included may have a somewhat

longer term than one year. Source: Bond buyer.



11. li*

Exhibit Q
Lar^e Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

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

State and
local government

877
525
526
537
571
1|20
399
318
605
1,093
725
356
281

Other 2/

99

81
22U
266
133
393
3I4U
UOU
iao
553
182
300
505
195

25

2U5
75
100
1,378
266
653
165
86

Large Individual Issues Offered during July

Issuer

Type y

Coupon
Amount
Offering
(millions
Maturity
yield
net
interof
dollars)
est cost

Rating

CORPORATE
Florida Power Corp.
1st mtg. bds. 25.0
1988
Northern Ind. Pub. Sv. Co. Com. stk.
15.2
Pacific Gas & Elec. Co.
Com. stk.
w a
N. Y. Telephone Co.
Ref. mtg. bds. 65.0
1993
New Eng. Tel. & Tel. Co.
Com. stk.
22.6
Southern Nat. Gas Co.
S.F. deb.
30.0 . 1978
Boston Edison Co.
Pfd. stk.
1st coll. tr. 22.0
1988
Southern Railway Co. .
S.F. deb.
140.0
Boeing Airplane Co.
1978
S.F. deb.
300.0
United States Steel Corp.
1983
Com. stk.
Pacific Lighting Corp.
16.3 S.F. deb.
25.0
1983
Burroughs Corp.
1988
1st mtg. bds. I5.O
Washington Wtr. Pwr. Co.
Nat. Gas Pipeline Co.
Conv. deb,
1978
of America
35.0
Nat. Gas Pipeline Co.
Pfd. stk.
15.0
of America




14 1/8

3.98

A

k 1/8

U.00

h 1/2

li.50

Baa

k 1/2

U.50
$.12
3.97

A
Baa
Aa

U 3/8
U 3/8

li.38
U.35

A
A

k 3/U

U.83

Baa

$
k

% %

-

V

H.1U •

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

Issuer

Type 3/

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

CORPORATE (Cont'd)
Boeing Airplane Co.
Burroughs Corp.

Conv. sub. deb. 30.6
Com. stk.
•15.0

1980

h 1/2 1i.50

Ba

STATE AND LOCAL GOVERNMENT
Penna. Gen. State Auth.
Met. San. Dist. ,of Chicago
Illinois
Memphis, Tennessee
Los Angeles Dept. of Wtr.
and Pwr;, California
State of North Carolina
State of Ohio
Territory of Hawaii
State of California
Los Angeles Sch. Dists.,
California

Rev.-S.T.

30.0

1960-8V68

3o3h ' 1.30-3.50

Rev.-Ut.
Rev.-Ut.

15.0
10.0

1960-78
1960-88/68

3.03
3.09

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

21.0
15.0
31.0
12.5
100.0

1.25-3.20
1.25-3.25

A
Aa

1959-88/61 3.30
1960-78
2.76
2.88
1959-72
1960-87/66 U.15
1960-8k/79 2o3h

1.00-3.50 Aa .
1.20-2.90 Aa
.90-3.05 Aa
2.00-1:.25, , A
1.20-3-350/ Aa

liO.O

1959-83

3.38

1.00-3.50

h1.0

Oct. 1959

1 3A

1.90

OTHER
Federal Land Banks

Loan bds.

~

1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development Issues and non-guaranteed issues by Federal agencies.
3j In the case of State and local government securities, G.0=, denotes general
obligations; Rev.-Ut., 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. .
k/ The 3-35 per cent yield is for the 1983 maturity0 The l's of I98I4.
were offered to yield 3.75 per cent.




11. Ill
Forthcoming Large Long-teim Public Security Offerings for New Capital*
(Other than U. S. Treasuiy) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
1957 - June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
1958 - 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/
370
526
578
#6
. ii58383
378
1*98
1,123
555
356
266
768
- 161

153
218
183
33k
3#
363
3k 5
370
•13k
298
193
177
225
55

25
30
30
18
150
110
150
36
—
—

Subsequent to
date shown
State and
Corporate local govt. Other.
1*79
1*71
379
551
51*3
#8
561*
1*87
31*1
330
1*93
208
235
125

U5
811
81*5
61*7
815
1,193
1,161
1,378
1,208
670
561
1*61*
1,01*8
381

25
30
15
1*5
63
165
110
150
36

Forthcoming Large Offerings, as of August 1
Type

Amount
Approximate dat<
(millions
of offering
of dollars)

CORPORATE
Montana Power Co.
Consolidated Natural Gas Co.
Houston Corp.
Public Service Electric & Gas Co.
Commerce Oil Refining Corp.
Standard Oil Co. of California
Harbin Co.
STATE AND LOCAL GOVERNMENT
Philadelphia, Pennsylvania
Georgia Rural Roads Auth.
Los Angeles, California
State of Indiana




1st mtg. bds.
S.F. deb.
Deb. & common stk.
1st ref. mtg. bds.
Deb., bds. & common
Deb.
S.F. deb.

20.0
1*5.0
36.2
60.0
1*5.0
150.0
25.0

Aug. 13
Aug. ll*
Aug. 15
Aug. 21
1958
1958
1958

12.0
21.0
21.5
30.0

Aug I 5
Aug. 5
Aug. 19
Sept. 9

'
G.O.
Rev.-Ut.
G.O.
Rev.

H.lU

H-2
Forthcoming Large Offering, as of August 1 (Cont'd)

Issuer

Type

Amount
(millions
of dollars)

Approximate date
of offering

STATE AND LOCAL GOVERNMENT (Cont'd)
San Diego Unif. Sch. Dist., Calife
*State of Ohio

GoOo
Rev.

10.0
30.0

Sept. 10
Sept. 17

None
*—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 issues: None.




H.Ik

Exhibit I

1

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A l/
A-rated oj["ferine yields
Amount above
Amount above
Actual
seasoned yields
Actual
seasoned yields
(per cent) (basis points) (per cent) (basis points)
Aa-rated <

Date
1952 - 1957
High
Low
1958 - January
February
March U
5
6
12
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

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

87
-3

*3.60
3.892/

-8
22

Ll5
U.22
LOO
li.00

Wi
50
28
26

U.05
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
2h

it. 00

25

H 8

5.50(11/7/57)
3.00(3/17/51)
3.962/
U.07
li.25

U.07

3
9
6

-7

3.98

5

• it. Oli
LOO

11
3

ii.07
ii.35

h
32

Loo
3.95

-1
-6

3.98%/
2?

123
-15

L35

1
31

*—Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey. Except 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.