Full text of H.16 Capital Market Developments : December 15, 1955

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Not f o r P u b l i c a t i o n
DECONTROLLED AFTER SIX MONTHS
HolU

December 15> 1955
CAPITAL MARKET DEVELOPMENTS

The volume of l a r g e s e c u r i t y i s s u e s p u b l i c l y o f f e r e d f o r
new c a p i t a l was heavy during the week ending December 9# t o t a l i n g
$190 m i l l i o n f o r corporations —including proceeds of $100 m i l l i o n
from RCA s u b s c r i p t i o n debentures—and $10l|. m i l l i o n f o r S t a t e and
l o c a l governments. A corporate debenture i s s u e of $25 m i l l i o n ,
S t a t e and l o c a l government o f f e r i n g s with proceeds of $88 m i l l i o n ,
and a Quebec Hydro-Electric Commission f l o t a t i o n of $$0 m i l l i o n are
the l a r g e i s s u e s expected t h i s week.
Bond Yields - Yields on corporate Aaa and S t a t e and l o c a l
government Aaa and Baa outstanding bonds increased s l i g h t l y l a s t
week. Corporate Baa bond y i e l d s rose moderately, and y i e l d s on
S t a t e and l o c a l government revenue bonds jumped f i v e b a s i s p o i n t s .
Treasury o b l i g a t i o n y i e l d s remained unchanged.. Daily f i g u r e s r e f l e c t e d a s l i g h t r i s e on Tuesday of t h i s week i n the/ corporate Aaa,
Baa and U. S. Government s e r i e s .
As shown i n E x h i b i t G, y i e l d s on newly-offered 30-year
f i r s t mortgage e l e c t r i c power bonds with Aa-ratings rose somewhat
t o 12 b a s i s p o i n t s above y i e l d s on s i m i l a r l y r a t e d outstanding bonds
with s l i g h t l y s h o r t e r m a t u r i t y . The preceding week the spread between newly-offered and seasoned y i e l d s had been seven b a s i s p o i n t s .
Stock p r i c e s - Stock p r i c e s as measured by t h e SEC index
of 265 common s t o c k s , rose to 270.5, a new high, during t h e week
ending December 9* P r i c e s decreased g e n e r a l l y during t h e f i r s t
t h r e e days of t h i s week according to d a i l y indexes.
Stock market c r e d i t - Total stock market c r e d i t — n e t
d e b i t balances with brokers and "bank loans t o "others" —increased
$36 m i l l i o n during November to a l e v e l of $3.,9Ul m i l l i o n in cont r a s t t o a $22 m i l l i o n decrease i n October. Most of t h e increase
was i n bank l o a n s j customers' n e t d e b i t balances, excluding b a l ances secured by U. S. Government T securities, accounted f o r only
$10 m i l l i o n of the""$36 m i l l i o n r i s e i n November.
Money borrowed on s e c u r i t i e s other than U« S. Government
o b l i g a t i o n s by NYSE member f i r m s maintaining margin accounts i n creased $97 m i l l i o n ; about o n e - t h i r d of t h i s increased borrowing
was secured by customer c o l l a t e r a l . Customers' n e t f r e e c r e d i t
balances declined
million.
The t a b l e on the following page shows t h e s e and other
d a t a on stock market c r e d i t f o r October and .November.




H.lU

-2End of month
October |November|

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 to "others"
Net debit balances secured by U.S. Govt, s e c u r i t i e s
Bank loans to others f o r purchasing or carrying
U. S. Govt, s e c u r i t i e s
Broker and d e a l e r c r e d i t
Money borrowed except on U.S. Govt, s e c u r i t i e s
On customer c o l l a t e r a l
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}9hk
277U9
1,195
. i40

3,980
27W
1,221
38

+10
+26
-2

29

27

-2

2,088
1,711
71
920

2,182
1,71*1
75
876

+97
+30
+i*

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 i s presented in the 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.

#



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

CORPORATE A a a

\-V
GOVERNMENT

STATE AND LOCAL
GOVERNMENT A a a

Corporate
Aaa 1 /

Date

U. s . Govt',
long-term 2 /

Spread between
S t a t e and l o c a l .
U. S. Govt, and
g o v t . , Aaa ^
Corporate S t a t e and
Aaa
l o c a l Aaa
(Per cent) .

19$2. - High

1955 - High
Low

3.03
2.91
3.U2
2.99
3.09
2.85
3.11i
2.91

November
November
November
December
December

3.08
3.08
3.11
3.12
3.13

1953 - High
Low
195U - High

11
18
25
2
9

(1/10

(2/1$)
(6/19)
(1/9)
(1/8)
(U/23)
(9/9)
(1/7)

2.79
2.56
3.15
2.78
2.7L
2.a
2.91
2.62
2.83
2.86
2.88
2.88
2.88

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

2.00 (10/23)
1.65 (5/1) .
2.73 ( 6 / 2 5 )
1.98.(1/8)
2 . 2 1 (6/10)
1.90 ( 9 / 2 ) ;
2.3U ( 9 / 8 )
2.05 (5/26)

• 37
• 19
• 38
.19
•1*3
•32 .
• 3U
•13

2.19
2.19
2.21
2.27
2.28

.25
.22
.23
• 2li
•25

1.02
• 71
.8U
• 30
.61
• 29
• 70
-*5U
.6U
.67
.67
.61
.60

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 11-lit y e a r s .
3/ Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average
term Ts 20 y e a 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 d i f f e r e n t s e r i e s .




EXHIBIT B

LOWER-GRADE BOND YIELDS
Weekly

/ t~
\

1952

1953

Date

Corporate
Baa 1 /

STATE

1954

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

1955

State and
l o c a l govt,
rev. 3/

(Per cent)
1952- - High
1953 - High

3-63
3.18
3.89
3-50
3.71

(1/U)
(5/16)
(9/18)
(1/2)
(1/8)

2.98 (10/23)
2.U8 (U/17)
3.79 (6/25)
2.96 ( 1 / 8 )
3.32.(1/7)

195k - High
Low
1955 - High
Low

3.61 ( 1 2 / 9 )
3.U5 ( 1 / l U ) .

3-25 (12/8)
3.02(1/6)

November
November
November
December
December

3.58
3-58
3-59
3-59
3.61

3.19
3.19
3.20

11
18
25
2
9

3.UU (12/31)

2.93(8/5)

3.2k
3.25

2.69
2.27
3.27
2.71
3.00
2.72
2.97
2.76

(12/19)
(U/25)
(6/26)
(1/2)
(1/1)
(8/13)
(12/9)
(1/7)

2.86
2.86

2.88

2.92
2.97

1/ Weekly average of d a i l y f i g u r e s . Average term of bonds .
included i s 25-26 y e a r s .
2/ Thursday f i g u r e s . Only general o b l i g a t i o n bonds are
included; average terra i s 20 y e a r s .
3 / Friday f i g u r e s . Average rating of bonds included i s
between Baa and Aj average tern i s 20 y e a 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 f o r d i f f e r e n t s e r i e s .




STOCK MARKET

Date

Stock p r i c e
index 1 /

Common | Stock market customer c r e d i t
1 Trading
stock
Customers'
volume 2/
Total d e b i t b a l - loans to
1 (millions y i e l d s 3/
(of shares) (per cent)
ances V "others" 5 /
(Millions of d o l l a r s )

1952 - High
1953 - High
Low
195k - High
1955 - High
Low
October
November
November 25
December 2
December 9

165.3
151.7
167.1
lUt.O
221.1*
156.5
270.5
217.U

(12/26)
(10/21,)
(1/2)
(9/18)
(12/31)
(1/6)
(12/9)
(1/lW

250.1,
265.0
268.3
268.3

270.5

2.0
0.9
2.5
0.9
3.7

l.i,
U.6
1.5
2.0
2.3
2.2
2.5
2.6

1,986
1,801
2,10,5
2,055
3,1,36
2,1,05
3,537

1,332
l,21il
1,665 '
1,311,
2,388 .
1,653
2,605
2,517

U.12
1.09

3,9l,U

2,71,9

n.a.

n.a.

n.a.

5.77
5.13
5.75
5,15
_f.33

U.20
U.22
3.78

3,966

656
552
780
66k

1,01,8
71x6
1,221
1,018
1,195
1,221
1,217
1,221
n.a.

1 / SEC index of 265 common stocks, weekly closing p r i c e s , 1939=100; converted
to 19H7-ii9=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 the New York Stock Exchange.
3 / Moody's 200 common stocks; end of month f i g u r e s .
H/ End of month f i g u r e s f o r member firms of the 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 .
5/ Wednesday f i g u r e s f o 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
at banks i n New York and Chicago are excluded. Weekly reporting banks account f o r
about 72 per cent of loans to o t h e r s .
Note.—Highs and lows are for 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.




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

1955
J anuary
February
March .

P

1

Corporate
195U
1

New c a p i t a l

5t*6
136 '
1,261

51*7
1*26
635

623
623
666

April
May
June

U9U
903
697

197
#6
81*2

779
1 675
123

July
August
September

583
651*
680

909
335 7U7

October
November
December

1,138 y
e/680
e/925

1st quarter
2nd q u a r t e r
3rd q u a r t e r
l*th quarter
Year

2,2ll3
2,09k
1,917
e/2,71(5
e/9,000

1,608
1,995
1,991
1,896
7,U90

.

S t a t e and l o c a l
1
195U
1

1953

535
312
538

396
1*11
565

390
360
>26

1*27
350
61*1

73k
7U8
853

329
61*9
h3k

1*83
325
753

1*70
21*9
1*06

279
261
61*9

519
259
175

577
1*29
1,138

e/900
3/625
e/l*00

59L
123
877

1*53
1*08
771*

1,912
. 1,385
1,1*18
2,578
.1,561 /
1,12k
2,1*1*1* y e/1,925
e/5,850
8,1*95

1,372
2,33U
1,188
1,891*
6,789

>

1,003
290
60U

1955

1953
•

.

1,176
1,1*12
1,253
1,636
5,1*77 .

Excluding f i n a n c e companies 3/
1st quarter
2nd quarter
3rd quarter
l*th quarter
Year

1,791
1,912
1,IM
e/2,5U5
e/7,690

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

.

1,669
•1,991
1,223
2,3W*
7,227

e/ Estimated.
'
~~
'
1 / Includes $637*2 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
"2/ Includes #602.$ m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
3 / Total new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and personal finance
companies.
Note.—Details may not add to t o t a l s due to rounding.




H.lU

Exhibit E
Large Public S e c u r i t y Issues f o r New,Capital
(Other than U. S. Treasuiy) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )

. Month

Corporate

195k - October
November
December
1 9 # - January'
February
March
April
May

S t a t e and
l o c a l government
388
268
689
3ul
107
337
238
152
ho 3
278
. 65
23k
716
396

U33
0
121
Ihl
63
750
173
U63
175
101
Uo5
328
80$.
269

July
August
September
October
November

Other 2 /

30
35
15

25

Large I n d i v i d u a l Issues Offered December 1 through 9
Issuer

Type 3 /

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

CORPORATE
Conv. deb.
Radio Corp. of America
Consolidated Edison Co.
of New York
Ist&ref.bds.
Connecticut Light & Power 1st &ref. bds.

100.0

1980

3 1/2

3-35

Baa

70.0
20.0

- 1985
1985

3 3/8
3 1/ii

3.32
3.27

Aa .
Aaa

Rev.

lU.h

1956-05

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

12.6
20.0
6.8
50.0

STATE. & LOCAL GOVERNMENT
Pend O r e i l l e Co., Wash.
Onondaga Co. Water
Authority, New York
Los'Angeles, C a l i f o r n i a
Cook County, I l l i n o i s
New York Thruway
OTHER
None




-

1957-95
1957-81
1957-75
1985-95

n.a.

1.85-3.25

3-30
2.72
2.81
2.7k

2.00-3.35
1.80-2.75
2.00-2.80
2.60-2.75

Baa
Aa
A
Aaa

H.1U

E-2

n.a.—Not a v a i l a b l e .
1 / Includes corporate and other s e c u r i t y o f f e r i n g 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 s e c u r i t y o f f e r i n g s of
5 m i l l i o n and over.
2 / Includes foreign government and I n t e r n a t i o n a l Bank f o r Recons t r u c t i o n and Development i s s u e s .
3/ In t h e 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 j Rev., revenue bondsj 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.




Exhibit F

. H.1U

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) l /
Expected Proceeds from Forthcoming Large Issues
During month following
date shorn
Corporate

Date of
computation
195U - Nov. 30
.
.Dec. 31
1955 - Jan. 31
Feb. 28
Mar. 31
Jipr. 29
May 31
June 30
July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30

9h
m
16
710
211
1*25
160
67
1*07
222
80S
202
215

661
567
682
521*
208
116
339
3UU
100
181*
8ii3
330
305

30

50

Subsequent to
date shown
Corporate
21*6
216
122
1,395
922
1,11*1
850
.830
1,135
920
909
1*12
230

2,682
2,11*1*

1,961
1,978
2,009
1,917'

30
35

1,861

•1,81*5

2,018

1,971
2,205
1,650
756

50

Forthcoming Large Offerings, as of December 9
Mount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s ) |

Issuer

New Jersey Bell Telephone
Sheraton Corporation of America

Deb.
Deb.

15.0

25.0

December ll*
1956

Rev.
G.O.
G.O.

1*6.0
6.9
5.0

December 13
December 13
December 13

G.O.
G.O.
G.O.
n. a.

10.0
20.0
13-3
6.7
6.0
5.0
38.0
8.0
. 9-5
5.2
25.0

December 13
December ll*
December 19
January 5
January 10
January 10
January 10
January 10
January 17
January 17
1956

• STATE AND LOCAL GOVERNMENT
California Toll Bridge Authority
Milwaukee, Wisconsin
Newark, New J ersey
Long Beach Unified School D i s t r i c t ,
California
S t a t e of South Carolina
San Francisco, California
Wayne County, Michigan
^Allegheny County, Pennsylvania
*Tacoma, Washington
Los Angeles, California
State of Colorado
San Diego, California
^ S p r i n g f i e l d , Ohio
V Inter-American Center Auth., F l a .




Rev.
Rev.
n.a.
n.a.
Rev.

H.lZt

F-2
Forthcoming Large O f f e r i n g s , as of December 9 (Cont'd)

!

Issuer

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

Type

STATE-AND LOCAL GOVERNMENT (Cont'd)
Oklahoma Turnpike AuthorityPennsylvania Turnpike Commission
Washington S t a t e Toll Bridge Auth.
S a l t River P r o j e c t , Arizona
Connecticut Expressway

Rev.
Rev.
Rev.
n.a.
Rev.

.

65.0
62.0
227.0
11.0
100.0

1956
1956
1956
1956
1956

OTHER
Quebec Hydro-Electric Commission

SF deb.

50.0

December 13

*—Included i n t a b l e f o r f i r s t ime.
\ j 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 .




Exhibit G
Yields on Novf and Outstanding
E l e c t r i c Pow-ar Bends, Rated Aa and A 1 /

Date
1952 average

3.16

13

3.35

12

1953 average

346

16 •

3.78

26

1954 average

3.03

3

3.12

-3

3.19
3.01
*2.93
2.99
3.00
*3.00
None
None
3.02
3,03
None
None

6
-1
0
5
4
l

. *3.35
*3.20
3.05
3.10
3.14
3.14
*3.13
. 3.11
*3.10
.3.10
None
3.11

1951} - January
February
March
April
' May
"

Aa-rated o f f e r i n g y i e l d s
A-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
(per cent) seasoned y i e l d s (per c e n t ) seasoned y i e l d s
(basis points)
(basis points)

" July
August
September
October
November
December
1955 - January
February
March
April
May
June
July
August 31
September 14
21
October 19
20
27
November 30
December 7

3
3
—

13
7
8

*3.15
*3.14
*3.17
None
*3.22
*3.20
None

—

3.32
3.25

10
7

3.27

"

10-

7

•

2
-1
-10
-6 .
0
-2
-1
-1
-3
-2
0

None
*3.23
3.29
3.31
3.35
*3.30
None

—

3.57
3.50

30
23

3.25
3.30

-7
-4

—

9
14
16
lit
10

7
12

1/ Covers only 30-year f i r s t mortgage bonds, ac r e p o r t e d i n Moody's Bond
Survey. Except vihere i n d i c a t e d , the a c t u a l y i e l d f i g u r e and the amount above
seasoned y i e l d s a r e averages of o f f e r i n g s during t h e i n d i c a t e d p e r i o d and of
the d i f f e r e n c e s between t h e s e new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r the same day. The number of new i s s u e s included i n t h e
monthly averages v a r i e s from 2 t o It except f o r .October 1954 when 6 i s s u e s were
included. Average maturity f o r the seasoned i s s u e s v a r i e s from 26 t o 28 y e a r s .