Full text of H.16 Capital Market Developments : December 26, 1957
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Not for Publication DECONTROLLED AFTER SIX.MONTHS December 26, 1957 CAPITAL MARKET DEVELOPMENTS Large.public security offerings for new capital during the week ending December 20 totaled $288 million f o r corporations ( a l l of i t representing the expiration of rights to the Standard Oil of New Jersey common stock) and $78 million for State and l o c a l governments. There are no large corporate issues scheduled for sale t h i s week, and the only large State and l o c a l government issue i s the $250 million issue of the Chelan County Public U t i l i t y Dist r i c t #1, Washington. I t was sold Tuesday to underwriters at a net i n t e r e s t cost of approximately 5«20 per cent. The 55-year i s s u e , which bore a coupon of 5 per cent and i s nonrefundable for twenty years, was quickly oversubscribed when offered by underwriters at par. In subsequent trading, the issue was bid at about lOlt, a y i e l d of about U.80 per cent. Bond y i e l d s - Bond y i e l d s declined sharply further l a s t week and, except for corporate Baa-rated bonds, a l l y i e l d s are within 11 basis points of the y e a r ' s low. Stock prices - Stock prices as measured by Standard and Poor's index of 500 common stocks declined l a s t week, closing at 39 «U8 on Friday. More detailed information concerning recent c a p i t a l market developments i s presented in the attached e x h i b i t . 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. HIGH-GRADE BOND YIELDS J . S . G o v t . , long-term 2 / Corporate Aaa 1 / Old s e r i e s New s e r i e s Spread between U. S. Govt. S t a t e and l o c a l govt, ( o l d s e r i e s ) and C o r p o r a t e l S t a t e and Aaa 3 / Aaa I l o c a l Aaa (Per c e n t ) ' 1953 - . H i g h Low 195L - High Low 1955 - High Low 1956 - High Low 1957 - High Low 3.12 2.99 3.09 2.65 3.17 2.91 3.79 3.07 L.lh November November December December December k.06 22 29 6 13 20 (6/19) (1/9) (1/8) (L/23) (12/23) (1/7) (12/28) (3/2) (9/27) 3.66 (b/12) h.02 3.97 3.81 3.77 3.15 ( 6 / 6 ) n.a. 2.78 (12/26) n.a. 2.7k ( 1 / 9 ) n.a. 2.hh ( 8 / 7 ) n.a. 2.91(8/5) 3 . 0 3 ( 8 / 5 2.62 ( 1 / 7 ) 2.89 ( 6 / 1 0 ) 3.19 (12/21)3.39 (12/28) 2.80 ( 2 / 1 7 ) 2.92 ( 2 / 3 ) ^e 3.a 3.U0 3.18 3.29 averages of d a i l y f i g u r e s . 3 / Thursday f i g u r e s . ter 1.98 (1/8) 2.21 (6/10) 1.90 ( 9 / 2 ) i:» 3 . 0 5 (12/27) 2.17 (2/23) 3.87 (10/18)3.66 (10/18) 3.L5 (8/29) 2.76 (2/21) 3.15 (2/8) 3.22 (2/8) n.a.--Not available. l / Weekly average of d a i l y f i g u r e s years, 2.73 (6/25) 3.23 3.16 3.03" 2.9k 2.66 s .38 s. s .13 •65 .56 .59 .59 .30 .61 .29 5 .32 .27 .28 .29 .31 .32 Average term of bonds included i s 25-26 The old s e r i e s i n c l u d e s f u l l y t a x a b l e , Only g e n e r a l o b l i g a t i o n bonds a r e i n c l u d e d , average ™ N o t e . - - H i g h s 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 d a t e s for different series. EXHIBIT B LOWER - GRADE BOND YIELDS -v y 7% CORPORATE Bac ) LOCAL GOVT. Baa A; 1 Th STATE AND LOCAL C Corporate Baa 1 / State and l o c a l govt. Baa 2 / State and l o c a l govt, rev. y (Per cent) 3.89 (9/18) 3.50 (1/2) 3.74 (1/8) 3'Uh (12/31) 3.63 (12/30) 3.145 ( I / I k ) U.kl (12/28) 3.58 ( 3 / 9 ) 5.10 (11/29) U.U2 (it/12) 5.09 5.10 5.09 5.06 5.00 3.79 2.96 3.32 2.93 3.26 3.02 a.22 3.20 U.51 (6/25) (1/8) (1/7) (8/5) (12/29) (1/6) ' (12/27) (3/8) (8/29) 3.90 (2/21) 3.27 (6/26) 2.71 3.00 2.72 2.99 2.76 3.98 2.89 3.98 3.70 (1/2) (1/1) (8/13) (12/30) (1/7) (12/28) (2/21) (1/W (2/22) it. 37 h.25 b.lk It.03 3.92 1 / Weekly average of daily f i g u r e s . A v e r a g e term of bonds included i s 25-26 years. J\J Thursday f i g u r e s . Only general obligation bonds are i n cluded; average term i s 20 years: 3/ Friday f i g u r e s . Average rating of bonds included i s between Baa and A; average term i s 20 years. h/ Series discontinued, as of March 15. 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 f o r d i f f e r e n t s e r i e s . .STOCK MARKET Date Stock price index 1 / Common Trading volume 2 / (millions yields 2 / of shares) (per cent) Stock market customer c r e d i t Customers' debit b a l - loans to ances 4/ "others" 5 / (Millions of d o l l a r s ) 1956 - High Low 1957 - High Low 26.54 22.95 35.98 2k.93 15.89 35.28 49.64 43.22 49.08 39.48 October November December 6 December 13 December 20 40.43 40.35 41.31 40.73 39.48 1953 - High Low 1954 - High Low 1955 - High (1/2) (9/18) (12/31) (1/8) (12/9) (1/11*) (8/3) (1/20) (7/12) (12/20) . 2.5 0.9 3.7 1.4 4.6 1.5 3.1 1.5 4.2 1.4 6.25 5.38 5.32 4.32 4.42 3.64 4.35 3.82 4.72 3.91 2.8 2.5 4.60 4.62 4.53 4.59 4.72 2.3 2.6 . 2,455 2,055 3.436 2,405 4,030 3,537 4,047 3,914 4,031 3,577 1,665 1,314 2,388 1,653 2,805 • 2,517 2.82J 2,740 2,887 2,517 3,643 3,577 n.a. 2,568 2,517 n.a. 780 664 1,048 746 1,241 1,018 • 1,267 1,155 1,163 1,054 1,075 1,060 1,054 1,064 , available. 1/ Standard and Poor's composite Index of $00 common stocks, weekly closing p r i c e s , 1941-43-10. Monthly data are averages of d a i l y f i g u r e s r a t h e r than of Fridays' only. Highs and lows a r e f o r Friday's data only. 2/ Averages of daily trading volume on the New York Stock Lxchange. J3/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. 4 / End of month figures f o r member firms of the New York Stock Exchange which carry margin accounts} excludes balances secured by U.S. Government obligations. y Wednesday f i g u r e s f o r weekly reporting member banks. Excludes loans f o r purchasing or carrying U.S. Government s e c u r i t i e s a t banks in New York and Chicago. Weekly reporting banks account f o r about 70 per cent of loans to others. For f u r t h e r d e t a i l see Bulletin. 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. Exhibit D H.lh Corporate and State and l o c a l Government Security Offerings and Placements (In m i l l i o n s of d o l l a r s ) New capital 1955 1957 State arnJ loc 1 1956 1 January February "arch 1,063 1,071 l,3bb 573 712 817 535 1,07 1,223 7h2 572 506 bub 6s 6 390 312 538 April May 92b 771 1,U89 818 1,116 81,1 1.78 666 687 5b6 395 376 190 735 1.27 350 61i? 991 91b 973 1,063 651, 838 597 61,b 670 529 58b 1,30 1,06 206 357 1,70 21,9 bo6 695 621 e/600 639 31,7 bo? 919 658 1.08 1,820 1,706 1,51,3 e/1,916 1,1,90 l,6u3 971 1,395 1,365 1,1,16 1,12b 1,98b IS 1957 Corporate 1 1956 | 3,093 b,o6b 5,1,59 2,802 3,927 5,911 . October November December 1,01b e/900 e/T,000 ! > / ' 1,088 1,162-/ 632 900 1st 2nd 3rd bth 3,b79 3,18k 2,878 e/2,9lb 2,102 2,805 2,556 2,922 2,165 2,052 1,911 2,695 a,907 7,1.63 10,38b b,2l6 6,127 8,821 ouarter quarter Quarter Quarter 1 s t half Three quarters Year ' 1st 2nd 3rd bth. Year quarter Quarter quarter ouarter Ill July August September Excluding finance companies h / 3,268 2,921 2,560 e/2,76U 1,61,7 2,5bl 2,21.6 2,826 1,727 1,870 1,1, ill 2,5bb e/11,516 9,259 7,595 e / Estimated. ' ~ 1 / Data through June 1956 are Bond Buyer data c l a s s i f i e d as new c a p i t a l by Federal Reserve; l a t e r data are from the Investment Bankers Association of America and are somewhat more complete as to coverage than the e a r l i e r data, p a r t i c u l a r l y f o r Federal Government loans. 2 / Includes #637.2 million AT&T convertible debenture issue . 3 / Includes $571.5 m i l l i o n AT&T common stock issue . t / 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 consumer finance companies. Note.—Details may not add t o t o t a l s due to rounding. H.lli Exhibit E Large Public Security Issues f o r New Capital (Other than U. S. Treasury) 1/ I ' Proceeds of Large Issues Offered ( M i l l i o n s of d o l l a r s ) Month Corporate 1956 - November December 1957 - January February March . April / May June July August September October November State and l o c a l government 701 U30 567 671 788 U77 329 877 525 -526 537 57k h20 Other 2 / 135 201 386 306 19U 199 2U8 176 265 357 185 135 386 100 50 125 25 39 25 30 75 Large Individual Issues Offered December 1 through 20 Issuer Type y Amount Coupon rate or (millions Offering Maturity of net i n t e r - ! y i e l d dollars) est cost Rating CORPORATE Virginia Elec. & Pwr. Co. Northern Natural Gas Co. Chesapeake & Potomac T e l . Co. of Maryland Commonwealth Oil R e f i n i n g N a t ' l . Cylinder Gas Co. Standard O i l Co. of N. J . lst&ref.mtg.bds.20.0 S.F. deb, 25.0 1987 1977 U 1/2 U 5/8 U.U7 U.63 - Deb. 30.0 Conv. sub.deb, , 18.5 Conv. sub.deb, . 17.5 Common s t k . 288.2 1993 1972 1977 h 1/8 6 5 1/8 3.98 6.uu 5.13 Aa A Aaa Ba STATE'. AND LOCAL GOVERNMENT Akron, Ohio Los Angeles Sch. D i s t s . , Calif. Indianapolis, Ind. S t a t e . o f Ohio Water r e v . G.O. G.O. G.O. 5.0 1959-78 15.0 1959-83" 5 . 1 " 1960-89 25.0 1958-77/67 3.36 2.5u-3.no A 3.19 2.91 2.65 2.35-3.25 2.25-3.00 2.UU-2.70 Aa Aaa Aaa. H.lii E-2 Large Individual Issues Offered December 1 through 20 (Cont'd) Issuer Type 3 / Coupon Amount Offering (millions Maturity Rating net i n t e r - y i e l d of dollars) e s t cost STATE AMD LOCAL GOVERNMENT (Continued) Greater Baton Rouge Port Comm., Louisiana Pergen Co., New Jersey Phoenix, Arizona S t a t e of Texas Minneapolis and S t . Paul M e t . Airport Comm., Minn. Atlanta, Georgia Mobile, Alabama Richmond, Virginia Chicago Bd. of Educ., 111. He v . 19.h G.O. 7.2 V;tr. rev, , 16.0 0.0. 12.5 1960-77/67 1959-82 1959-87/68 1966-86/67 3.36 2.70 3.51 2.70 2.60-3.1iU 2.10-2.80 2.50-3.50 2.1,0-2.70 Eaa Aa A Aa G.O. 13.0 G.O. 15.0 Wtr. rev.. 6.0 6.8 G.O. 0.0. 25.0 1961-88/73 1958-86 1961-91/68 1959-78 1960-77 2.79 2.96 3.93 ,2.1,8 3.07 ?.??-?.90 2.U0-2.90 2.90-li.00 2.00-2.50 2.50-3.10 Aa Aa Baa Aaa A OTHER None __ _ of Cl'j> million 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 ^ud over. 7 j Includes foreign government and I n t e r n a t i o n a l pank 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 {eneral o b l i g a t i o n s ; Pev., revenue bonds; G.R., genera] o b l i g a t i o n s a d d i t i o n a l ] y 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. H.lli Exhibit F Forthcoming Large Public Security Offerings for New Capital (Other than U.S. Treasury) 1 / Expected Proceeds from Forthcoming Large Issues Date of computation 1956 - Nov. 30 Dec. 31 1957 - Jan. 31 Feb. 28 Mar.. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 During month following date shown Corporate State and Other 2 / local govt. U36 176 591 710 L61 187 525 370 526 578 576 158 383 I48 280 153 153 290 179 97 172 252 2U3 370 369 387 23 100 35 25 25 25 30 30 18 Subsequent to date shown Corporate State and Other 2/ l o c a l govt. 181 796 966 795 186 258 525 L15 811 8U5 617 815 1,193 979 763 6U8 631 862 396 388 1*98 5Hi 1*39 587 573 589 . 23 100 35 25 25 25 30 15 15 63 Forthcoming Large Offerings, as of December 20 type Amount Approximate date (millions of dollars) of offering CORPORATE Washington Water Power Company ^Connecticut Lt. & Pwr. Co. Commerce Oil Refining Corp. Commerce Oil Refining Corp. W e s t Virginia Pulp & Paper Co. ^Indiana & Michigan Electric Co. American Telephone & Telegraph Co. Commercial Credit Co. Natural Gas Pipeline Co. of- America 1 s t mtg. bds. : 1st mtg. bds. 1st mtg. bds. Sub. deb. & common Deb. 1st mtg. bds. Conv. deb. Notes 1st mtg. bds. 20.0 30.0 25.0 20.0 lO.O 25.0 720.0 50.0 ItO.O Jan. 10 Jan. 10 Jan. Jan. Jan. Jan. March 12 (rights expire) Winter Winter STATE AND LOCAL GOVERNMENT Chelan Co. Pub. Ut. D'ist., No.1,Wash University of Minnesota *Minneapolis-St. Paul Met. Airport Comm., Minn. Rev. Rev. 250.0 5.0 Dec. 2h Dec. 30 G.O. 13.0 Dec. 30 Forthcoming Large Offerings, as of December 20 (Cont'd) Issuer Type Amount Approximate date (millions of o f f e r i n g of d o l l a r s ) STATE AND LOCAL GOVERNMENT (Cont'd) Caddo Parish Sch. D i s t . , La. Los Angeles, C a l i f o r n i a Dade Co., Florida *Des Moines Ind. Sch. D i s t . , Iowa S t a t e of New York *New York, New York State of North Carolina. Penna. State Highway & Bridge Auth. State of C a l i f o r n i a ^Florida State Board of Education Los Angeles, C a l i f o r n i a East Baton Rouge Par. S.D. N o . l , La. Denver, Colorado W i c h i t a , Kansas School D i s t . , No. 1 New York State Thruway Auth. State of Missouri Pennsylvania Turnpike Commission Inter-American Center Auth., F l a . G.O. G.O. G.O. G.O. G.O. G.O. G.O. Rev. G.O. G.O. Water r e v . G.O. Water r e v . G.O. Rev. G.O. Rev. Rev. ' 7.5 25.0 Hi.5 5.7 37.5 25.5 10.0 20.0 i5o.o 7.9 9.0 10.0 20.0 5.0 Uo.o 30.0 62.0 20.0 Jan. 7 Jan. 7 . Jan. 8 Jan. 9 " Jan. lU Jan. 15 Jan. 16 Jan. 17 Jan. 22 Jan. 28Jan. 29 Feb. a , Feb. 5 Feb. 6 Winter Winter Winter Winter OTHER I n t ' l . Bank f o r Reconstruction and Development Union of South Africa Bds. . Ext,, loan bds. 150.0 15.0 January Winter *—Included i n t a b l e f o r f i r s t •ime. 1 / Includes corporate and other i s s u e s of $15 m i l l i o n 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 . Note.—-Deletions for reasons other than s a l e of i s s u e : None.