Full text of H.16 Capital Market Developments : December 28, 1956

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Not f o r Publication DECONTROLLED AFTER SIX MONT^I
H.1J+

*

December 28,* 1956

. CAPITAL MARKET DEVELOPMENTS
Large public s e c u r i t y o f f e r i n g s l a s t week were limited
to two corporate issues t o t a l i n g $58 m i l l i o n . Both issues were
convertible debentures, and a f t e r expiration of subscription
r i g h t s both traded a t p r i c e s which s u b s t a n t i a l l y reduced the 4-50
per cent o f f e r i n g y i e l d . There were no large State and local
government o f f e r i n g s , nor are any l a r g e public issues—either
corporate or government—scheduled f o r the week between Christmas
and New Year's. The calendar for large issues early in 1957*
however, has continued t o expand s u b s t a n t i a l l y . This includes
announcement of a #100 m i l l i o n bond issue by the I n t e r n a t i o n a l
Bank for Reconstruction and Development, i t s f i r s t o f f e r i n g in the
American market since January, 195k*
Bond y i e l d s - Yields on a l l types of bonds, corporate
and government, reached new highs during the week ending December 21.
Corporate bonds and State and local Baa and revenue issues a l l
r e g i s t e r e d a 3 b a s i s - p o i n t increase* Increases were sharper for
U. S. Government long-term bonds while Aaa S t a t e and local
obligations showed l i t t l e change.
Stock prices - According to the SEC index of 265 common
stocks, stock p r i c e s declined by 1.2 points during the week to
276.2. Daily averages i n d i c a t e no significant- change through
Thrusday of t h i s week.
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 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

CORPORATE

STATE AND LOCAL
GOVERNMENT A a a

U. S. Govt., long-term 2/
Corporate
Aaa 1 /

Bite

Old s e r i e s

New s e r i e s

Spread between
S t a t e and
U. S. Govt,
local govt. (old s e r i e s ) and
Corporate I State and
Aaa 3/
Aaa
| local Aaa

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

(6/19)
(1/9)
(1/8)
(V23)
(12/23)
(1/7)
(12/21)
(3/&)

23
3.71
J>0 3-73
7 i 3.72
lU 3.72
21 1 3-76

3.15 (6/6)
2.78 (12/26)
2.74 (1/9)
2.UU(8/7)
2.94 ( 8 A )
2.62 (1/7)
3-49 (12/21)
2.80 (2/17)

2.73
1.98
2.21
1.90
3.03 (8/5)
2.3U
2.89 (6/10) 2.05
3.38 (12/21) 3.05
2.92 (2/3)
2.17

3-30
3.36
3J5
3.38
3-U9

3 #
3.33
3.33
3-34
3J8

1/ Weekly average of daily f i g u r e s .

n.a.

2.98
3.01
3.02
3.04
3.05

(6/25)
(1/8).
(6/10)
(9/2)
(9/8)
(5/26)
(12/20).
(2/23)

•38
.19
.43
.32
.34
.13
.a
.13

.81+
.30
.61
'29
•70
•54
.68
.32

M

.32
.35
•33
•34
•45

.37
.37
•34
.27

Average term of bonds included i s

2/ Weekly avera-es of daily f i g u r e s . The old s e r i e s includes f u l l y taxable,
marketable 2 l / 2 per cent bonds due o r " f i r s t c a l l a b l e a f t e r 12 years through
September 1955, and those due or c a l l a b l e in 10-12 years t h e r e a f t e r ; the average
term to f i r s t c a l l of the bonds included declined from 14 years in early 1953 to
11 1/2 years in early 1956. The new s e r i e s i s comprised of the 3 per cent bond
of 1995 and the 3 l / L per cent bond of 1978-83.
3 / Thursday f i g u r e s . Only general obligation bonds are included; average
term is 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 different series.
FRASER

Digitized for


EXHIBIT B

L O W E R - G R A D E BOND YIELDS

Corporate
Baa V

Date

S t a t e and
local govt.
Baa 2/

S t a t e and .
local govt,
rev. j /

(Per c e n t )
1953 - High
1954 - High
Low
1955 - High •
1956 - High
November
November
December
December
December

2$
30
7
14.
21

3.89 (9/18)
3.50 (1/2)
3 . 7 4 (1/8)
3.44 (12/31)
3.63 (12/30)
3.45 (1/14)
4.38 (12/21)
3.58(3/9)
4.26
4.30
4.32
4.35
4.38

3.79 (6/25)

2.96 (1/8)
3.32 (1/7)
2.93 (8/9)

3.26 (12/29)
3.02(1/6)

4.20 (12/20)
3.20(3/8)
4.09
4.12

:

4.15
4.17
4.20

3,27 (6/26)
2.71 (1/2)
3.00 ( 1 / 1 )
2.72 (8/15)
2.99 (12/30)
2.76 (1/7)
3.97 (12/21)
2.89 (2/%)
3.91
3-94
3-94
3.91
3.97

l / Y/eekly average o f d a i l y f i g u r e s . - Average term of bonds
included i s 25-26 years.
2 / Thursday f i g u r e s . Only g e n e r a l o b l i g a t i o n bonds are i n cluded; average terra i s 20 y e a r s .
Friday f i g u r e s . Average r a t i n g o f bonds i n c l u d e d i s
between Baa and A; average term i s 20 y e a r s .
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 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 l /

Trading
Common
volume 2 j
stock
(millions yields j /
of s h a r e s ) ( p e r c e n t )

S t o c k m a r k e t customer c r e d i t
Customers»
l o t . 1 debit b a l - loans to
a n c e s I j / " o t h e r s " 5/
( M i l l i o n s of d o l l a r s )

1955 - High
. Low
1956 - High Low

167.1
144.0
221.4
156.5
270.7
217.4
295.5
257.4

October
November
December 7
December ll+
December 21

275.7
273.1
279.2
277.4
276.2

1953 - High
1954 - High

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/14)
(%A)
(1/20)

2.5
0.9
3.7
1.4.
4.6
1.5
3.1
1.5

5-75
5.15
5-33
4.20
4-22
3.78
U.25
3.86

1.8
2.2
2J+
2.4
2.3

4.23

h.25

•

2,445
2,055
3,436
2,405
4,030
3.537
4,047
3,914

1,665
1,314
2,388
1,653
2,805
. 2,517
2,810
2,740

780
664
1,048
746
1,241
1,018
1,267
1,155

3,914
3,946

2,748
.2,784

1,166
1,162
1,158
1,155
n.a.

n.a.

n.a.

, l / SEC i n d e x of 265 common s t o c k s , w e e k l y c l o s i n g p r i c e s , 1939=100; c o n v e r t e d
t o 1947-49=100 by F e d e r a l R e s e r v e . The c o n v e r s i o n f a c t o r i s 1 2 3 . 9 1 .
2 / Averages of d a i l y t r a d i n g volume on t h e New York S t o c k Exchange.
2i/ Moody's 200 common s t o c k s ; end o f month f i g u r e s .
h j End of month f i g u r e s f o r member f i r m s of t h e New York S t o c k Exchange which
c a r r y margin a c c o u n t s ; e x c l u d e s b a l a n c e s s e c u r e d b y 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 r e p o r t i n g member b a n k s . E x c l u d e s l o a n s f o r
p u r c h a s i n g or. c a r r y i n g U. S . Government s e c u r i t i e s a t banks i n New York and C h i c a g o .
Weekly r e p o r t i n g banks a c c o u n t f o r a b o u t ? 2 p e r c e n t o f l o a n s t o o t h e r s .
N o t e . — H i g h s and lows a r e f b r i n d i v i d u a l s e r i e s and may b e on d i f f e r e n t d a t e s
for different series.




Exhibit D

H.Ik

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
(In m i l l i o n s of d o l l a r s )

1956
January
February
March

Corporate
1955
1

New c a p i t a l
1954

1956

S t a t e and l o c a l
1
1955
1

195a

579
70h
790

535
407
1,223

547
426
635

4o4
696
390

535
312
538

396
411565

April
May
June

816
1 , 144
830

478
886
687

497
656
842

377
490
735

427
350
641

734
748
853

July
August
September

1,066
669
836

597
644
670

909
335
747

376
199
333

470
249
406

279
261
649

, 778 2 /
e/1,050
e/1,100

1,162 ^
632
900

1,003
290
604

e/635
e/325
e/400

919
658
408

594
423
877

2,073
2,790
4,863
2,571
7,U3U
e/2,928
e/3L0,362

2,165
2,052
4,217
1,911
6,128
2,695
8,821

1,608
1,995
3,603
1,991
5,594
1,896
7,490

1,490
1,603
3,093
908
4,001
e/i,36o
; e/5,361

1,385
1,418
2,803
1,124
3,927
1,984
5,911

1,372
2,334
3,706
1,188
4,894
1,894
6,789

October
November
December
w'
1st quarter
2nd q u a r t e r
1st half
3rd q u a r t e r
Three q u a r t e r s
4th q u a r t e r
Year

,

Excluding f i n a n c e companies 3 /
1st quarter
2nd q u a r t e r
3rd q u a r t e r
4th q u a r t e r
Year

1,617
2,520
2,263
e/2,803
e/9,203

1,727
1,870
1,434
2,554
7,569

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

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 $571.5 m i l l i o n AT&T common stock 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 consumer f i n a n c e
companies.
Note.—Details may not add t o t o t a l s due to rounding.

•



HolU

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

Month

Corporate

3.955 - November
December
1956 - January
February
March
April
' May.

.

, -

J

f

July
August
September
October
November

S t a t e and
l o c a l government

221
263
95
212
2?8
395
62)
185
592
217
558
-386
701

Other 2 /

401
227
192
IM
163
157
233
U63
16U
35
18U
383
135

=

25
50

50
20
37
35

Large Individual Issues Offered December 1 through 21
Issuer

Type 3 /

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

CORPORATE
S i n c l a i r Oil Corp.
Chase Manhattan Bank
Michigan Bell Tel.
Long Island Lighting t o .
Public Service E l e c .
& Gas Co.
General- Telephone Corp.
Texas Eastern Transmission Corp.
F l o r i d a Power & Light Co.
Burroughs Corp.
National Cash Register Co.




Conv. sub.deb. I67.2
Cap. s t k .
1+7.0
Deb.
30.0
1st n t g . bds..20.0
Common s t k .
Common s t k .

31.2
31.1

Deb.
1 s t n t g . bds .
Conv.sab. deb.
Conv. sub. deb,,

30.0
15.0
30.2
28.2

1986

U 3/8

U.38

A

1991
1986

h 3/8
b ?A

4.25
4.58

Aaa
Aaa

5
4
U
4

5.50
U.30
U.50
U.50

Ba
Aa
Baa
Baa

1976
1986 '
' . 1981
1981

1/2
3/8
1/2
1/2

E-2
Large Individual Issues Offered December 1 through 21 (Cont'd)

Issuer

Type 3 /

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

STATE & LOCAL GOVERNMENT
Prince Georges Co., Md.
Maryland Sta te Roads
Commission
Milwaukee, Wisconsin
F l o r i d a S t a t e Board of
Education
Memphis, Tennessee

G.O.
G.O.
G.O.
L.L.
Elec. rev.

5 . 0 , 1957-81

1+.28

5.00-U.25

2.75-3*50, yAa
2.20-2.85-i' Aaa
5/
3.50-4.20

15.0
8 .it

1958-72
1957-76

3.60
2.81

163.2

1958-77
1963-92

3.79
U.kl

Baa

n.a,
A

None
n»a,—Not a v a i l a b l e .
•
l / Includes corporate and other s e c u r i t y o f f e r i n g s of 315 m i l l i o n 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 35 m i l l i o n and-over.
f
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 for 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 general
o b l i g a t i o n ; Rev., revenue bonds; 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; L.L., l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
designated revenues.
11/ P a r t not r o o f f e r e d .
5 / Not r e o f f e r e d .

#>



Exhibit F

H.lU

Forthcoming Large Public S e c u r i t y Offerings f o r New Capital
(Other than U. S. Treasury) l /
Expected Proceeds from Forthcoming Large Issues

Date of
computation

During month following
date shown
S t a t e and Other 2 /
Corporate
l o c a l govt.

1 9 5 5 - Nov. 3 0
Dec. 3 0
1 9 5 6 - Jan. 3 1
Feb. 2 9
Mar. 30
Apr. 3 0 .
May 31

,

215
•70
176
123
380

568
198

June 29
July 31
Aug. 3 1
S e p t . 28
Oct. 31
Nov. 30

437
247
369
315 .
683

436

205
121
327
220
132
173
332
81

50

.

230 '
85
376
233
1,013
818

1J48
37

131
359
162
48

Subsequent t o
date shown
S t a t e and
Corporate
l o c a l govt. Other 2 /

23

567
1,096
1,202
1,009
990
481

756
618
917
735
811
832
941
690
726
958
1,197
955
979

50

37

23

Forthcoming Large Offerings# as of December 21
Type

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

CORPORATE
Aluminum Co. of America
Idaho Power Co.
New England T e l . & T e l . Co.
• I n t e r s t a t e 'Gil Pipe Line Co.
*Sears Roebuck Acceptance Corp.
• P a c i f i c Petroleums, Ltd.
Louisiana Power & Light Co.
•Oklahoma Gas & E l e c t r i c Co.
Armco S t e e l Corp.
•Niagara-Mohawk Power Co.
Standard Oil Co. of Ohio
American Tel. & T e l . Co.
Michigan Wisconsin Pipe Line Co.
Southern New England Telephone Co.
May Stores Realty Corp.




Deb.
1 s t mtg. bds.
Deb.
S . F . deb.
Deb. Conv. sub. deb.
1 s t mtg. b d s .
1 s t mtg. b d s .
Common s t k .

125.0

20.0

35.0
25.0

50.0
15.0

20.0
20.0
65.0

Conv. deb.

46.2

S.F. deb.
Deb.
1 s t mtg. b d s .
Common s t k .
Gen. mtg. b d s .

25.0
250.0
25.0
20 .4
25.0

January' 8
January 8
January 9
January 9
January 10
Januar y 14
January 16
January 18
January 2l±
( r i g h t s expire)
January 28
( r i g h t s expire)
January
March
Winter
Winter
Winter

H.lU .

F-2
Forthcoming Large O f f e r i n g s , as of December 21 (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 )
Z

STATE AND LOCaL GOVERNMENT
Fort Worth, Texas
Los Angeles, C a l i f .
•Fort Lauderdale, F l o r i d a
Caddo P a r i s h School D i s t r i c t , La.
Orange- County Flood D i s t r i c t , Cal.
S t a t e of Michigan 3 /
•Georgia Rural Roads Authority
S t a t e of C a l i f o r n i a
Dallas, Texas
Dallas, Texas
•San Antonio, Texas
Denver, Colorado
Spokane Co. School D i s t r i c t
No. 81, Washington
Birmingham, Alabama
^Pennsylvania Turnpike Commission
Washington S t a t e Toll Bridge Auth.
Inter-American Center Auth., F l a .
New York S t a t e Thruway Authority
Jacksonville Expressway Authority
F l o r i d a S t a t e Turnpike Authority
Oklahoma Turnpike Authority
S tate of Connecticut
•

G.O.
G.O.

January
January
January
January
January
January
January
January
January
January
January
January

U
8
8
9
15
15
15
16
16
lb
17
18

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

5.0
18.0
11.0
5-0
10.0
27.0
17.5
85.0
10.0
5-0
20.0
20.0

G.O.
G.O.
Rev.
Rev.
Rev.
G.O.
Rev.
Rev.
Rev.
Expressway r e v .

6.0
6.7
62.0
227.0
20.0
50.0
42.0185.0
65.0
54.0

January 18
January 23
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter

100.0

January

OTHER

I n t e r n a t i o n a l Bank f o r Reconstruction
& Development

Bonds

*—Included i n t a b l e f o r f i r s t time.
l / 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 issues of $5 m i l l i o n and over.
2 j Includes f o r e i g n government and I n t e r n a t i o n a l Bank for Reconstruction
and Development i s s u e s .
j / Reduced from $52 m i l l i o n and rescheduled with higher maximum permissible
i n t e r e s t cost a f t e r f a i l i n g t o receive bids on December 4 .
Note. —Deletions for reasons other than s a l e of i s s u e : P a c i f i c Power &
Light Company &20.0 m i l l i o n l 6 t mortgage bond issue reduced t o l e s s than yl5million.

#