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

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February 16, 19^6
CAPITAL MARKET DEVELOPMENTS

Three large State and l o c a l government offerings t o t a l i n g
$132 million and a single corporate common stock issue of 626 mill i o n were the large o f f e r i n g s floated for new c a p i t a l purposes during the week ending February 10. The increased volume of financing
w i l l continue t h i s week—large issues are expected to t o t a l $88 mill i o n for State and l o c a l governments and $6U m i l l i o n for corporations.
Bond y i e l d s - Yields on State and l o c a l government Aaa
bonds dropped s i x basis points during the week ending February 10.
Yields on other bonds were generally s t a b l e . Daily figures indicate
a drop on Tuesday of t h i s week in the U. S. Government long-term
(old series)bond y i e l d s .
Stock market c r e d i t - Customer credit increased $1$ mill i o n in January to a l e v e l of $h,0h0 million at the end of the month.
A l l of the increase was accounted for by the r i s e in bank loans to
"others", since there was no change in customers' net debit balances.
Money borrowed by brokers and dealers except on U. S. Government
s e c u r i t i e s declined $117 million, c h i e f l y that borrowed on customer
collateral.
The following table shows these and other data on stock
market credit for December and January.
End of month
December
January , Change
(Millions of dollars)
Customer credit
Excluding U. S. Govt, s e c u r i t i e s - Total
' Net debit balances
Bank loans toJLothers"
Net debit balances secured by U. S. Govt, s e c u r i t i e s
Bank loans to others for purchasing or carrying
U. S. Govt, s e c u r i t i e s
Broker and dealer credit
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' net f r e e credit balances




L022
2T785
1,239

MliO
27785
l,2$h

3h

36

32

37

2,21:6
1,816
51
j
895

2,129
1,73k
U1
905

+15
+15
+2

-117
-82
-10
+10

-2-

Stock prices - The SEC index of 265 comiaon stocks decreased
sharply to 260.9 during the week ending February 10. After f a l l i n g
s l i g h t l y on Monday and Tuesday of t h i s week, prices rose moderately
on Wednesday in heavy trading.
More detailed information concerning recent capital market
developments i s presented i n the attached exhibits.

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 B O N D YIELDS

7v

\A

STATE AND LOCAL
GOVERNMENT A a a

U. S. Govt., long-term %/
Date

Corporate
Aaa 1 /

Old series

Spread between
State and
U. S. Govt,
local govt. (old series) and
Aaa 3/
Corporate[State and
Aaa
1local Aaa

New series

(Per cent)
3.U2
2.99
3.09
2.85
3.17

(6/19)
(1/9)
(2/8)
(V23)
(12/23)

3 i S (1/6)

3-08 (2/10)
3.13
3.11
3.09
3.09

3.08

3.15 (6/6)
2.78 (12/26)

n.a.
n.a.
n.a.
2.7k (1/9)
n.a.
3-03 (8/5)
2.89 (6/10)
2.90 (3/6) - 2.96 (1/6)
2.81 (2/10) 2.92 (2/3)

2.73
1.98
2.21
1.90
2.3L
2.05
2.29
2.18

2.88
2.83
2.83

2.27
2.27
2.27
2.2U

•IE

2.81
2.81

. 2.95
2.93
2.9k
2.92
2.93

2.18

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(1/5)
(2/9)

'hi
.13

.28
.2U

• 29

1
1
.61

.26

.2&
.27

2/ Weekly average of daily figures. Average tern of bonds included i s 25-26
years.
2/ Weekly averages of daily figures. 'The old series includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t callable after 12 years through
September 1955* and those due or callable in 10-12 years thereafter; the average
tern to f i r s t c a l l of the bonds included declined from 11* years i n early 1953 to
11 1/2 years in early 1955. The new series i s comprised of the 3 per cent bond
of 1995 and the 3 l/lt per cent bond of 1978-83.
3/ Thursday figures. Only general obligations bonds are included; 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
for d i f f e r e n t s e r i e s .




EXHIBIT B

L O W E R - G R A D E B O N D YIELDS
Weekly

Per cent per annum

Corporate
Baa y

State and
local govt.
Baa 2/

State and
local govt.
rev. 3/

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

3-89
3-50
3.7L
3.UU
3.63
3.U5
3.62
3-58

January 13
January 20
January 27
February 3
February 10

3.61
3.60

II

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/lU)
(1/6)
(2/10)

3.79 (6/25)
2.96 (1/8)
3.32(1/7)
2.93 (8/5)
3-26 (12/29)
3.02 (1/6)
3-26 (1/5)
3.22 (2/9)

3.27
2.71
3.00
2.72
2.99
2.76
2.9k
2.89

3.25
3.22
3.22
3-22
3-22

2.91
2.90
2.90
2.89
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(1/6)
(2/10)

1/ Weekly average of daily figures, Average term of bonds
incli.uded i s 25-26
25-2<" years.
2/ Thursday f i g u r e s . Only general obligation bonds are
included} average term i s 20 years.
if 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.
Note.—-Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock p r i c e
index 1 /

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

Stock market customer c r e d i t
Customers1
Bank
d e b i t b a l - loans t o
ances 4 / "others" 5 /

Total

( M i l l i o n s of d o l l a r s )

High
Low

167.1
144.0
221.4
156.5
270.7
217.4
268.8
257.4

December
January
January 27
February 3
February 10

269.2
262.8
259.0
266.7
260.9

1953 - High
Low
1954 - High
Low
1955 - High
1956

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

2.5
0.9
3-7
1.4
4.6
1.5
2.4
2.0
2.4
2.2
2.1
2.0
2.1

5.75
5.15 '
5-33
4.20
4-22
3.78

2*445
2,055 .
3,436
2,405
4,025
3,537 .

1,665
1,314
2,388
1,653
2,805
2,517

n.a.

n.a.

4.06
4.08

4,025
4,040

2,786
2,786

n.a.

n.a.

n.a.

. n.a.

780
664
1,048
746
1,241
1,018
1,267
1,241
1,239
1,254
1,254
1,267
n.a.

n.a.—No ' a v a i l a b l e .
V SEC index of 265 ccnnon s t o c k s , weekly c l o s i n g p r i c e s , 1939-100} converted
t o 19u?-U9-100 t y Federal Reserve. The conversion f a c t o r i s . 1 2 3 . 9 1 2/ Averages of d a i l y trading volume on t h e New York Stock Exchange.
"%/ Moody's 200 common stocks; end of month f i g u r e s .
k / 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 loans f o r
purchasing or carrying U> S . Government s e c u r i t i e s a t banks i n New York and Chicago.
Weekly reporting banks account f o r about*72 per cent of loans t o o t h e r s . r
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 different series.




H.ll*

Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(in millions of dollars)

Januaiy
Februaiy
March

1956

Corporate
! . 1955
1

SZJ35

51x6

6/600

136
1,261

New capital
195U

. 1956

5U7

e/U00
e/625

h26

635

State and l o c a l
1 1955
1

535
312

538

April
May
June

h9k

903
697

U97
.656
8U2

127
350
6Ul

July
August
September

583
6%

909
335

U70
2 h9
U06

680

7h7

October
November
December

1,207
631
921

1,003
290
60U

& 1 s t quarter
^ 2nd quarter
3rd quarter
Itth quarter
Year

2,2U3
2,091
1,917

1,995
1,991

2,760

9,OIL

1,608

1,896

7,U90

919
/

658

e/U00
1,385
1,118
1,12

U

e/1,977

e/5,90k

195U
396
111
565
73U
853
279

261
6U9
59k

U23

877
1,372
2,334

1,188

1,69k
6,789

Excluding finance companies 2 /
1st quarter
2nd quarter
3rd quarter
lith quarter
Year

1,791
1,912

i,ai
e/2,560

e/7,70U

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

1 / Includes $637.2 million AT&T convertible debenture i s s u e .
~2/ Total new capital issues excluding offerings of sales and personal finance
companies.
Note.—Details may not add to t o t a l s due to rounding.




.

718

.

H'lii

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues Offered
(Millions of dollars)

Month

1955 - January
February
March
April
May
June
July
August
September
October
. November
December
~ 1956 - January

Corporate

State and
l o c a l government

111
63
750
173

3U1
107
337
238
152

183

Other 2 /

35
15

103

175
101

278
6
?
23U
716

1x0$

328
805
269
215
95

396

.

25
50

205
192

Large Individual Issues Offered February 1 through 10
Issuer

-

Type 3 /

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

CORPORATE

Northwestern Bell
Telephone
Reynolds Metals
Chemical Corn Exchange
Bank

Deb.
Pfd. stk.

25,0
.itO.O

Com. s t k .

26.0

1996

3 1/U

3.15

Aaa

STATE & LOCAL GOVERNMENT
Oklahoma City, Oklahoma
Public Housing Auth.
New Orleans, Louisiana
OTHER
None -




G.O.
G.O.

13.2
106.8
11.5

1958-81
1956-90
1957-95

2.U9
2.69
2.57

1.85-3.10
1.80-2.75
1.70-2.75

A
Aaa
A

•

H.m

E-2

1 / Includes corporate and other security offerings of $15 mill i o n and over; State and l o c a l government security o f f e r i n g s of
&5> million and over.
j?/ Includes foreign government and International Bank for Reconstruction and Development i s s u e s .
3 / In the case of State and l o c a l government s e c u r i t i e s , G.O.
denotes general obligation; Rev., revenue bonds; G.R., general obligations additionally 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.




Exhibit F

H.lU

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues
During month following
date shorn
State and o t h e r 2 /
Corporate
l o c a l govt.
—

Date of
computation

16
710
211
U25
160
67

Jan. 31
Feb. 28
Mar. 31
Apr. 29
May 31
June 30
July 29
Aug. 31 .
Sept. 30
Oct. 31
Nov. 30
Dec. 30
Jan. 31

k07

222
805
202
215
70
176

682

mmmm

$2k

——

208
116
339
3UU
100
18U
8U3
330
20$
121
327

Subsequent t o
date shown
State and other 2 /
Corporate
l o c a l govt.
-

. ——•

—

' 122
1,395
922
8^0
830
1,135 .
920
909
U12
230
85
376

1,961
1,978
2,009
1,917
1,861
1,8U5
2,018
1,971
2,205
1,650
756
618
917.

——

—
——

50
—

Forthcoming Large Offerings, as of February 10
Type

Issuer

Amount
Approximate date.
(millions
of offering
of dollars)

CORPORATE
' Southern California Edison
M. Lowenstein and Sons
Koppers Co., Inc.
Tennessee Gas Transmission
Westcoast Transmission, Ltd.
Bell Telephone of Pennsylvania
•^Houston Lighting and Power
New York Telephone
Southern California Gas
Sheraton Corporation of America

""

Pfd. stock
Conv. sub. deb.
Com. stock
Pfd. stock
Sub. deb.
Deb.
1 s t mtg. bds.
Ref. mtg. bds.
Mtg. bds.
Deb.

30.0
3U.3

15.6

UQ.O
20.5
35.0

30.0

55.0
UO.O

15.0

February
February
February
February
March 5
March 6
March 7
March 27
May
19#

lit
15
20
21

February
February
February
February
February

Hi
U4.
1U
15
15

. STATE AND LOCAL GOVERNMENT
Harris County, Texas
Metropolitan Water D i s t . of So. Cal.
Lubbock, Texas
New York State Thruway
Chicago, I l l i n o i s




G,0.
Rev.
v 0.0.-Rev.
G.R.
Rev.

5-5
7-3
9.8

50.0
15.0

H.lh

F-2
Forthcoming Large Offerings, as of February 10 (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of offering
- of dollars)

• STATS AND LOCAL GOVERNMENT (Cont'd)
^Puerto Rico
*Los Angeles, California
^Montgomery Co., Maryland
Indianapolis, Indiana
Rochester, New York
Weber Basin Water Conservancy
D i s t r i c t , Utah
Fort Worth, Texas
Connecticut Expressway
Los Angeles Co., Calif.
State of California
*San Antonio, Texas
Inter-American Center Auth., Fla.
•^Denver, Colorado, School D i s t . #1
•K-State of New Hampshire
Georgia Rural Roads Authority
K Florida State Turnpike Authority
f Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
S a l t River Project, Arizona

G.O.
Rev.
G.O.
" G.O.
G.O.
G.O.
r.O.-Rev.
Rev.

Rev.
, Rev.
Rev.
Rev.
Rev.

9-5

2U.0

6.8
18.0
7.U

' 5-U
10.0
100.0
7.9
30.0
•5.0
70.0
28.5
19.3
15.5

185.0
65.0
62.0

227.0

11.0

February
February
February
February
February

20
20
21
21
21

February 23
February 27
February 28
February 28
February 29
March 1
March 6
March 7
March 15
May
Late spring
1956
1956
1956
1956

OTHER
None
*—^Included in table for f i r s t time.
n.a.—Not available.
1 / Includes corporate and other i s s u e s of $15 million and over; State and.
local"government i s s u e s of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development i s s u e s .