Full text of H.16 Capital Market Developments : February 16, 1959

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Not for Publication DECONTBOLLED AFTER SIX MONTHS
H.ll;

February 16, 1959
CAPITAL MARKET DEVELOPMENTS

Large corporate issues, including expiration of subscription
rights totaled $130 million during the week ending February 13. Large
State and local government issues with total proceeds for $70 million
were also sold. This week, only one large corporate issue for $25 million is expected. However, State and local government issues totaling
$108 million and a foreign government issue for $30 million are scheduled
for sale. In addition, the $120 million issue for Chicago-O'hare Airport is tentatively scheduled to be offered this week.
Bond yields - Bond yields changed little last week. Yields
declined slightly for all categories of outstanding bonds, except those
for lower-grade corporate bonds, which remained stable.
Stock market credit - Customer credit in the stock market
(excluding that for U. S. Government securities) increased $62 million
further in January. At a record level of $k>55h million, customer
credit was 6 per cent higher than when margin requirements were increased last October. The January increase in customer credit was
largely in bank loans to "others," which increased $50 million, while
the rise in net debit balances was $12 million.
Borrowing by member firms of the New York Stock Exchange maintaining margin accounts (excluding borrowing on U. S. Government securities) declined last month, principally in borrowing on customer collateral. Customers' net free credit balances increased substantially,
totaling $1,226 million at the end of January.
End of month
Jan.
Dec.
Customer credit
Excluding U. S. Government securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Government securities
Broker and dealer credit
Money borrowed except on U. S. Government securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances
__

£/ Revised.




'

Change

(Millions of dollars)
h,$$h
3,297
1,257
155

rA>92
1,207
116

+62
+12
+50
+9

62

63

-1

1,990
1,714
230
1,226

2,071
1,797
231
1,159

-81
-56
-k
+67

— 2 —

Stock prices - Stock prices, as measured by Standard and Poor's
index of 500 common stocks, showed little net change last week, closing
at 5k*k2 on February 13. Trading volume was the lightest since December,
averaging 3.0 million shares a day.
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

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




Exhibit 1i

H.l4

Tables for Exhibit A
High-grade Bond Yields
Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

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

State and
local govt.
Aaa 2/

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

1959 - High

ts

Jan.
Jan.
Jan.
Feb.
Feb.

It. 1 1
4.12
4 . 16
it. 15
4.14

Low

16
23
30 '
6
13 g/

(4/23)
(9/27)
(10/10)
(5/2)
(1/30)
(1/9)

2.ii5
3.76
3.84
3.07
3.96
3.83

(6/6)
(10/18)
(12/26)
(V25)
(1/16)
(1/2)

3.89
3.96
3.94
3.93
3.92

1.90 (9/2)
3.45 (8/29)
3.31 (9/11)
2.64 ( 5 A )
3.20(2/5)

.30
.60 •
.51
.22
.27

3.19
3.19
3.20
3.20
3.18

.22
.16
.22
.22
.22

3.18 (2/12)

-16

.30
.47
.72
.34
.77
.65
.70
.77
.71*
.73
.74

Lower-grade Bond Yields

Date

Corporate
Baa 1 /

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low
Jan.
Jan.
Jan.
Feb.
Feb,

16
23
30
6
13 2/

2.93
4.51
4.34
3.64

(8/5)
(8/29)
(9/11)
(5/D

3.44 (12/31)
5.10 (11/29)
4.96 (1/3)
4.51 (7/11)
4.90(2/13)
4.85 (1/9)

4.13(2/5)
4.08 ( 1 A 5 )

4.86
4.88
4.90
4.90
4.90

4.08
4.10
4.13
4.13
4.11

.52
1.27
1.28
.77
.77
.74

.96
1.21
1.11
.93
.98
.89

.75
.76
.74
.75
.76

.91
.93
.93
.93

.89

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.
j|/ Thursday figures. Only general obligation 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.




STOCK

MARKET




1941-43 Averege.10

STOCK MAIKiT CIIDIT

Exhibit D
Table for Ex] libit C
Stock Market

Date

Stock price
index 1/

Trading
Common
volume 2/
stock
(millions
yields 3/
of sharers) (per cent)

Stock market customer credit
Bank
Customers'
debit bal- loans to
ances U/ "others" 5/

Total

(Millions of dollars)
1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
1959 - High
Low

26.51* ( 1 / 2 )
22.95 (9/18)
35.98 (12/31)
21.93 (1/8)
1*5.89 ( 1 2 / 9 )
35.28 (l/ll*)
1*9.61* ( 8 / 3 )
1*3.22 ( 1 / 2 0 )
1*9.08 ( 7 / 1 2 )
39.1*8 ( 1 2 / 2 0 )
5U.11 ( 1 2 / 2 6 )
hO,37 ( 1 / 1 0 )
56.00 (1/23)
5U.37 ( 2 / 6 )

December
January
Jan. 30
Feb. 6
Feb. 13 e /

53.49
55.82
55.1t2
5U.37
5U.U2

2.5
0.9
3.7
l.U
U.6
1.5
3.1
1.5
1|. 2
1.1*
U.9.
1.7
U.2
3.0

3.7
3.2
3.0

:

5.38
6.25
U.32
5.82
U.08
U.Ul
3.82
U. 3U
3.91
U.72
3.30
U.58
3.19
3.3U
3.35
3.2U
3.27
3.3U
3.35

780

1,665
1,31k

2 ,U55
2,055
3>U36
2,1.05
h,030
3,537
Ii,0li7
3,914
li,031
3,576
4,1.80
3,55k
n.a.
n.a.

1,653
2,805
2,517
2,823
2,7140
2,987
2,U82
3,261
2,U87.
n.a.
n.a.

i/h,k92
U, 551*
n.a.
n.a.
n.a.

i/3,285
3,297
n.a.
n.a.
n.a.

2,308

661*
1 ,

7^

i,2ia

1,018

1,267
1,155
1,163
1,051*
1,317
1,051
1,257

1,210
1,207
1,257
1,257
1,251

n.a.---Not available.
p/ Preliminary.
£/ Revised.
1/ Standard and Poor's composite index of 500 common'stocks, weekly closing
prices, Ifkl-lC-lO. 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.
5 / Wednesday figures for weekly reporting meml>er 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 l o on different dates
for different series.




H.ll*

Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1959
January
February
March

New capital
Corporate 1/
State and local 2/
1 1958
1 1958 1 1957
1959
1 1957

%%h/

1,060
1,065
1,320

April
May
June

l,ll*l
600
881

July
August
September

e/700
e/6$0

723

October
November
December
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

7k2
572
506

765
i,to

798
895
551

765
5U6
393

1,102
536
1,1W*

1,003
92k
973

806
k03
651

529
581*
1*31

858
1*78
91k

1,090
789
1,076

1*56
k7k
k35

633

3,135
2,78k
2,250

3 ,kk5
3,lk9
2,899
2,95k

2,276
2,2kk
1,860
1,365

1,820
1,701*
1,51*1*
2,029

5,757
8,5kl
10,791

6,59k
9,1*3
12,a?

1,520
6,380
7,7l6

3,521*
5,069
7,099

2,622

.

1st half
Three quarters
Year

812

9

ii

698
698

Excluding finance companies h/
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

Year

2,89k
2,583
2,753
2,175
ii,ko5

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

__
2/ Preliminary.
~ij Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
U/ Total new capital issues excluding offerings of sales and consumer finance .
companies.




Exhibit F

11.11*

Other Security Offerings 1/
(In millions of dollars)
Long-term
Federal agency 3/
Foreign government 2/
1#U
1 1957 1 1956
1958
1 1957
1 1956
January
February
March

196
53

April
May
Jane

139
198
120

123
k8
k2

z^July
1
August
September

9
5
17

28
7
30

—

58
123
74

4
60
1

I4U
5
21

507

300

October
November .
December
Year

—

992

.

8k
k9
30

37
8

1,163
251

5G
. 95

—

523

125

—

2
39

72

—

—

—

215

2,321

Short-term
State and local government 4/

109
—

100
—

—

572

169

Federal agency 3/

January
February
March

233
460
273

326
455
147

196
357
249

371
208
144

638
430
505

380
220
283

April
May
June

357
354
26k

205
337
153

125
252
. 176

209
161
329

336
469
501

323
314
260

July
August
September

289
423
369

272
272
252

195
207
179 -

437
206
330

224
370
512

222
425
273

231
. H5
E/2U1

303
9k
159

294
328
148

114

454

137

1,238
255
116

407
222
128

[2/3,909

3,27k

3,098

5,543

3,457

October
November
December
Year

.

2,706.

.

60

164

220

—

60

1/ Data presented in this exhibit differ from thoeo in Etiiibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more th'^n one year.
2/ Includes securities offered in the United Staten by foreign governments and
tHeir subdivisions and by international organizations. Sourcer Securities and Exr
change Commission.
2/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
4/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing Authority notes. In some instances P11A notes included may have a somewhat
tern than one year. Source* Bond buyer.
Digitizedlonger
for FRASER



1

H.lU

Exhibit G
Large Long-tern Public Security Issues for New Capital
(Other than U. S. Treasury) 1/

t

Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1957 - December
1958 - January
F ebruary
March
April
May
June
July
August
September
October
November
December
19 $9 - January

State and
local government

Other 2/

404
4i o
553
182
300
505
195
275
109
288
172
259
229
3#

399
318
605
1,093
725
356
281
771
209
8#
259
227
305
3#

1,357
266
653
164
86
a

18
209
100
79
75

Large Individual Issues Offered February 1 through 13
Issuer

Type 3/

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

CORPORATE
Southern Co.
Com. stk.
145,3
Universal Oil Processes,Ihc Cap. stk.
72.5
Avco Manufacturing Co.
Conv. deb. lb.9
1979
5
Reynolds Metals Co.
Conv. pfd. stk.55.0
ConsolidatedridisonCo.
Conv. deb. 59.6
1973
4
STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wisconsin
G.O.
i4.o 1960-7it
2.70
Los Angeles, California
Rev.-Ut.
14.0 1960-79
3.47
Massachusetts Port Auth.
Rev.-Ut.
50.1 1998/64
4.86
Louisiana Dept. of Highways
G.O.
20.0 1960-81/68 3.50
State of Minnesota
Rev. -S.T.
22.9 1964-76
n.a.
State of Washington
G.O.
34.9 1960-79/69 3.19
St. Louis, Missouri
G.O.
12.6 1965-78
3.05

5.00

Ba

4.00

A

1.80-3.00
1.90-3.60
4.75
1.90-3.60
2.40-3.10
1.80-3.35
2.55-3.10

Aaa
Aa
A
Aa
Aa
Aa

OTHER

Kingdom of Denmark




Ext. loan bds. 20.0

1974

5 1/2

5.75

—

n.a.—Not available.
1/ Includes corporate.arid 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.
y In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.




Exhibit «

H.ll*

Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation

1957 - Nov. "29
Dec. 31
1958 - Jan. 31
Feb. 28
Mar. 31
Apr. .30
May 29
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30

1

During month following
Subsequent to
date shown
date shown
State and
State and
Coiporate local govt. Other 2/ Corporate local govt. Other 2/
383
378
1*9,8
1,123
555
356
266
766
161
785
113
201*
301
210
270

363
315
370
131*
298
1*93
177
225
55
21*1
295
258
229
261
551

18
150
110
150
36

71
75
1*5

1,193
1,161
1,378
1,208
670
561
1*61*
1,01*8
381
911*
216
326
1*01
370
365

558
561*
1*87
31*1
330
1*93
208
235
125
1*35
521*
675
683
515
856

63
165
110
150
36

71
75
1*5

Forthcoming Large Offerings, as of February 13
Issuer

Public Service Co. of Indiana, Inc.
Connecticut Light and Power Co.
Illinois Bell Telephone Co.
•^Northern Indiana Public Service Co.
American Natural Gas Co.
Montana Power Co.
Conmierce Oil Refining Corp.

Type

Amount
Approximate date
(millions
of offering
of dollars)

1st mtg. bds.
Common stk.

25.0
17.2

Rev.-Ut.

13.2

Feb. 17

G.O.
G.O.
G.O.

10.0
25.0
60.0

Feb. 17
Feb. 18
Feb. 18

Feb. 18
Feb. 2k
(rights expire)
1st mtg. bds.
Feb. 25
50.0
1st mtg. bds.
25.0 Mar. 11
Common stk.
30.0
"Mar. 12
(rights expire)
1st mtg. bds.
20.0
Winter
Deb., bds. & common 15.0
Winter

STATE AND LOCAL GOVERNMENT
Monroe County Water Auth., N. Y.
Los Angeles Co. Flood Control Dist.,
California
East Bay Mun. Ut. Diet., Calif.
State of New York




H.li;

H-2
Forthcoming Large Offerings, as of February 13 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
San Antonio, Texas
State of Michigan
•^Chicago, Illinois
Public Housing Authorities
Chicago, Illinois
Memphis, Tennessee
^Philadelphia, Pa.
*New York, N. Y.
Metro. Water Dist. of So. California
State of California
Chesapeake Bay Ferry Commission
Detroit-Metro. Expressway
State of New Jersey
OTHER
Empire of Japan •

G.O.
Rev.-S.T.
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
Rev.-Ut.
G.O.
Rev.-Ut.
Rev.-Ut.
G.O.
Ext. loan bds.

10.8
25.0
iiO.O
103.0
120.0
10.0
22.5
26.3
26. h
100.0
lhh.0
35.0
25.0

Feb. 2h
Feb. 2h
Feb. 25
Feb. 26
Feb.
Mar. 1
•Mar- h
Mar. 10
Mar. 10
"Mar. 11
Winter
Winter
Winter

30.0

Feb. 18

*—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over j 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 issue; None.




H.Ut

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
A-rated offering yields
Aa-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis points)

Date

1952 - 1957
High
Low

1958 - January

February
March

April

May 7

1

^

20
21
22
28

June 10

17
25

July 2

9
18
23
Oct. 7
15
28
29
Dec. 17
1959 - Jan. 7
20 .
28

... •

5.00(8/14/57)
2.93(3/31/54)

87
-3

*3.60,,
3.89^
U.08
3.91

-8
22
35
18

3.90

21

3.85
3.85

16
16

3.85
3.82
3.95

17
12
24

4.00
4.10
4.10
4.57
4.50
4.40./
4.42^
4.44

25
28
29
25
22
12
14
23

5.50(11/7/57)
3.oo(3A7/5M
3.96%/
lt.07
4.16
4.01
4.00

•

3
9
-1
8
' 3

4.07
4.35

4
32

4.00
3.95

t-1
-6

3.98^

1

1».352/

31

b.7$2/
4.6o
4.65

123
-15

' 23

34
40
•

•—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 * provision. Other issues have no such provision.