Full text of H.16 Capital Market Developments : February 21, 1957

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Not for Publication DECONTROLLED AFTER SIX MOUTHS
H.lU

February 21, 1957
CAPITAL MARKET DEVELOPMEIffS

The volume of large publicly offered securities was moderate last week, but is expected to be substantial this week, particularly for corporate securities. During the week ending February
15, corporations sold large issues totaling $66 million and State
and local government offerings amounted to $75 million. This week
subscription rights expire on Socony Mobil Oil Company's §199 million
stock issue and two corporate debt issues with aggregate proceeds of
$57 million are expected. State and local government offerings totaling $75 million are also scheduled for sale.
Bond yields - Yields declined last week for outstanding corporate and State and local government bonds> while those for U. S.
.Government (old series) obligations remained stable and U. S. Government (new series) bond yields increased. The decline was sharp for
State and local bond yields.
Reoffering yields on new corporate issues showed little
change. A new Aa-rated, 30 year first mortgage electric utility
issue was reoffered this week at a yield of It. 25 per cent—only h
basis points below a similar offering made on February 5»
Stock market credit - Customer credit in the stock market
(excluding U. S, Government securities) declined during January,
totaling S3j903 million at the end'of the month. This is the smallest
amount outstanding since August 1955. The decline of $81 million
resulted from a decline of $6l million in net debit balances and a
continuing decline, amounting to $20 million, in.bank loans to
"others." Borrowing by member firms of the NYSE maintaining margin
accounts, except borrowings on U. S. Government securities, declined
<i>l68 million, principally in borrowing on customer collateral. Customers' net free credit balances also declined. These and other data
on stock market credit for January and December are shown in the
following table.




End of Month
January jDecember

Change

(millions of dollars)
3,98k
2,823
1,161
33

hi

hl

l,961i 1,73k
h2
866

2,132
1,852
I46

880

Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, increased 1.2 points last week, closing at
261.5 on February 15. Daily figures through Wednesday of this week
indicate little change in price.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Business Finance and CapitalfoarketsSection,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




°

Broker and dealer credit
honey borrowed except on U. S. Govt, securities
On customer collateral
Money borrowed on. U. S. .Govt, securities
Customers.' net free credit balances

3,903
2,762
1,111
29

1 1 1 1

Customer credit
Excluding U. S. Govt, 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. Govt, securities

-168
-118
- h
-lh

EXHIBIT A

3

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

CORPORATE Aaa

'v'

GOVERNMENT

v

-

STATE AND LOCAL
GOVERNMENT Aaa

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

Old series

New series

Spread between
State and
U. S. Govt.
local govt. (old series) and
Aaa |Z
CorporateI State and
Aaa
Ilocal Aaa

(Per cent)
1953 - High
195U - High
1955 - High
1956 - High
1957 - High
-Low
January 18
January 25
February 1
February 8
February 15

3.1t2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
3.82
3.67

(6/19) 3 .15 (6/6)
(1/9) . 2.78 (12/26)
(1/8K 2
(1/23) 2,M
(12/23) 2,
(1/7)
2,
(12/28) 3, U9 (12/21) 3.39
(3/2)
2, 80 (2/17) 2.92
(1A)
3. 53 (1/U)
3.U5
( 2 A 5 ) 3.15(2/15) 3.22

3.78

I

3.30
3.22
3.20
3.15
3.15

1/ Weekly average of daily figures.

3.37
3.31
3.29

2.73 (6/25)
1.98 (1/8)

2.21 (6/10)
1.90 (9/2)

(12/28)
(2/3)
a/k)
(2/8)

2.3U
2.05
3.05
2.17
3.05
2.76

3.02

I:It

2.81
2.76

(9/8)
(5/26)
(12/27)
(2/23)
(1/10)
(2/110

.38
.19
.1*3
.32
.3li
.13
.16
.13
.51
.29
.18
.51
.52
• 5ti
.52

'

.81*
.30
.61
.29
.70
•5U
.68
.32
.U8
.26,
.28
.26
.33
.34
.39

Average tern of bonds included is 25-26

2/ Weekly averages of daily figures. The old series includes fully taxable
marketable 2 1/2 per cent bonds due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to first call of the bonds included declined from lit years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/h per cent bond of 1978-83.
2/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
Note.—Hi^is and lows are for individual series and may be on different dates
for different series.




L O W E R - GRADE B O N D YIELDS
Weekly

L CORPORATE Baa

I

i

I

. I

I

I

STATE AND LOCAL GOVT. Baa

I

v

A/

-/
-itoM
I

H i

I

I

I

I

STATE AND LOCAL GOVT. REVENUE

Corporate
Baa 1/

State and
local govt.

State and
local govt,
rev, y

(Per cent)
1953 - High
195U - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
January 18
January 25
February 1
February 8
February 15

3.89
3.50
3.7k
3.W
3.63
3.1*5
U.ltl
3.58
14.-50
U.U6
U.50
U.U8
U.48
U.U8

k.hl

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/Hi)
(12/28) .
(3/9)
(1/18)
d A )

3.79
2.96
3.32
2.93
3.26
3.02
1*. 22
3.20
14.22
3.9U
U.17
li.l3

I1.08
U.00
3.9U

3.27 (6/26)

2.71
3.00
2.72
2.99
2.76

(1/2)
(1/1)
(8/13)
(12/30)
(1/7)

3.98 (12/28)

2.89 ( V 2 U )
3.98 (1/k)
3.70 (2/15)
3.90
3.81;

3.81
3.80
3.70

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years. 2/ Thursday figures. Only general obligation bonds are included; average term is 20 years.
2/ Friday figures. Average rating of bonds included is
between Baa and Aj average term is 20 years.
Note.--Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

D»t.

Stock price

aarkefc custximer credit
Customers'
debit bal- loans to_
ances h/ "others" 2/

Common
volume 2/
(millions • yields
of shares) (per cent)

(Millions of dollars)
1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low

167.1 (1/2)

221.lt
156.5
270.7
217.U
295.5
257.lt
279.2
260.3

December
January
February 1
February 8
February 15

277.7
273.0
266.3
260.3
261.5

lltU.0 (9/18)
(12/31)
(2/6)
(12/30)
(1/1W
(8/3)
(1/20)
(1/W
(2/8)

2.5
0.9
3.7

M

It.6
1.5
3.1
1.5
2-7
1.8
2.It
2.2
1.8
2.1
2.It

n.a.

n.a.

1,665
l,3Ht
2,388
1,653
2,805 2,517
2,823
2,7lt0
n.a.
n.a.

It. 13
It. 31

3,98U
3,903

2,823
2,762

5.75
5.15
5.33
It. 20
" It. 22
•
3.78
It. 25
3.86

2,ltlt5
2,055
3,lt36
2,lt05
It,030
3,537
U,0lt7
3,91U

780
661t
I,0lt8
7lt6
l,2ltl
1,018
1,267
1,155
1,163
1,120
1,161 1,114
i,ua
1,120

. n.a.—Not available.
V SEC index of 265 common stocks, weekly closing.prices, 1939-100; converted
to 19u7-h9"100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Moody's 200 common stocks; end of month figures.
%/ 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 member banks. Excludes loans for
purchasing or carrying U. S. Government securities at banks in New York and Chicago.
Weekly reporting banks account for about 72 per cent of loans to others.
Note.—Highs and lows are for individual.series and may be on different dates
for different series.




H.lU

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

1957
January
February
harch

New capital
1955

579
70U
790

535
W7
1,223

April
May
June

816
l,liiU
830

July
August
September

1,066
669
836

October
November
December

1,!% /

|

*lst
2nd
3rd
i|th

e/1,100
e/l,0C0

Corporate
1 1956
I

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

State and local
1 1956
I
1957

e/660
e/525

1955

hOh
696
390

U

535

U78
886
687

377
h9 0
735

127
350
6ia

597
6hh
670

376
199
333

L70
2h9
U06

61*5
311
e/W

919
658
1:08

1,09k

1,162 ^
632
900

2,073'
2,790
2,571
2,929

2,165
2,052
1,911
2,695

1,190.
1,603
908
e/l,3>1

1,385
1,1|18
1,12U
1,98k

U,863
7,h3h
10,363

а, 217
б,128
8,821

. 3,093
U,001.
e/5,332

2,803
3,927
5,911

excluding finance companies Zj
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

Year

1,617
2,520
2,263
e/2,80U

1,727
1,870
1,U3U
2,554

^/9,'2iQU

7,569

1/ Includes &637.2 million AT&T convertible debenture issue,
2/ Includes #571,5 million AT&T common stock issue.
2/ Total new capital issues excluding offerings of sales and consumer finance
companies.
'
Note.—Details may not add to totals due to rounding.




4

- H.lU

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

Corporate

Month

1956 - January
February
March
April
May
June
July
August •
September
October
November
December
1957 - January

State and
local government
192
1M
163
157
- 233

95
212
276
395
623
185
592
217
558
386
701
1*30
567

Other 2/

.
50
20

to.

161*
35
18b
383
135
201
386

——

37
35
100

Large Individual Issues Offered February 1 through 15

Issuer

Type y

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

CORPORATE
Conv.sub.deb. 18.0
Carrier Corp.
Conv. sub.deb. 27.9
Douglas Aircraft CoT""
Stanrock Uranium Mines,Ltd 1st mtg. bds. 16.0
Deb.
Potomac Electric Power Co.
18.0Trans-Canada Pipe Lines,Ltd Deb. & Common 20.8
Common stk. 27.0
Ohio Edison Co.




1982
1977
1963
1982
1987

h 1/8
k /
5 3/U
it 5/8
5.60

14.03
3.89

Ba?
Ba«

k%5
y

A

V

H.l4
I

E-2
Large Individual Issues Offered February 1 through 15 (Cont'd)
Issuer

Type 3/

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

STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wisconsin
G.O,
11.2
San Diego Unified Sch.
Dist., California
G.O.
5.0
New York, New York
G.O.
25.2
Fresno Unified Sch. Dist.,
California
G.O.
5.5
Public Housing Authorities
28.6
State of Missouri
G.O.
i 20.0
Allegheny Co. Sanitary
Auth., Pennsylvania
Swr. rev. 15.0
State of New York
G.O.
4o.4

1958-67

2.48

2.00-2.45

Aaa

1959-78
1958-66

3.07
2.89

2.35-3.10
2.25-3.00

A
A

1958-77
1958-97
1958-77

2.10-2.85
2.79
2.82 - 1.95-2.85
1.80-2.40
2.39

Aa
Aaa
Aaa

1961-96
1959-2007

3.21
2.67

2.60-3.22
2.00-2.90

Aaa

4 3/8

4.47

A

mmmm

OTHER
Quebec Hydro-Electric
Commission

Deb.

5o.o

1977

State and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government securities, G.O. denotes _ general obligationj Rev,, revenue bonds; G.R., general obligations additionally
secured by facilities revenues; L.L., limited liability obligations secured Iyy
pledge of designated revenues,
4/ Offered in units with common stock.




Exhibit F

H.Ik

Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State
and
State and
Corporate
local govt. Other 2/ Corporate local govt. Other 2/

Date of
• computation
1956 - Jan. 31
• Feb. 29
Mar. 30
Apr. 30
May 31
June 29
July 31
Aug. 31
Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31

176
123
380
568
198
U37
21*7
369
315
^683
1*36
1*76
591
_L

327
220
132:173
332
81
131
#9
162
1*8
260
153

376
233
1,013
818
1*1*8

37

23
100
35

567
1,096
1,202
1,009
990
1*81
796
966

917
785
811
• 832
91*1
• 690
726
958
1,197
955
979
763
61*8

37

23
100
35

Forthcoming Large Offerings, as of February 15
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Southern California Edison Co.
Socony Mobil Oil Co.

Ist&ref. mtg. bds. 37.5
Common stk.
199.3

Colorado Fuel & Iron Corp.

Conv. S.F. deb.

19.9

Conv, deb.

171.8

1st mtg. bds.
1st & coll. tr.
Preferred stk.
Common stk.

1*0,0
35.0
15.0
86.7

Phillips Petroleum Co.
Illinois Bell Telephone Co.
United Gas Corp.
Potomac Electric Power Co.
Anaconda Co.

Columbus & Southern Ohio Electric Co* 1st mtg. bds.




16.0

February 19
February 19
(rights expire)
February 20
(rights expire)
February 25
(rights expire
February 27
February 28
February 28
March 5
(rights expire)
March 6

IP

H.Ik

F-2

'

Forthcoming Large Offerings, as of February 15 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of dollars) of offering

CORPORATE (Cont'd)
^-Connecticut Light & Power Co*

15.3
15.0
Uo.o
50.0
20.0
28,0

Deb.
1st mtg, bds.

250.0
25.0

San Francisco (City & Co.), Calif.
G.O.
St. Louis, Missouri
G.O.
Montgomery Co., Md.
G.O.
Elizabeth, New Jersey
G.O.
El Paso Co. Sch. Dist, No. 11, Colo.
G.O,
Los Angeles, California
Wtr. rev.
Puerto. Rico Aqueduct & Sewer Auth.
Rev.
Commonwealth of Massachusetts
G.O.
Jacksonville, Florida
Elec. rev.
Dallas Ind, Sch, Dist,, Texas
G.O.
Georgia Farmers Market Authority
Rev.
*State of Delaware
G.O,
Houston Ind. Sch. Dist,, Texas G.O,
Seattle, Washington
G.O,
^University of Illinois
Rev,
Broward Co, Spec. Tax Sch. Dist,,Fla
G.O.
*Dade Co. Tax Dist, No. 1, Ela,
G.O.
-xFort Worth, Texas
Wtr.&swr, rev.
*Fort Worth, Texas
G.O.

23.6
12,1
6,0
5.0
6.9
9.0
12.0
83.2
8.0
7.5
10.0
10.8
16.8
6,5
6.8
6.0
10.0
6.0
k.o

February 18
February 19
February 19
February 19
February 20
February 20
February 20
February 26
February 26
February 27
February 27
February 28
March 1 >
March 1
March 5
March lit
March 20
.March 25
March 25

Consolidated Edison Co.
*Applachian Electric Power Co.
•Consumers Power Co.
*Lone Star Gas Co.
0

Common stk.
•1st mtg. bds.
1st mtg.P.L. bds.
1st mtg. ods.
Common stk.
Common stk.

March 6
(rights expire)
March 7
March 7
March 12
March 13
March lU
(rights expire)
March 15
(right.<3 expire)
. March 20
March 22
(rights expire)
March 25
(rights expire)
March 26
Winter

Southern Counties Gas Co.
#Texas Eastern Transmission Corp.
^Commonwealth Edison Co.
Central & South West Co.
American Natural Gas Co.

American Tel. & Tel. Co.
Michigan Wisconsin Pipe Line Co.

Conv. deb.

55.1

1st mtg. bds.
Common stk.

29.0
2U.0

Conv. pfd. stk.

15.5

STATE AND LOCAL GOVERNMENT

i




.

'

H.lli

.
.

"

F-3 -

Forthcoming Large Offerings, as of February 15 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

. STATE AND LOCAL GOVERNMENT (Cont'd)
Pennsylvania Turnpike Commission
Inter-American Center Auth., Florida
New York State Thruway Authority
Jacksonville Expressway Authority
Florida State Turnpike Authority
Oklahoma Turnpike Authority
State of Connecticut

Rev.
Rev.G.O.
Rev.
Rev.
Rev.
Expressway rev.

62.0
20.0
50.0
1*2.0
185.0
65.0
5U.0

Winter
Winter
Winter
Winter
Winter
Winter
Winter

• OTHER
None
*—Included in table for first time,
1/ Includes corporate and other issues of &15 million and over; State and
local government issues of #5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issue: None.