Full text of H.16 Capital Market Developments : February 5, 1958
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Not for Publication DECONTROLLED AFTER SIX MONTHS H.lU . Februaiy 5> 1958 CAPITAL MARKET DEVELOPMENTS Large public security offerings for new capital during the week . ending January 31 consisted of State and local government issues totaling $132 million and a foreign issue for $50 million. No large corporate issues for new capital were sold. The calendar for' this week includes corporate issues totaling $ij.7 million and State and local government issues amounting to $233 million. Bond yields - Yields on outstanding bonds were mixed last week. The weekly average for outstanding corporate bond yields continued to decline, although on a daily basis, there was some upturn in Aaa yields toward the end of the week. Yields on U, S. Government and State and' local government bonds increased slightly. Some strengthening in offering yields on new corporate issues has occurred. A new A-rated, 30-year first mortgage electric utility issue was offered to investors this week to yield 3.90 per cent — 10 basis points above the offering yield for a comparable issue sold on January 20, and it is reported that the new issue did not move rapidly. Stock prices - The Standard and Poor's index of 500 common stocks changed little last week, closing at Ul.70 on January 31. Prices increased substantially on the first two days of this week then declined, closing at 42.19 on Wednesday. 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. H I G H - G R A D E B O N D YIELDS ' tote Corporate Aaa ]/ U. S. Govt, long-term 2/ State and local govt. A a a y Spread beU. S . Qofft Corporate State and local Aaa (Per cent) 1953 - High 1955 - High Low 1956 - High Low 1957 - High Low 1958 - High Low 3.42 (6/19) 2.99 (1/9) 3.09 (1/8) 2.85 (4/23) 3.17 (12/23) 2.91 (1/7) 3.79 (12/28) 3.07 (3/2) 4.14 (9/27) 3.66 (it/12) 3.68 (1/3) 3.56 (1/31) 3.19 (6/5) 2.74 (12/31) 2.7k (1/8) 2.45 (8/6) 2.97 (8/5) 2.64 (1/7) 3.45 (12/28)5 2.84 (2/17) 3.76 (10/18) 3.18 (2/8) 3.28 (1/31) 3.20 (1/10) 2.73 (6/25) 1.98 (1/8) 2.21 (6/10) 1.90 (9/2) 2.34 (9/8) 2.05 (5/26) 3.05 (12/27) 2.17 (2/23) 3.45 (8/29) 2.76 (2/21) 2.86 (1/10) 2.65 (1/24) January 3 January 10 January 17 January 24 January 31 3.68 3.65 3.61 3.57 3.56 3.22 3.20 3.21 3.27 3.28 2.86 2.86 2.68 2.65 2.68 1951 - High .38 .20 .43 .30 .27 .11 .h1 .12 .60 .27 .46 .28 .46 .45 .ko .30 .28 .83 .33 .62 .30 .76 .57 .71 • 32 .47 .15 .62 -3k .36 .34 .53 .62 .60 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. 3/ Thursday figures. Only general obligation bonds are included; average term is 20 years. Not.—Highs and lows are for individual series and may be on different dates for different series. EXHIBIT B LOWER - GRADE BOND Date YIELDS Spread between Aaa and Baa 1 State and 1local govt. " Corporate Baa 1/ State and local govt. Baa 2/ 3.89 (9/18)' 3.50 (1/2) 3.7k ( 1 / 8 ) 3.W* (12/31) 3.63 (12/30) 3.15 (1/lii) U.Ul (12/28) 3.58 (3/9) 5.10 (11/29) U.U2 (k/12) h.96 (1/3) k.72 (1/31) 3.79 (6/25) 2.96 (1/8) 3.32 (1/7) 2.93(6/5) 3.26 (12/29) 3.02.(1/6) L 2 2 (12/27) 3.20 (3/8) k.Bi (8/29) 3.90 (2/21) 3.92 ( 1 / 3 ) 3.73 (1/2U) 1.27 .6U 1.28 1.16 It.96 U.92 U.8U U.77 3.92 3.88 3.77 3.73 3.76 1.28 1.27 1.23 1.20 1.16 Corporate (Per cent) 1953 - High 195U - High 1955 - High " 1956 - High 1957 - High 1958 - High Low January January January January January 3 10 17 2k 31 k.72 ' .69 .k2 .68 .52 •5U .kS .63 .k2 , / /" 1.21 .98 1.16 .93 1.03 .87 1.17 .89 1.21 1.0U 1.09 1.02 1.06 1.02 1.09 1.08 1.08 1/ Weekly average of daily figures. Average term of bonds includes is 25-26years. 2/ 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 Stock price Trading Common Stock market customer credit volume 2/ Customers' Bank (millions yields y Total debit bal- loans to of shares) (per cent) ances h/ "others" 5/ (Millions of dollars) '1951* - High 1955 - High 1957 - High Low 1958 - High November December January 17 January 2li January 31 26.5k (1/2) 22.95 (9/18) 35.98 (12/31) 2b.93 (1/8) 1*5.69 (12/9) 35.28 (1/lW l*9.61t (8/3) 1*3.22 (1/2C 1*9.08 (7/12) 39.1*8 (12/20) 1*1.71 (1/21*) 1*0.37 (1/10) 6.25 II 1*.1*2 3.6U i 3.91 1*.58 1*.1*2 1*0.3F l*o.- l*l._u 1*1.71 1*1.70 2.1* 2.3 1*. 62 i*.63 lt.50 1*.1**3 1*.1*2 2,1*55 2,055 3,1*36 2,1*05 1*,030 3,537 l*,0l*7 3,911* U.031 3,576 1,665 1,3U* 2,386 1,6c3 2,605 2,517 2,823 2,71*0 2,887 2,1*82 3,577 3,576 2,517 2,1*82 n.a. , 66l> 1,01*8 • -71*6 1,21*1 1,018 1,267 1,155 1,163 1,051* 1,058 1,051 1,060 1,091* 1,053 .1,058 n.a.—Not available. 1/ Standard and Poor's composite index of 500 common stocks, weekly closing prices, 191*1-143-10. 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. 3/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. h/ End of month figures for member firms of the New York Stock Exchange wh carry margin accounts; excludes balances secured by 0. S. Government obligations 5/ Wednesday figures for weekly reporting member banks. Excludes loans fc; 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. Fcr further detail see Bulletin. __ Note.—Highs and lov, ore for individual series and may be on different dates for different series. . ^ Exhibit D Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) 1958 January February March a/ 800 e/ 625 April May July August September New capital Corporate 1 1957 1 1,063 1,071 1,3UU 1956 •. 573 712 817 1958 , 796 e/ 750 State and local 1/ 1 1956 1 1957 7U2 572 506 UOU 696 . 390 92U 771 1,189 818 l,lU6 6U1 765 5U6 393 378 U90 735 991 911 973 1,063 65U 038 529 , 581. U31 U08 206 357 #8 6# 3U7 L09 October November December 1.01U 831 e/1,000 1,089^/ 1,088 1st 2nd 3rd Uth 3,U79 3,16U 2,078 e/2,8U5 2,102 2,805 2,556 2,922 2,029 6,662 9,51(0 5/12,385 U,907 7,U63 10,36U 7,099 quarter quarter quarter quarter 1st half Three quarters Year 633 698 1,820 3,524 . 5,069 1,1490 1,603 .971 1,395 3,093 h,0614 5,U59 Excluding finance companies 3/ 1st 2nd 3rd Uth quarter quarter quarter quarter Year 3,268 2,92k 2,560 2/2,695 1,61*7 2,5U1 2,21*6 2,826 e/11,UU6 9,260 e/ Estimated. 1/ Data through June 1956 are Bond Buyer data classified as new capital by Federal Reserve; later data are from the Investment Bankers Association of America and are somewhat more complete as to coverage than the earlier data, particularly for Federal Government loans, 2/ Includes $571.5 million AT&T common stock issue. J3/ Total new capital issues excluding offerings of sales and consumer finance companies. Note.—Details may not add to totals due to rounding. H.lti . Exhibit E Large Public Security Issues for Hew Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) - Month Corporate 1956 - December 1957 - January February March April May State and local government 1*30 567 671 786 U77 3# 877 $25 526 537 57U it20 399 . July August September October November December 201 366 . 306 19li U99 2U8 176 265 357 185 1*35 306 h39 Other 2/ 100 50 125 25 39 25 30 75 — Large Individual Issues Offered during January Type y Amount. Coupon (millions Maturity rate or Offering not interyield of dollars) est cost Rating CORPORATE Commercial Credit Co. Notes 50.0 Conn. Light & Power Co. IsWref .mlg,bd31-30.0 Washington Water Pwr. Co. 1st mtg. bdi". 20.(1 Commonwealth Edison Co. S.F. d<»h. - 50.0 W. Va. Pulp & Paper Co. Deb. liO.O Pacific Power & Light Co. 1st mtg. bds. 15.0 Alabama Power Co. 1st mtg. bds. 23.0 Kimberly Clark Corp. S.F. deb. 15.0 Pacific Gas & Electric Co. Ist&ref.mtg.bds .75.0 1978 ,1968 1908 ,2008 1976 1968 1988 1983 .1978 L 1/6 3 7/6 h 1/8 3 7/8 h h 1/h 7/8 3/1, 3 3A 3 3 h*20 3.69 ii.10 3.83 a.05 b.25 3.85 3.75 3.65 Aaa A Aa A Baa A Aa . Aa H.lh E-2 • • I . Larpe Individual Issues Offered during January (Cont'd) Type 3/ Amount Coupon Offering (millions Maturity Rating of net inter- yield dollars) est cost STATE AND LOCAL GOVERNMENT G.O. Los Angeles, California 25.0 1959-68/6*) 'Dade Co., Florida G.O. lit. 5 1958-72/63 G.O. Caddo Parish S. D., La. 1959-78 ' 7.5 Des Moines Sch. Dist., Ia. G.O. 5.7 1958-77 State of New York G.O. 1959-72 37.5 Rev. Ga. Rural Roads Auth. 17.5 1959-78/68 0*0. State of Missouri 55.0 1959-79 New York, New York 0.0. 1959-61 25.5 10.0 State of North Carolina G.O. 1959-77 Pa. State Hwy. & Bridge Rev. Auth. 20.0 1960-79/65: Rev. San Diego Wtr. Auth.,Cali£ 7.5 , 1959-93 Penna. State Univ. Rev. 11.8 1961-77,99 Swr. rev. Mansfield, Ohio 6.2 1959-87/67 State of California G.O. 100.0 1959-83/78 Swr. rev. Milwaukee Co., Wise. 1959-68 5.7 Puerto Rico Water Resources Rev. Auth. 25.0 1960-95 Wtr.&swr.rev. £.0 Dallas, Texas 1958-78 Dallas, Texas G.O. Y.8 1958-77 Fla. State Bd. of Ed. G.O. 7.9 1959-78/64 Tonawanda City S.D., N.Y. G.O. 5.1 1958-86 8.0 State of South Carolina G.O. 1959-74 Univ. System Bldg. Auth., G.O. Georgia 9.0 1959-03 Boston Met. Dist., Mass. G.O. 1959-88 5.5 Wtr. rev. Los Angeles, California 1959-88 9.0 Rev. Port of New York Auth. ho.o 1959-78/68 El.,wtr.&swr.rev. 6.8 1960-79/73 Austin, Texas G.O. State of New Hampshire 28.L . 1959-86 3.18 3.61 3.17 2.62 2.28 3.Ul 2.3k 2.12 2.39 Aa A A Aa A A 1.60-2.38 . Aaa 1.75-2.05 A 1.60-2.1*0 Aa 2.63 1.90-2.70 2.00-3.35 2.50-3.73 2.30-3.75 1.65-3.15 1.50-2.15 2.10-3.30 2.75-3.50 2.15-3.20 1.80-2.60 1.60-2.30 2.20-3.W 3.2? 3.65 3.07 2.15 2.60-4.10 1.50-2.80 1.60-2.80 1.75-3.10 1.80-3.30 1.50-2.10 k.n 2.72 2.71 3.00 3.23 2.29 Aa A —— Baa Aa Aaa Baa Aa A A Baa Aa 2.50-U.00 A 1.60-3.00 Aa 2.86 3.06 1.80-3.20 Aa 1.80-3.20 A 1.60-3.00 Aa . 1.50-2.70 3.06 2.95 2.55 OTHER Int'l Bk. for ReconstrucBds. tion and Development 150.0 Ext. loan bds. 15.0 Union of South Africa Ext. deb. 50.0 Quebec Hydro-Elec. Comm. 1979 1968 1983 h 1/h 5 1/2 3 3/U , In 29 5.70 3:83 Aa A A t H.Ik E-3 n.a.—Not available. 1/ Includes corporate and other security offerings of $15 million and over; State and local government security offerings of'45million 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 obligations; Rev., revenue bonds; G.R., general obligations additionally secured by facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues. Exhibit F H.lli Forthcoming Large Public Security Offerings for New Capital (Other than U. S. Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following date shown State and Corporate Other 2/ local govt. Date of computation 1957 - Jan. 31 Feb. 28 Mar. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 Dec. 31 1958 — Jan. 31 - 591 7ii0 1+61 187 525 370 526 578 #6 158 383 378 1*98 153 153 290 179 97 172 252 21*3 370 369 387 383 1*29 35 25 25 25 30 30 18 150 Subsequent to date shown State and Corporate Other 2/ local govt. 966 795 1*86 . . 258 525-^ U15 811 81*5 61*7 815 1,193 .1,161 1,378 61*8 631 862 396 388 1*98 51k 1*39 587 573 589 35 25 25 25 30 15 1*5 63 61I4 165 51*6 — Forthcoming Large Offerings, as of January 31 Issuer Tennessee Gas Transmission Co. *Texas Utilities Co. Royal Dutch Petroleum Co. Northern Natural Gas Co. Southern California Edison Co. General Motors Acceptance Corp. Indiana & Michigan Electric Co. -*New York State Electric & Gas Co. Pennsylvania Electric Co. Cleveland Electric Illuminating Co. Type Amount Approximate date (millions of offering of dollars) Common stk. Common stk. Common stk. 30.8 16.6 100.0 Common stk. 21.8 Pfd. stk. Deb. 1st mtg. bds. „ 1st mtg. bds. 1st mtg. bds. 1st mtg. bds. 25.0 150.0 25.0 25.0 29.0 30.0 Feb. 1* Feb. 5 Feb. 10 (rights expire) Feb. 11 (rights expire) Feb. 12 Feb. 12 Feb. 11* Feb. 2i Feb. 25 Feb. 26 F-2 H.m Forthcoming Large Offerings, as of January 31 (Cont'd) Type Amount (millions Approximate date of offering of dollars) CORPORATE (Cont'd) 1st mtg. bds. -^Central Illinois Public Service Co. 15.0 1st mtg.&coll.tr.bds.30.0 •^United Gas Corp. Pfd. stk.. Public Service Electric & Gas Co. 25.0 1st mtg. bds. Union Electric Co. 35.0 Conv. deb. American Telephone & Telegraph Co. 718.3 •^Chicago,. Rock Island & Pacific HR*' Commerce Oil Refining Corp. Natural Gas Pipeline Co. of America 1st mtg. bds. Deb.,bds. &'common 1st mtg. bds. 16.0 45.0 1*0.0 Feb.. 26 Feb.. 27 Mar.. 5. Mar., 6 , Mar. 12 (rightsi expire) Mar. 13 Winter Winter STATE AMD LOCAL GOVERNMENT Columbus City Sch. Dist., Ohio Detroit, Mich. Springfield, Illinois Allegheny Go. Sanitary Auth., Pa. No. Hempstead Sch. Dist. No. 9, N.Y. East.Baton Rouge Par. S.D. No.l, la. Memphis, Tenn. ^-Detroit, Michigan New Orleans, La. Denver, Colorado Public Housing Authorities Wichita. Sch. Dist. No. 1, Kansas New York State Thruway Auth. State of Minnesota ^Hartford, Connecticut Met. Water Dist. of Southern Calif. Guilford Co.", North Carolina ^Hempstead U. F. S. D., N. Y. •^Kansas City Sch. Dist., Mo. Long Beach, California State of Connecticut State of Alabama -^Cleveland, • Ohio ->State of Kentucky Houston. Ind. Sch. Dist., Texas Milwaukee, Wisconsin Pennsylvania Turnpike Commission Inter-American Center Authority,Fla. Met. Fair f- Exposition Auth., 111. OTH !'.'•? None G.O. Wtr. rev. Swr. rev. Swr. rev. G.O. G.O. G.O. G.O. G.O. Wtr. rev. — G.O. Rev. G.O. G.O. Rev. G.O. G.O. G.O. G.O. G.O. G.O. G.O. G.O. G.O. Wtr. rev. Rev. Rev. B1dg. rev. 5.0 5.0 5.6 25.0 7.h 10.0 12.5. lii.o 6.3 20.0 67.1 5.0 50.0 12.0 6.9 18.0 6.0 5.h 7.0 . 10.1 35.0 21.0 25.0 35.0 15.0 10.0 62.0 20.0 25.0 Feb. h Feb. k Feb. h Feb. h Feb. h Feb. h Feb. h Feb. k Feb. 5 Feb. 5 Feb. 5 Feb. 6 Feb. 6 Feb. 11 Feb. 11 Feb. 11 Feb. 11 Feb. 13 Feb. 17 Feb. 18 Feb. 18 . Feb. 19 Feb. 25 Feb. 25 Feb. 26 Mar. 18 Winter Winter Winter H.lit F-3 Included in table for first time. 1/ Includes corporate and other issues of $15 million and over; State and local government issues of #£ 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.