Full text of H.16 Capital Market Developments : February 9, 1959

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Not f o r Publication DECONTROLLED AFTER SIX MONTHS H.lU

February 9, 1959
CAPITAL MARKET EEVELOPMTS

New public security financing continues to be substantial.
During the week ending February 6, corporations sold large issues t o t a l ing $118 million and State and local governments sold issues with aggregate proceeds of t?98 million. A foreign government issue f o r $20 million
was also offered l a s t week. This week, large corporate issues, including
expiration of subscription r i g h t s , are expected to t o t a l $130 million.
Large State and local government bond issues amounting to $70 million
are also scheduled f o r sale. This State and local government financing
t o t a l does not include a $120 million revenue bond issue for ChicagoO'tiare International Airport, which may be sold t h i s week by negotiation.
Bond yields - Yields on outstanding bonds showed l i t t l e change
l a s t week. Yields on U. S. Government and high-grade corporate bonds
declined slightly, while those on State and local government and lowergrade corporate bonds remained stable at t h e i r peak levels f o r t h i s year.
Stock prices - Common stock
l a s t week. Standard and Poor's index
$k_> 37 on February 6, the lowest level
Trading activity averaged 3.2 million

prices and trading volume declined
of 5>00 common stocks closed at
reached since before Christmas.
shares a day.

More detailed information concerning recent capital market
developments i s presented in the attached exhibits.

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.




HIGH-GRADE

BOND

YIELDS




45

- STAIt AND 10CA1 GOVT, lii

H.lU

Kxhlbit Is
Tables for Exhibit A
High-grade bond Yields
Date

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

State and
local govt.
Aaa y

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

(Per cent)
19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.05
4.14
U.13
3.55
4.16
1.09

Jan.
Jan.
Jan.
Jan.
Feb.

1.09
4.11
4.12
4.16

9
16
23
30
6 jd/

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

2.45
3.76
3.84
3.07
3.96
3.83

(0/6)
(10/18)
(12/26)
(4/25)
(1/16)
(1/2)

3.84
3.89
3.96
3.94
3.93

1.90
3.45
3.31
2.64
3.20
3.19

(9/2)
(8/29)
(9/11)
(5/1)
(2/5)
(1/22)

3.19
.3.19
3.19
3.20
3.20

.30
.60
.51
.22
.27
.16

.30
.1*7
.72
.34
.77
.65

.25
.22
.16
.22
.22

.65
.70
.77
.74
.73

Lower-grade Bond Yields
Corporate
Baa 1/

State and
local govt.
Baa y

1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3,44
5.10
4.96
4.51
4.90
L85

2.93
4.51
4.34
3.64
1.13
4.08

Jan.
Jan.
Jan.
Jan.
Feb.

4.85
4.86
4.88
4.90
4.90

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)

9
16
23
30
6 e/

(12/31)
(11/29)
(1/3)
(7/11)
(2/6) .
(1/9)

4.12
4.08
4.io
4.13
4.13

(8/5)
US/29)
(9/11)
(5/1)
(2/5)
(1/15)

.52
1.27
1.20
.77
.77
.74

.96
1.21
1.11
.93
.98
.89

.76
.75
.76
.74
.75

.93
.89
.91
.93
.93

q/ Preliminary.
1/ Weekly average of daily figures. Average term of bonds included i s 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or morn.
2 / Thursday figures. Only general obligation bondc are included; average term
i s 20 years.
Note.—Iiiphs and lows are for individual series and may be on different dates for
d i f f e r e n t series.




STOCK _ M A R K E T

-MiUiMi pf. Pollgri.




Exhibit D
Table f o r Exl libit C
Stock Market
Date

Stock price
index 1/

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

Stock market customer credit
Bank
Customers1
Total debit bal- loans to
ances 4/ "others" 5/
(Millions of dollars)

1953 - High
--Low
1954 - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
1959 - High
Low

26.5k
22.95
35.98
24.93
15.89
35.28
49.6ft
1(3.22
49.06
39.48
51.11
hO.37
56.00
54.37

(1/2)
(9/18)
(12/31)'
(1/8)
(12/9)
(1/14)
(8/3)
(1/20)
(7/12)
(12/20)
(12/26)
(1/10)
(1/23)
(2/6)

November
December
Jan. 23
Jan. 30
Feb., 6 d/

52.50
53.19
56.00
55.12
54.37.

2.5
0.9
3.7
1.4
4.6
1.5
3.1
1.5
4.2
1.4
4-9
1.7
4.2
3.2

5.38
6.25
4.32
5.82
14.08
h.hl
3.62
It. 3U
3.91
4.72
3.30
4.58
3.19
3.33

2,155
2,055
3,1*36
2,405
4,030
3,537
4,047
3,914
4,031
3,576
4,488
3,554
n.a.
n.a.

1,665
1,314
2,308
1,653
2,805
2,517
2,823
2,740
2,967
2,4^2
3,281
2,487

4.1
3.6
3.9
3.7
3.2

3.42
3.35
3.19
3.27
3.33

4,423
4,488

3,245
3,281

n.a.

n.a.

n.a.

780
664
1,048
746
1,241
1,018
1,267
1,155
1,163
1,054
1,317
1,051
1,257
1,210
1,178
1,207
1,246
1,%%

n.a.—Mot available.
o/~Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 1941-4.3=10- Monthly data are averages of daily figures rabner than of
Fridays' only. Highs and lows are for Friday's data only.
2/ Averages of daily trading volume on the Mew Yprk 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 rcafch^d i t s hirrh or low.
4/ End of month figures for member firms of the fiew York Stock Exchange which
carry margin accounts- excludes balances securcd by U. S. Government obligations.
5/ Wednesday figures for weekly reporting member Mnks. Excludes loans for
purchasing or carrying U. 8. Government securities at. bunks in Hew York and Chicago.
Weekly reporting banks account for about 70 per cent of loans to others. l : or
f u r t h e r detail see Bulletin.
Note.—Hifhs and lows are for individual series and may io on different dates
f o r different series.




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

1959

New Capital
State and Local 2/
Corporate 1/
1 1958 1 1957
1 195H 1 1957
1959
812
953
511

712
572
506 ,

765
1,«3

798
895
551

765
5k6
393

1,102
538
i,m

1,003
92k
973

806
W3
650

529
58U
to

fS

JD/815

1,090
789
1,076

to
1*72
E/1I30

698
633
698

3,135
2,622
2,78U
e/2,2U0

3,w
3,lk9
2,899
2,95k

2,276
2,2iiU
1,859
E/l,355

1,820
l,70it
l,5iiU
2,029

5,757
8,5a
e/10,781

6,59k
9,193
12,^7

' • 1,520
6,379
2/7,735

3,52k
5,069
7,099

723
651,/
1,561^/

1,060
1,065
1,320

April
May
June

.i,m
600
881

JulyAugust
September
October
November
December

January
FebruaryMarch

1st
2nd
3rd
Uth

e/700
i/650

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

e/650
e/800

-

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

quarter
quarter
quarter
quarter

Year

2,891
2,583
2,753
e/2,165

3,237
2,889
2,582
2,810

e/10,395

11,518

3/ 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.
%/ Total new capital issues excluding offerings of sales and consumer finance
companies.




Exhibit F

it.iii

Other Security Offerings \ J
(In millions of dollars)
Long-term
Federal agency 3/
Foreign government 2/
lygT
1956
"I9ffi
W
H H
January
February
March

196
53

April
May
July
August
September
October
November
December

8U
U9
30

37

139
198
120

123
U8
h2

50

9
5
17

28
7
30

58

ii
60
1

hh
5

507

300

—

123

Year

8

1,163
251

95

—

—

523

125

60

—

220

21

April
May
June

357
26k

20S
337
153

July
August
September

289
U23
369

#2
272
252

179

231
U15
E/2L1

303
9h
k59

lU8

j2/3,909

3,271

October
November
December
Year

326

155
llt7

109

215

—

100
—

169

572

Short-term
State and local government h/
233
L60
273

60

161*

—

January
February
March

72

—

—

2
39

1956

Federal agency 3/

2U9

371
208
116

125
252

161

329

336
1,69
501

260'

437
206
330

22h
370
512

U25
273

h$k
111*
137

1,238
255
116

h07
222
128

5,513

3 >57

196

357

176

195
207

29h
328

2,706.

209

3,098

638

380

ii30
505

220
283
323
311

222

e/ Estimated.
jg/ Preliminary.
1/ Data presented in t h i s exhibit d i f f e r from those u> K:.:h.1bit E in that refunding issues, as well as new capital indues, are included. Long-tena securities are defined as those maturing in more thvn one year.
2/ Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission.
Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or c e r t i f i c a t e s and Public

Housing
Authority notes. In some instances PHA notes included may have a somewhat
longer term than one year. Source: bond Buyer.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

Exhibit G

H.lU

Large Long-tern Public Security Issues f o r New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues Offered
(Millions of dollars)
Month

Corporate

1957 - December
1958 - January
February
March
April
May
June
July
August
September
October
November
December
1959 - January

State and
local government

__

40U
tilO
553
182
300
505
195
275

#9
318
#5
1,093
725
356
281
771
209
825
259
227
305
369

Other 2/

1,357"
266
653
161|
86
a

109

288
172
259
229
335

18
209
100
79
75

Large Individual Issues Offered February 1 through 6
Type y

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

CORPORATE
Southern Co.
Universal Oil Processes,Inc

Com. stk.
Cap. stk.

. 1(5.3
72.5

G.O.
Rev. -Ut.
Rev.-Ut.
G.O.

lli.O
lit.O
50.1
20.0

STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wisconsin
Los Angeles, California
Massachusetts Port Auth.
Louisiana Dept. of Highway

1960-7U
1960-79
1960-79
1960-81

3.1*7
ii.86
3.50

197^

5 1/2

1.80-3.00 Aaa
1.90-3.60 Aa
.,4.75
1.90-3.60 • A

OTHER
Kingdom of Denmark

Ext. loan bds. 20.0




5.75

G-2
n.a.—Not available.
1/ Includes corporate and 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 f o r Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
J3/ In the case of State and local government secur ities, G.O. denotes general
obligations3 Rev.-Ut., revenue obligations secured only by income from public u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue fitm q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.




Kxhibit «

H.ll*

Forthcoming Large Long-term Public Security Offerings f o r 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. 26
Mar. 31
Apr. 30
May 29 .
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28 .
Dec. 31
1959 - Jan. 30

During month following
date shown
State and
Coiporate local govt. Other 2/
383
378
198
1,123
555
356
266
768
161
785
113
20l*
301
210
270

363
345
370
13b
298
1*93
177
225
55
21*1
295
258
229
261
551

18
150
110
150
36

71
75
1*5

Subsequent to
date shown
State and
Corporate local govt. Other 2/
1,193
1,161
1,378
1,208
670
561
1*61*
1,01*8
381
91U
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 6
Type

Amount
Approximate date
(millions
ol' offering
of dollars)

CORPORATE
Avco Manufacturing Co.
Reynolds Metals Co.
Consolidated Edison Co.
Public Service Co. of Indiana, Inc.
Connecticut Light and Power Co,
^ I l l i n o i s Bell Telephone Co.
American Natural Gas Co.
Montana Power Co.
Commerce Oil Refining Corp.




Conv. deb.

lh.9

Conv. pfd. stk.
Conv. deb.

55.0
59.8

1st mtg. bds.
Common stk.

25.0
17.2

1st mtg. bds.
Common stk.

50.0
30.0

1st mtg. bds.
Deb., bds. & common

20.0
1*5.0

Feb. 10
(rights expire)
Feb. 11
Feb. 13
( r i g h t s expire)
Feb. 18
Feb. 2i*
(rights expire)
Feb. 25
March 12
(rights expire)
Winter
Winter

H.lii ^

H-2
Forthcoming Large Offerings, as of February 6 (Cont'd)
Type

Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s )

STATE AND LOCAL GOVEltN.'^NT *"
State of Minnesota
State of Washington
St. Louis, Missouri
^
State of New Jersey
Monroe County Water Auth., N. I .
Los Angeles Co. Flood Control D i s t . ,
California
East Bay Mun. Ut. D i s t . , C a l i f .
*State of New York
San Antonio, Texas
State of Michigan
Public housing Authorities
Chicago, I l l i n o i s
^Memphis, Tennessee
Metro. Mater D i s t . of So. California
State of California
Chesapeake Bay Ferry Commission
Detroit-Metro. Expressway

G.O.
G.O.
G.O.
Rev.-Ut.
Rev.-Ut.

22.9
3W
12.6
25.0
13.2

Rev.-Ut.
Rev.-Ut.
G.O.
G.O.
Rev.-S.T.
G.O.
Rev.-Ut.
G.O.
Rev.-Ut.
G.O.
Rev.-Ut.
Rev.-Ut.

10.0
25.0
60.0
- 10.8
25.0
103.0
iro.o
10.0
26.1*
100.0
liiii.O
35.0

Feb.
Feb.
Feb.
Feb.
Feb.

10
10
10
16
17

Feb. 17
Feb. 18
Feb. 18
Feb. 2h
Feb. 2k
Feb. 26
Feb.
Mar. 1
Mar. 10
March
Winter
Winter

OTHER
Empire of Japan

Ext. loan bds.

30.0

Feb. 18

Included in t a b l e f o r f i r s t time.
1 / Includes corporate and other i s s u e s of $15 million and over; State and
l o c a l government i s s u e s of $10 million and over.
2/ Includes foreign government and I n t e r n a t i o n a l Bank f o r Reconstruction
and Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions f o r reasons other than sale of i s s u e : State of Connecticut's
$50.5 million issue - short-term notes.




Exhibit I

H.lli

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

Date
1952 - 1957
High
Low

5.00(8/lU/57)
2.93(3/31/5k)

1958 - January
February
March
April
May 7
13
15
16
20
21
22
28
June 10
17
25
July 2
9
•8
Oct. 7
15
28
29
Dec. 17
1959 - Jan. 7
20
28

'

87
-3

5.50(11/7/57)
3.00(3A7/5U)

123
-15

ll.08
3.91

-8
22
35
18

3
9
-1
8

3.90

21

3.96%/
k.07
it. 16
lt.01
Loo

3.85
3.85

16
16

3.85
3.82
3.95

17
12
21*

LOO
It. 10
LlO
1,57
U.50
l+.iiii

25
28
29
25
22
12
lit
23

ii.6o
a. 65

3h
kO

'

'

3

It. 07
It. 35

h
32

it.00
3.95

t-1
-6

3.98^

1

U.352/

31

h.l&

23

*—Single observation, not an average.
1/ Covers only 30-year f i r s t 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 a provision. Other issues have no such provision.