Full text of H.16 Capital Market Developments : January 24, 1957

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//V

- •

Not for Publication

DECONTROLLED AFTER SIX MONTHS

H.lU

January 2U, 1957
CAPITAL MARKET DEVELOPMENTS

The volume of publicly sold security issues was quite
large last week, particularly for tax-exempt issues, but is expected to be somewhat smaller this week. During the week ending
January 18> corporations sold large issues totaling $70 million
while State and local government offerings amounted to $223 million. The State and local government financing total includes the
$27 million Michigan State Highway bond issue, which was sold at
a net interest cost of 3*37 per cent. The issue had been rescheduled for sale with a i+.OO per cent maximum cost limit after no
bids were received on a larger issue with a -3»50 per cent limitation on December
This week ^subscription rights expire on a common stock
issue for $6l million, and two corporate debt issues with aggregate
proceeds of §50 million are scheduled for flotation. State and
local government offerings totaling §32 million are expected.
Bond yields - Bond yields declined last week for all
categories of outstanding bonds, except those for corporate Baa's
which increased one basis point. The decline was particularly
sharp for the TJ. S. Government (old series) bond yields, bringing
them down to the level of mid-November.
Offering yields on new corporate issues showed some signs
of leveling off after increasing almost continually during 1956.
A new A-rated, 30-ysar, first mortgage electric utility issue for
$10 million was re offered this week at a yield of I+.56 per cent.
This yield is 11 basis points below that for the last comparable
issue, an offering made on January 16. 'However, an Aa-rated first
and refunding utility issue was also offered this week, at a yield
of i+.50 per cent—7 basis points above that for a comparable offering
made late last week and the same as the yield for an issue sold
January 8.
Stock prices - The SEC index of 265 common stocks declined
9.7 points last week, closing at 267 .U on January 18—about 1+ per
cent below prices at the end of the year with most of the decline
occuring last week. Daily figures through Wednesday of this week
indicate some increase in prices on balance.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Business Finance and 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 BOND YIELDS
Weekly

# W

I >

°l°

\ i ) . S. GOVERNMENT y V

;

Spread between
U. S. Govt,
State and
New series local govt. (old series) and
Corporate!State and
Aaa 2/
Aaa
1 local Aaa

U. S. Govt., long-term 2/
Date

Corporate
Aaa 1/

Old series

(Per cent)
1953 - High
Low
1951 - High
Low
1955 - High
Low
1956 - High
Low

3.12 (6/19) 3.15 (6/6)
2.99 (V9) 2.78 (12/26)
3.09 (V8) 2.7U (1/9)
2.1*1* (8/7)
2.85 ih/23)
3.17 (12/23) 2.9k (8/5) 3.03
2.91 (1/7) 2.62 (1/7) 2.89
3.79 (12/28) 3.U9 (12/21) 3.39
3.07 (3/2) 2.80 (2/17) 2.92

December 21
December 28
January 1*
January 11
January 18

3.76
3.79
3.82
3.81
3.78

3.U9
3.18
3.53
3.1*5
3.30

3.38
3.39
3.1*5
3.W*
3.37

2.73 (6/25)
1.98 (1/8)
2.21 (6/10)
1.90 (9/2)
(8/5) 2.31* (9/8)
(6A0) 2.05 (5/26)
(12/28) 3.05 (12/27)I
(2/3) 2.17 (2/23)

.38
.19
.1*3
.32
.31*
.13
.1*1*
.13

.81*
.30
.61
.29
.70
.51*
.68 '
.32

3.05
3.05
3.05
3.05
3.02

.27
.31
.29
.36
.1*8

.1*1*
.1*3
.1*8
.1*0
.28.

J Weekly average of daily figures.Average term 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 14 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 1/1* per cent bond of 1978-83.
3/ 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.




'

LOWER - GRADE BOND YIELDS

STATE AND LOCAL GOVT. REVENUE

Corporate
Baa 1/

Date

State and
local govt.
Baa 1/

State and
local govt,
rev. .2/

. (Per cent)
1953 - High
Low
1954 - High
Low
1955 - High
Low
1956 - High
Low
December 21
December 28
January U
January 1 1
January 18

3.89
3.50

(9/18)
(1/2)

3.79
2.96

(6/25)
(1/8)

3.7U
3 . a
3.63

(1/8)
(12/31)
(12/30).

3.32
2.93
3.26

(1/7)
(8/5)
(12/29)

(12/28)

3.02
a.22

(1/6)
(12/27)

3 . 5 8 ( 3 # )

3.20

(3/8)

U.38

U.20

3.15 (l/lU)
U.Ul

U.Ul

I f . 22
h.22
.

U.U9
U.50

U.22

h.hS

U.17

3.27

(6/26)

2.71
3.00
2.72

(1/2)
(1/1)
(8/13)

2.99

(12/30)

2.76
3.98
2.89

(1/7)
(12/28)
(2/2U)

3.97
3.98
3.98
3.95
3.90

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

Digitized for


STOCK M A R K E T

Stock price

Trading
Common
Stock market customer credit
Customers
volume 2/
(millions yields 2/ Total debit bal- loans to
Iof shares) (per cent)
ancea h/ "others" 5/
(millions of dollars)

1957 - High
Low

221.lt
156.5' a / i f
270.7
217.2; MS'
295.5
257.1;
279.2
267.lt

3.7
3-.lt
lt.6
1.5
3.1
1.5
2.7
2.3

November
December
January It
January 11
January 18

273.1
277.7
279.2
277.1
267.lt

2.2
2.It
2.7
2.It
2.3

195a - High
Low
1955 - High
1956 - High

5.33
It. 20
It. 22
3.78
It. 25
3.86
n.a.
It. 25
It. 13

3,U36
2,lt05
1,030
3,537
lt,0lt7
3,911*

2,388
1,653
2,805
2,517
2,823
2,7UO

l,0lt8
716
l,2ltl
1,018
1,267
1,155

2,781t
2,823

1,162
1,161
1,163
1,157

n.a.
. 3,9k6
3,981,

n.a.

nil]

n.a.—Not available
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted
to 19U7-li9"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.
5/ End of month figures for member firms of the New York Stock Exchange which
cariy margin accounts; excludes balances secured by U. S. Government obligations.
5/ Wednesday figures for weekly reporting member banks. Excludes leans for
purchasing or cariying 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.




Exhibit D

H.Ui

Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital
1957
January
February
March

e/1,050

Corporate
1 1956
I

535
312
538

178
. 886
687

377
U90
735

127
350
6I4I

1,066
669
836

597
6hh
670

376
199
333

U70
2U9
U06

, 778 2 /
s/1,057 &
e/950

1,162 ^
632
900

2,073
2,790
2,571
e/2,785

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

1,U90
1,603
908
e/1,370

1,385
1,10-8
1,121+
1,98k

1,217
6,128 .
8,821

3,093
. k,001
e/5,371

2,803
3,927
5,911

535
bQ7
1,223

April
May
June

816
i,ia
830

July
August
September

1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

1955

hoh
696
390

579
10k
790

October
November
gpecember

State and local
1
1956
I
1957

1955

L,863
7,k3h
e/10,219

e/600

'

6h$
e/325
e/iiOO

.

919
658
U08

Excluding finance companies 3/
.1st
2nd
3rd
itth

quarter
quarter
quarter
quarter

Year

1,617
2,520
2,263
e/2,660

1,727
1,870
1,U3U
2,55.1

e/9,060

7,569

-

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




Exhibit E
Large Public Security Issues for New Capital
(Other than XT* S. Treasury) V
Proceeds of Large Issues Offered
(Millions of dollars)

Corporate

Month

.

50

50
20

. 16U

592

July
August
September
October
November
December

Other

227
192
Wi
163
157
2%
463

263
95
212
278
395
623
185

1955 - December
1956 - January
February
March
April
May

i

State and
local government

217
558

37

35
18U
383
135
201

. 386
701
430

35
—

1
Large Individual Issues Offered January 1 through 18

Issuer

Type 3/

Coupon
Amount
Offering
rate or
(millions
Maturity. net interyield
of
est cost
dollars)

Rating

CORPORATE
1st mtg. bds. 20.0
Idaho Power Co.
S.F. deb. 25.O
Standard Oil Co. of Ohio
Deb.
Aluminum Co. of America
125.0
Deb.
New England Tel. & Tel. Co.
35.0
S.F. deb. 25.0
Interstate Oil PL Co.
Deb.
Sears Roebuck Accept.Corp.
50.0
Deb.
30.0
Household Finance Corp.
Louisiana Power & Light Co. 1st mtg. bds. 20.0
Oklahoma Gas & Electric Co. 1st mtg. bds. 20.0

1987
1982
1982
1986
1987
1972
1977
1987
1987

U 1/2
It l/U
k i / u
1*3A

U iA

k 5/8
U 3 A
k 5/8

4.50
4.25
U.25
1+.60
4.25
U.57
U.60
4.67
4.43

Aa
Aa
Aa
: Aa
Aa
A
Aa

STATE AND LOCAL GOVERNMENT
San Antonio Ind. Sch.
Dist., Texas
IFort Worth Ind. Sch.
"
Dist., Texas




G.0»

5-0

1958-75

3.76

2.80-3.75

A

G.O.

5.0

1958-82

3.58

2.70-3.80

A

H.lU

E-2
Large Individual Issues Offered January 1 through 18 (Cont'd)

Issuer

Type 3/

Amount
Coupon
(millions
rate or
Offering
, Maturitynet interof
yield
dollars)
est cost

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd)
Los Angeles, California
G.O,
18.0
Port Lauderdale, Florida Vftr. & swr, rev.11.0
Caddo Parish Sch. Diet* La.
G.O.
5.0
Dallas# Texas
G.O.
10.0
Dallas, Texas
Rev.
5.0
Orange Co. Flood Dist., CaL
G.O.
10.0
State of Michigan
L.L.
27.0
Ga-« Rural Roads Auth.
L.L.
17.5
Spokane Go. Sch, Dist, No. 83,
Washington
G.O.
6.0
King Co, Sch. Dist. No. 1,
• Washington
G.O.
10.0
State of California
G.O.
85.0
Alabama Highway Authority
6;0
L.L.
Elec.
San Antonio, Texas
20.0
,/ichita Sch. Dist. No. 1, Kan. G.O.
6.0
Denver, Colorado
G.O.
20.0

C

1958-87
1957-86
1958-77
1957-76
1957-77
1958-96
1958-77
1958-72

3-38
1+.51
3.49
3.31
3.33
3-33
3-37
3.81

2.50-3.50
3.00-4.50
2,50-3.25
2.50-3.35
2,U0-3»25V
2.50-3.55
.50-3*55'2
2.50-3.35
3.00-3.75

Aa
Baa
A
A
Aa
Aa
Aa
A

1958-80

2.96

2.U0-2.90

Aa

1959-77
1958-83
1959-76
1958-80
1958-77
1968-95

3.39
3.32
3.69
3.36
3.33

3.02

2.65-3 .Uo
2.60-3.40
2.90-3.70
2.50-3.30
2.60-3.35
2.65-3.05

A
Aa
A
Aa
A
Aa

1977

4 1/2

4.39

OTHER
Int. Bank for Reconstruction
& Development

100.0

l/ Includes corporate and other security offerings of $15 million and over;
State, and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
j/ In the case of State and local government securities, G.O. denotes general
obligation; Rev., revenue bonds; G.R., general obligations additionally secured
by facilities revenues; L.L., limited liability obligations secured by pledge of
designated revenues.
]xf Is of 1993-96 not reoffered.




H .14

.Exhibit \P

Forthcoming Large Public Security Offerings for New Capital
(Other than U . S . Treasury) \f.
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
1955 - Dec. 30
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

70
176
123
380
568
198
437
247
369
315
683
436
476

121
327
220
132
173
332
81
131
359
162
48
280

37

.

23
100

- 618
85
376 « 917
233
785
1,013: . 811
818
832
w?
941
690
567
1,096
726
1,202
958
1,009
1,197
990
955
481
979
796
763

.

37 .

23
100

Forthcoming Large Offerings, as of January 18
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Pacific Petroleums, Ltd.
Pacific Gas & Electric Co.
Armco Steel Corp. .
Niagara-Mohawk Power Co.

Conv. sub. deb. ' 15*0
1st & ref.mtg. bds. 55.0
Common stk. 60.9
Conv. deb.

46.2

Mountain States Tel• & Tel .Co.
•Currier Corp.
•Douglas Aircraft Co.
Socony Mobil Oil Co.

Deb.
35.0
Conv. sub. deb. 18.0
Conv. sub. deb.
)0.0
Common stk. 200.0

•Colorado Fuel & Iron Corp.

Conv. SiF. deb.

•Phillips Petroleum Co.
American Natural Gas Co.
American Tel. & Tel. Co.
5| Michigan Wisconsin Pipe Line Co.
.W May Stores Realty Corp.




19.9

Conv. deb.

171.8

Common stk.

25.0

Deb.
1st mtg. bds,
Gen. mtg. bds.

250.0
25.0
25.0

January 23
January 23
January 24
(rights expire)/
January 28 f
(rights expire)
January 29
February 6
February 6
February 19
(rights expire)
February 23
(rights expire)
February 25
(rights expire)"
February 25
(rights expire)
March
Winter
Winter

H.lU

F-2
Forthcoming Large Offerings, as of January 18 (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

STATE AND LOCAL GOVERNMENT
Columbus, Ohio
G.O.
Tulsa, Oklahoma
G.O.
Birmingham, Alabama
G.O.
DeKalb County Soh. Dist., Georgia
G.O.
Boston Metropolitan District, Mass.
G.O.
Port of New York Authority
Rev.
State of Connecticut
G.O.
•Milwaukee Co., Wisconsin
G.O.
San Diego Unified Sch. Dist., Calif.
G.O.
New York, New York
G.O.
Fresno Unified Soh. Dist., Calif.
G.O.
Public Housing Authorities
•State of Missouri
G.O.
•San Francisco (City & Co.), Calif.
G.O.
•El Peso Co. Sch. Dist. No. 11, Colo.
G.O. '
•Houston Ind. Sch. Dist.,.Texas
G.O.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth, Fla.
Rev.
New York State Thruway Authority
G.O.
Jacksonville Expressway Authority
Rev.
Florida State Turnpike Authority
Rev.
Oklahoma Turnpike Authority
Rev.
State of Connecticut
Expressway rev.

5.0
6.5
6.7
5.1
8.2
50.0
29.2
11.2
5.0
25.2
5.5
28.6
20.0
23.6
6.9
16.8
62.0
20.0
50.0
I42.O
185.0
65.0
54.0

January 22
January 22
January 23
January 2i+
January 21+
January 29
January 30
February I4.
February 5
February 5
February 5
February 6
February 13
February 18
February 20
Marchrl
Winter
Winter
Winter
Winter
Winter
Winter
Winter

OTHER
Quebec Hydro-Electric Commission

Deb.

35.0

February 7

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.
•
Bote.—Deletions for reasons other than sale of issue* Southern New England
Telephone Co., '420 million common stock issue—withdrawn from registration.




H.lU

Exhibit G
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
Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis points)

Date.

1952
1953
195k
1955
1956
1956

average
average
average
average
average
- January
February
March
April
May
June
July 3
18
25
August 1
30
September 11
13
25
October 10
31
November 21
December 6
12

-

1957 - January 8
16
18

3.16
3.16
3.02
3.23
3.81
None
*3.15
3.28
*3.77
*3.53
*3.52

3
11
ko
19
18

3.62
3.70

26
33

1.07
it. 20
U.17
it.01

52
62
58
37

it. 20
it. 30

18
52

it. 30

it7

1+.50

62

13
16
2
9
35

56

3.35
3.78
3.12
3.33
3.73
None
3.23
3.U5
3.61
3.77
*3.75
3.82

i

u
26
-3
12
27

lt.00

it3

U.itO

63

it.58

70

it. 67

•

-6
15
26
28
27
28

70

*—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.