Full text of H.16 Capital Market Developments : January 26, 1956

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"

3XBC05TBOLLED AFTER SIX MOHTHS

H.ll*

January 26, 1956
CAPITAL MARKET DEVELOPilSOTS.

The volume of p u b l i c l y sold i s s u e s has been small in
January. The f i r s t l a r g e p u b l i c corporate o f f e r i n g of t h e year—
$75 m i l l i o n of s e n i o r notes—was f l o a t e d l a s t week by Commercial
Credit Company. P r i v a t e s a l e s t o insurance companies, however,
have been l a r g e r than a t t h i s time l a s t y e a r , apparently r e f l e c t ing l a r g e takedowns of commitments to two f i n a n c e companies—$100
million each to CIT F i n a n c i a l and GMAC. One #30 m i l l i o n corporate
o f f e r i n g i s scheduled f o r t h i s week.
Large S t a t e and l o c a l government o f f e r i n g s t o t a l e d $58
m i l l i o n during the week ending January 20, and $15 m i l l i o n of such
o f f e r i n g s are expected t h i s week.
I l l i n o i s ' turnpike i s s u e , viiich was sold l a s t October,
was f i n a l l y cleared of l i t i g a t i o n on Monday, and the # 1 5 m i l l i o n
of t o l l road revenue bonds were delivered t o t h e u n d e r w r i t e r s .
A major f a c t o r i n s e c u r i t y markets l a s t week was the
Ford Foundation's o f f e r i n g of Ford Motor Company stock on January 17. Amounting t o $61*2.6 m i l l i o n , i t was the l a r g e s t i s s u e of
i t s type on r e c o r d . Apparently the i s s u e was heavily oversubs c r i b e d j the s t o c k , tdiich was i n i t i a l l y o f f e r e d , a t $61*. 50 per
s h a r e , reached a high of $71.00 early i n over-the-counter t r a d i n g .
Since t h e n , however, the p r i c e has decreased t o $61* 7/8 bid',
$65 1/8 asked.
The stock w i l l n o t be l i s t e d on the New York Stock
Exchange u n t i l sometime a f t e r t h e s e t t l e m e n t d a t e of January 26.
Some r e p o r t s a t t r i b u t e r e c e n t strong demands f o r U. S. Government short-term s e c u r i t i e s t o a n t i c i p a t i o n of reinvestment of
t h e proceeds of t h i s f l o t a t i o n , as well as of t h e I l l i n o i s Turnpike i s s u e mentioned above.
Bond y i e l d s - IT. S. Government long-term bond y i e l d s
dropped f i v e b a s i s p o i n t s during t h e week ending January 20.
Yields on S t a t e and l o c a l government Baa bonds decreased t h r e e
b a s i s p o i n t s . Other bond y i e l d s decreased more moderately, with
t h e exception of S t a t e and l o c a l government Aaa bond y i e l d s which
d i d not change l a s t week.
Daily f i g u r e s i n d i c a t e moderate i n c r e a s e s on both Monday
and Tuesday of t h i s week f o r Treasury o b l i g a t i o n s .
Stock p r i c e s - Stock p r i c e s , as measured by t h e SEC i n dex of 265 common s t o c k s , dropped 8.8 p o i n t s to 257.L during the




H.lli

-2-

week ending J anuary 20, the lowest p r i c e l e v e l s i n c e October 28 .
Since the beginning of t h e y e a r , t h i s index has f a l l e n by 5 per c e n t .
During the f i r s t t h r e e days of t h i s week, however, p r i c e s increased
somewhat.
More d e t a i l e d information concerning r e c e n t c a p i t a l mark e t developments i s presented i n the attached e x h i b i t s .

Business Finance and 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.




EXHIBIT A

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

CORPORATE A a a

GOVERNMENT

STATE AND LOCAL
GOVERNMENT A a a

Date

Corporate
Aaa 1 /

U. S. Govt,
long-term 2 /

S t a t e and l o c a l
govt., Aaa 3/

Spread between
U* S» Govt, and
Corporate State and
Aaa
l o c a l Aaa

(Per cent) .
1953 - High
Low
195k - High
Low
1955 - High
Low

3.U2
2.99
3.09
2.85
3.17
2.91

December 23
December 30
J anuaiy 6
January 13
January 20

3.17
3.16
3.1k
3-13
3.11

(6/19)
(1/9)
(1/8)
(V23)
(12/23)
(1/7)

3.15
2.78
2.71
2.U1
2 -9U
2.62
2.88
2.89
2.90
2.88
2.83

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)

2.73
1.98
2.21
1.90
2.3U
2.05
2.30
2.30
2.29
2.27
2.27

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)

.38
.19
.U3
.32
-3k
.13
• 29
•27
•2U
.25
.28

•8U
• 30
.61
.29
.70

„

•58
.59
.61
.61
.56

1/ Weekly average of daily f i g u r e s . Average term of bonds included i s 25-26
yearsT
£ / Weekly average of daily f i g u r e s ; old s e r i e s . Average term to f i r s t c a l l
of bonds included i s II-U4 years.
3/ Thursday f i g u r e s . Only general obligation bonds are included; average
term Ts 20 y e a r s .
Note.—Highs and lows are for individual s e r i e s and may be on d i f f e r e n t dates
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS
Weekly

Per cent per annum

J

\
STATE AND LOCAL GOVT. B a a
/\
Moody".
W

V

!

I

Corporate
Baa 1 /

Date

/

State and
local govt.
Baa 1 /

State and
l o c a l govt,
rev. 3/

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
Low

3.89
3.50
3-71*
3-hk
3.63
3.1*5

December 23
December 30
January 6
January 13
January 20

3.63
3.63
3.62
3.61
3.60

(9/18)
(1/2)
(3/8)
(12/31)
(12/30)
(I/Hi)

3.79
2.96
3.32
2.93
3.26
3.02
3-25
3.26
3.26
3.25
3.22

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)

3.27
2.71
3.00
2.72
2.99
2.76

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)

2.99 ^
2.99
2.91*
2.91
2.90

v Weekly average of daily f i g u r e s . Average term of bonds
included i s 25-26 years.
2/ Thursday f i g u r e s . Only general obligation bonds are
included; average term i s 20 years.
Friday f i g u r e s . Average r a t i n g of bonds included i s
between Baa and A; average term i s 20 years.
Note.—Highs and lows are f o r individual s e r i e s and may
be on d i f f e r e n t dates f o r d i f f e r e n t s e r i e s .




STOCK MARKET

Date

Stock p r i c e
index 3 /

Common
Trading
volume 2/
(millions yields J /
of s h a r e s ) ( p e r c e n t )

Stock market customer c r e d i t
Bank
Customers 1
T o t a l d e b i t b a ^ - loans t o
"others" 5/
( M i l l i o n s of d o l l a r s )

1953 - High
Low
195U - High
Low
1955 - High
Low
November
December
January 6
J anuary 13
J a n u a r y 20

167.1
ia.0
221. U
156.5
270.7
217.14

(2/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/lh)

265.0
269.2
268.8
I 266.2
1 257. U

2.5
0.9
3.7
l.U
U.6
1.5

5.75
5.15
5-33
U.20
U.22
3.78

2,1*5
2,055
3,1*36
2,1,05
a,025
3,537

1,665
1,311*
2,388
1,653
2,805
2,517

780
66U
1,01*8
7U6
1,21a
1,018

2.3
2.U
2.3
2.1i
2.3

U.09
U.06

3,980
1,025

2,759
2,786

n.a.

n.a.

n.a.

1,221
1,239
1,253
1,253
n.a.

1 / SEC i n d e x of 265 common s t o c k s , weekly c l o s i n g p r i c e s , 1939-100; converted
t o 1957-U9-100 by Ftederal Reserve. The conversion f a c t o r i s 123.91.
2/ Averages of d a i l y t r a d i n g volume on t h e New York Stock Exchange.
"%f Moody's 200 common s t o c k s ; end of month f i g u r e s .
k / End of month f i g u r e s f o r member f i r m s of t h e New York Stock Exchange which
c a r r y - m a r g i n accounts; excludes b a l a n c e s s e c u r e d t y D. S . Government o b l i g a t i o n s .
i f Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes a l l l o a n s
f o r purchasing o r c a r r y i n g U. S. Governments f o r 1952; s i n c e 1953 only t h e s e l o a n s
a t banks i n New York and Chicago a r e excluded. Weekly r e p o r t i n g banks account f o r
about 72 p e r cent of l o a n s t o o t h e r s .
Note.—Highs and lows a r e f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t d a t e s
for different series.




Exhibit D
Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of d o l l a r s )
Corporate
1955
1

Nevr c a p i t a l
195k

1956

5U6
U36
1,261

. 5U7
U26
635

e/360

April
•May'
June

U9U
903
697

July
August
September

#3
65k
680

October
November
December

1,136 y
601
e/850

1956
January
February
March

e/600

! 1st quarter
2nd q u a r t e r
3rd q u a r t e r
iith q u a r t e r
Year

|

'

2,213
2,09b
1,917
e/2,590
e/8,8U5

S t a t e and l o c a l
1
1955
1

1954

535
312
538

396
1*11
565

197
6#
8U2

1*27
350
61*1

73k
7U8
853

909
335 7U7

1*70
21*9
1*06

279
261
61*9

1,003
290
60k

919
658
e/UOO

59U
1*2 3
877

1,608
1,995
1,991
1,896
7,190

1,385
1,108
1,121
e/l,977.
e/5,90U

1,372
2,33b
1,188
1,891
6,789

Excluding f i n a n c e companies 2/
1st quarter
2nd quarter
3rd quarter
Uth quarter
Year

1

1,791
1,912
1,UU1
e/2,390
1/7,535

.

1,527
1,927
1,911
1,792
7,158

e / Estimated.
T / Includes $637*2 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
2 / Total new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and personal f i n a n c e
companies.
Note.—Details may not add to t o t a l s due to rounding.




H.Ik

Exhibit E
Large Public S e c u r i t y I s s u e s f o r New Capital
(Other than U. S. Treasury). 1 /
Proceeds of Large Issues Offered
(Millions of d o l l a r s )

Month

Corporate

195h - December
. 1955 - January
February
March
April
May
June
July
August
September
October
November
December

121
llil
63
750
. 173
k&3
175
101
W5
328
805
269
215

S t a t e and
l o c a l government

Other _2/

6#
. 3hi
107
337
238
"
152
103
278
65
23k
716
396
205

30 •
35
15
—

—
——

25
50

Large I n d i v i d u a l I s s u e s Offered January 2 through 20

Issuer

Type 3 /

Coupon
Amount
(millions
r a t e or O f f e r i n g
Rating
of . Maturity n e t i n t e r yield
e s t cost
dollars)

CORPORATE
Commercial Credit Co.

j

Notes

75.0

1976

3 5/8

3.63

—

STATE &.LOCAL GOVERNMENT
Wayne County Sewer
System," Michigan
P l a t t e County, Missouri
Allegheny Co., Pa.
Los Angeles, C a l i f .
S t a t e of Colorado
D e t r o i t , Michigan
Gwinnett County, Ga.
San Diego,. C a l i f .
S p r i n g f i e l d , Ohio
S t a t e of Michigan




G.O.
Rev.
G.O.
G.O.
L. L.
Rev.
L* L.
G.O.
G.O.
L.L.

V
• 6.7
$.h
6.0
10.0
8.0
8.0
5.9
9.5
5.2
10.0

1956-93
1986
1957-86
1957-76
1957-71
1961-76
1959-81;
1957-81
1957-80
1957-78

3.21
2.53
2.58
2.29
2.U1
2.56
2.1*8
2.37

1.90-3.20
3.75
1.75-2,60
1.80-2.65
1.70-2.25
2.10-2.U5
3.00-3.50
1.75-2.60
1.75-2.55
1.70-2.1*0

A
A
Aa
Aa
Aa
AA
Aa

H.lli

E-2

Large I n d i v i d u a l I s s u e s Offered January 2 through 20 (Cont'd)
Issuer

type 3/

Coupon
Amount
r a t e or O f f e r i n g Rating
(millions Maturity
net interof
yield
e s t cost
dollars)

STATE & LOCAL GOVERNMENT
(Cont' d T ~
S t a t e of Michigan
D e t r o i t , Michigan
Caddo P a r i s h , La.
La. S t a t e Building Auth.

L.L.
G. 0.
G. 0«
L. L*

10,0
5.2
5.0
7-6

1957-72
1957-81 .
1957-76
1961-85

2.30
Var.
2.57
3.06

1.70-2.30 - Aa
1.80-2.60
A
1.80-2.60
A
Baa
2.50-3.05

OTHER

Var.—Various
n,a.—Not a v a i l a b l e .
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of #15 m i l l i o n and over;
S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of $5 m i l l i o n and over.
* 2/ Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and
Development i s s u e s .
5/ In the case of S t a t e and l o c a l government s e c u r i t i e s , G.O. denotes general
o b l i g a t i o n ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured
by f a c i l i t i e s revenues; L . L . , l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
designated revenues.




H.lU

Exhibit F
Forthcoming Large Public Security Offerings f o r Mew Capital
(Other than U . S . Treasury) 1 /
Expected Proceeds from Forthcoming Large I s s u e s
During month following
date shown
S t a t e and Other 1/
Corporate
l o c a l govt.

Date of
computation

18U
lo
710
211
U25
160
67
U07
222
805
202
215 70

195U - Dec. 31
1955 - Jan. 31
Feb. 28
Mar. 31
Apr. 29
May 31
June 30
J u l y 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30

567
682
52U
208
116
339
3kh
100
18U
8U3330
205
.^121

50

Subsequent t o
date shown
S t a t e and Other 2y
Corporate
l o c a l govt.
216
h22
1,395
922
1,1U1
850
830
1,135
920
909
U12
230
85

.

2,'lUU
1,961
1,978
2,009
1,917
1,861
1,81*5
2,018
1,971
2,205
1,650
756
618

35

50

Forthcoming Large O f f e r i n g s , as of January 20
Issuer

Textron-American
Northwestern B e l l Telephone
Texas U t i l i t i e s
^Chemical Corn Exchange Bank
#M« Lowenstein and Sons
Reynolds Metals
Bell Telephone of Pennsylvania
New York Telephone
. Southern C a l i f o r n i a Gas
Sheraton Corporation of America
^Southern C a l i f o r n i a Edison

Type

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

. Conv. deb.
Deb.
Com. stock
Com., stock
Conv. sub. deb.
P f d . stock
Deb.
Ref. mtg. bds.
Iltg. bds. Deb.
P f d . stock

30.0
25.0
15.0
26.0
3U-3
UO.O
35.0
55.0
Uo.o
15.0
30.0

G.O.
G.O.
G.O.
Rev.

8.9
6.0
7.8
5.0

January 26
February 1
February 1
February 8
February 15
February
March 6
March 27
May
1956
1956

STATE AND LOCAL GOVERNMENT
Milwaukee County, Wisconsin
P h i l a d e l p h i a , Pennsylvania
S t a t e of Maryland
Tacoma, Washington




January
January
January
January

23
25
31
31

H.llt

F-2
Forthcoming Large O f f e r i n g s , as of January 20 (Cont'd)
Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s ) |

Issuer
STATE AND LOCAL GOVERNMENT (Cont'd)
Walsenburg, Colorado
Oklahoma C i t y , Oklahoma
Public Housing A u t h o r i t i e s
*New Orleans, Louisiana
^Harris County, Texas
^Metropolitan Water D i s t . of So Gal.
*lVeber Basin 1,'ater Conservancy
D i s t r i c t , Utah
Rochester, New York .
^Georgia Rural Roads Authority
• F l o r i d a S t a t e Turnpike Authority
Inter-American Center Auth., F l a .
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e T o l l Bridge Auth
S a l t River P r o j e c t , Arizona
Connecticut Expressway

Rev.

Rev.
Rev.
Rev.
Rev.
Rev.
Rev.

21.0
13.2
106.8
11.5
5.5
7.3
5-U
7.U
15.5
185.0
25.0
65.0
62.0
227.0
11.0
100.0

February
February
February
February
. -February
February

2
7
7.
8
lit
lii

February 15
February 21
May
Late spring
1956
1956
1956
1956
1956
1956

OTHER

*—Included i n 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; S t a t e and
local!"government i s s u e s of $5 m i l l i o n and over.
2 j Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction
and Development i s s u e s .