Full text of H.16 Capital Market Developments : July 28, 1958

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Not for Publication

DECONTROLLED AFTER SIX MOUTHS '

H.lU .

July 28, 1958,
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing was moderate last
week. Large corporate issues sold totaled $65 million, while State
and local governments offered bonds for $11*4. million. This week's
calendar is light; rights expire on two corporate issues with
proceeds of $16 million, while one $h0 million State and local
government bond offering is scheduled.
Bond yields - Yields on outstanding corporate bonds
increased last week, while those on U. S, Government obligations
.and Baa-rated State and local government bonds decreased slightly.
Aaa-rated State and local bond yields were unchanged. A new Aa-rated,
first mortgage electric utility bond issue was offered to investors
at 1*. 10 per cent last week, the same yield as that for a comparable
offering made the preceding week.
Stock prices - Common stock prices increased sharply last
week in the heaviest trading volume of the year. Standard and Poor's
index of stock prices closed at 1*6.97 on Friday, a new high for the
year and only h per cent below the 1957 peak. Trading volume averaged
3.7 million shares a day.
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.




EXHIBIT A

HIGH-GRADE BOND YIELDS

L O W E R - G R A D E B O N D YIELDS
W«elely




Per cent per annum

/ \/

11.ll

Exhibit B
Tables for Exhibit A
High-grade Bond Yields

\

Corporate
Aaa 1/

• Date

U. S. Govt,
long-term 2/

State and
local govt.
Aaa 1/

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

(Per cent)
1953195k 1957 1958 -

July
July
July
July

High
Low
high
High
Low

3Ji2
2.85
U.lU
3.70
3.55

(6/19)
(1/23)
(9/27)
(7/25)
(5/2)

(6/5)
(8/6)
(10/18)
(7/18)
(1/25)

3.26
3.26
3.31
3.39
3.38

3.61
3.62
3.63
3.67
3.70

I4
11
18
25fiZ

3.19
2.15
3.76
3.L0
3.07

2.73 (6/25)
1.90 (9/2)
3.15 (8/29)
2.86 (1/9)
2.61* (5/1) .

.38
.30
.60
.51
.28

.83
.30
Ml
.62
• 3U

2.78
2.78
2.78
2.78
2.78

.35
.36
.32
.28
.32

•U8
• .U8
.52
.62
.60

Lover-grade Bond Yields
Bate

Corporate
Baa 1/

State and
local govt.
Baa

Spread between '
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953.- High
lS5ii - Low
1957 - High
1958 - High

3.89 (9/18)
3.lil* (12/31)
5-10 (11/29)
L96 (1/3)
ii.51 (7/11)

June
July
July
July
July

k.5k
14.53
L.51
h.52
L.55

27
li
11
16
252/

.

3.79 (6/25)
2.93 (8/5)

m'

3.61* (5/1)
3.8L
3.8k
3.85
- 3.83
3.82

.69
.52
1.27
1.28
.85
.93
.91
.88
.85
.85

1.23
1.21
1.11
.99
1.06
1.06
1.07
1.05
1.0U

vj .Preliminary.
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.
2/ Thursday figures. Only general obligations bonds are included; average tern
is 20 years.
'Mote.—highs and lows are for individual series and nay be on different dates for
different series.




STOCK M A R K E T




t. t" 1

t.I\ 1

Table for Exhibit C
Stock Market
Date

Stock price
index 1/

Trading
• Common
Stock market customer credit
stock
volume 2/
Customers' Bank
(millions yields V
debit bal- loans to
of shares) (per cent;
ances 4/ "others" 5/
(Millions of dollars)

1953 - High
Low
1954 - High
Low
1 9 # - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
May
July 11
July 18
July 25e/

26.5U (1/2)
2.5
22.95 (9/18) 0.9
35.98 (12/31)
2li.93 (1/8)

US.89 (12/9)

35.28 (l/lli)
49.64 (8/3)
1*3.22 (1/20)
ll9.08 (7/12)
39.48 (12/20)
46.97 (7/25)
40.37 (1/10)
43.70
44.75
15.72
45.77
16.97

8

1.5

S

4.2
1.4
3.7
1.7

2.6

2.7
2.5
3.1
3.7

6.25

It. 32
5.82

1.08

4.41

3.82
4.34
3.91
4.72
3.88
4.58

4.17 .
4.07
3.99
3.98

3.88

II

2,1.05

4,030
3,537
4,047
3,91k
It,031
3,576

It, 226
3,55k

4,069

4,226
n.a.
n.a.
n.a.

1,665
1,314
2,388
1,653
2,805
2,517
2,823
2,740
2,887
2,482
2,929
2,487
2,856
2,929
n.a.
n.a.
n.a.

780
664
1,241

1,018

1,267
1,155
1,163
1,054
1,317
1,051
1,213
1,297
1,307
1,294

n.a.—Not available.
g/ Preliminary. "
•
1/ Standard and Poor's composite index of 5d0 common stocks, weekly closing
prices, 1941-43-10. 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.
J/ 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 reached its high or low.
1±/ End of month figures for member firas of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government obligations.
%/ 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 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit E

H.lli

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

1958
January
February
March

1

723

i S *

New capital
State and local 2/
Corporate 1/
1958
1 1957 1 1956
1957 1 1956
1,060
1,065
1,320

April
May
June

2/1,121*
2/621*
e/800

1,153

July
August
September

e/1,150

1,003

October
November
December
1st quarter
2nd quarter .
3rd quarter
j*th quarter

3,135
2/2,51*8

1st half
Three quarters
Tear

e/5,683

;»
92U
973

.

71*2

1*04

1,11*6
81*1

797
871
2/532

765
51*6
393

378
1*90
735

1,063
651*

«/5?5

529
581*
1*31

1*08
206
357

573
712
817

812
953
511

818

838

1,090
789
1,076

1,088

3,1*1*5
3,11*9
2,899
2,951*

2,102
2,805
2,556
2,922

6,591*
9,1*93
12,1*1*7

10,381*

698

i s

633

698

2,276
2/2,200

1,820

i:S

2,029

2/1*, 1*26

696

390

•

3,521*
5,069

7,099

639

31*7
1*09

1,1*90 , "
1,603
971
1,395
3,093
It,061*
5,1*59

Excluding finance companies $/
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

2,89li
e/2,U98

Year

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

1,61*7
2,51*1
2,21*6
2,826

11,518

9,260

3/ Securities and Exchange Commission estimates of net proceeds.
2/ 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.
3/ Includes $718.3 million AT&T convertible debenture issue.
5/ Includes $571.5 million AT&T common stock issue.
jgy Total new capital issues excluding offerings of sales and consumer finance
companies.




.

11.1k

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-term
Foreign government 2/
Federal agency
1958
I 1957
I 193&
1958
1957

January
February.
-March

196
53

81*
1*9
30

April
May

139
197

123
1*8
1*2

July
August
September

28
7
30

October
November
December

1*
60
1

Year

507

37
8

1,163
251

72

523

125

50

2
39

April
May
June

109

1*1*
5
21

100

300

169

572
Federal agency 3/

233
1*60
273

326
1*55
11*7

196
357
21*9

371
208
11*1*

638
1*30
505

380
220
283 .

357
35U
B/26U

205
337
153

125
252
176

209
161
329

336
1*69
501

323
311*
260

272
272
252

195
207
179

221*

370
512

222
1*25
273

303
91*
1*59

291*
328
11*8

1,238
255
116

1*07
222
128

3,271*

2,706

July
August
September
October
November
December

60

215

Short-tenu
State and local government k/
January
February
March

1935"

60

95
;

E

.

^Year

5,51*3 '

3,1*57

e/ Estimated.
g/ Preliminary.
1/ Data presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than 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.
jj/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commissionj .short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public

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

Federal Reserve Bank of St. Louis

Exhibit Q

H.lii

Large Long-term Public Security Issues for New Capital
(Other than U, 8. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

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

State and
local government
81
22k
266
133
393
3W»
iiOii
ltlO
553
182
300
505
195

877
525
526
537
57U
U20
399
318
6o5
1,093
725
356/
281

Other 2/
99
25
2U5
75
100
1,378
266
653
165
86

Large Individual Issues Offered July 1 through 25
Issuer

"type ]/

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

CORPORATE
Florida Power Corp.
1st mtg. bds. 25.0
Northern Ind. Pub. Sv. Co. Com. stk.
15.2
Pacific Gas & Elec. Co.
Com. stk.
hh.k
N. Y. Telephone Co.
Ref. mtg. bds. 65.0
New Eng. Tel. & Tel. Co. Com. stk.
22.6
Southern Nat. Gas Co.
S.F. deb.
30.0
Boston Edison Co.
Pfd. stk.
Southern Railway Co.
1st coll. tr. 22.0
S.F. deb.
Boeing Airplane Co.
1*0.0
United States Steel Corp. S.F. deb.
300.0
Com. stk.
Pacific Lighting Corp.
16.3
Burroughs Corp.
S.F. deb.
25.0
Washington Wtr. Pwr. Co. 1st mtg. bds. 15.0
Nat. Gas Pipeline Co.
Conv. deb.
of America
35.0
Nat. Gas Pipeline Co.
Pfd. stk.
of America
15.0




3.98

A

h 1/8

1.00

Aaa

1978

h 1/2

h.$0

Baa

1988
1978
1983

h 1/2
5
h

U.50 -5.12
3.97

A
Baa
Aa

1983
1988

a 3/8
h 3/8

lt.38
U.35

A
A

1978

h 3A

L 83

Baa

1988

h 1/8

1993

H.1U

G-2
Large Individual Issues Offered July 1 through 25 (Cont'd)

Issuer

Type 3/

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

STATE AND LOCAL GOVERNMENT
Penna. Gen. State Auth.
Met. San. Dist. of Chicago,
Illinois
Memphis5 Tennessee
Los Angeles Dept. of Wtr.
and Pwr., California
State of North Carolina
z
State- of Ohio Territory of Hawaii
State of California

Rev.-S.T.

30.0 1960-84/68

Rev.-Ut.
Rev.-Ut.

15.0
10.0

Rev. -Ut.
G.O. '
Rev.-S.T.
Rev.-Ut.
G.O.

21.0
15.0
31.0
12.5
100.0

3.34

1.30-3.50

—

3.03
1960-88/68 3.09

1.25-3.20
1.25-3.25

A
Aa

1959-88/61
1960-78
1959-72
1960-87.cx
1960-84/79

3.30
2.76
2.88
4.15
2.34

1.00-3.50
1.20-2.90
.90-3.05
2.00-4.25
1.20-3.35V

Aa
Aa
Aa
A
Aa

1 3/4

1.90

1960-78

OTHER
Federal Land Banks

Loan Bds.

^ ia. 0 Oct. 1959

—

State and local government security offerings of $10 million and over.
.2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
3/ In the case of State and local government securities, G.O., denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent,
revenue bonds secured solely by lease payments.
h/ The 3.35 per cent yield is for the 1983 maturity. The l's of I98U
were offered to yield 3.75 per cent.




H.li*

Exhibit H
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues

Date of
computation

Subsequent to
date shown

During month following
date shown
Corporate

1957 - May 31
June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
1958 - Jan. 31
Feb. 28
Mar. 31
Apr. 30
May 29
June 30

525
526

Si

U50
383
378
1*98
1,123
.

%

266
768

| Other V
87
153
218
183
33U
339

lui

370
134
298
U93
177
225

25
30
30
18
150
110

Corporate | ^ % ^ J o t h e r 2 /
1*07
1*79
1*71
379

SI

811
81*5
61*7
815
1,193
1,161
1,378
1,208
670
561
1*61*
1,01*8

IS
Hi*
1*87
31*1
330
1*93
208
235

25
30
15

I
110

•5

Forthcoming Large Offerings, as of July 25
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Boeing Airplane Co.
Burroughs Corp.
Montana Power Co.
Consolidated Natural Gas Co.
Houston Corp.
^Public Service Electric & Gas Co.
Commerce Oil Refining Corp.
Standard Oil Co. of California
Martin Co.

Conv. sub. deb.
Common stk.

30.6
15.0

1st mtg. bds.
20.0
S.F. deb.
1*5.0
Deb, & common,-stk* 36.2
1st ref. mtg. bds. 60.0
Deb., bds. & common 1*5.0
Deb.
150.0
S.F. deb.
25.0

July 29
(rights expire)
July 30
(rights expire)
Aug. 13
Aug. 11*
Aug. 15
Aug. 21
1958
1958
1958

STATE AND LOCAL GOVERNMENT
Los Angeles Sch. Diets., Calif.
Philadelphia, Pennsylvania
^Georgia Rural Roads Auth.




0.0.

0.0.
Rev.—Ut•

1*0.0

12.0
21.0

July 29
Aug. 5
Aug. 5

H.1U

H-2
Forthcoming Large Offering, as of July 2$ (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of.offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
*Los Angeles, California
-xState of Indiana
San Diego Unif. Sch. Dist., Calif.

G.O.
Rev.
G.O.

21.5
30.0
10.0

Aug. 19 Sept. 9
Sept. 10

OTHER
None
-x—Included in table for first time.
1/ Includes corporate and. other issues of $15 million and over; State and
local government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issues: None.




H.lli

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date .
1952 - 1 9 5 7
High
Low

Aa-rated <offering yields A-rated oJ^ferine yields
.. Amount above
Amount above
Actual seasoned yields Actual seasoned yields
(per cent) (basis points) (per cent) (basis points)
5.00(8/1^/57)
2.93(3/31/51*)-

1958 - January
February
March U

*3.60

5
6
12
19
21
25

,

87
-3

5.50(11/7/57)
3.00(3/17/51)

—8

3.89i/

22

U.15
U.22
U.00
In 0 0

UU
50
28
26

L 05
3.98

LOO

31
23
25

3.75

5

3.96^/
U.07
U.25

U.07

April 1

2
17
23
29
May 7

3.90

June 10
17
25

July 2
9
18
23

.

16

3.85
3.85

16

3.85
3.82
3.95

17
12
2it

a.oo

25

t-18

3

9
6

-7

3.98

5

U.0U
a. 00

11
3

U.07
U.35

U
32

21

•8
16
20
21
22
28

123
-15

II

U.oo

-i

3.95

-6

1

3.98^

U.35

1

31

*—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.
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.