Full text of H.16 Capital Market Developments : July 5, 1956

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H,lli

'

• .

J u l y $ , 1956

CAPITAL mRKET DEVELOPMENTS

The r e l a t i v e l y small volume of new l a r g e s e c u r i t y i s s u e s o f f e r e d
p u b l i c l y during the week ending June 29 was dominated by a bond i s s u e
t o t a l i n g • $91=8 m i l l i o n o f f e r e d by the Public Housing A u t h o r i t i e s .
Of t h i s t o t a l , $ 8 8 m i l l i o n was r e o f f e r e d p u b l i c l y and appears to have
met a. f a i r r e c e p t i o n , with approximately $5>0 m i l l i o n l e f t i n account near
the end of the week. This i s s u e brought l a r g e s t a t e and l o c a l o f f e r i n g s to
a t o t a l of vl|63 m i l l i o n f o r June—the h i g h e s t monthly volume i n over a
year.
' The week's only a d d i t i o n to June corporate - o f f e r i n g s came
through the e x p i r a t i o n of s u b s c r i p t i o n r i g h t s to a *19.6 m i l l i o n i s s u e of
i n d u s t r i a l common s t o c k . This brought the t o t a l of new l a r g e corporate
s e c u r i t y i s s u e s to a modest %185 m i l l i o n f o r the month. The only other
l a r g e o f f e r i n g during the week was a (,20 m i l l i o n B r i t i s h Columbia sinking
fund debenture,
rFor the week ending J u l y 6, including the J u l y k holiday, no
l a r g e s t a t e or l o c a l public o f f e r i n g s and only one $20 m i l l i o n corporate
i s s u e are scheduled. A s u b s t a n t i a l increase i s r e p o r t e d , however, among
new i s s u e s now scheduled f o r o f f e r i n g l a t e r i n the month as can be noted
in Exhibit F.
Bond Yields - Last week was marked by a s l i g h t upward trend i n
y i e l d s g e n e r a l l y , carrying the y i e l d on corporate Baa's to 3,77—a new
1956 h i g h . On J u l y 2, a »20 m i l l i o n i s s u e of 30-year A-rated f i r s t mortgage
e l e c t r i c u t i l i t y bonds was sold to y i e l d 3 , 8 2 . This was 7 b a s i s p o i n t s
above a comparable o f f e r i n g during the week of June 20,
Stock Prices - The SEC index of 265 common stock p r i c e s recorded
a r i s e of 2.U p o i n t s during the week ending June 29, This brought the
index to 280,1 by the end of the week—equal to the average l e v e l f o r
May though s t i l l w e l l below A p r i l h i g h s . Trading volume, though s t i l l
l i g h t , was up 0 , 2 m i l l i o n from the y e a r ' s low of 1 , 6 m i l l i o n the preceding
week. Daily indexes i n d i c a t e t h a t the beginning of the s t e e l s t r i k e had
a moderately adverse e f f e c t on the market Monday, b u t the recovery on
J u l y 3, c a r r i e d the index to a l e v e l s l i g h t l y higher than the close on
F r i d a y , June 29.
More d e t a i l e d information concerning the r e c e n t c a p i t a l market
developments i s presented i n the attached e x h i b i t s .

Business Finance and' C a p i t a l Markets S e c t i o n ,
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

CORPORATE

U. S. GOVERNMENT

! STATE AND LOCAL
GOVERNMENT A a a

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

•

Corporate
Aaa 1 /

Old s e r i e s

New s e r i e s

Spread between
U. S. Govt,
S t a t e and
l o c a l g o v t . (old s e r i e s ) and
Corporate (State and
Aaa 3 /
1local Aaa

(Per c e n t )
1953 - High

1956 - High
Low

3.42
2.99
3.09
2.85
3-17
2.91
3.30
3.07

June 1
8
15
22
June 29

3.27
3.27
3.26
3.26
3.27

1954 - High
1955 - High

(6/19)
(1/9)
(1/8)
(4/23)
(12/23)
(1/7)
(5/4)
(3/2)

3.15
2.78
2.74
2.44
2.94
2.62
3.08
2.80

(6/6)
(12/26)
(1/9)
(8/7)
(8/5) •
(1/7)
(4/20)
(2/17)

2.87
2.87
2.87
2.88
2.92

1 / Weekly average of d a i l y f i g u r e s .

n.a.

3.03
2.89
3.13
2.92
2.99
2.98
2.97
2.98
3.00

•

(8/5)
(6/10)
(4/20)
(2/3)

2.73
1.98
2.21
1.90
2.34
2.05
2.51
2.17
2.42
2.38
2.33
2.32
2.34

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(5/3)
(2/23)

.38
.19
.43
• 32
.34
• 13
.40
.13

.84
.30
.61
.29
•70
.54
.68
.45

.40
.40
.39
.38
•35

.45
.49
.54
.56
.58

Average term of bonds included i s 25-26

2 / Weekly averages of d a i l y f i g u r e s . The old s e r i e s includes f u l l y t a x a b l e ,
marketable 2 l / 2 per cent bonds due or f i r s t c a l l a b l e a f t e r 12 years through
September 1955* and those due or c a l l a b l e in 10-12 years t h e r e a f t e r ; the average
term t o f i r s t c a l l of the bonds included d e c l i n e d from 14 years i n e a r l y 1953 t o
11 l / 2 years in e a r l y 1956. The new s e r i e s i s comprised of the 3 per cent btyid
of 1995 and the 3 ' l / 4 P e r cent bond of 1978-83.
2 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average
term i s 20 y e a r s .
'
Note.—Highs and lows are 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 dates
for different series.




LOWER - GRADE BOND YIELDS

CORPORATE B a a

STATE AND LOCAL GOVT. B a a
ZV
j Moody's I
j. W

1

!. - . /

i" I

i

STATE AND LOCAL GOVT. REVENUE

Corporate

-Baa 1/

State and
l o c a l govt.
Baa 2 /

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

(Per cent)
1953 - High
1954 - High
Low
1955 - High
1956 - High
Low
June 1
June 15
June 22
June 29

3.89
3.50
3.7U
3.44
3.63
3.45
3.77
3.58
3.74
3.75
3-75
3.75
3.77

OAS)
(1/2)'
(1/3) - (12/31)
(12/30)
(1/14)
(6/29)
(3/9)

3.79 (6/25)
2.96 (1/8)
3.32 ( 1 / 7 )
2.93-(8/5)
3 . 2 6 (12/29)
3.02 ( 1 / 6 )
3.44 (5-/3)
3.20 ( 3 / 8 ) •

3.27
2.71
3.00
2.72
2.99
2.76
3.12
2.89

3.31
3.28
3.23
3.24
3.24 •

3.03
3.02
3.00
3.01
3.03

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(4/27)
(2/24)

l / Weekly average of d a i l y f i g u r e s . Average term of bonds
included i s 25-26 y e a r s .
2 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are
included; average term i s 20 y e a r s .
3 / 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 y e a r s .
Note.—Highs and lows are f o r individual s e r i e s and nay
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 .
FRASER

Digitized for


STOCK MARKET

Date

Stock p r i c e
index l /

T r a d i n g . Common
volume 2 /
stock
(millions yields 3 /
of s h a r e s ) ( p e r c e n t )

Stock market customer c r e d i t
Customers'
d e b i t b a l - loans t o
ances 4 / " o t h e r s " 5 /

Total

( M i l l i o n s of d o l l a r s )
1953 - High
1954 - High
1955 - High
1956 - High
Low
May

June 29

167.1
144.0
221.4
156.5
270.7
217.4
290.8
257.4

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/14)
(4/6)
(1/20)

280.1
275-5
277.0
277.7
280.1

1,665

2.5
0.9
3.7
1.4
4.6
1.5
3.1
1.6

5.75
5.15
5-33
4.20
4.22
3.78
4.08
3.68

2,445
2,055
3,436
2,405
4,030
3,5374,047
3,991

1,314
2,388
1,653
2,805
2,517
2,810
2,740

2.4
1.8
1.7
1.6
1.8

3-97

4,047

2,810

n.a.

n.a.

n.a.

780
664
1,048.
746
1,241
1,018
1,267
1,217
1,237
1,217
1,222

n.e.--Not available.
l / SEC index 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; c o n v e r t e d
t o 19^7-49=100 by F e d e r a l B e s e r v e . The c o n v e r s i o n f a c t o r i s 1 2 3 . 9 1 .
2 / Averages-of d a i l y t r a d i n g volume on t h e New York Stock Exchange.
3 / Moody's 200 common stocks; end of month f i g u r e s .
4 / 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 margin a c c o u n t s ; e x c l u d e s b a l a n c e s s e c u r e d by U. S. Government o b l i g a t i o n s .
5 / Wednesday f i g u r e s f o r weekly r e p o r t i n g member b a n k s . E x c l u d e s l o a n s f o r
p u r c h a s i n g o r c a r r y i n g U. S. Government s e c u r i t i e s a t banks i n New York and Chicago.
Weekly r e p o r t i n g banks account f o r a b o u t 72 p e r c e n t 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 arid Local Government
S e c u r i t y Offerings and Placements
( I n m i l l i o n s of d o l l a r s ) .

1956
January
February
March

579
70k
790

New c a p i t a l

Corporate
1
1955 1

195U

1956

535
U07
1,223

51+7
1*26
635

UOU
696
'390

535
312
538

396
lai
565

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

195k

April
May
June

e/890
e/1,100
- e/875

k78 .
886
687

k97
656
81*2

377
e/500
e/730

U27
350
6kl

73k
7L8
853

July
August
September

e/1,075

597.
616
670

909
335
7k7

e/LOO

U70
2U9
k06

279
261
61*9

919
658
ko8

59k
U23
877

1,385
l,kl8
1,12k
1,98k
5,911

1,372
2,33k
1,188
1,89k
6,789

. October
November
December
1st quarter
2nd q u a r t e r
3rd q u a r t e r
kth q u a r t e r
•Tear

2,073
e/2,865

1,162^/
632
900

1,003
290
. 6ck

2,165
2,052
1,911
2,695
8,821

1,608
1,995
1,991
1,896
7,k90

1,U90
e/1,607

Excluding ; f i n a n c e companies 2 /
1st quarter
2nd q u a r t e r
3rd q u a r t e r
Uth q u a r t e r
Year

1,617
e/2,665

1,727
1,870
l,k3k
2,55k
7,569

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

e / Estimated.
1 / 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 / T o t a l 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 p e r s o n a l f i n a n c e
companies.
Note#—Details may not add t o t o t a l s due t o rounding.




1/

#

H.lli

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

Corporate

Month

1955 - June
July
August
September
October
November
December
1956 - January
February
March
April
»
• May
June

S t a t e and
l o c a l government
1*03
278
65
23U
716
1*01
227
192
Wi
163
157
233 .

175
101
U05
328
805
221
263
95
212
278
395
623
185

to

Other 2 /

__

25
50

50
20

Large I n d i v i d u a l I s s u e s Offered during June
Issuer

Type 3 /

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

CORPORATE
Commonwealth Ediaon
U. S. Plywood
Household Finance
Boston Edison
Combustion Eng'g.
Halliburton Oil Well
Cementing Co.
National Gypsum

1 s t mtg, bds.
Deb,
Deb.
Pfd. stk.
Conv.sub.deb.
Common s t k .

1*0.0
15.0
50.0
18.0
15.0
27.6

Common s t k .

19.6

*



1986
1981
1978
1981

3 1/2
kl/h
ij.
1.25
3 3/8

3.50
U.25
a . oo

Aaa
Baa

3.38

Baa

7
H.ll*

E-2

Large I n d i v i d u a l I s s u e s Offered During June (Cont r d)

Issuer

type 3/

Amount
(millions
Maturity
of
dollars)

Coupon
Offering
r a t e or
Rating
yield
net i n t e r est cost

STATE & LOCAL GOVERNMENT
Rev.
Wash. Toll Bridge Auth,
G.O.
C i n c i n n a t i , Ohio
G.O.
New York, N. Y.
G.O.
Denver, Colorado
G.O.
Chicago, I l l i n o i s
Elec. r e v .
Tallahassee, F l o r i d a
J t i l . t a x rev.
Tallahassee, F l o r i d a
Rev.
Pa. Gen. S t a t e Auth.
Rev.
Georgia Rural Roads Auth.
G.O.
S t a t e of C a l i f o r n i a
G.O.
Hudson County, N. J .
U t i l . rev.
Alexandria, La.
G.O.
Long Beach, C a l i f .
G.O.
Wash. Sub. San. Dist.,Md.
G.O.
"State of Vermont
Rev.
Pwr. Auth. of the S t a t e
of N. Y.
Rev.
Grant Co. Pub. U t i l .
D i s t . , Wash.
Public Housing Authority
OTHER.
B r i t i s h Columbia Power
Commission

—

I S . F . Deb
j

6.0
= 8.5
30.0
5.3
22.0
. U.o
1.5
20.0
15.5
50.0
5.1
8.3
5.9
8.5
7.6
7.3

1956-96
1957-96
1957-71
1967-95
1958-75
1959-78
1958-82
1958-82
1958-72
1958-77
1958-81
1959-86
1958-81
1957-95
1957-66
1961-85

166.0

2005

91.8

1957-96

20.0

1986

2.35
2.80
2.50
2.61
3.13
3.07
2.66
2.81
2.30
2.7k
3.21
2.16
3.12
1.98
2.86
4.05
• 2.18
3 3A

y
1.70-2.50
2.00-2.80
2.10-2.55
2.10-2.65
2.60-3.15
2.25-3.10
2.10-2.70
2.20-2.75
1.80-2.35
2.00-2.75
2.UO-3.25
1.90-2.52
2.50-3.60
1.65-2.00
2.30-3.00

Aaa
A
. Aa
A
Baa
A
A
Aa
A
A
Aa
Baa
Aaa
—

3.92
1.75-2.55

—

Aaa

3.81

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;
State*~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 .
3/ 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 gene r a l 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.
hf Kb r e o f f e r i n g .




H.lli

Exhibit F
Forthcoming Large Public S e c u r i t y Offerings f o r New C a p i t a l
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large I s s u e s

Date of
computation
1955 — June 30
J u l y 29
Aug. 31
Sept.30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31
June 30

During month following
date shown
sTaTe and Other-2/
Corporate
l o c a l govt.
67
lt07
222
805
202
215
70
176
123
380
568
198
1*37

3hh
100
18U
813
330
205
121
327
220
132
173
332
81

50

Subsequent t o
date shown
S t a t e and Other 2 /
Corporate
l o c a l govt.
830
1,135
920
909
U12
230
85
376
233
1*013
818
m
567

1,845
2,018
1,971
2,205
1,650
756
618
917
785
811
832
9hl
690

50

—*

Forthcoming Large O f f e r i n g s , as of June 29
Type

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

CORPORATE

36.6

P a c i f i c Gas and E l e c t r i c

Common s t k .

F l o r i d a Power Corp.
American Telephone and Telegraph
Union E l e c t r i c Co. of Mo.
Sperry Rand

1 s t mtg. b d s .
Deb.
1 s t mtg. bds.
Common s t k .

20.0
250.0

1 s t mtg. b d s .
Deb.
Deb,
Deb.
1 s t mtg. b d s .
Deb.
Deb.
Deb.
. Deb.

20.0
30.0
30.0

^ I l l i n o i s Power .
Tennessee Gas Transmission
tfFood Machinery and Chemicals
•MChampion Paper
^Inland S t e e l
•^Superior Oil of C a l i f .
Consolidated Natural Gas
CIT F i n a n c i a l
P a c i f i c Finance




UO.O

60.0

16.5

50.0

U5.7

30.0
75.0

25.0

July 2
(rights expire)
July 2
J u l y 10
July 17
July 25
(rights expire)
J u l y 25
July
July
July
July
July
Summer

88

•

H.lU
Forthcoming Large O f f e r i n g s , as of June 29 (Cont'd)

Issuer

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 GOVERNMENT
*New Jersey Highway Authority
S t a t e of Massachusetts
e s t a t e of Michigan
*New York S t a t e Thruway Authority
•a-Tulsa, Okla. Irid. Sch. D i s t .
Dearborn, Mich. School D i s t r i c t
Maryland S t a t e Road Commission
Jacksonville, Florida
* J a c k s o n v i l l e Expressway Authority
F l o r i d a S t a t e Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e T o l l Bridge Auth.
Inter-American Center Auth., F l a .

Rev.
22.0
G.O.
38.5
Rev.
16.0
G.O.
50.0
G.O.
5.5
G.O.
lh.o
G.O*
15.0
E l e c . r e v . bdsi. lU.o
Rev.
12.0
Rev.
185.0
Rev.
' 65.0
Rev.
62.0
Rev.
227.0
Rev.
70.0

J u l y 10
July- 11
July 17
July 17
July 17
J u l y 18
July 2U
July 2h
Sept.
Fall
1956
1956
1956
1956

OTHER

n.a.—Not a v a i l a b l e .
1 / Includes corporate and other i s s u e s of $1$ m i l l i o n and over; Statie
and l o c a l government i s s u e 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 .
*—Included i n t a b l e f o r f i r s t t i m e .




'