Full text of H.16 Capital Market Developments : June 27, 1957

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

'/•

) 0 v-

Not for Publication DECONTROLLED AFTER SIX MONTHS

hi.Ik

June 27, 1957
CAPITAL MARKET DEVELOPMENTS

Large public security offerings issued for new capital
during the week ending June 21 totaled #150 million for corporations
and &2b million for State and local governments. This week, corporate
issues with aggregate proceeds of »198 million, including expiration of subscription rights, are expected. Also scheduled for
sale this week are large State and local government issues totaling
&U7 million and a foreign issue for $3? million.
Bond yields - Yields on all types of outstanding bonds
continued to increase last week, establishing new postwar highs in
every category. The increase in yields on U. S. Government obligations
was particularly sharp—16 basis points for the old series and 13
basis points for the new series. Daily data indicate further increases
for corporate bond yields through Tuesday of this week.
Estimated July volume - Corporate security issues during
July are expected to total $900 million, one-third below the estimated
June volume and only one-seventh below the"exceptionally large volume
in July last year. Large publicly offered issues are expected to
total over #300 million, including the *120 million First National
City Bank of New York capital stock issue, for which subscription
rights expire in mid-July.
State and local government issues for July are currently
estimated at ^375 million. This total would be less than one-eighth
below.the estimated June volume and about the same as the volume in
July 1956.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks declined sharply last week, closing at 283.0 on
June 21. Daily figures through Wednesday of this week indicate
little change 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.




1

CORPORATE

U. S. Govt., long-term £J
Corporate
Aaa y

Old series

State and
local govt.
Aaa J /

New series

Spread between
U. S. Govt.
(old series) and

(Per cent)

3.12 (6/19)

2.99
3.09
2.85
3.17
2.91
3.79
3.07
3.914

(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(12/28)
(3/2)
(6/21)

3.66 (1/12)
3.75
3.79

3.82

3.9k

3.15 (6/6)

2.78 (12/26)
2.71 (1/9)
2.kh (8/7)
2.9li C8/5)

2.62 (1/7)
3.19 (12/21)

2.80 (2/17)
3.70 (6/21)

2.73
n.a.
1.98
n.a.
2.21
n.a.
1.90
3.03 (8/5) 2.3k
2.89 (6/10) 2.05
3.39 (12/28)3.05
2.92 (2/3) 2.17
3.62 (6/21) 3.23

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)
(6/20)

3.15 (2/8)

3.22 (2/8) 2.76 (2/21)

3.

3.L2

3.51
3.5U
3.70

3.1<9

1/ Weekly average of daily figures.

3.62

2.99
3.10

• 3.23

.38

'.3h

:8

.13
-51*
.2h

•I
.29

I

.32

.35
.31
.31

.3L

.2b

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 lit 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/U per cent bond of 1978-83.
2 / 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 peries.




EXHIBIT B
LOWER - GRADE

BOND

YIELDS

CORPORATE Be

STATE AND LOCAL GOVT. Boa

V"V

V - 1

; T ' ;

Zz'v

' STATE AND LOCAL GOVT. REVENUE
4
S
1953

0

M

1 " S
1954

D

M

Corporate
Baa 1/

J
1955

S'

D

M

J S
. 1956

C

M

J
1957

State and
local govt,
rev. y

State and
local govt.
Baa 2/
(Per cent)

1953 - High
195U - High
1955 - High
1956 - High
1957 - High
Low
May 2h
May 31
June 7
June lh

3.89
3.50
3.7k
3.a
3.63
3.L5
h.hl

k.h2
h.Sh

L.56
a. 59

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(I/Ik)
(12/28)

k.22

(h/12)

£'33 $20)
3.90 (2/21)

1

h.lS

V

.

3.79 (6/25)

2.96 (1/8)

3.32 (1/7)
2.93 (8/5)
3.26 (12/29)

3.02 (1/6)

L.23

(12/27)

3.27 (6/26)
2.71 (1/2)

3.00 (1/1)
2.72
2.99
2.76
3.98

.

(8/13)
(12/30)
(1/7)
(12/28)

W

3.70 (2/22)

ii.62

a. 66

14.33

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are included; average tern is 20 years.
3/ Friday figures. Average rating of bonds included is
between Baa and A; average term is 20 years.
h / Series discontinued, as of March 15.
N o t e . — H i g h s and lows are for individual series and may
be on different dates for different series!




STOCK MARKET

1953

Date

1954

Stock price

1955

1956

Trading
Common
volume 2/
(millions
yields ]/
of shares) (per cent

1957

Stock market customer credit
Customers1
debit bal- loans to .
ances h/
"others" SJ
(Millions of dollars)

1953 - High
19514 - High
195$ - H i g h
1956 - High
1957 - High
Low
April
May
June lli
June 21

167.1
1W.0
221.U
156.5
270.7
217.U
295.5
257.lt
290.0
260.3

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/Ut)
(8/3)
(1/20)
(6/lU)
(2/8)

273.3
384.2
287.it
290.0
283.0

2.5
0.9
3.7
1-1* •
. U.6
1.5
3.1
1.5
2.7 .
1.6
2.3 '
2.1* '
2.2
2.6
2.2

5.88
5.15
5.19
lt.09
lt.23
3.59
14.13
3.65
14.28
3.71*
3.96
• 3.62
3.80
3.714
3.83

.

2,W5
2,055
3,1436
2,1405
14,030
3,537
14,01:7
3,911*
3,938
3,832

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,7140
2,7914
2,713

780
661*
1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163
1,117

3,938.
3,92k

2,792
2,7914
n.a.

n.a.-

n.a.

1,1146
1,130
1,137
1,1142
n.a.

n.a.--Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19^7-149-100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the «ew *ork Stock Exchange.
3/ Moody's 125 industrial-stocks; weekly data based on Friday.
5/ End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured tjy U. S. Government obligations. 5/ 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 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
Corporate and State and Local Government
Security Offerings and Placements (In millions of dollars)

January
February
March
April
May
June
July
August
September

1957

Corporate
1
1956
I'

1,063
1,071
1,3^

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

State and local
1
1956
1

1955

1957

573
712
817

535
1*07
.1,223

685
566
1*99

1*01*
696
390

535
312
538

e/950
J/750
e/1,300

- 818
1,1146
61*1

U78
886
687

762
e/550
e/k25

378
- 1*90
735

1*27
350
61*2

e/900

1,063
651
838

597
6a
670

e/375

376
199
. 333.

1*70
21*9
1*06

61*5.
3U
1*26

919
658
1*08

'rf

October
November
December
1st
2nd
3rd
kth

New Capital

.

1955

71*5
1,089i/
1,088

1,1621/
632
900

3,179
e/3,000

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

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

1,750
e/1,737

1,1*90
1,603
908
1,382

1,385
1,1*18
1,121*
1,981*

e/6,k79

1,907
7,163
10,38k

l*,2l6
6,127
8,821

e/3,k87

3,093
i*,001
5,383

2,803
3,927
5,911

Excluding finance companies y
1st
2nd
3rd
l*th

quarter
quarter
quarter
quarter

3,268
e/2,750

Year

1,6k?
2,5la
2,216
2,826

1,727
1,870
1,1*1*1*
2,55k

9,259

7,595

e/ Estimated.
1/ Includes $637.2 million AT&T convertible debenture issues.
2/ Includes $571.5 million AT&T common stock issues.
y Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.--Details may not add to totals due to rounding.




•
H.lli

V

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) \/
Proceeds of Large Issues Offered
(Millions of dollars)
Month

Corporate

• 1956 - May
June.
July
August
• September
October
November
December
1957 - January
Febru'ary
March
April
May

.

State and
local government

623
185
592
217
#8
386
701
100
567
671
788
177
329

233
463
161|
35
. 184
, 393
135
201
386
306
19U
Ii99
2h8

Other 2/

20
--

37
35
100
50

.

125
25

Large Individual Issues Offered June 1 through 21

Issuer

Type y

Amount
Coupon |
(millions Maturity rate or
Offering Rating
of
net inter- yield
dollars)
est cost 1

CORPORATE
Virginia Elec. & Pwr. Co.
Common stk.
2U.2
Boston Edison Co.
1st mtg. bds.
25.0
General Tele. Co. of Calif. 1st mtg. bds.
20.0
Columbia Gs s Synfcem, Inc.
Deb.
20.0
Georgia Power Co.
1st mtg. bds.
15.5
Metropolitan Edison Co,
1st mtg. bds.
19.0
Comnercial Credit Co.
Sr. notes
75.0
Int. Business Machines Coip, Conmon stk. 231.0
General Telephone-Corp.
Conv. deb
Uii.5
Kichigan Wisconsin P.L. Co. 1st mtg. P.L. bds
. 30.0
Consolidated Nat., Gas Co.
Deb.
25.0
Michigan Consol. Gas Co.
1st mtg. bds.
30.0
Fairbanks, Morse & Co.
Deb.
15.0
Southern Bell TeL & Tel. CoDeb.
70.0
Texas Eastern Trans. Corp. Conv. pfd. ;
stk. 20.0
Texas Eastern Trans. Corp.
Deb.
•15.0




1987
1987
1982
1987
1987
1977

' U 5/8
5
5 1/2
5 l/u
li 7/8
5

Aaa

li.53
5.00
5.h0
5.10
1.78
h.9$

A
A
Aa

A

1977
1977
1982
1982
1972 ,
1986

U 1/2 "
6 i/a
1* 7/8
6 1/h
5 3/U
5

it. 25
6.00
80
6.00
5.75
1.85

Ba
Baa
Aaa
A
Ba
Aaa

1977

6

6.13

Ba

H . l U fc-2
Large Individual Issues Offered June 1 through 21 (Cont'd)

Issuer

Type 3/

Amount
Coupon
(millions
rate or
Maturity
of
net interdollars)
est cost

Offering
Rating
yield

STATE AND LOCAL GOVERNMENT
Tacoma, Washington
i Lt & pwc rev.
Columbus, Ohio
G.O.
Los Angeles, California
Elec. rev.
San Antonio, Texas
Water rev.
Dallas, Texas
Airport rev.
Cheltenham S.D. Auth., Ra..
Rev.
State of Ohio
Highway rev.
Pittsburgh, Pennsylvania
G.O.
Cowlitz Co. P.U.B. No. 1,
Washington
G.O.
Hempstead C.H.S.D. No. 3,
New York
G.O.
San Diego, California
G.O.
Independence, Missouri
Elec. rev.
State of Rhode Island
G.O.
State of Vermont
G.O.

5.0
5.0
15.0
13.9
6.3
6.I4.
32.0
5.2
20.0
8.2
5.0
^.0
7.0
9.3

1959-83
1959-83
1958-87
1966-82*
1962-81
1958-91
1957-72
1958-77

h.29

3.35
3.88
3.78
lull
U.I46
3.75
3.13

1960-2007

5.06

1958-86
1958-77
1960-87
1958-77
1958-77

h.3k

3.73
h.lh

3.59
2.9U

,

3.15-1.25
2.60-3.W
2.50-3.90
3.30-3.80
2.80-I1.50
2.20-3.65
2.W-3.W

Baa
Aa
Aa
Aa
n.a.
A
Aa
A

3.25-5.00
2.85-U.30
2.50-3.75
3.35-L.70
2.50-3.60
2.20-3.10

Baa
. A
A
Aaa

OTHER
None
n.a.—Not available.
1/ Includes corporate and other security offerings of §15 million and over5
State and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ 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.




H.l4

Exhibit F
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Procoeds from Forthcoming Large Issues

Date of
computation
I956 - May 31
June 29
July 31
Aug. 31
Sept. 28
Oct. 31
Nov. 30
Deo. 31
1957 - Jan. 31
Feb. 28
Mar. 29
• Apr .. 30
May 31

During month following
date shown
State and
Corporate
Other 2/
local govt.
198

.

h37

247
369
315
683
436
476
591
740
I461
187
525

-

332
81
131
359
162.
I48
280
153
153
290
179
97

37

23
100
35
25
25

Subsequent to
date shown
State and
Corporate
Other
local govt.
448
567
1,096
1,202
1,009
990
481
796
966
795
486
258
525

9U1
690
726
958
1,197
955
979
763
648
631
862
396
388

37
—
—•

23
100
35
25
25

Forthcoming Large Offerings, as of June 21
Type

Amount
(millions Approximate date
of offering
I of dollars)

CORPORATE
Delaware Power & Light Co.
Kerr-McGee Oil Industries, Inc.
*Kerr-McGee Oil Industries, Inc.
Philadelphia Electric Co.

1st & coll. tr. bds.
S.F. deb.
Common stk.
Common stk.

15.0

20.0

15.6
22.1

Puget Sound Power & Light Co.
Household Finance Corp.
Southern California Gas Co.
Kaiser Aluminum & Chemical Corp.
Timken Roller Bearing Co,

1st mtg. bds.
S.F. deb.
1st mtg. bds,
Conv. pfd. stk.
Common stk.

Southern California Edison Co.
Rochester Gas & Electric Co.
Central Illinois Light Co.
Wisconsin Telephone Co.
Washington Water Power Co.
West Penn Power Co.

1st & ref. mtg. bds. 1*0.0
1st mtg. bds.
15.0
1st mtg. bds.
15.0
Deb,
30.0
1st mtg. bds.
30.0
1st mtg. bds.
20.0




20.0
1*0.0
35.0

30.0

19. k

June 25
June 25
June 25
June 25
(rights expire)
June 26
June 27
June 27
June 27
July 1
(rights expire)
July 2
July 3
July 10
July 10
July 11
July 11

- ti.liv

F-2
Forthcoming Large Offerings, as of June 21 (Cont'd)
Type

Amount
Approximate date
(millions
of offering
I of dollars)

CORPORATE.(Cont'd)
•it-Texas Electric Service Co.
Jersey Central Power & Light Co.
*-First Nat. City Bank of N. Y.
Public Service Electric & Gas Co.
Associates Investment Co.
-

1st mtg. bds.
1st mtg. bds.
Capital stk.

16.0 .

15.0

120.0

July 16
July 17
July 22
(rights expire)
1957
1957

Pfd. stk.
Deb.

20.0

I Water rev.

5.0

June 2k

8.0

June 25

25.0

STATE AND LOCAL GOVERNMENT
Sabine River Auth., Texas
Louisville & Jefferson Cos. Sewer
Dist., Kentucky
Dist., La.
Louisiana State University
Harris Co., Texas
Wayne Co., Michigan
Ft. Worth Ind. Sch. Dist., Texas
*Salt River Agric. Imp. & Power
Dist., Arizona
-*Fresno Unified Sch. Dist., Calif.
*Met. Water Dist. of So. California
*St. Louis Co., Mo.
•it-State of Louisiana
Atlanta, Georgia
Milwaukee, Wisconsin
State of California
Los Angeles City Sch. Dists., Calif.
State of Ohio
State of Texas
Jacksonville, Florida
University System Bldg. Auth., Ga.
Pennsylvania Turnpike Commission
Inter-American Center Auth., Fla.
New York State Thruway Authority
Oklahoma Turnpike Authority

Rev.
G.O. ,
Bldg. rev.
G.O.
Airport rev.
G.O.

10.0
7.5
5.0
6.6
5.0

June
June
June
June
June

G.O.
G.O.
Rev.
G.O.
G.O.
G.O.
Water rev.
G.O.
G.O.
Highway rev.
G.O.
Utilities rev.
Rev.
Rev. ;
Rev.
G.O.
Rev.

5.0
7.0
15.0
6.8
10.0
15.0
10.0
50.0
31.0
12.5 '
30.0
12.0
62.0
20.0
50.0
65.0

July 2
July 9
July 9
July 17
July 17
July 20
July 23
July 2h
Aug. 13
Sept. 10
1957
1957
1957
.
1957
1957
1957
1957 .

39.U
25.0

June 26
July 10

kh.o

26
26
27
27
27

OTHER
Metropolitan Toronto, Ontario
Montreal, Quebec




Deb.
Deb.

•id

H.lU

F-3

*—Included in table for first time.
1/ Includes corporate and other issues of 515 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.
Note.—Deletions for reasons other than sale of issue: None.