Full text of H.16 Capital Market Developments : June 8, 1956

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Not for Publication DECONTROLLED AFTER SIX MONTHS
H.Ik

June 8, 1956
CAPITAL - MARKET DEVELOPMENTS

The volume of publicly offered securities was quite small
during the holiday-shortened week ending June 1; the only large
issue sold was a $25 million corporate issue. This week, ending
June 8, the volume will be quite substantial with large corporate
issues totaling $105 million and State and local government.issues
of $78 million scheduled for sale.
Bond yields - Yields on outstanding U. S. Government and
State and local government bonds declined further during the week
ending June 1, while yields on Aaa-iated corporate bonds were stable
and Baa corporate yields increased slightly. Yields on newly-offered
corporate issues apparently have changed little in recent weeks; an
Aa-rated electric utility bond issue was reoffered at 3.57 per cent
on June h, about the same yield as on a similar offering of May 2b.
Stockyprices - Common stock prices, as measured by the
SEC index of 265stocks, recovered some of their May losses last
week, but, at 272.9 on June 1, were, still well below their earlier
levels. Trading volume continued to be light. Daily indexes indicate that on balance there was some further increase in prices
through Thursday of this week.
More detailed information concerning recent 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.




EXHIBIT A

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

Weekly

I CORPORATE Aaa

1953

1954

1955

long-term 2/
Date

Corporate
Aaa y

Old series

New series

1956

Spread between
State and
U. S. Govt,
local govt. (old series) and
Aaa 3/
Corporate 1 State and
Aaa
1local Aaa

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

3.12
2.99
3.09
2.85
3.17
2.91
3.30
3.07

May 1*
May 11
May 18
May 25
June 1

3.30
3.27
3.27
3.27
3.27

~

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

(5/U)

(3/2)

(6/6)

3.15
2.78
2.71*
2.1*1*
2.9U
2.62
3.08
2.80

n.a.
(12/26) n.a.
(1/9)
(8/7)
(8/5) 3.03 (8/5)
( V 7 ) 2.89 (6/10)
(V20) 3-.13 (U/20)
(2/17) 2.92 (2/3)

2.73
1.98
2.21
1.90
2.3k
2.05
2.51
2.17

2.99
2.98
2.9k
2.89
2.87

3.08
3-05
3.03
3.00
2.99

2.51
2.1*8
2.W*.

2.10,

2.1*2

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

.38
.19
.1*3
.32
.31*
.13
.1*0
.13
.31
.29
.33
.38
.1*0

.81*
.30
.61
.29
.70

.51*
.68

.1*5
.1*8
.50
.50 .

.1*5

.1*5

l7 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 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 l/U 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

W

u

Date

STATE AND LOCAL GOVT.

Corporate
Baa 1/

State and
local govt.
Baa 1/

State and
local govt,
rev. 3/

(Per cent)
1953 - High
Low
195U - High
Low
19# - High
Low
1956 - High
Low

3.89
3.50
3.7k
3.Wi
3.63
3.U5
3.7U
3.58

May h
May 11
May 18
May 25
June 1

3.72
3.72
3.73
3.73
3.74

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/1U)
(6/1)
(3/9)

3.79
2.96
3.32
2.93
3.26
3.02
3.UU
3.20
3.Ui
3.1*0
3.37
3.33
3.31

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(5/3)
(3/8)

3.27 (6/26)
2.71 (1/2)
3.00 (3/1)
2.72 (8/13)
2.99 (12/30)
2.76 (1/7)
3.12 (U/27)
2.89 (2/2U)
3.10
3.06
3.0U
3.0U
3.03

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 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.




STOCK MARKET

1953

Date

Stock price
index 3/

1954

1955

1956

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

narket customer credit
Customers'
debit bal- loans to
ances h/ "others" $/
(Millions of dollars)

1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low

167.1
ll*l*.0
221.li
156.5
270.7
217 .U
290.8
257.lt

April
May
May 18
May 25
June 1

286.8
280.1
279.1
268.0
272.9

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/llt)
(l*/6)
(1/20)

2.5
0.9
3.7
1.1,
U.6
1.5
3.1
2.0

5.75
5.15
5.33
1*.20
U.22
3.78
li.08
3.68

2 ,1*1*5
2,055
3,1,36
2,1*05
U,030
3,537
l*,0l*3
3,991

1,665
1,311.
2,388
1,653
2,805
2,517
2,788
2,71*0

780
661*
1,01*8
71*6
1,21*1
1,018
1,267
1,237

2.6
2.1*
2.2
2.3
2.2

3.69

l*,0l*3

2,788

n.a.

n.a.

n.a.

1,255
1,21*0
1,237
1,21*0
n.a.

n.a.—Not available.
1/ SEC index of 265 comnon stocks, weekly closing prices, 1939-100; converted
to 1967-1*9-100 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 comnon stocks; end of month figures.
ljJ End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by 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.




'<0
H.Ik

Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

19#
January
February
March
April
May
June

Corporate
.'1955 1

State and loc;,1
1 1955 1
i 1954
535
312
538

1*78
886
687

k97
656
8U2

e/350
a/500
e/700

U27
. 350
6kl .

73k
7k8
853

597
6kk
670

909
335
7k7

U70
2k9
ko6

279
261
6h9

1,162
632
900

1,003
290
60k

919
658
I1O8

59k
k23
877

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

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

e/890
a/1,050
e/675

2,073
e/2,815

1950
kOk
696
e/375

535
k07
1,223

October
November
December

New capital
195k
5k 7
k26 .
635

579
70k
790

July
August
September

Tst quarter
®id quarter
3rd quarter
kth quarter
Year

1

e/l,l»75
e/1,550

1,385
1,418
1,12k
1,98k
5,911- .

3#
111 :
565

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

Excluding finance companies 2/
1st quarter
2nd quarter
3rd quarter
Uth quarter
Year
I
I
|
1

1,617
e/2,615

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

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

je/ £/£> ujjiidueu.
1/ Includes $637.2 million AT&T convertible debenture issue.,
2/ Total new capital issues excluding offerings of sales and personal finance
companies.
Note.—Details may not add to totals due to rounding.

8



'

-

' H.Ui

Exhibit E
Largo Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1955 - April
May

State and
local government
238
152
403
278
65
234
716
401
227
192
444
163
. 157
233

173
483
175
101
4o5
328
805
221
#3
95
212
278
395
623

July
August .
September
October
• November
December
1956 - January
February
March
April
May

Other 2/
' 15

25
50

50
EM*

Large Individual Issues Offered during May
• Issuer

Type 3/

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

CORPORATE
Duke Povrer
Kaiser Aluriiinum & Chem.
General Telephone
Calif. Oregon Power
-General American Trans.
Niagara Mohawk Power
General Electric
Northern Illinois Gas
Consolidated Edison
Southern Cal. Gas
Lockheed Aircraft
Mountain States Telephone
' & Telegraph

1st & ref.
mtg. bds. 30.0
Ccnv. pref. stk. 3P=0
Conv. deb. 53.0
1st mtg. bds. 16.0
Conv. deb. 23.8
Gen'l. mtg.
bds.
30,0
Deb.
300.0
1st mtg. bds. 15.0
1st & ref.
mtg. bds. 30.0
1st mtg. bds. 40.0
Deb.
30.0




Deb.

25.0

1986

3 5/8

3.50

Aaa

1971
1986
1981

u
3 7/8
k

it .00
3.80
4.00

A
Baa

1986
1976
1981

3 5/8
3 1/2
3 3/1)

3.55
3.47
3.70

Aa
Aaa
A

1986
1981
1976

3 5/8
3 7/8 .
It 1/2

3.55
3.75.
4.50

Aa
Aa
Baa

1990

3 1/2

3.45

Aaa

——

H.lii

E-2

Large Individual Issues Offered 'during May (Cont'd)
Issuer

Type 3/

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

STATE & LOCAL GOVERNMENT
Allegheny Co. Sanitary
Auth., Pa.
Baltimore, Maryland
La Mesa, Lemon Grove
& Spring Valley
Irrigation Dist., Cal.
Los Angeles, Calif.
Dept. of Water & Power
Great Falls, Montana
Pasadena, Calif.
Tulsa, Oklahoma
Salt River Project, Ariz.
Toledo, Ohio
Dade Co., Fla., Special
Tax School Dist. No. 1.
Omaha,Neb., School Dist.
Port of N. Y. Auth., N. I.
ate of Minnesota
aveland, Ohio
Baltimore County Metropolitan Dist., Md.
Houston, Texas
Mahoning Valley Sanitary
Dist., Ohio
Kansas City, Missouri

§

Rev.
G.O.

25.0
25.0

1961-96
1958-82

3.35
2.81

2.75-3.35
2.10-2.80

Aa

5.2

1966-96

3.90

3.30-3.85

Baa

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

9.0.
5.0
11.0
5.0
11.0'
5.o

1957-86
1973
1958-71
1958-81
1960-87
1958-77

2.91
it. 35
2.47
2.82
3.36
2.51

2.10-2.95

Aa .

2.00-2.50
2.20-2.85
2.65-3.35
2.00-2.56

Aa
A
A
Aa

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

15.0
20.0
30.0
10.0
16.2

1959-76 ^
1958-77
1986
1959-71
1957-76

3.31
2.28
3,Ok
2,23
2.h3

2.60-3.20
1.85-2.30
3=00
1.95-2-25
1.80-2.55

Baa
Aa
A
Aa
Aa

G.O.
G.O.

10.0
17.0

1959-96
1956-81

2.82
2.66

2.20-2.95
2.OO-2.9O

A
A '

G.O.
G.O.

6.0
7.1

1957-76
1957-76

2.89
2.31

2.10-2.90
1.80-2.W

A '
Aa

G.O. *

. OTHER
None
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,
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.
V 1972-76 maturities not reoffered.
jy 1971-76 maturities not reoffered.

I




R.lh

Exhibit F

Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
Corporate State and o t h e r 2 /
local govt.

Date of
computation
1555 - hay 31
June 30
'July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31

160
,67
kOl
222

805
202

215
~ 70
176
123
380

568
198

339
3UU
100
184
8143
330
205
121
327 ,

Subsequent to
date shown
Coip orate State and Other 2/
local govt.

50

220

132
173
332

850
830
1,135
#0
909
U12
230
85
376
233
1,013
818
448

1,861
1,81*5
2,018
1,971
2,205
1,650
756
618
917
785
811
832
941

50

Forthcoming Large Offerings, as of June 1
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Commonwealth Edison
U. S.- Plywood
Household-Finance
-^Combustion Engineering
•^Halliburton Oil Well Cementing Co.
^National Gypsum
Boston Edison
American Telephone and Telegraph
CIT Financial
Pacific Finance

1st mtg. bds.
Deb.
Deb.
Conv. sub. deb.
Common- stk.
Common stk.

40.0
15.0
50.0
15.0
25.9
20.0

Pfd. stk.
Deb.
Deb.
Deb,

18.0
250.0
75.0
25,0

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

6.0
8.5
30.0
5.3
22.0
6.0

June 5
June 6
June 6
June 15
June 20
June 25 •
(rights expire)
June
July 10
1956
1956

STATE-AND LOCAL GOVERNMENT
Washington Toll Bridge Authority
Cincinnati, Ohio
New York, New York
Denver, Colorado
Chicago, Illinois
Tallahassee, Florida




June 5
June 5
June 5
June 6
June 6
Jun e 7

H.1U

F-2
Forthcoming Large Offerings, as of June, 1 (Cont'd)

m
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AMD LOCAL GOVERNMENT (Cont'd)
Pennsylvania General State Auth.
Georgia Rural Roads Authority
State of California
-xHudscn County, New Jersey
Long Beach, California
Grant County Public Utility
District, Washington
Public Housing Authorities
Florida State Turnpike Authority
Oklahoma Turnpike Authority
Per.r sylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.

Rev.
Rev.
G.O.
G.O.
G.O.
"Rev.
Rev.
Rev.
Rev.
- Rev.
Rev.

20.0
15.5
50.0
- 5.1
5.9
163.0
110.0
185,0
65.0
62.0
227.0
70.0

. June 12
June 12
June 23
June Ik
June 21
June
June
Summer
1956
1956
1956
1956

OTHER
None
*—Included in table for- first time.
n.a.—Not available.
1/ Includes corporate and other issues of y>l5 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.

|

9