Full text of H.16 Capital Market Developments : June 9, 1955

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Not f o r P u b l i c a t i o n

DECONTROLLED AFTER SIX MONTHS

H.llv

June 9, 1 9 # •
CAPITAL MARKET DEVELOPMENTS

Volume of new c a p i t a l moderate — S t a t e and l o c a l governments f l o a t e d s e v e r a l l a r g e s e c u r i t y i s s u e s w i t h a g g r e g a t e proceeds
of 87 m i l l i o n d o l l a r s during t h e week ending June 3; no l a r g e c o r p o r a t e i s s u e s were o f f e r e d . Almost 100 m i l l i o n d o l l a r s of l a r g e
o f f e r i n g s a r e expected t h i s week, i n c l u d i n g 7h m i l l i o n s of t h e
F l o r i d a S t a t e Turnpike A u t h o r i t y i s s u e .
Bond y i e l d s - S t a t e and l o c a l government Aaa bond y i e l d s
i n c r e a s e d one b a s i s p o i n t during the week ending June 3 , and U . S .
Government l o n g - t e r m bond y i e l d s d e c r e a s e d one b a s i s p o i n t . Y i e l d s
on c o r p o r a t e Aaa bonds d i d n o t change.
S t a t e and l o c a l government revenue bond y i e l d s r o s e two
b a s i s p o i n t s l a s t week. Y i e l d s on l o we r-g ra d e c o r p o r a t e and S t a t e
and l o c a l bends remained s t e a d y .
L i t t l e change occurred d u r i n g t h e f i r s t t h r e e days of
t h i s week in the s e r i e s f o r which d a t a a r e a v a i l a b l e .
Stock p r i c e s r i s e - Stock p r i c e s , a s measured by the SEC
i n d e x of 265 common s t o c k s , r o s e t o a new high of 2 3 7 . 5 l a s t week.
F u r t h e r i n c r e a s e s occurred each day of t h i s week through Wednesday
according t o d a i l y i n d e x e s .
I n s t i t u t i o n a l Savings and Investments
- i n t h e F i r s t Quarter of 1955L i f e i n s u r a n c e companies, s a v i n g s . a n d l o a n a s s o c i a t i o n s
and m u t u a l . s a v i n g s banks i n c r e a s e d mortgage h o l d i n g s by 2 .5 b i l l i o n d o l l a r s during t h e f i r s t q u a r t e r of 1955., a s shewn i n the
a t t a c h e d t a b l e , almost h a l f again as much a s t h e i n c r e a s e i n t h e
same p e r i o d l a s t y e a r . Net mortgage a c q u i s i t i o n s accounted f o r
more t h a n 70 p e r c e n t of t o t a l a v a i l a b l e f u n d s i n 1955 compared
t o l i t t l e more t h a n o n e - h a l f the y e a r b e f o r e . R e f l e c t i n g t h e
h e a v i e r investment i n mortgages,' b u s i n e s s s e c u r i t y h o l d i n g s r o s e
only 550 m i l l i o n d o l l a r s , o n e - f o u r t h l e s s t h a n t h e growth i n t h e
f i r s t q u a r t e r of 195^• Net i n v e s t m e n t s in o t h e r a s s e t s i n c r e a s e d
i n t h e f i r s t p e r i o d b u t not. a s much a s - b e f o r e .
The f l o w of new savings i n t o i n s t i t u t i o n s was s l i g h t l y
l a r g e r from January t o March t h i s y e a r than l a s t — 3 . 3 b i l l i o n d o l l a r s i n 1955 compared t o 3 . 1 b i l l i o n i n 195k• The p e r c e n t a g e i n c r e a s e i n new savings from one f i r s t q u a r t e r t o t h e next was only




-2-

Uses and Sources of Funds by 1.1ajor Types of Savings I n s t i t u t i o n s
F i r s t Quarter 195k-1955
(In m i l l i o n s of d o l l a r s )
Sources of funds " 1 .
Reduction
New of U. S.
Total
.savGovernment
sources 2 / ings
securities

Uses - Net purchases o f :
First
quarter

Total
uses y

Danestic
business Morts e c u r i t i e s gages

S t a t e and
l o c a l govt, Other
securities assets

Total - Major Types of Savings I n s t i t u t i o n s
19#
195h

2,521
1,739

3,319
3,285

182
210

2 9k
602

.

3,5k9
3,285

3,280
3,111

-295
131

1,575
i,kkfr

-70
106

L i f e Insurance Companies
19#
195k

1,676
1,708

• 526
561

• 800
k9h.

131
168

-

219
185

1)676
1,708

Savings and Loan Associations
19#
195k

1,20k
912

19#
195k

669
665

1,171
8k0

" 33
72

#

1,20k
912

1,139
1,123

-181
-5

669
665

566
5k0

-kk
30

Hutual Savings Banks
;•

26
173

550
105

51
h2

h2
k5

U. S. Government s e c u r i t i e s .
2 / Includes other sources n o t shown s e p a r a t e l y . •
3/ Change of l e s s than 500 thousand d o l l a r s .

i

Note.—Details may not add t o t o t a l s / b e c a u s e of rounding.
Sources of d a t a . — I n s t i t u t e of L i f e Insurance, Federal Savings and Loan
Insurance Corporation, and National Association of Mutual Savings Banks.




-35 per c e n t , the smallest, in f o u r y e a r s . During the f i r s t q u a r t e r
of 195>1, a smaller volume of new savings flowed i n t o t h e s e i n s t i t u t i o n s than i n the preceding f i r s t q u a r t e r . Gash and surplus supplied
• a s u b s t a n t i a l proportion of t o t a l funds during t h e f i r s t q u a r t e r of
1955 i n c o n t r a s t to a r e l a t i v e l y unimportant r o l e i n the previous
f i r s t q u a r t e r . For the f i r s t time i n eight q u a r t e r s , these i n s t i t u t i o n s as a whole increased r a t h e r than reduced U. S. Government'
holdings. They bought almost 300 m i l l i o n d o l l a r s of Government s e c u r i t i e s . This was l a r g e l y a r e s u l t of i n s t i t u t i o n a l p a r t i c i p a t i o n in
the T r e a s u r y ' s o f f e r i n g of IjO-^ear bonds i n February of t h i s y e a r .
L i f e insurance companies - New', savings of l i f e insurance
companies were 1.6 b i l l i o n d o l l a r s , s l i g h t l y more than e a r l i e r . Because insurance companies increased t h e i r holdings of U. S. Government s e c u r i t i e s for the f i r s t q u a r t e r since the J u l y t o October
period i n 1952, funds a v a i l a b l e f o r other investments were smaller
than l a s t y e a r ; Governments increased 70 m i l l i o n d o l l a r s . Almost
half the a v a i l a b l e f u n d s , o r 800 m i l l i o n d o l l a r s , were placed i n
• mortgage holdings i n c o n t r a s t t o h9b m i l l i o n in the previous f i r s t
p e r i o d . Investments in other s e c u r i t i e s and other a s s e t s increased
somewhat but not as much as a year e a r l i e r . Business s e c u r i t y i n vestments were $26 m i l l i o n d o l l a r s t h i s .year compared t o £ 6 l m i l l i o n
i n the f i r s t t h r e e months of 19%h•
Savings and loan a s s o c i a t i o n s - Savings and loan a s s o c i a t i o n s used 1.2 b i l l i o n d o l l a r s t o acquire about u0 per cent more net
mortgages i n the f i r s t p e r i o d of 1%$ than a year ago. The flow i n
savings c a p i t a l was almost the same -in both periods—about 1 . 1 b i l l i o n d o l l a r s . The a s s o c i a t i o n s purchased a r e l a t i v e l y heavy volume
of Government s e c u r i t i e s — a l m o s t 200 m i l l i o n d o l l a r s i n c o n t r a s t to
only 5 m i l l i o n l a s t y e a r . Cash and other sources supplied about 250
m i l l i o n d o l l a r s of a d d i t i o n a l f u n d s .
Mutual savings banks - Mortgage holdings "increased more
than one-half b i l l i o n d o l l a r s f o r mutual savings banks in t h e f i r s t
q u a r t e r t h i s y e a r , about o n e - t h i r d more than in the corresponding
period of 1951*. Less funds were invested i n business s e c u r i t i e s —
only 26 m i l l i o n d o l l a r s canpared t o 173 m i l l i o n l a s t y e a r . Deposits
grew s l i g h t l y more t h i s year—566 m i l l i o n d o l l a r s .
IJore 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 w i l l be found in' the a t t a c h e d 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.




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

Per c e n t p e r a n n u m

x,sj I SO
1952

Date

1953

Corporate
Aaa y

1954

U. S. Govt,
long-term 2/

1955

State and local
govt., Aaa 3/

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

(Per cent)
1952 - High
Low
1953 - High
195k - High
Low
1955 - High
Low

3.03
2.91
3.1*2
2.99
3.09
2.85
3.05
2.91

May 6
May 13
May 20
May 27
June 3

3.02
3.0U
3.0k
3.05
3.05

(l/k)
(2/15)
(6/19)
(1/9)
(1/8)
(k/23)
(6/3)
(1/7)

2.79
2.56
3.15
2.78
2.7k
2.a
2.77
2.62

(12/27)
(5/17)
(6/6)
(12/26)
(1/9)
(8/7)
(5/6)
(1/7)

2.77
2.75
2.7k
2.75
2.7k

1/ Vfeekly average of daily figures.

2.00
1.65
2.73
1.98
2.21
1.90
2.11
2.06
2.08
2.07
2.05
2.05
2.06

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

-

.37
.19
.38
.19
.13
.32
•3k
.2k

1.02 .
.71
• 8k
.30
.61
.29
.70
•5k

.25
.29
.30
•30
- -31

.69
.68
.69
.70
.68

Average term of bonds included is 25-26

2/- Weekly average of daily figures; old series. Average terra to f i r s t call
of bonds included i s 13-lk years.
3/ Thursday figures. Only general obligation bonds are"included; average
term i s 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

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

Per cent p e r a n n u m

STATE A N D LOCAL GOVT.

hU

STATE A N D LOCAL GOVT. REVENUE

Corporate
Baa 1/

Date

State and
local govt.
Baa V

State and
local govt,
rev. 3/

(Per cent)
1952 - High

1955 - High
Low

3.63 ( l A )
3.48(5/16)
3.09 (9/18)
3.50 (1/2)
3.74 (1/8)
3.44 (12/31)
3.50 (6/3)
3.15 ( l / l 4 )

2.98
2.^8
3.79
2.96
3.32
2.93
3.08
3.02

May 6
May 13
May 20
May 27
June 3

3.19
3.50
3-49
3.50 •
3.50

3.08
3.08
3.06 *
3.06
3.06

1953 - High
1954 - High

(10/23)
(4/17)
(6/25)
(1/8),
(1/7) •
(8/5)
(5/12) "
(1/6)

2.69
2.27
3.27
2.71
3.00
2.72
2.80
2.76

(12/19)
(4/25)
(6/26)
(1/2).
(1/1)
(8/13)
(4/15)
(1/7)

2.78
2.77
2.77
2.77
2.79

1/ weekly average of daily figures. Average term of bonds
included i s 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 i s
between Baa and A; average tern is 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Million! ot Dollar*. W w t l y

Stock price

Trading
volume 2 /
(sdlUona yields y
I of shares) (per cent)

Stock market c r e d i t
ICustomer a*
Bank
debit b a l - loans t o
ances k / "otha-8" 5 /
(Millions of d o l l a r s )

1952 - High
tor
1953 - High
Low
195U - High
1955 - mgh
April

May

May 20
May 27

165.3 (12/26)

151.7
167.1
XUU-0
221.lt
156.5
237.5
217.lt

(10/2lt)
(1/2)
(9/18)
(12/31)
(1/6)
(6/3)
(Vlit)

231.lt
233.3
233.3
23lt.6
237.5

2.0

%
1 I
It .20
It .22
It.12

3,537

2.7

U.12

3,785

2.0

8

0.9

a

2.2
2.1

is

It .14

1,332

1,314

2,388

656

I

1:^

l,0lt8
71*6
1,103

2,70lt

1,081

2,517

1,018
1,103
z/1,092
1,103

1/ SEC index of 265 conmon stocks, weekly closing prices, 1939-100; converted
to 1967-lt9-100 by Federal Reserve. The conversion f a c t o r i s 123.91.
2 / Averages of daily trading volume on the New York Stock Exchange.
"$f Moody's 200 common stocks; end of month f i g u r e s .
6 / End of month figures f o r member firms of the New York Stock Exchange which,
carry margin accounts; excludes money borrowed f a r carrying U. S. Government o b l i gations.
Wednesday f i g u r e s for weekly reporting member banks. Excludes a l l loans
on U. S. Governments for 1952; since 1953 only loans secured by Governments at
banks in New York and Chicago are excluded. Weekly reporting banks account f o r
about 72 per cent of loans to others.
r / Revised.
n.a.—Not available.
Note.—Higfis and lore 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
for different series.




Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(In millions of d o l l a r s )
New c a p i t a l

1955

Corporate
1 1954
1

1953

1955

January
February
March-

$U6
k3&
1,261

547
1*26
635

623
623
666

April
Hay

e/500
e/900
1/650

197
656
61,2

. 779
675
1,123

July
August
September

909.
335
747

October
November.
December
lst^quarter
2nd quai'ter
3rd quai'ter
lith quarter
Year

2,21:3
e/2,050

.

577
429 -,/
1,438 y

1,608
1,995
1,991
1,896
7,490

1,912 .
2,578

5:28 *

1953

m

538

396:
411
565

389
360
426

'e/125
e/350
e/550

734
71:8
853

329
6h9
k3k

279
261
649

519
259
1*75

591:
1:23
877

• 453
1*08
77k

1,372
2,33k
1,188
1,891:
6,789

1,176
1,1:12
1,253
1,636
5,1:77

483
325
753

1,003
290
604

State and l o c a l
1 1951:
1

*

1,385
1,325

8,1:95

Excluding finance companies 2 /
1st quarter"
2nd quarter
3rd quarter
lj.th quarter
Y&ar

1,791
e/2,000

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

1,669
1,991
1,223
2,344
7,227 .

2 / Total new c a p i t a l issues excluding o f f e r i n g s of sales and personal finance
companies.
e/ Estimated.
Note.—Details may not add to t o t a l s due t o rounding.




H.lZ;

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 t h a n U. S. Treasury) 1 /
Proceeds of Large Issues Offered
(Millions of d o l l a r s )

Month

Corporate

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

32h
350
336
• 75
3#
' 103
0
9k '
111
72
750
175
1*83

557
603
92
86
U55
388
268
6#
3U1*
107
337
238
109

19$k - May
July
August
September
October
November
December
1955 - January
February
March
April
May

Other 2 /

30
35
15

Large I n d i v i d u a l Issues Offered June 1 through 3
Issuer

Coupon
Amount
Offering
Type 3 / . (millions Maturity r a t e or
Rating
yield
net i n t e r of
e s t cost
dollars)

CORPORATE
None
STATE AND LOCAL GOVERKl'.IENT
Houston, Texas
New York City Housing
Authority
S t a t e of North Carolina
Baltimore, Maryland
Galveston Co. Navigation
D i s t r i c t , Texas
Minneapolis, Minnesota
OTHER
None,




G.O.
G.R.
G.O.
G.O.
G.O.
G.O.

.

12.5

1956-80

2.1:7

1.20-2.65

A

27.2
11.0
2U.7

1958-03
1957-75
1956-81;

3.01
1.96
2.15

A
Aa
Aa

1957-91
1956-75

2.93

1.75-2.78
1.20-2.05
1.05-2.30
liY
1.1*0-3.00^
1.15-2.10

6.0
5.2.

^—

:

A
Aa

H • lit

E-2

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
d o l l a r s 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 Recons t r u c t i o n and Development i s s u e s .
3 / In t h e 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 gations 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; and, L.L., limi 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 / Subject t o award.




Exhibit F

H.lii

Forthcoming Large P u b l i c Security O f f e r i n g s f o r New C a p i t a l
(Other t h a n U. S . T r e a s u r y ) 1 /
Expected P r o c e e d s . f r c m Forthcoming Large I s s u e s
During month f o l l o w i n g
d a t e shown
S t a t e and
Other 2 /
Corporate
l o c a l govt.

Date of
. computation
1954 - Lay 28
June 30
J u l y 30
Aug. 3 1
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1955 - J a n . 31
Feb. 28
Mar. 31 ,
Apr. 29 May 3 1

332
336
. • 100
3 3k
31*3
15
9k
18k
16
710
211
k25
160

__

#6
36
5k
300
3%
1I36
661
#7
682
#4
208
116
3#

30

— .

Subsequent t o
d a t e shown
S t a t e and
C o r p o r a t e l o c a l g o v t . Other 2/
#6
$32
303
608
klk
135
2l|6
216
k22
' 1,395
922
1,1ill
850

1,971
1,52k
1,553
1,876
2,158
1,957
2,682
2,m
1,961
1)978
2,009
1,917
1,861

30
30
35

Forthcoming Large O f f e r i n g s , as of June 3
Issuer

•

Type

. Amount
Approximate d a t e
(millions
of o f f e r i n g
of d o l l a r s )

CORPORATE
V i r g i n i a E l e c t r i c and Power
Southern C a l i f o r n i a Edison
Southern New. England Telephone
and Telegraph Oklahoma Gas and E l e c t r i c
C o n s o l i d a t e d N a t u r a l Gas
B a l t i m o r e Gas and E l e c t r i c Co.
Peoples Gas l i g h t &. Coke
*Merritt-Chapman & S c o t t Corp.
American Telephone and Telegraph
Southern C a l i f o r n i a Gas Co.

1st & r e f . mtg.bds,.
Conv. ,deb.
Deb.
1 s t mtg. b d s .
Common s t o c k
Common s t o c k
Common s t o c k
Deb.
Conv. deb.
Bonds

25.0
1*1.0

June 7
June 111

20.0
15.0
22.9
17.1
15.5
25.0
650.9
ko.o

June
June
June
June
June
June
1955
1955

21
21
21
22
2k

7k.0
58.5
7.0
6^)
25.0

June
June
June
June
June

7
lit
lii
111
20

STATE AND LOCAL GOVERNMENT '
F l o r i d a S t a t e Turnpike A u t h o r i t y
Texas Turnpike A u t h o r i t y
Kansas C i t y , Kansas
•fcPrince G e o r g e ' s County, Maryland
Maryland. S t a t e Roads Commission




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

II
H.lU

'

F-2
Forthcoming Large O f f e r i n g s , a s of June 3 ( C o n t ' d )

• Issuer

• Type

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

STATE AlvQ LOCAL GOVERNMENT ( C o n t ' d )
Cleveland, Ohio
Tacoma, Washington
Pennsylvania General S t a t e Auth.
D a l l a s , Texas „
Inter-American Center A u t h . , F l a .
-Michigan Turnpike A u t h o r i t y
S t a t e of Louisiana
I l l i n o i s Turnpike A u t h o r i t y
Connecticut Expressway
~
Texas Turnpike Company
Dade County P o r t A u t h o r i t y , F l a .
Springfield, Illinois
Allegheny County, Pennsylvania
Sanitary Authority
C a l i f o r n i a T o l l Bridge A u t h o r i t y
J e r s e y C i t y Sewerage A u t h . , 11. J .
North C a r o l i n a Turnpike A u t h o r i t y

Rev.
Rev.
Rev.
Rev.
n.a.

13.2
15.0
50.0
9.2
60.0
186.0
80.0
390.0
100.0
140.0
21.0
9.0

June
June
June
June
19#
19#
1955
195?
-19#
1955
1955
1955

Rev.
Rev.
Rev.
n.a.

85.o
235.0
16.0
200-.0

195?
1955
1955
1955

n.a.
Rev.
Rev.
Rev.
Rev.

21
21
22
27

OTHER
None
1 / I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of 15 m i l l i o n d o l l a r s and over3 S t a t e
and l o c a l government i s s u e s of 5 m i l l i o n and o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n and
Development i s s u e s «
n.a.—Not available.
*—Included in t a b l e f.or f i r s t t i m e .