Full text of H.16 Capital Market Developments : June 9, 1958

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Not for Publication
DECONTROLLED AFTER SIX MONTHS
—
^

H.lli

'

June 9, 1958 =

CAPITAL MARKET DEVELOPMENTS
Large public security issues for new capital during the week
ending June 6 totaled #100 million for corporations and $56 million for
State and local governments. This week, the volume of new financing is
expected to be somewhat smaller- Large corporate issues are expected to
total $75 million and no large State and local government issues (issues
of *10 million and over) are scheduled for sale.
New exhibits - A new exhibit — F — is included in this report for the first time this week. It presents data on the volume of
long-term bond offerings made in the United States by foreign governments, long- and short-term issues sold by Federal agencies but not
' guaranteed by the Federal government (issues of the Banks for Cooperatives, Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association and Federal home Loan Banks) and shorttern security offerings of State and local governments. The exhibit
will be shown every week and will be kept as current as available data
permit.
Data shown in tnis cxuibit differ, from those presented on
long-term, corporate and State and local government security offerings
in Exhibit E in that the new exhibit includes all security offerings,
while Exhibit E includes only issues sold to obtain new capital. Data
on individual large long-term foreign government and Federal agency
issues recently sold or definitely scheduled for future sale will be
included in Exhibits G and H.
Information on current developments in mortgage financing will
shortly be added to this weekly report, which will hereafter be distributed in the early part, rather than the later partsof the week. The
data to be added on mortgage financing will include charts and tables on
mortgage interest rates, mortgage recordings, and FNFiA activities„
Bond yields - Changes in yields on outstanding bonds were
mixed last week. Yields on State and local government Aaa-rated and
U. S. Government obligations increased, while those for lower rated State
and local government bonds remained stable„ Yields on corporate bonds
declined slightly.
Stock prices - Standard and Poor's index of 500 common stock
prices continued to increase last week, closing at 14;.61* on June 6,
Current levels are 13 per cent above the December 1957 low and 9 per cent
below the July 1957 high. Trading activity also increased last week,
averaging 2.7 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

HIGH-GRADE BOND YIELDS

u. s. G O V E R N M E N T /

LOWER-GRADE

BOND YIELDS




I

A

H.lU

Exhibit B
Tables for Exhibit A
High-grade Bond Yields

Date

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

State and
local govt.
Aaa y

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

(Per cent)
1953
1954
1957
1958

-

High
Low
High
High
Low

May 9
May 16
May 23
May 30
June 6 E/

3.42
2.85
4.14
3.68
3.55

(6/19)
(4/23)
(9/27)
(1/3)
(5/2)

3.19
2.15
3.76
3.28
3.07

(6/5)
(8/6)
(10/16)
(1/31)
(4/25)

(6/25)
(9/2)
(8/29)
(1/9)
(5/D

2.66
2.71
2.71
2.71
2.72

3.14 •
3.15
3.13
—
3.13
3.14

3.57
3.57
3.57
3.57
3.56

2.73
1.90
3.45
2.86
2.64

.38
.30
.60
.51
.28

.83
.30
.47
.62
.34

.43
.42
.44
.44
.42

.48
.44
.42
.42
.42

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa j/

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953
1954
1957
1958

-

High
Low
High
High
Low

May 9
May 16
May 23
May 30
June 6 eZ

3.89
3.44
5.10
4.96
4.58
4.63
4.62
4.62
4.60
4.58

(9/18)
(12/31)
(11/29)
(1/3) ^
(6/6)

3.79 (6/25)
2,93. (8/5)
4.51 (8/29)
3.92 (1/2)
3.64 (5/1)

.69
.52
1.27
1.28
1.02

1.21
.93
1.21
1.11
-99

3.65
3.76
3.76
3.76
3.76

1.06
1.05
1.05
1.03
1.02

.99
1.05
1.05
1.05
1.04

£/ 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
term is 20 years.
Note. —Highs and lows are for individual series and may be on different
for
FRASER
dates
for different series.

Digitized


STOCK MARKET
Millions of Dollars




1941 43 Averoge-10

STOCK

MARKET

CREDIT

Exhibit D
Stock Market

Date

Stock price
index 1/

Trading
Common
Stock market customer credit
Customers' . Bank
volume 2/
stock
(millions
yields 3/ Total debit bal- loans to
of shares) (per cent)
ances h/ "others" 5/
(Millions of dollars)

1953 - High
Low
1951* -High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

26.5k (1/2)
2.5
22.95 (9/18)
0.9
35.98 (12/31)> 3.7
1.1*
2U.93 (1/8)
1*.6
1*5.69 (12/9)
35.28 (1/HO
1.5
49.61* (8/3)
3.1
1*3.22 (1/20)
1.5 .
1*. 2
1*9.08 (7/12)
1.1*
39.1*8 (12/20)
l*l*.61i (6/6)
2.8
1*0.37 (1/10)
1.7

6.25
5.38
5.82
1*.32
1*.1*2
3.61*
1*.35
3.82
1*.72 3.91
1*.58
1*.09

2,1*55
2,055
3,1*36
2,1*05
1*,030
3,537
1*,047
3,911*
1*,031
3,576
3,980
3,551*

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82

780
661*
1,01*8
•71*6
1,21*1
1,018
1,267
1,155
1,163
1,051*

2,735
2,1*87

1,21*5
1,051

March
April
May 23
May 30
June 6 g/

1*2.11
1*2.31*
1*3.87
1*1*.09
1*1*. 61i

1*5 35
1*.33
1*.16
ii.ll*
1*.09

3,863
3,980

2,665
2,735

n.a.

n.a.

1,198
1,21*5
1,226
1,213

2.2
2.1*
2.5
2.3
2.7

••

n.a.—Not available, p/ Preliminary.
*
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19l*l-U3"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.
Standard and Poor's composite stock yield based on Wednesday data converted, to weekly closing prices by Federal Reserve.
h/ End of month figures for member firais of the.New York Stock Exchange which
cariy 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 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.




Exhibits

H.Ik

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

1958
January
February
March

i.'Ss/

April
May
June

e/900

723

1

Corporate
1957
1
1,060
1,065
1,320

New capital
1956
573
712
817

1958

State and local 1/
1
1956
1957
1

812
953
511

71*2
572
506

1*01*
696
390

795

765
51*6
393.

378
1*90
735

;s

1,1*53

818
1,11*6
81a

July
August
September

1,003
92k
973

1,063
651*
838

529
581*
1*31

1*08
206
357

October
November
December

1,090
789
1,076

71*5, /
1,0892/
1,088 .

698
633
698

639
31*7
1*09

3,1*1*5
3,11*9

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

1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

e/2'675

5/5,810

i:S3

6,59 It
9,1*93
12,W

S:S

10,381

$fo

2,276
e/2,201

1,820
1,701*.
1,51*1*
2,029

1,1*90
1,603
971
1,395

e/l*,l*77

3,52k
5,069
7,099

h,06k
5,1*59

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

quarter
quarter
quarter
quarter

Year

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

1,61*7
2,51a
2,2li6
2,826

11,5.18

9,260

1/ Data through June 1956 are Bond Buyer data classified as new capital by
Federal Reserve3 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.
2/ Includes $718.3 million AT&T convertible debenture issue.
3/ Includes $571.5 million AT&T common stock issue.
h/ Total new capital issues excluding offerings of sales and consumer finance
5/•
companies.
Note.—Details may not add to totals due to rounding.




Exhibit F

H.lU

Other Security Offerings 1/
(In millions of dollars)
Long-term
Federal agency 3/
Foreign government 2/
193T
19 56
1958
I 1957
~19ffi
m r
January
February.
March

196
53

April
May
June

8U
U9
30

37

123

50

8

hd

U2

95

July
August
September

28
7
30

2
39

October .
November
December

h
60

a

Year

233
160
2/271

April
May

e/520

125

109
215
100

507

300

512

326
. U55
; 1U7
205
337 .
153

-

638
U30
505

380
220
283

125
252
176

209

336
L69
501

323
31U
260

22k
370
512

U2$

October
November
December

303

2 9h
328
1U8.

3,271*

Federal agency y
371
208
liiU

195
207
179

U59

169

196
357
2U9

272
272
252

9h

60

60

5
21

July
August
September

Tear

72

1

State and local government hf
January
February March

1,163
251

2,706

222

273

U07

1,238
255
116

222
128

5,5U3

3 - h$l

e/ Estimated.
g/ Preliminary. 5
l/ Data presented in this exhibit differ from those in Exhibit F in that refunding
issues, as well as new capital issues, are included. Long-term securities arc 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.
3/ Issues not guaranteed by the U . S . Government.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public
DigitizedHousing
for FRASER
Authority notes. In some instances FHA notes included may have a somewhat
longer term than one year.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

H.lli

Exhibit G
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars) ___

Corporate

Month

1957 - May

State and
local government

176
81
221*
266
133
393
3^
1*01*
1*10
553
182
300
505

329
877
525
526
537
571*
1*20
399
318
605
1,093
725
356

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

Other 2/

25
99
25
21*5
75
100
1,378
266
653
165

Large Individual Issues Offered June 1 through 6

Issuer

Type y

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

Rating

CORPORATE
Consolidated Edison Co.
1st.ref.mtg.bds. 50.0 1988
Texas Eastern Trans. Corp.
Pfd. stk.
15.0
Owens-Illinois Glass Co.
S.F. deb.
3U.7 1988

lj.
3 3/U

3.85

Aa

3.72

Aa

STATE AND LOCAL GOVERNMENT
Port of New York Authority
Tulsa Mun. Airport Trust,
Oklahoma
OTHER
None
n.a.—Not available.




Rev.-Ut.

35.0

1988/68

3-UU

3.1*0

A

Rev.-Ut.

20.5

1983/59

n.a,

1*.50

Baa

G-2

2/ Includes corporate and other security offerings of $15 million and over;
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.0„, 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.lii
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasuxy) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation

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

During month following
date shown
Corporate | ^ % ^ | o t h e r 2/
525
370
526
578
576
1*58
383
378
1*98
1,123
555
356
266

|

87
153
218
183
331*
339
363
3U5
370.
131*
298
1*93
177

—

25

V

30
30
18
150
110
150
36

Subsequent to
date shown
Corporate

| Other 2/
1*07
1*79
1*71
379
551
51*3
558
561*
1*87
31*1
330
1*93
208

525
1*15
811
81*5
• 6U7
815
1,193
1,161
1,378
1,208
6?0
561
1*61*

25
,

30
15
1*5
63
165
110
150
36

Forthcoming Large Offerings, as of Jvne 6
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Virginia Electric & Power Co.
Niagara Mohawk Power Corp.
Oklahoma Gas & Electric Co.
Mountain Fuel Supply Co.
Pacific Power & Light Co.
United Gas Corp.
^Standard Oil Co, of California
Florida Power Corp.
Pacific Gas & Electric Co.
New England Telephone & Telegraph Co.
Commerce Oil Refining Corp.
Natural Gas Pipeline Co. of America
Consolidated Natural Gas Co.




1st ref. mtg. bds.
Gen. mtg. bds.
1st mtg. bds.
Deb.
1st mtg. bds.
S.F. deb.
Deb.
1st mtg. bds.
Common stk.
Common stk.

25.0

50.0
15.0
16.0
20.0

ltO.O

150.0
25.0

20.0
22.6

Deb., bds. & common 1*5.0
1st mtg. bds.
1*0.0
S.F. deb.
1*5.0

June 11
June 12
June 17
June 19
June 25
June 26
June 26
July 2
July 8 t
(rights expire)
July 11
(rights expire)
1958
1956
1950

H-2

H.ii*

Forthcoming Large Offerings, as of June 6 (Cont'd)
Amount

'lApproximate date

STATE AMD LOCAL GOVERNMENT^/
State of New York
State of Minnesota
-»-hilwaukee, Wisconsin
State of Texas
haiyland State Roads Commission
' State of Ohio

. G.O.
G.O.
G.O.
G.O.
. G.O.
Rev.-S.T.

1+9.0
35.0
17.8 .
12.5
25.0
31.0

June
June
June
June
June
July

17
17
17
18
2b
22

S.F. deb.

35.8

June 20

OTHER
Metropolitan. Toronto, Canada
-*high Authority of European Coal &
Steel Community
-xHigh Auth. of European Coal & Steel
Community

Bonds

25.0

June 26

Wotes

15.0

June 26

*—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,
3/ Beginning with this report only State and local government issues with
proceeds of &L0 million and over will be included. As a result of this change,
issues under $10 million previously included have, been deleted.




Exhibit I

H.lU

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
seasoned yields
(per cent)
(per cent)
(basis points)
(basis points)

Date

1952 - 1957
High'
Low

;
i

1958 - January
February
March k
5
6
12
19
21
25
April 1
2
17
23
29
May 7
13
15
16
20
21
22
28

5.00(8/11/57)
2.93(3/31/51)

87
-3

*3.60,
3.89^/

-8
22

li.l5
1.22
li.00
ii.00

hh
50
28
26

14.05
3.98
ii.oo

31
23
25

3.75

5

3.90

21

3.85
3.65

16
16

5.50(11/7/57)
3.00v3/17/510
3.9&E/
1.07
L.25

li.07

123
-15
3
9
6

.

-7

3.98

5

li. Oh
1.00

li
3

1.07
U.35

32

h.OO
3.95

-1
-6

h

•k•—Single observation, not an average.
1/ Coders 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 avers pes of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned is:ics of
similar quality for the same day. Average maturity for the. seasoned issi
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.