Full text of H.16 Capital Market Developments : March 1, 1956

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Not f o r P u b l i c a t i o n DECONTROLLED AFTER SIX SOUTHS
H.1U

March 1, 1956
CAPITAL MARKET DEVELOPMENTS

S t a t e and l o c a l governments o f f e r e d $71 m i l l i o n of l a r g e
s e c u r i t y i s s u e s during the week ending February 2h. Two l a r g e c o r p o r a t e stock i s s u e s were also p u b l i c l y f l o a t e d f o r new c a p i t a l l a s t
week, but no l a r g e o f f e r i n g s are expected t h i s week. S t a t e and
l o c a l governments are scheduled t o o f f e r l a r g e i s s u e s with t o t a l
proceeds of $1$3 m i l l i o n , including the $100 m i l l i o n o f f e r i n g f o r
t h e Connecticut Expressway.
Expected March volume - The March e s t i m a t e f o r corporate
new c a p i t a l i s s u e s i s $750 m i l l i o n , more than UO per cent below t h e
volume f o r March of 1955- L a s t y e a r , however, two i s s u e s alone
accounted f o r most of t h e volume of l a r g e i s s u e s , and almost h a l f
of t h e t o t a l of a l l new c a p i t a l f l o t a t i o n s . This y e a r only about
o n e - s i x t h of t o t a l volume i s expected i n l a r g e p u b l i c i s s u e s , none
of which compares i n s i z e with the General Motors or GMAC i s s u e s
of l a s t March. New c a p i t a l o f f e r i n g s f o r the f i r s t t h r e e months
of t h i s year are estimated a t $2,160 m i l l i o n , four per cent below
the $2,2U3 m i l l i o n a y e a r ago.
The estimated March volume f o r S t a t e and l o c a l government
f i n a n c i n g i s &U25 m i l l i o n , about o n e - f i f t h below t h e corresponding
t o t a l a year ago, and more than o n e - t h i r d l e s s than l a s t month's
volume. The f i r s t q u a r t e r estimate of t o t a l volume i s $1,1*75 m i l l i o n , s i x per cent above the corresponding t o t a l f o r 1955*
Bond y i e l d s - Corporate and S t a t e and l o c a l government
bond y i e l d s did not change during the week ending February 2hYields on U. S. Government long-term bonds (old and new s e r i e s )
r o s e , as can be seen i n the attached e x h i b i t s .
Stock p r i c e s - The SEC index of 265 common stocks rose
t o a new high of 271.2 during the week ending February/ 2h i n tile
l a r g e s t average d a i l y t r a d i n g volume t h i s y e a r . P r i c e s decreased
on balance through Wednesday of t h i s week, with the i n i t i t a l advance on Wednesday morning following the P r e s i d e n t ' s announcement
o f f s e t by s u b s t a n t i a l d e c l i n e s i n the a f t e r n o o n .
More 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 i s presented i n t h e attached e x h i b i t s .




H I G H - G R A D E B O N D YIELDS
Weekly

CORPORATE A a o

\

U. S. GOVERNMENT :

long-lerm

/

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
S t a t e and
U. S. Govt,
l o c a l govt. ( o l d s e r i e s ) and
Corporate IState and
Aaa 3 /
Aaa
[ l o c a l Aaa

(Per cent)
3-1*2
2.99
3.09
2.85
3-17
2.91
3.1k
3.07

(6/19)
(1/9)
(1/8)
(1/23)
(12/23)
(V7)
(1/6)
(2/2lt)

3.09
3.09
3.08
3.07
3.07

3-15
2.78
2.7U
2.UU
2.9k
2.62
2.90
2.80

(6/6)
(12/26)
(1/9)
(8/7)
3.03 (8/5)
(8/5)
2.89 (6/10)
(1/7)
2.96 ( 1 / 6 )
(1/6)
(2/17) 2.92 (2/3)

2.21
1.90
2.3k
2.05
2.29
2.17

2.83
2.81
2.81
2.80
2.83

2.9k
2.92
2.93
2.93
2.9k

2.27
2.2k
2.18
2.17
2.17

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

2.73 (6/25)

1.98 (1/8)

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

• 19
•k3

:S

.13
.28
• 2k
.26
.28
.27

.8k
• 30

.61
• 29

1
.56
• 56
1

Average term of bonds included i s 25-26

2/ Weekly averages of d a i l y figures-. The old s e r i e s i n c l u d e s f u l l y t a x a b l e ,
marketable 2 1/2 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 t h o s e due or c a l l a b l e i n 10-12 y e a r s 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 t h e bonds included d e c l i n e d from Ik years i n e a r l y 1953 t o
11 1 / 2 y e a r s i n e a r l y 1955• The new s e r i e s i s comprised of the 3 per cent bond
of 1995 and the 3 1/k per cent bond of 1978-83.
3 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average
tern i s 20 y e a r s .
N o t e . - - H i g h s 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.




EXHIBIT B

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

V*

Date

!

Corporate
Baa 1 /

. State and
local govt.
Baa 2/

State and
local govt,
rev. 3/

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low

3.89
3.50
3.7k
3-Uli
3-63
3-1*5
3.62
3.58

January 27
February 3
February 10
February 17
February 2k

3.59
1%

3.58
3.58

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

3.79
2.96
3.32
2.93
3.26
3.02
3.26
3.20
3.22
3.22
3.22
3.20
3.20

(6/25)
(1/8)
(1/7)

(8/5)

(12/29)
(1/6)
(1/5)
(2/23)

3.27
2.71
3.00
2.72
2.99
2.76
2.91
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(1/6)
'
(2/2U)

2.90
2.89
2.89
2.89
2.89

1/ Weekly average of daily figures. Average term of bonds
included i s 25-26 years.
2 / Thursday figures. Only general obligation bonds are
inducted; average term i s 20 years.
3/ Friday figures. Average rating of bonds included i s
between Baa and A; average terra i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock p r i c e
index 1 /

Common
Trading
stock
volume 2 /
(millions y i e l d s 3/
of shares) (per cent)

Stock market customer c r e d i t
Customers'
d e b i t b a l - loans to
ances h / "others" 5 /
( M i l l i o n s of d o l l a r s )

167-1
1UU.0
221.U
156.5
270 . 7
217-U
271.2
257-U

(1/2)
(9/18)
(12/31)
(1/6)
(12/ 30)
(1/lU)
(2/2U)
(1/20)

269-2
262.8
260.9
266.U
271.2

2.5
0.9
3.7
l.u
U.6 '
1.5
2.6
2.0
2.1i
2.2
2.1
2.1
2.6

5.75
5.15
5-33
U-20
1.22
3.78

2,165
2,055
3,U36
2,1*05
r/U,030
" 3,537

n.a.

n.a.

U-06
U.08

r/U,030
U,0lt0

1,665
1,31h
2,388
1,653
2,805
2,517

780
66U

l,0lt8

7U6

1,2U1

1,018
1,267

l,2ia
" 2,786

1,239
1,25U

1,2U6

1,252

n.a.—Not available.
'
— — — — — — — — — — — —
r / Revised.
1 / 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; converted
to 19H7-U9-100 try Federal Reserve. The-conversion f a c t o r i s 123.91.
2 / Averages o f d a i l y t r a d i n g volume on the New York Stock Exchange.
~V Moody's 200 common, s t o c k s ; end of month f i g u r e s .
5 / End of month f i g u r e s f o r member firms of the New York Stodc Exchange which
cariy margin accounts; excludes balances secured by U. S. Government o b l i g a t i o n s .
Wednesday f i g u r e s f o r weekly reporting member banks. Excludes loans f o r
purchasing or c a r i 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 reporting banks account f o r about 72 per cent of loans t o o t h e r s .
N o t e . — H i # i s 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 d a t e s
for different series.




Exhibit D

H.lU

Corporate and State and Local Government
Security Offerings and Placements
(In millions of d o l l a r s )
Corporate
1955
1

New capital
195U

1956

5U6
U36
1,261

H
U26
635

e/UOO
e/650
e/U25

April
May
June

U9U
903
697

July
August
September

583
65U
680

1956
January .
February
March

e/735
e /675
e/7#

1

1,207 y
631
921

October
November
December
& 1st quarter
" 2nd quarter
3rd quarter
Uth quarter
Year

e/2,l60

1st quarter
2nd quarter
3rd quarter
Uth quarter
Year

e/l,660

2,2U3
2,09U
1,917
2,760
9,01U

State and. l o c a l
1 1955
1

195U
396

535
312
538

u

U97
656
8U2

U27
350
6U1

a
853

909
335
7U7

U70
2U9
U06

279
261 •
6U9

1,003
290
60U

919
658
e/UOO

59U
U23
" 877

1,385
1,U18
1,12U
e/1,977
e/5,90U

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

1,608
1,995
1,991
1,896
, 7,U90

e/l,U75

Excluding finance companies 2 /
1,791
1,912
1,UU1
e/2,560
e/7,70U

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

T / Includes $637.2 million AT&T convertible debenture i s s u e .
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.
Note.—Details may not add to t o t a l s due t o rounding.

#



H. lit

Exhibit E
Large Public Security Issues f o r New Capital
(Other than U. S. Treasury ) 1 /
Proceeds of Large Issues Offered
(Millions of d o l l a r s )

Month

Corporate

1955 - January'
February
March
April
MayJune
July
August
September
, October
November
December
1956 - January

State and
l o c a l government

1hi
63
750
173
U83
175
101
U05
328
805
269
215
95

Other 2/

3k 1
107
337
238
152
U03
278
65
23U
716
396
205
192

35
15

25
50

Large Individual Issues Offered February 1 through 2k [
Issuer

Type 3/

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

CORPORATE
Northwestern Bell
Telephone
Reynolds Metals
- Chemical Corn Exchange
Bank
So. C a l i f . Edison
M. Lowenstein & Sons
Hoppers Co., Inc.
Tennessee Gas Transmission-

Deb.
Pfd. s t k .

. 25.0
Uo.o

Com. s t k .
Pfd. s t k .
Conv. sub.deb.
Com. s t k .

26.0
30.7
3L 3
15.6

Pfd. s t k .

1996

3 1/U

3.15

Aaa

1981

L 3/8

U.38

Ba

1.85-3.10
1.80-2.75
1.70-2.75

A
Aaa
A

W.O

STATE & LOCAL GOVERNMENT
Oklahoma City, Oklahoma
Public Housing Auth.
I
New Orleans, Louisiana (




G.O.
G.O.

13.2
106.8
11.5

1958-81
1956-90
1957-95

~'2

.U9
2.69
2.57

H.1U

E-2

Large Individual Issues Offered February 1 through 2h (Cont'd)
Issuer

type 3 /

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

STATE & LOCAL GOVERNMENT
(Cont'd)
Metropolitan Water D i s t .
of So. C a l i f .
Lubbock, Texas
New York State Thruway
Chicago, I l l i n o i s
Puerto Rico
Los Angeles, C a l i f .
Montgomery Co., Md.
Indianapolis, Ind.
Rochester, New York
Weber Basin Water Cons.
D i s t r i c t , Utah

Rev.
G.O.-Rev.
G.R.
Rev.
G.O.
Rev.
G.O.
G.O.
G.O.
G.O.

7.3
9.8
50.0
12.0
9-5
2U.0
6.8
18.0
7-h
. 5-U

1957-81
1957-81
1985-95
196^-78
1957-76
1957-86 , ,
1957-86
1958-87
1957-69

2.2k
2.80
2.U2
2.60
2.78
2.U7
2.88
2.29
1.89

1.50-2.35
1.90-2.85
2.25-2.UO
2.30-2.65
1.90-2.75
1.65-2.25
1.85-3.00
1.65-2.38
1.50-1.90

1960-96

3.38

2.50-3.50

Aa
A
Aaa
A
A
Aa
Baa
Aaa
Aaa

OTHER

1/ Includes corporate and other s e c u r i t y o f f e r i n g s of $15 million and over;
S t a t e and l o c a l government security o f f e r i n g s of $5. million and over.
2 / Includes foreign 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 State and l o c a l government s e c u r i t i e s , G.O. denotes gene r a l obligation; Rev., revenue bonds; G.R., general obligations additionally s e cured by f a c i l i t i e s revenues; L.L., limited l i a b i l i t y obligations secured by
pledge of designated revenues.
V 198U-86 m a t u r i t i e s not r e o f f e r e d .

e




H.1U

Exhibit F
Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
Corporate
jother 2 /

Date of
computation
— Feb* 28
Mar. 31
Apr. 29
May 31
June 30
. July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
- Jan. 31
Feb. 29

710
211
U25
160
67
U07
222
805
202
215
70
176
123

52U
208
116
339
3UU
100
18k
8U3
330
205
'
121 .
327
220

Subsequent t o
date shown
S t a t e and j o t h e r 2 /
Corporate
l o c a l govt.
~

——

50
—

1,395
922
1,111
850
830
1,135
920
909
U12
230
85
376
233

1,978
2,009
1,917
1,861
1,8U5
2,018
1,971
2,205
1,650
756
618
917
785

50

Forthcoming Large Offerings, as of Februaiy 2it
Issuer
'

Type

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

CORPORATE

Bell Telephone of Pennsylvania
. Westcoast Transmission, Ltd.
Houston Lighting and Power
*Freuhouf T r a i l e r Co.
New York -Telephone
Southern California Gas
Sheraton Corporation of America

Deb.
Sub. deb.
1 s t mtg. bds.
Conv. sub. deb.
Ref. mtg. bds.
Mtg. bds.
Deb.

35.0
20.5
30.0
37-5
55-0
10.0
15.0

March
March
March
March
. April
May
1956

6
7
7
7
30

STATE AND LOCAL GOVERNMENT
Fort Worth, Texas
Connecticut Expressway
Los Angeles Co., C a l i f .
S t a t e of C a l i f o r n i a
San Antonio, Texas
Inter-American Center Auth., F l a . Penn Township School D i s t r i c t , Pa.
S t . Louis, Missouri




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

10.0
100.0
7.9
30.0
5.0
70.0
5.3
12.2

Februaiy
February
Februaiy
Februaiy
March 1
March 6
March 6
March 6

27
28
28
29

.

H.llt

F-2

-

Forthcoming Large O f f e r i n g s , as of February 2U (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 (Cont'd)
Santa C l a r a , C a l i f o r n i a
Denver, Colorado, School D i s t . //I
Bethlehem Authority, Pa.
S t a t e of North Carolina
* S t a t e of Alabama
S t a t e of New Hampshire
. *San Diego, C a l i f o r n i a
* S t a t e of Oklahoma
*Dallas, Texas
Georgia Rural Roads 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 Toll Bridge Auth.
S a l t River P r o j e c t , Arizona

G.O.
G.O.
Rev.

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

5.2
28.5
8.0
25.0
15.0
l?-3
6.0
11.6
8.5
15-5
185.0
65.0
62.0
227.0
11.0

March 6
March 7
March 8
March lit
March lit
. March 15
March 15
March 20
March 26
May
Late spring
1956
1956
1956
1956

OTHER
^

None
-a—Included i n t a b l e f o r f i r s t time.
n.a.—Not a v a i l a b l e .
l / Includes corporate and other i s s u e s of $15 m i l l i o n and over; S t a t e and
local""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 .

e




?