Full text of H.16 Capital Market Developments : March 2, 1959

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Not for Publication

DECONTROLLED AFTER SIX MOUTH

H.lk

.

March 2, 1959.

CAPITAL MARKET DEVELOPMENTS
The volume of new public security financing was substantial
last week, particularly for State and local governments, but is expected to be much smaller this week. During the week ending February
27, corporations sold large issues, including expiration of subscription rights, totaling $6? million and State and local governments
offered large issues amounting to $l5U million. The calendar for this
week includes State and local government issues for $81 million; no
large corporate issues are scheduled for sale.
Bond yields - Bond yields continued to decline slightly last
week. Yields declined for all types of outstanding bonds, except those
for lower-grade corporate bonds, which remained stable.
March security volume - New corporate security offerings are
expected to total $650 million in March, the same as the estimated
February volume, but less than half the record volume in March 1958
(nearly half of which was accounted for by a $718 million AT&T convertible debenture issue). Large public issues are expected to total
between $200 and $250 million. New financing of $650 million in
March would bring the first quarter new issue total to $2.0 billion,
$1.1 billion less than the volume in the first quarter of 1958.
State and local government security financing is expected to
total $650 million in March. This volume would be nearly one-fifth
less than the estimate for February, but one-fourth larger than the
volume a year earlier. For the first quarter of this year State and
local government bond issues are expected to amount to $2.1 billion,
only $200 million less than the unusually large volume in the first
quarter last year.
Stock prices - Standard and Poor's index of 500 common stocks
declined slightly last week, closing at 55.bl on February 27. Trading
volume was heavy, averaging U.l 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.




-

•

' 1*

exHint a!
HIGH-GRADE

BOND

YIELDS

"47

w
LOWER-GRADE

BOND

YIELDS




1?
H.l4

Ex)libit D
- Tables for Exhibit A
High-grade itond Yields

Date

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

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

State and
local govt.
Aaa J/

(Per cent)
19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
4.14
U.13
3.55
4.16
4.09

Jan.
Feb.
Feb.
Feb.
Feb.

4.16
4.15
4.14
4.14
4.13

30
6
13
20
27 2/

(4/23)
(9/27)
(10/10)
(5/2)
(1/30)
(1/9)

2.45 (8/6)
3.76 (10/18)
3.84 (12/26)
3.07 (4/25)
3.96 (1/16)
3.83 (1/2)

1.90 (9/2)
3.45 (8/29)
3.31 (9/U)
2.64 ( 5 A )
3.20 (2/5)
3.11 (2/26)

3.94
3.93
3.92
3.91
3.90

3.20
3.20
3.18
3.13
3.11

.30
.60
.51
.22
.27
.16

.30
.47
.72
.34
.79
.65

.22
.22
.22
.23
.23

.74
.73
. .74 •
.78
.79.

Lower-grade Bond Yields
Corporate
Baa 1/

State and
local govt.
Baa y

1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
4.90
4.85

2.93(8/5)
4.51 US/29)
4.34 (9/11)
3.6k (5/1)
4.13 (2/5)
4.03 (2/26)

Jan.
Feb.
Feb.
Fob.
Feb.

4.90
4.90
4.90
4.89
4.89

Date

(Per cent)

30
6
13
20
27 2/

(12/31)
(11/29)
(1/3)
(7/11)
(2/13)
(1/9)

4.13
4.'13
4.11
4.05
4.03

Spread between
Aaa and Baa
State and
Corporate
local govt.
t"'
.96
1.21
1.11
.93
.98
.89

.52
1.27
1.20
.77
.77
.74
.74
.75
l
•l?
.75
.76

'

.93.
.93
.93
.92
.92

jo/ Vrc.Liminuiy.
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 duo or callable in
10 years or n-oro.
J/ Thursday figures. Only general obligation bondc are included- average term
is 20 years.
Note.—highs and lows are for individual series and may be on different dates for
different series.




STOCK

MARKET

1954




1957

1958

1959

Exhibit D
Table for Exldbit C
Stock Market

Date

Stock price
index 1/

Trading
Common
Stock market customer credit
volume 2/
stock
Bank
Customers1
(millions
yields y
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
1959 - High
Low

26.51 (1/2)
. 2.5
22.95 (9/18)
0.9
#.98 (12/31)
3.7
l.i*
2U.93 (1/8)
1(5.89 (12/9)
h.6
35.28 (l/lli)
1.5
U9. 6Ji (8/3)
3.1
13.22 (1/20)
1.5
i»9.08 (7/12)
li. 2
39.1(8 (12/20) 1.1*
5L11 (12/26) la.9
10.37 (1/10)
1.7
1*. 2
56.00 (1/23)
5U.37 (2/6)
3.0

December
January
Feb. 13
Feb. 20
Feb. 27 £/

53.1*9
55.82
5b. 1*2
55.52
55.1*1

3.6

l*.o

3.0
3.7
l*.l

5.38
6.25
U. 32
5.82
1*.08
lull
3.62
1*.3U
3.91
U-72
3.30
1*.58
3.19
3.31*

1,665
2,1*55
1,311*
2,055
3,1*36
2,388
2,1*05
1,653
la, 030
2,805
- 2,517
3,537
l*,0lt7
2,823
2,71*0
3,911*
la,031 V2,667
2,1*62
3,576
4,1*60
3,201
2,L87
3,551*
n.a.
n.a.
n.a.

3.35
3.21*
3.35
3.28
3.29

1*,1*92
1*.551*
n.a.
n.a.

3,285
3,297
n.a.
n.a.
n.a.

780
66k
1,018
71*6
1,21*1
1,018
1,267
1,155 ,

1,163

1,05)1
1,317

1,051

1,25?
1,210

1,207
1,257
1,259
1,256

n.a.—Mot available.
^
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19U1-'i3=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.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. Yields shown are for dates
on which nrice index rcachtd its high or low.
h/ End of month figures for member firms of the f-iew 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. 5. 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 Pulletin.'
Note.—Highs and lows are for individual series and may ce on different dates
for different series.
-




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

19 59
January
February
March

e/700
e/650
e/650

HI
r

April
May

October
November
December
quarter
quarter
quarter
quarter

e/2,000

1st half
Three quarters
Year

1,5613/

1,060
1,065
1,320

1,141
600
881

812
953
511

742
572
506

;§
1,453

798
895
551

765
546
393

1,102
538
1,144

1,003
924
973

806
403
651

529
584
431

858
1*73
911

1,090
789
1,076

456
474
435

698
633
698

3,135
2,622
2,78k
2,250

3,445
3,149
2,899
2,954

5,757
8,511
10,791

6,594
9,493
12,447

723

2/629
e/800
e/650

e/2,079

2338
cm cxj co

1st
2nd
3rd
4th

New capital
Corporate 1/
State and local 2/
1
1958
1
1957
1959
1
1958
1957
1

1,820
1,704
1,544
2,029

4,520
6,380
7,746

3,524
5,069
7,099

Excluding finance companies 4/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/1,800

Year

2,89k
2,583
2,753
2,161

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

10,391

11,518

1/ Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
#/ Total new capital issues excluding offerings of sales and consumer finance
companies.




Exhibit F

H.llt

Other Security Offerings 1/
(In mllliona of dollars)
Long-term
___
Foreign government 2/
|
federal apcncy
"19gr
195b
I 1957
I 1956
1958

E

.

January
C February
>} March

196
53

f April
May
June

139
198
120

123
1*8
1*2

9
5
17

28
7
30

58
123
71*

1*
60
1

—

July
August
September
October
November
December
Year

992

81,
1*9
30

507

72

37
1
50

523

. 95
2
39
•

16k

300

233
1*60
273

April
May
June

s

July
August
September

289
1*23
369

October
November
December
Year

26h

- #

220

2,321

2/21*1
E/3,909

196
357
21*9

205

S

125
252
. 176

272
272
252.

195
207
179

3
9U
1*59

11*6

326

$

2,706.

3,098

3,271*

100
169

572
Federal agency 3/

326
1*55
147

29l*

109

215

—

1*1*
5
21

60

125

60

Short-1
January
February
March

19^5"

638
1*30
505

380
220
283

161
329

336
1*69
501

32)
311*
260

1*37
206
330

221*
370
512

222
1*25
273

h$k

1,238
S -

1*07
222
128

5,51*3

3,1*57

371
208
11*1*

209

e/ Estimated.
" jg/ Preliminary.
%/ Dftta presented in this exhibit differ from those in Exhibit £ in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more th->n one year.
2/ Includes securities offered in the United Stated by foreign governments and
their subdivisions and by international organisations. Source1 Securities and JSx*
change Commission,
y Issues not guaranteed by the V. S. Government. Sources long-term, Securities
and Exchange Commission* .short-term, Federal Reserve.
U/ Principally tax and bond anticipation notes, warrants or certificates and Publio
Housing Authority notes, J6> some instances PHA no tee included may have a somewhat
longer ten* than one year. Sources Bond Buyer.




Exhibit G

H.14

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

Month

1957 - December
19$8 - January
February
March
April
May
June
July
August
September
October
November
December
1959 - January

Corporate

State.and
local government
404
410
553
182
300
505
195
275
109
288
172
259
229
335

#9
318
605
1,093
725
356
281
771
. 209
825
259
227
305
369

.

Other 2/

1,357
266
653
164
86
4l
18
209
100
79
75 .

Large Individual Issues Offered during February

Issuer

Type 3/

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

Southern Co. .
Com. stk.
Universal Oil Processes,Inc
Cap. stk.
Avco Manufacturing Co.
Conv. deb.
Reynolds Metals Co.
Conv.pfd.stk.
Consolidated Edison Co.
Conv. deb.
Public Service Co. of Ind. 1st mtg. bds.
Connecticut Lt. & Pwr. Co.
Com. stk.
Illinois Bell Tel. Co.
1st mtg. bds.

15.3
72.5
11.9
55.0
59.6
25.0
17.2
50.0

hating

1979

5

5.00

Ba

1973
1989

4
4 3/8

4.00
4.35

A
Aa

199k

4 3/8

4.32

Aaa

STATE AND LOCLiL GOVERNMENT
Milwaukee Co., Wisconsin
Los Angeles, California
Massachusetts Port Auth.
Louisiana Dept. of Hiphwa^
State of Minnesota
State of Washington
I
St. Louis, Missouri
[




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

14.0 1960-71
14.0 1960-79
50.1 1998/64
20.0 19(0-81/68
22.9 1964-76
34.9 1960-79/69
12.6 1965-78

2.70
3.47
4.86
3-50
2.96
3.19
3.05

1.80-3.00
1.90-3.60
4.75
1.90-3.60
2.40-3.10
1.80-3.35
2.55-3.10

Aaa
Aa
A
Aa
Aa
Aa

ti.lh

G-2
Large Individual Issues Offered during February (Cont'd)

Issuer

Type ]/

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

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd)
Chicago, Illinois
Monroe Co.' Wtr. Auth.,N.Y.
Los Angeles Co. Flood
Control Hist., Calif.
East Bay Mun.Ut.Dist.,Cal.
State of New York
San Antonio, Texas
Chicago, Illinois
Public Housing Auth.

Rev.-Ut.
Rev.-Ut.

120.0
13.2

• 1999/65
I96I-99/69

li.86
i|.06

U.75
2.30-1*. 10

G.O.
G.O.
G.O.
G.O.
G.O.
G.O.

10.0
25.0
60.0
10.8
ItO.O
103.5

1960-89
1960-91/75
1960-79
1961-79M
I960-77
1959-99

3.3it
3.U5
2.92
3.28
3.20
3.U1

2.15-3.75
1.85-3.60
1.70-3.00
2.10-3.U0
1.90-3.30
1.60-3.60

Aa
Aa
A
A
Aaa

OTHER
Kingdom of Denmark
Empire of Japan

Ext.loan bds. 20.0
Ext.loan bds. 15.0

1974
197k

5 1/2
5 1/2

5.75
5.70

__

n.a.—Not available.
1/ Includes corporate and other security offerings of $15 million and over5
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.
2/ In the case of State and local government securities, G.O. denotes general
obligations5 Rev.-Ut., revenue obligations secured only by income from public utilities ; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilitiesj
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.




Exhibit H

H.ll*

Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State and
Corporate local govt< Other 2/ Corporate

Date of
computation

1958 - Feb. 28
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
^ Dec. 31
1959 — Jan. 30
Feb. 27

1,123

1

768
161
785
113
20k
301
210
270
198

13k
298
1*93
177
225
55
2U1
295
258
229
261
551
292

31*1
330
1*93
208
235
125
1*35
521*
675
683
515
856
1*81

1,208
670
561
1*61*
1,01*8
381
911*
216
326
1*01
370
365
279

—*

110
150
36

71
75
1*5
—

mmmm

110
150
36

71
75
1*5
—

Forthcoming Large Offerings,, aa of February 27
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Northern Indiana Public Service Co.
KLM Royal Dutch Airlines
American Natural Gas Co.
Colorado Interstate Gas Co.
*Texas Eastern Trans. Corp.
Cleveland Electric Illuminating Co.
*Ohio Edison Co.
*0hio Power Co.
•KMonongahela Power Co.
Montana Power Co.
Commerce Oil Refining Corp.

1st mtg. bds.
Conv. sub. deb.
Common stk.
1st mtg. p. 1. bds.
Pfd. stk.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Deb., bds. & common

25.0

17.0
28.0

33.0
15.0

25.0
30.0
25.0
16.0
20.0

1*5.0

Mar. 11
Mar. 12
Mar. 12
(rights expire)
Mar. 12
Mar. 20
Mar. 25
Mar. 26
Mar. 31
Apr. 1
Spring
Spring

STATE AND LOCAL GOVERNMENT
Detroit-Metro. Expressway
Philadelphia, Pa.
*Port of New York Auth.
New York, N. Y.
Metro. Water Dist. of So. Calif.
State of California
*Phoenix,
Arizona




Rev.-Ut.
G.O.
Rev.—Ut *
G.O.
Rev.-Ut.
• G.O.
Rev.-Ut.

25.0
25.5
30.0
26.3
26.1*
100.0
10.0

Mar.
Mar.
Mar.
Mar.
Mar.
Mar.
Mar.

3
1*
5
10
10
11
17

H_2

H.lU

Forthcoming Large Offerings, as of February 27 (Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
•^Milwaukee, Wisconsin
Pennsylvania General State Auth.
Buffalo, New York
Chesapeake Bay Ferry Commission
State of New Jersey
Memphis, Tennessee

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

18.8
30.0

10.2

lWi.0

25.0

10.0

Mar. 31
Mar. 31
Apr.
Spring
Spring
Spring

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




Exhibit I

H.lU

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date
1952 - 1957
High
Low
1958 - January
February
March
April
May 7
13
15
16
20
21
22
28
June 10
17
25
^ July 2
9
18
23
Oct. 7
15
28
29
Dec. 17
1959 - Jan. 7
20
28
Feb. 18

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)
5.00(8/14/57)
2.93(3/31/51)

87
-3

*3.60./
3.89^
4.08
3.91

-8
22
35
18
21

3.90
3.85
3.85

16
16

3.85
3.82
3.95

17
12
24

LOO
it. 10
1.10
1,57
4.50

25
28
29
25
22
12
lit
23

i >
4.44
4.60
L6i,

•

5.50(11/7/5% )
3.00(3A7/54)

123
-15

3^96^
k.07
4.16
4.01
LOO

3
9
-1
8
3

4.07
4.35

4
32

4.00
3.95

-1
-6

3.98^

1

4,352/

4.75^

23

34

4o
4

Single observation, not an average.
1/ Covers 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 averages of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned issues of
similar quality for the same day. Average maturity for the seasoned issues
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 narked include one or more
issues with such a provision. Other issues have no such provision.