Full text of H.16 Capital Market Developments : March 21, 1956

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Nbt f o r Publication

SIZMOIM

.

H.lU

March 21, 1956
CAPITAL MARKET DEVELOPMENTS

Three State and local government bond issues totaling
OUO million were the only large public security issues sold during
the week ending March l o . This week, large State and local government issues are expected to t o t a l #23 million. Corporations are
scheduled to o f f e r large issues with proceeds aggregating $176 million." This includes the £>100 million Tide Water Associated Oil
Company debenture issue.
Bond yields - Yields on a l l types of outstanding bonds
rose l a s t week. The increase was particularly sharp for yields
on State and local government Aaa-rated bonds and revenue bonds,
which rose 7 and 5 basis points, respectively.

f .

Stock market credit - Customer c r e d i t i n the stock market, excluding U. S. Government securities, declined $1*9 million
during February to t o t a l $3,991 million.at the end of the month.
This was the f i r s t decrease since October 1955 and was primarily
the result of a decline in customers' net debit, balances. Despite
the decline in debit balances, borrowing by NYSE firms maintaining
margin accounts increased moderately during February.
The following table shows these and other data on stock
market credit for January and February.

End of month
January February

. Change

(Millions of dollars)
•Customer credit
Excluding U. S. Govt, securities - Total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Govt, securities
Broker and dealer credit
Money borrowed except on U. S. Govt, securities
On customer c o l l a t e r a l
Money borrowed on U. S. Govt, securities
|
Customers' net f r e e credit balances




U,oUo
27m

1,25k
36

3,991
277H0
1,251

-U9

3h

-3
-2

37

36

-1

2,129
1,7 3k

2,137
1,756
52
913

+8
+22
+11
+8

hi
90$

Stock prices - Common stock prices advanced sharply l a s t
week in the heaviest trading volume since l a t e September 1955* The
SEC index of 26£ common stocks rose 6.6 points during the week "to a
new high of 286 on March 16. Daily indexes indicate a continued
sharp advance in prices Monday and Tuesday of t h i s week.
More detailed information concerning recent market developments i s presented in the attached exhibits.

B u s i n e s s F i n a n c e and C a p i t a l Markets S e c t i o n ,
D i v i s i o n of R e s e a r c h and S t a t i s t i c s ,
Board of Governors of t h e F e d e r a l Reserve System.




CORPORATE Aa«

STATE AND LOCAL
GOVERNMENT A o o

I "TXl

U. S. Govt., long-term 'if
Corporate
Aaa 1 /

Spread between
State and
U• S* Govt.
l o c a l govt. (old series) and
Corporate IState and
Aaa 3/
Aaa
Ilocal Aaa

(Per cent)
3-U2 (6/19)
2.99 (1/9)
3.09 (1/6)
2.85 (U/23)
3.17 (12/23)
2.91 (1/7)
3.1U (1/6)
3.07(3/2)
3.07
3-07
3-07
3.08
3.10

3.15 (6/6)

2.78 (12/26)
2.7U (1/9)
2.hh (8/7)
2.91 (8/5)
2.62 (1/7)
2.90 (1/6) •
2.80(2/17)
2.80
2.83

2.eu

2.86
2.89

2.73 (6/25)

1.98 (1/8)

3.03*(8/5)
2.89. . (6/10)
.
.
2.97 (3/16)
2.92(2/3)

2.93
2.9U
2.9U
2.96
.2.97

1/ Weekly average of daily figures.

2.21
1.90
2.3U
2.05
2.29
2.17
2.17
2.17
2.18
2.18
2.25

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

• 38
.19
• li3
• 13

:LT
.23
.22
.21

.8U
• 30
.61
.29

:S

.68
• 56
•63
.66 •

.66
.68

.6I4

Average term of bonds included i s 25-26

2/ Weekly averages of daily figures. .The old series includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t callable after 12 years through
September 1955j and those due or callable in 10-12 years thereafter; the average
term to f i r s t c a l l of the bonds included declined from 1U years i n early 1953 to
11 1/2 years in earihr 1956. The new series i s comprised of the 3 per cent bond
of 1995 and the 3 1/h per cent bond of 1978-83if 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 d i f f e r e n t dates
for different s e r i e s .




LOWER - GRADE BOND YIELDS

CORPORATE Boa

STATE AND LOCAL GOVT. B a a

, n r i

STATE AND LOCAL GOVT. REVENUE

tyKJ I I I I 1 I 1 I I I I I I II

Date

Corporate
Baal/

S t a t e and
l o c a l govt.
Baa £ /

State and
l o c a l govt,
rev. 3/

(Per cent)
1953 - High
Low
19$k - High

High
Low

3.89
3.50
3.7k
3.UU
3.63
3.U5
3-62
3.58

February 17
February 2k
March 2
March 9
March 16

3.58
3»58
3.58
3.58
3-59

1955 - High
1956

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

3.79 ( 6 / 2 5 )
2.96 ( 1 / 8 )
3.32 ( 1 / 7 )
2.93(8/5)
3.26 (12/29)
3.02 ( 1 / 6 )
3.26 ( 1 / 5 )
3.20 ( 3 / 8 )

3.27
2.71
3.00
2.72
2.99
2.76
2.96
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(3/16)
(2/2L)

3.20
3-20
3.20
3-20
3.23

2.89
2.89
2.90 2.91
2.96

Average term of bonds
included i s 25-26 y e a r s .
2/ Thursday f i g u r e s . Only general o b l i g a t i o n bonds are
included; average term i s 20 y e a r s .
J / Friday f i g u r e s . Average r a t i n g of bonds included i s
between Baa and A; average term i s 20 y e a r s .
Note.—Highs 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 d i f f e r e n t s e r i e s .




Date

Stock price
index 1 /

Common
Trading
volume 2 /
(millions yields 3/
of shares) (per cent)

Stock market customer credit
Customers1
Bank
debit bal- loans to
ances h / "others" 5 /

Total

(Millions of dollars)
1953 - High
1951 - High
1955 - High
Low
1956 - High
Low
January
February
March 9
March 16

167.1
HiU.O
221.U
156.5
270-7
217.U
286.0
257.U

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/1U)
(3/16)
(1/20)

262.8
266.3
27k.5
279.1
286.0

1,665
1,31k
2,388
1,653
2,805
2,517
2,786
2,710

780
66L
' 1,0U8
7U6
1,2!a
1,018
1,267
l,2la

U,0it0
3,991

2,786
2,7U0

n.a.

n.a.

1,25U
1,2U1
1,251
1,251
n.a.

2.5
0.9
3-7
i.u
U.6
1.5
3.1
2.0

5-75
5-15
' 5-33
U.20
• u.22
3.78
It. 08
3.93 '

2,Ub5
2,055
3>L36
2,U05
U,030
3,537
U,oUo
3,991

2.2
2-3
2.8
2.8
3.1

U.08
3.93
n.a.

.

-

n.a.—Not available.
1 / SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19H7-U9=100 by Federal Reserve. The conversion factor i s 123.91.
2 / Averages of daily trading volume on the New York Stock Exchange.
3 / Moody's 200 common stocks; end of month figures.
It/ End of month figures f o r 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 s e c u r i t i e s 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 d i f f e r e n t s e r i e s .




Exhibit D

Corporate and State and Local Government
Security Offerings and Placements
(in millions of dollars)

1956
J anuary
February
March

1

Corporate
1955
1

487
e/725
e/975

April
May
June

October
November
December
^ 1st quarter
W 2nd quarter
3rd quarter
4th quarter
Year

e/2,M5

1st quarter
2nd quarter
3rd quarter
4th quarter
Year

e/1,765

1956

546
436
1,261

547
426
635

I e/400
e/650
e/425

494
903
697

497
656
642

583
654
680

State and local
1
1 1955

1954

535
312
5#

396
411
565

427
350
641 .

734
748
853

909
335
. 747

470
249
406

279
261
649

1,207
631
921

1,003
290
604

919
658
408

594
423
877

2,243
2,09k
1,917
2,760
9,014

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

1,385
1,418
1,124
1,984
5,911

1,372
,2,334
1,188
1,894
6,789

'

July
August
September

New cs p i t a l
1954

;

3/1,475

Excluding finance companies 2/
1,791
1,912
1,410.
2,619
7,762

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

e / Estimated.
T/ 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 t o t a l s due to rounding.




:

•

H.lU

Exhibit E
Large P u b l i c 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 than U. S. Treasury) l /
Proceeds of Large I s s u e s O f f e r e d
( M i l l i o n s of d o l l a r s )

Month

Corporate

6} .
750
173
1I83
175
101
U05
328
805
221
263
95
212

1 9 # - February "
March
April
May
June
July
August
September
October
November
December
1956 - January
February

S t a t e and
| l o c a l government
1
107
337
238
152
103
278
65
23U
. 716
396
205
192
U33

Other 2 /

15

25
50

Large I n d i v i d u a l I s s u e s O f f e r e d March 1 through 16

Issuer

Type 3 /

Amount
Coupon
(millions M a t u r i t y r a t e or
Offering
yield
of
net i n t e r dollars)
est cost

Rating

CORPORATE
B e l l Telephone of P a .
Houston L i g h t i n g and
Povrer
Fruehauf T r a i l e r Co.

Deb.

35-0

1996

3 iA

3.20

Aa

1st mtg. b d s . 30.0
Conv. sub. deb • 37-5

1996
1976

3 1/h
k

3.19
U.00

Aa
Baa

STATE & LOCAL GOVERNMENT
San Antonio, Texas
Penn Township School
D i s t r i c t , Pa.
S t . Louis, Missouri
Santa Clara, C a l i f .
Denver C o l o . , School
D i s t r i c t #1
Bethlehem A u t h . , Pa.
S t a t e of Alabama
S t a t e of New Hampshire
San Diego, C a l i f .




G.O.

'

5.0

1957-76

2.71

1.90-2.75

Baa

L.L.
G.O.
G.O.

5.3
12.2
5.2

1957-86
1962-75
1957-81

3.31
2.16
2.29

1.95-3.35
1.85-2.25
1.60-2.35

Baa
Aa
Aa

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

26.5
:1957-75
8.0
1959-96
15.0
1958-75
1 9 . 3 . 1957-83
6.0
1956-75

2.27
2.81
2.96
2.25
2.57

1.60-2.30
2.00-2,82
2.00-2.90
1.60-2.35
1.80-2.60

Aa
A
A
Aaa
Aa

1

E-2 1

H.lit

Large Individual Issues Offered March 1 through 16 (Cont!d)
Issuer

Type 3/

Coupon
Amount
(millions Maturity r a t e or
Offering
of
net interyield
est cost
dollars)

Rating

OTHER
None

State and local government security offerings of S3' million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government s e c u r i t i e s , G.O. denotes general obligation; Rev., revenue bonds; G.R., general obligations additionally
secured 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.

e

#



II.lit

Exhibit F
Forthcoming Large P u b l i c S e c u r i t y 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 i y ) 1 /
Expected P r o c e e d s f r o 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 l o t h e r 2 /
Corporate
l o c a l govt.1
—.

. Date of
computation
1955 - Feb. 23
Mar. 31
Apr. 29
May 31
June 30
J u l y 29
Aug. 31
S e p t . 30
Oct. 31
Nov. 30
Dec. 30
1956 - J a n . 31
Feb. 29

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

52U
208
116
339
3Wi
100
18U
8L3
330
205
-121
#7
220

——
—-

50

—

Subsequent t o
d a t e shown
C o r p o r a t e 1 S t a t e and Other £ /
1 l o c a l govt'
1,395
922
l,lUl
850
830
1,135
920
909
k!2
230
85
376
233

1,978
2,009
1,917
1,861
1,845
2,018
1,971
2,205
1,650
756
618
917
785

'—
——

50

—

Forthcoming Large O f f e r i n g s , as of March 16
Issuer

Type

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

CORPORATE
P a c i f i c Gas and E l e c t r i c
"Whirlpool-Se eger
T i d e Water A s s o c i a t e d O i l
Westcoast Transmission, Ltd.
New York Telephone
Bank of America
. S c o t t . Paper
F l o r i d a Power and L i g h t
Duquesne L i g h t •^Plantation Pipe Line
^Caterpillar Tractor
-* Columbia Gas
S o u t h e r n C a l i f o r n i a Gas
S h e r a t o n C o r p o r a t i o n of America
Kentucky U t i l i t i e s
P e n n s y l v a n i a S a l t Mfg.
^ S o u t h e r n C a l i f o r n i a Edison




l s t & z e f . mtg.bds.
25.0
SF d e b .
. 30.0
SF d e b .
100.0
Sub. d e b . .
20.5
R e f . mtg. b d s .
55/0
Com. s t o c k
56.0
Conv. d e b .
98.7
1 s t mtg. b d s .
15.0
1 s t mtg. b d s .
20.0
SF d e b .
25.0
Com. s t o c k
33-5
Deb.
hO . 0
Mtg. b d s .
Uo.o
Deb.
15.0
1 s t mtg. b d s .
19.0
SF d e b .
15.0
1 s t & r e f . mtg. b d s . Uo.o

• March 20
March 20
March 21
March 21
March 27
April 2
' April 3
April 3
April k
April k
April k
A p r i l 10
May
1956
1956
1956
1956

H.lU

F-2
Forthcoming Large Offerings, as of March 16. (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of offering
of dollars)

STATE .41 ID LOCAL GOVERNMENT (Cont'd)
Milwaukee, Wisconsin
State of New Mexico
Key VJest, Florida
Dallas, Texas
Washington State Toll 'Bridge Auth.
•»-State of Delaware
St. Louis County, Missouri
Louisville, Kentucky
Alexandria, Louisiana
Inter-Merican Center Auth., £La.
Louisiana State Building Auth.
Philadelphia, Pennsylvania
Georgia Rural Roads Authority
Chesapeake Bay Ferry Commission
Florida State Turnpike Auth.
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Salt River Project, Arizona

G.O.
L.L.
Rev.
. G.O.
Rev.
G.O.
G.O..
G.O.
Rev.
Rev.
n.a.
Rev.
n.a.
Rev.
Rev.
Rev.
n.a.

8.0
5-0
9-5
8.5
9.3
10.8
10.7
6.0
8.3
70.0
12.0
12.0
15-5
20.0
209.0
65.0
62.0
227.0
11.0

,

March 20
March 20
March 20
March 26
March 27
March 27
March 28
March 28
March 29
March
April 5
April 10
May
Spring
Summer .
1956
1956
1956
1956

OTHER
None
*—Included in table for f i r s t time.
n.a.—Not available.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of
million and over.
2/ Includes foreign government and International Bank f o r Reconstruction
and-Development issues.




Exhibit G
Y i e l d s on New and O u t s t a n d i n g
E l e c t r i c Power Bonds, R a t e d Aa and A l /
Aa-rated o f f e r i n g y i e l d s
A-rated o f f e r i n g y i e l d s
A c t u a l I Amount above
A c t u a l I Amount above
( p e r c e n t ) . [seasoned y i e l d s ( p e r c e n t ) Iseasoned y i e l d s
|(basis points)
1(basis points)

Date

1952 a v e r a g e

3.16

1953 a v e r a g e

3-U6

•

13

3.35

12

16

3-78

26

195U a v e r a g e

3.03

3

1955 a v e r a g e

3.23

9

*3.12
*3.1k
-x-3.17

13
7
8

*3.22
*3.20

10
7

*3.32
*3.25
*3.27
*3.32

10
7
7
12

1955 ~ J a n u a r y
February
March
April
Hay
June
July
August
• September
October
November
December

None

None
None

1956 - J a n u a r y

None

•

—

F e b r u a r y 1$

28
29

March 8

>1 rVl a

nv»Tf ft + 4 a»%

3.15

3

3.19

S

;

3.12

-3

3.33

12

None

.

*3.23
3.29
3.31
3.3S
*3.30

9
1U
16
1U
10

*3.^7
*3*50
3-28

30
23
-5

None

None
None

None

—

3-20
3.25

-8
-3

v-i a

1/ Covers only 30-year f i r s t 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. The number of new issues included in the
monthly averages varies from 2 to U except for October 195U when 6 A-rated
issues were included. Average maturity for the seasoned issues varies from 26
to 28 years.