Full text of H.16 Capital Market Developments : March 3, 1955

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Not f o r P u b l i c a t i o n
DECOKTBOLLED AFTER SIX MONTHS
March 3, 1955

H.Ik

l

CAPITAL MARIET DEVELOPMENTS.
Small volume of s e c u r i t y i s s u e s l a s t week - Large 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 f o r new c a p i t a l t o t a l e d 25
m i l l i o n d o l l a r s during the week ending February 25; 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 . The volume of l a r g e corporate and
S t a t e and l o c a l f l o t a t i o n s expected t h i s week i s 1+lii m i l l i o n d o l l a r s and includes 250 m i l l i o n d o l l a r s of General Motors Acceptance
Corporation debentures.
February experience - February estimate of t h e volume of
S t a t e and l o c a l s e c u r i t i e s i s now 310 m i l l i o n d o l l a r s , considerably
lower than the preliminary e s t i m a t e . At t h e end of January, 682
m i l l i o n d o l l a r s of l a r g e i s s u e s were expected f o r o f f e r i n g i n the
following month, b u t only 101 m i l l i o n were s u c c e s s f u l l y f l o a t e d .
Several i s s u e s t o t a l i n g 650 m i l l i o n d o l l a r s which had been t e n t a t i v e l y scheduled f o r o f f e r i n g , notably those of t h e I l l i n o i s T oll
ftoad, Texas Turnpike, F l o r i d a S t a t e Turnpike, and Sam Houston Turnpike, f a i l e d t o reach the municipal market i n February. Since these
i s s u e s were t o be sold by n e g o t i a t i o n , t h e i r o f f e r i n g dates were
f i x e d l e s s d e f i n i t e l y than f o r most S t a t e and l o c a l s e c u r i t y o f f e r i n g s . The l a t t e r a r e sold on an auction b a s i s w i t h a predetermined
bidding d a t e . The I l l i n o i s T o l l Road Authority expects t o o f f e r
the 390 m i l l i o n i s s u e i n March, but no d e f i n i t e d a t e s a r e c u r r e n t l y
l i s t e d f o r t h e o t h e r s . .All b i d s were r e j e c t e d on two smaller bond
i s s u e s ; one was r e o f f e r e d and sold l a t e r i n the month.
March outlook - Corporate s e c u r i t y o f f e r i n g s f o r new capi t a l i n March a r e estimated a t 1,150 m i l l i o n d o l l a r s , a volume l a r ger t h a n any month s i n c e December 1953* Included i n t h i s estimate
are two o f f e r i n g s with aggregate proceeds of almost 600 m i l l i o n d o l l a r s t o be issued by General Motors and GMA.C.
The March estimate f o r S t a t e and l o c a l government i s s u e s
i s 750 m i l l i o n d o l l a r s , almost a ' t h i r d greater than the volume i n
the corresponding month a year ago and n e a r l y two and one-half times
as l a r g e as i n February 1955* As noted above, t h i s estimate includes
the proceeds from the I l l i n o i s Toll Road i s s u e .
F i r s t q u a r t e r e s t i m a t e s f o r corporate and S t a t e and l o c a l
o f f e r i n g s a r e 1,750 and 1,595 m i l l i o n d o l l a r s r e s p e c t i v e l y . Excluding f i n a n c e companies, the c o r p o r a t e f i r s t q u a r t e r volume i s estimated
a t 1,575 m i l l i o n d o l l a r s , s l i g h t l y l a r g e r than the corresponding p e r i o d a year ago.




11'

H#H|

-2 —

Bond y i e l d s - Yields on corporate Aaa, Baa, and U. S.
Government and high-grade municipal bonds rose during the week
ending February 25. On a weekly b a s i s , Treasury y i e l d s rose f i v e
b a s i s p o i n t s ; no f u r t h e r change occurred on a d a i l y b a s i s on lionday
and Tuesday of t h i s week * Corporate Aaa y i e l d s increased thr ee
points l a s t week and rose one point on March 1.
Stock p r i c e s - Stock p r i c e s , as measured by the SEC index
of 26£ common stocks, decreased s l i g h t l y l a s t week. A small i n crease was indicated by d a i l y indexes through March 2. Daily t r a d ing volume on the New York Stock Exchange decreased t o an average
of 2.9 million shares per day l a s t week.
S t a t e and Local Government Security
O f f e r i n g s , Fourth Quarter
and Year, 1953-195U
S t a t e and l o c a l governments issued a greater volume of
. s e c u r i t i e s in 195k than in any other year—a t o t a l of 6,969 mill i o n d o l l a r s , as shown in the accompanying t a b l e , 25 per cent greater
than the 1953 volume. Refunding i s s u e s , which are only a small p a r t
of t o t a l o f f e r i n g s , increased 100 million d o l l a r s over the previous
y e a r ' s volume and t o t a l e d 180 million f o r 195k» Offerings f o r new
c a p i t a l were l,89li million d o l l a r s in the f o u r t h . p e r i o d , a q u a r t e r l y
t o t a l second only t o the record volume of t h e second period l a s t
year.
Purpose of issues
Highway, bridge and tunnel financing accounted f o r the
l a r g e s t use of funds in the f o u r t h quarter and year' of both 1953
and 195b. The volume was 2,136 million d o l l a r s in 195kf over a
t h i r d larger than the volume in the previous y e a r . Included in
these t o t a l s were several very large issues of over 100 million
d o l l a r s . Another important purpose in t h e f o u r t h period of 195k
was miscellaneous public service e n t e r p r i s e s , due mainly t o t h e
335 million d o l l a r New York Power Authority i s s u e offered in Decemb e r , the l a r g e s t single financing in the municipal market since
February 1950. Bond issues f o r school construction in the l a s t
t h r e e months of 195k were somewhat below the corresponding 1953
volume. School o f f e r i n g s increased in volume f o r the year as a
whole but decreased as a proportion of t h e new c a p i t a l t o t a l .
Issuing authority
Unlike a year e a r l i e r , S t a t e governments were t h e l a r gest i s s u e r s in both the f o u r t h quarter and year of 195k• States
offered 2,0U7 million d o l l a r s of s e c u r i t i e s during 195U in contrast
t o only 767 million in 1953* Almost half the volume of l a s t y e a r ' s
State i s s u e s were f l o a t e d in the f o u r t h period. Special a u t h o r i t i e s offered 1,1*63 million in 195k, considerably l e s s than in 1953 •




H.lli
when a very large l a s t quarter brought the y e a r l y t o t a l t o 2,091
m i l l i o n , the l a r g e s t group t h a t y e a r .
Type of issue
The proportion of type of issue t o t o t a l o f f e r i n g s has
varied s u b s t a n t i a l l y in the l a s t two y e a r s . Revenue bonds r e p r e sented 2|6 per cent of t o t a l o f f e r i n g s in 195k as compared with 23
per cent the year e a r l i e r . The increased volume of revenue i s s u e s ,
e s p e c i a l l y in the large issues of over 50 million d o l l a r s , as shown
in the t a b l e below, made up a major portion of the r i s e in t o t a l
s e c u r i t y 4 o f f e r i n g s . Included i n the 1,889 million dollar t o t a l of
large revenue o f f e r i n g s were four issues of over 200 m i l l i o n d o l l a r s — t h r e e turnpike o f f e r i n g s and the New York Power Authority
i s s u e . Only one issue of t h a t s i z e was f l o a t e d in 195)3, the 280
million d o l l a r Indiana Toll Road o f f e r i n g . Small revenue i s s u e s
increased 5It8 million d o l l a r s from 1953 t o l a s t y e a r . Mo general
revenue bonds were f l o a t e d i n 19$h in contrast t o a t o t a l of 535
million d o l l a r s of such issues i n t h e e a r l i e r y e a r .
S t a t e and Local Government Security Issues
Year
1953
1954

Total
5,558
6,969

General
obligation
3,a#
3,739

General
revenue 1/

Total

Revenue
Small Large 2 /

1,566
3,235

798
1,3^6

768
1,889

of t h e S t a t e .
2 / Issues of 50 million d o l l a r s or more.
Mote.--Details may not add t o t o t a l s because of rounding.
Further d e t a i l s on c a p i t a l market developments available
from exhibits - More d e t a i l e d information concerning recent c a p i t a l
market developments w i l l be found in t h e following exhibits which
are attached hereto:

,

A - Bond Yields
B - Stock liarket
C - Corporate and State and Local
Government Security Offerings
and Placements
D - Large IJublic Security Issues
f o r New Capital (Other than
U. S. Treasury)
E - Forthcoming Large Public Security
Offerings for New Capital (Other
than U. S. Treasury)

Business Finance and Capital Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




H.14

-ULong-Term Security Issues of State and Local Governments
Fourth Quarter and Year, 1953 and 1954
(in millions of d o l l a r s )

Type of issuer or purpose of issue

Fourth Quarter

Issuing a u t h o r i t y :
State
County and township
Municipality
School d i s t r i c t
Special authority
Unidentified 1/
Total
Purpose of issue:
New c a p i t a l t o t a l
Schools
Highways, bridges, tunnels
Residential-buildings
Hospitals and i n s t i t u t i o n s
Sewer and waiter
Misc. public service e n t e r p r i s e s
Recreation
Port and a i r p o r t
Veterans aid
I n d u s t r i a l building
Other
Unidentified 1/
Refunding
Total

1954

1,006
102
138
172
106
157

164
69
195
190
901
152

2,01*7
1,076
967
828
1,163
587

767
271
1,052
834
2,091
543

1,980

1,671

6,969

5,558

1,89k

1,636

6,789

252
- 652
1
6
173
406
32
22
60

303
703
121
<50
140
26
12
26
5

135
15U

93
152

1,1x32
2,136
456
77
671
597
58
88
162
2
533 .
576

, 86

35

180

82

1,980

1,671

6,969

5,558

1

1/ Issues of l e s s than £500,000 not c l a s s i f i e d .
Itfote.—Details may not add t o t o t a l s because of rounding.
Sources.—Bond Buyer and Federal Reserve.
i




Year

1953

1954

1

1953

.

I M
1,320
1,588
506
133
647
156
45
49
> 141
7
344
542

^

EXHIBIT

H.14

A

BOND YIELDS
PER

WEEKLY

CORPORATE

CENT

PER

ANNUM

Baa

CORPORATE A a a

U.S. G O V E R N M E N T
LONG-TERM

1

/V

Vv'

1
V

/ H I G H - GRADE

MUNICIPAL

NDVP O O R ' S CORP.
I
V/ . 5 1 AN U A K
JljL I I l 1'' I ' I ' 1 I I I • • I • I 1 ' ' 1
M

J

S

1951

J

S

111111»lyj
J

s

1953

1952

Corporate 1 /

i

U. s . Govt,
long-term 2 /

J

S

1954

Spread b e t w e e n
Corporate Aaa
and U. S . Govt.

Highgrade
lAin. 1 '

(Per c e n t p e r annum)
1952 - High
Low
1953 - High
19SU - High
1955

Hi#i
Low
January 2 8
. February k
February 1 1
February 18
February 2 5

3.03
2.91
3.L2
2.99
3.09
2.85
3.02
2.91
2.9U
2.97
2.97
2.99
3.02

3.63
. 3.U8
3.89
3.50
3.7lt
3>U8
-3.U5
3.1:6

3.U6
3.hi
3.1i7
3.W

2.79
2.56
3-15
2.7ii
2.7li
2.Hi
2.77
• 2.62
2.67
2.70
2.69
2.72
2.77

.37
.19
,38
.19
•U3
.32
.29

2.1,3

.27
.27

2.Ill
2.1*3

.27
.25

2.Ill
2.2i3

.2$
.28

2.00
3.Ik
2.U3

2.56
2.23

2.U1

1 / Moody's I n v e s t o r s S e r v i c e ; w e e k l y a v e r a g e of d a i l y f i g u r e s .
? / Federal Reserve; weekly average of d a i l y f i g u r e s .
3 / Standard and P o o r ' s C o r p o r a t i o n ; Wednesday f i g u r e .
N o t e . — H i g h s and l o w s a r e 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.




STOCK MARKET

Date

Bank l o a n s
Common s t o c k Customers' t o " o t n e r s "
Trading
f o r purchases
S t o c k p r i c e volume y
yields 3/
of s e c u r balances it/
index 1 /
(per cent
(millions
itiel
(millicns
(19U7-U9-100) of s h a r e s ) p e r annum)
(millitons
of d o l l a r s )
of d o l l a r s )

1952 - High
Low
1953 - High
Low
195k - High
1955 - High
Low
January
February
February 1 1
February 18
February 2 5

165.3
151.7
167.1
3M.0
221.lt
156.5
228.1
217.lt
2l8.lt
226.8
228.1
227.6
226.2

'

2.0
0.9
2.5
. 0-9
3.7
l.lt
lt.6
2.8
.
3.6
3.2
3.It .
3 .It .
2.9

5.77
5.13
5.75
5.15
5.33
It.20

1,328
l,2ltl
1,665
l,fk
2,?88
1,653

It.22

2,517

"

•

295
250
327
252
187
328
lt97
lt75
lt8l
lt90
lt88
lt89
lt97

1 / SF.n index o f
common stocks. weeklv elosina nriee . 1919*100; converted to
19it7-It9-10O by F e d e r a l R e s e r v e . - The c o n v e r s i o n f a c t o r . i s 1 2 3 . 9 1 .
2 / Weekly a v e r a g e s of d a i l y t r a d i n g volume on New York S t o c k Exchange.
3 / Moody's 2 0 0 common s t o c k s ; end of month f i g u r e s ;
t / End of month f i g u r e s f o r member f i r m s of New York S t o c k Exchange; e x c l u d e s
b a l a n c e s s e c u r e d b y U. S . Government s e c u r i t i e s .
5 / Wednesday f i g u r e s f o r w e e k l y r e p o r t i n g member banks i n New York and C h i c a g o ;
e x c l u d e s l o a n s f o r purchase of U. S . Government s e c u r i t i e s . On March It, 1953# t h e
l a s t d a t e on which f i g u r e s f o r a l l r e p o r t i n g banks were a v a i l a b l e , New York and
Chicago a c c o u n t e d f o r US p e r c e n t of s u c h l o a n s . I n t h e p a s t New York and Chicago
l o a n s have f l u c t u a t e d more than t o t a l l o a n s .
n.a.—Not available.
N o t e . — H i g h s and l o w s a r e f o r i n d i v i d u a l s e r i e s and may b e on d i f f e r e n t d a t e s
for different series.




Exhibit C
Corporate and S t a t e and Local Government
S e c u r i t y Offerings and Placements
(In m i l l i o n s of d o l l a r s )
-

1955
January
February.
March

r

1953

1955

$hh
439
660

623
#3
666

V535
e/310
e/750

486
652
859
898
316
776

e/450
3/350
e/1,150

April
• May
June
July
August
September

'

October
November
• December
•1st.quarter
2nd q u a r t e r
3rd q u a r t e r
4t h q u a r t e r
Year

1,008
298
592
3/1,9#

Nevf c a p i t a l

Corporate
i1
1
1954

-

1,6^3
1,998
2,021
1,899
7,561

S t a t e and l o c a l
1 1954
1

1953

#6
111
5#

389
360
426

779
#5
1,123

73k
718
8#

329
649
434

A83
325.
753

279
261
649

519
259
475

577
te9lZ
1,1*38*

594
423
877

453
408
774

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

1,176
1,412
1,253
1,636
5,477

1,912
2,578

e/1,595

8,495

Excluding f i n a n c e companies 2 /
1st quarter
2nd quarter
3rd q u a r t e r
4th q u a r t e r
Year

e/1,575

1,562
1,931
1,91*1
1,795
7,229

-

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

1/ Includes 602,5 m i l l i o n d o l l a r AT&T debenture i s s u e .
2 / T o t a l new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and personal f i n a n c e
companies.
e / Estimated.
Note.—Details may not add t o t o t a l s due t o rounding.




H.lii

-

Exhibit D

Large Public S e c u r i t y Issues f o r New C a p i t a l
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of d o l l a r s )

Month

Corporate

1954 - February
March
April
May
June
July
August
September
October
November
December
1955 - January
February

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

103
160
169
32h
350
3#
75
335
413
0
9k
liil
72

Other 2 /

213
378
557
557
. 603

50

%

86 .
455
388
268
MP
3 U101

30
35

Large I n d i v i d u a l I s s u e s Offered during February

Type 3 /

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

CORPORATE
A l l i e d Stores
Common s t k .
Hilton Hotels
Deb.
Kansas City Power & Light 1 s t mtg. bds.

l6.lt
39.9
16.0

1970
1985

4 1/2 :i; 3 / 4
3.25

n.a.
3.12

n.a.
Aaa

2.37
3-09
1.43

0,90-2.55
1.20-3.10
0.85-1.45

A
Baa
Aaa

STATE AND LOCAL GOVERNMENT
Allegheny Co., Pa.
Miami, F l o r i d a
Milwaukee County, 17is.
Long Beach Unified
School D i s t r i c t , Cal.
F l o r i d a S t a t e Board of
Education
San Antonio, Texas




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

7.2
1956-85
6.0
1956-81
1 5 . 5 ^ 1956 r 62

G.O.

16.3

1956-75

2.48

0.90-2.50

A

L.L.
G.O.

9.2.
6.0

1956-75
1957-70

Var.
2.36

1.00-2.75
1.20-2.55

A
Baa

H.ll*

D-2

Large Individual Issues Offered during February (Cont'd)
Issuer

Type 3 /

Amount
^ o n £ Maturity

( B i

'dollars)

Coupon
r a t e or. Offering Rating
yield
net i n t e r e s t cost

STATE AND LOCAL GOVERNMENT
(Cont'd)
Huntington, New York
Baltimore County, Hd.
Fort YTorth, Texas
Fort n o r t h , Texas
Milwaukee, .Wisconsin
Washington Suburban Sani t a r y D i s t r i c t , Hd.

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

5.6

7.0

1955-8U. /
1958-95=/
1956-80
1956-80
1956-75

9.8

1956-95

10.0
%

1.10-3.00

2.1*1*

1.83

1.00-2.1*0
1.00-2.90
0.80-2.00

Baa
A
Aa
A
Aaa

2.98

1.10-3.1*0

Baa

2 .1*9
2.1*2

2.21

1.20-2.70

OTHER
None
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 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 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 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
obligation"; Rev., revenue bonds; G.R., general obligations 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., limited l i a b i l i t y obligations secured by pledge
of designated revenues.
h / Bonds maturing 1990-95 not publicly r e o f f e r e d .




H-lU

Exhibit E
Forthcoming Large Public S e c u r i t y Offerings f o r New C a p i t a l
(Other than U. S . Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues
During month following
• date shown
S t a t e and o t h e r 2 /
Corporate
l o c a l govt,
-

Date of
computation
195k •- Feb. 26
Mar. 31
Apr. 30
May 28
June 30
J u l y 30
Aug. 31
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
- J a n . 31
Feb. 28

108
2 Oh
323
332
336
100
33k
3h3
15
9h
18k
16
710

.

1*9.8
555
525
596
86
5b
300
333
436
661
567
682
524

50
27

30

.

Subsequent t o
date shown
S t a t e and
Corporate
l o c a l govt.
690
555
6U7
526
532
30)
608
hlh
135
2i;6
216
122
1,395

.

1,916
2,789
2,322
1,971
1,52k
1,553
1,876
2,158
1,957
2,682
2flhb
1,961
1,978

other

y
2_

50
27

*

30
30
35
—

Forthcoming Large O f f e r i n g s , , as of February 25
Issuer

Type

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

CORPORATE
May Department Store
^Central and South West Corp.
Union Oil Company
P a c i f i c Gas and E l e c t r i c Co.
General Motors Acceptance Corp.
General' Motors Corp.
New England Telephone and Telegraph
Alabama Power
American Telephone and Telegraph
*Joy Manufacturing Company

SF deb*
25.0
Common stock
19.7
Cony. deb.
21.0
I s t & r e f . mtg.bds. 50.0
Deb.
250.0
Common stock
328.6
Common stock
15.7
1 s t mtg. bonds
15.0
Conv. deb.
650.0
20.0
SF deb.

March 1
March 2
. March 2
March 2
March 3
March 7
March 31
May 31 .
1955
1955

STATE AMD LOCAL GOVERNMENT
P o r t l a n d , Oregon
S t a t e of Louisiana
Hempstead, North Hempstead, II. Y.
Houston, Texas
Multnomah County, Oregon
'
Metropolitan Water D i s t . of So. Cal.
New York Bridge Authority




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

8.0

10.0

15.5
15.0.
15-5

8.0

16.0

March
March
March
March
March
March
March

1
3
3
k
8
9
9

H.14

E-2
Forthcoming Large O f f e r i n g s , as of February 25 (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)
S t a t e of South Carolina
S t . Petersburg, F l o r i d a .
S t a t e of M i s s i s s i p p i
^ S t a t e of New Jersey
I l l i n o i s Turnpike Authority
New J e r s e y Turnpike Authority
Connecticut Expressway
'
Texas Turnpike Authority
Los Angeles, C a l i f o r n i a
San Diego County, C a l i f o r n i a
Inter-American Center Auth., F l a .
Michigan Turnpike Authority
S t a t e of Louisiana
Sam Houston Turnpike Corp.
Texas Turnpike Company
F l o r i d a S t a t e Tyrnpike Authority
Sam Houston Company
Dade County Port 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 Toll Bridge Authority
J e r s e y City Sewerage Auth., N. J .
North Carolina Turnpike Authority
'

G.O.
L.L.
Rev.
Rev.
n«a*
Rev.
Rev.
n.a.
n.a.
Rev.
Rev. ..
n.a.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
. Rev.
Rev.
n.a.

20.0
14.0
' 5.2
6.6
390.0
• 30.0
100.0
5 - i o .p
.
8.4
60.0
186.0
80.0
46.0
140.0
74.0
100.0
21.0
9.0
85.0
235.0
16.0
200.0

March 9
March 10
March 15
March 15
March
Winter
Winter
Winter
April 6
Spring
Spring
Spring
Spring
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955

OTHER

None
and l o c a l 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 .
n.a.—Not a v a i l a b l e .
*—Included i n t a b l e f o r f i r s t t i m e .
'