Full text of H.16 Capital Market Developments : May 11, 1959

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Not f o r P u b l i c a t i o n

jjecOHTEOLLED AFTER SIX MONTHS

K.Ik

May 11, 1959.
CAPITAL MARKET DEVELOPMENTS

The volume of p u b l i c s e c u r i t y f i n a n c i n g i s expected t o be
l a r g e r t h i s week than t h e v e r y small volume a week e a r l i e r . During
t h e week ending May 8, a c o r p o r a t e i s s u e f o r $26 m i l l i o n was t h e only
l a r g e s e c u r i t y o f f e r i n g made t o t h e p u b l i c . The c a l e n d a r f o r t h i s
week i n c l u d e s l a r g e c o r p o r a t e i s s u e s t o t a l i n g $U6 m i l l i o n and S t a t e
and l o c a l government bonds, with a g g r e g a t e proceeds of *131 m i l l i o n .
Bond y i e l d s - Y i e l d s c o n t i n u e d t o advance l a s t week f o r a l l
t y p e s of o u t s t a n d i n g bonds e x c e p t t h o s e f o r U. S. Government o b l i g a t i o n s ,
which remained s t a b l e f o r t h e second week. High-grade c o r p o r a t e bond
y i e l d s reached new postwar p e a k s , w h i l e t h o s e f o r o t h e r t y p e s of bonds
a r e a t o r n e a r t h e i r 1959 h i g h s .
Mortgage r e c o r d i n g s and l o a n s — Nonfarm mortgage r e c o r d i n g s
i n January and February c o n t i n u e d s t r o n g . Unadjusted t o t a l r e c o r d i n g s
showed some s e a s o n a l d e c l i n e s but s e t new h i g h s f o r t h e months, and
FHA-insured l o a n s c l o s e d and c o n v e n t i o n a l a c t i v i t y a l s o were a t new
r e c o r d s . VA l o a n s c l o s e d were above y e a r - e a r l i e r l e v e l s but w e l l below
peaks a t t a i n e d i n t h e m i d - 1 9 5 0 ' s . In J a n u a r y , s e a s o n a l l y a d j u s t e d t o t a l
r e c o r d i n g s r o s e s l i g h t l y t o a monthly r a t e of n e a r l y $>2.7 b i l l i o n , t h e
h i g h e s t f o r any month on r e c o r d .
Stock p r i c e s - Stock p r i c e s d e c l i n e d on b a l a n c e l a s t week.
Standard and P o o r ' s index of 500 common s t o c k s c l o s e d a t 57.32 on
May 8 a f t e r p a r t i a l . r e c o v e r y from t h e sharp drop i n p r i c e s on Thursday.
Trading a c t i v i t y i n c r e a s e d , a v e r a g i n g 3 . 8 m i l l i o n s h a r e s a day.
More d e t a i l e d i n f o r m a t i o n concerning r e c e n t c a p i t a l market
developments i s p r e s e n t e d in t h e a t t a c h e d e x h i b i t s .

C a p i t a l Markets S e c t i o n ,
D i v i s i o n of Research 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.




EXHIBIT A '
HIGH-GRADE

BOND

YIELDS




V\/

Exhibit b

H.ll*

Tables l o r Exhibit A
High-grade bond Y i e l d s

Date

Corporate
Aaa 1 /

U. S. Govt,
long-term 2/

Spread between
U. S. Govt, and
C o r p o r a t e S t a t e and
Aaa
l o c a l Aaa

S t a t e and
l o c a l govt.
Aaa 3 /

(Per cent)
195U - Low
1957 - High
1958 - High
Low
1959 - High
Low
Apr. 10
Apr. 17
A p r . 21*
May 1
May 8 g /

2.85 (4/23)
4.14 (9/27)

L.13 (10/10)

3.55 (5/2)
4.33 (5/8)
k.09 ( 1 / 9 )
4.20

2.45 (0/6)

3.76 (10/18)
3.84 (12/26)

3.07 ( 4 / 2 5 )
4.05 (5/8)
3.83 (1/2)
3.97
4.01
4.05
4.05
4.05

4.22
4.26
4.30
4.33

1.90
3.45
3.31
2.64

(9/2)
(8/29)
(9/11)
(5/1).

.30

.60

.1.7
.72
.34

.51
.22

.28

3.23 (5/7)

3.06 (3/26)

.92
.65

.16

3.09 '
3.09
3.14
3.18
3.23

.23

.21
.21

.92

:U

1

Lower-grade Bond Y i e l d s
Corporate
Baa 1 /

S t a t e and
l o c a l govt.
Baay

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

3 . 4 4 (12/31)
5 . 1 0 (11/29)
4.96 (1/3)
4.51 (7/11)
4.93(5/8)
4.83 (4/17)

2.93(8/5)
4.51 (8/29)
4.34 ( 9 / 1 1 )
3.64 ( 5 / 1 )
4.13 (2/5)
3.92 (3/26)

Apr. 10
Apr. 17
A p r . 24
May 1
May 8 2 /

4.84
4.83
4.88
4.91
4.93

3.98
3.98
4.06
4.09
4.12

Date

Spread between
Aaa and Baa
S t a t e and
Corporate
local govt.

(Per cent)
.52
1.27
1.20
.77
.77
.60

.96
1.21
1.11
.93
.98
- .86

.64
.61
.62
.61
.60

.89
.89
.92
.91
.89

2 / f'reli.min.3 r y .
1 / Weekly a v e r a g e of d a i l y f i g u r e s . Average t e r m of bonds i n c l u d e d i s 25-26 y e a r s .
2 / Weekly a v e r a g e of d a i l y f i g u r e s . The s e r i e s i n c l u d e s bonds due o r c a l l a b l e i n
10 y e a r s o r more.
J / Thursday f i g u r e s . Only g e n e r a l o b l i g a t i o n bond.*" a r e i n c l u d e d ; a v e r a g e term
i s 20 y e a r s .
N o t e . — h i g h s and lows 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 f o r
different series.




STOCK

MARKET

MORTGAGE

RECORDINGS AND LOANS




\—r.
V

COHVCNTIONAl

Exhibit D - Tables f o r Exhibit G
Stock Market
Stock p r i c e
index 1/

Date

1953-1958 - High
Low
1959 - High
Low

5U.11
22.95
57.96
51.37

March
April
Apr. 2k
May 1
May 8 q/

56.15
57.10
57.96
57.65
27.32

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

Trading
Common
volume y
stock"
yields 2/ (millions
( p e r c e n t ) of s h a r e s )

(12/2U/58)
(9/18/53)
(k/24)
(2/6)

Total

3.30
6.25
3.21
3.3k

1.9
^.9
4.3
3.0

4,492
2,055
1,597
1,527

3,285
1,31k
3,305
3,253

1,317
669
1,332
1,210

3.25
3.25
3.21
3.22
3.25

3,9
3.4
3.6
3.6
3-8

4,597

3,305

n.a.

n.a.

1,292
1,320
1,332
1,320
n.a.

n . a . . - - Hot a v a i l a b l e .
£ / Preliminary.
1 / S t a n d a r d and P o o r ' s composite Index of 500 common s t o c k s , weekly c l o s i n g p r i c e s , 1941-43=10. Monthly d a t a
a r e a v e r a g e s of d a i l y f i g u r e s r a t h e r t h i n of firidays' o n l y . Highs and lows a r e f o r F r i d a y s ' d a t a o n l y .
2 / S t a n d a r d and P o o r ' s composite s t o c k y i e l d based on Wednesday d a t a c o n v e r t e d t o weekly c l o s i n g p r i c e s by
F e d e r a l R e s e r v e . Y i e l d s shown aro f o r d a t e s on which p r i c e index r e a c h e d I t s h i g h or low.
3 / Averages of d a i l y t r a d i n g volu.no on t h e New York Stock Sbcohange.
4 / End of month f i g u r e s f o r member f i r m s of t h e New York Stock Exchange which c a r r y margin a c c o u n t s ; e x c l u d e s
b a l a n c e s s e c u r e d by U. S. Government o b l i g a t i o n s .
5 / Wednesday f i g u r e s f o r weekly r e p o r t i n g member h a n k s . Excludes l o a n s f o r p u r c h a s i n g o r c a r r y i n g U. S.
Government s e c u r i t i e s a t banks i n Hew York and Chicago. Weekly r e p o r t i n g banks a c c o u n t f o r a b o u t 70 p e r c e n t of
l o a n s t o o t h e r s . For f u r t h e r d e t a i l see B u l l e t i n .

.

Nonfarm Mortgage Recordings and Loans 1 /
Date

Feb.
Mar.
Apr.
May
Jt:ne
July
Aug.
Sept.
Oct.
Nov.
Dec.
Jan.
Feb.

Unadjusted
Total
Seasonally
VA
Unadjusted
FHA
adjusted 2/
( M i l l i o n s of d o l l a r s )
1,959
1,971
1,993
2,087
2,192
2,291
2,413
2,488
2,576
2,652
2,629
2,677

1,701
1,866
2,022
2,151
2,275
2,543
2,535
2,596
2,857
2,432
2,629 ^
2,353
2,245

•

279
319
306
311
343
368
371
1,80
501
457
510
585
506

142
123
85
73
98
127
156
189
239
216
257
276
238

Conv.

1,280
1,424
1,632
1,767
1,835
2,048
2,007
1,927
2,116
1,759
1,861
1,491
1,500

n.a.—Not available.
1 / T o t a l r e c o r d i n g s d a t a a r e e s t i m a t e s based on r e p o r t s from about 450 a r e a s and i n c l u d e
mortgages of $20,000 or l e s s s e c u r e d by nonfarm r e a l e s t a t e , p r i m a r i l y r e s i d e n t i a l p r o p e r t i e s .
FHA-insured l o a n s r e p r e s e n t g r o s s amount of i n s u r a n c e w r i t t e n , and VA-guaranteed l o a n s t h e g r o s s amount
of l o a n s c l o s e d , o n 1 - 4 f a m i l y h o u s e s . Conventional d a t a a r e d e r i v e d a s a r e s i d u a l , a l t h o u g h t o t a l
r e c o r d i n g s and VA and FHA l o a n s a r e n o t s t r i c t l y comparable i n concept o r t i m i n g .
2 / Three-month moving a v e r a g e , s e a s o n a l l y a d j u s t e d by F e d e r a l R e s e r v e .
Source: F e d e r a l Home Loan Bank Board, F e d e r a l Housing A d m i n i s t r a t i o n and V e t e r a n s A d m i n i s t r a t i o n .




Exhibit K

H.lli

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

1959

1

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

January
February
March

6/782
2/#3
e/650

723

April
May
June

e/700
is/600

I,l4l
600
881

765
1,453

1,102
538
1,144

636
855
2/623

812
953
511

i ®

798
895
551

393

1,003
924
973

806
403
651

%
4311

858
1*73
91U

1,090
789
1,076

456
474
435

698
633
w

3,135
2,622
2,781
2,250

3,4145
3,149
2,899
2,954

2,276,
2,2441,860
1,365

1,820
1,704

5,757
8,5W.
10,791

6,594
9,193
12,a?

July
August
September
October
November
December
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/2,1(#

1st half
Three quarters
Year

1^060
1,065
1,320

B/a,iHt

7U2
Si.

;•$

4,520.
7,099

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

quarter
quarter
quarter
quarter

Year

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

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

10,391

11,518

2/1,905

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;
H/ Total new capital issues excluding offerings of sales and consumer finance
companies.




Exhibit F

H. i k

Other Security Offerings 1 /
(In millions of dollars)
Long-term
Foreign government 2/
Federal agency 3/
~
1958
1959
1959
I 1956
19W
m r

1

January
February
March

77
59

196
53
—

April
May
June

81*
1*9
30

•

199

1,163
251

—

125

139
198
120

123
1*8
1*2

523

9
•5
17

28
7
30

161*

October
November
December

58
123
74

1*
60
1

220

Year

992

July
August
September

326
1*55
11*7

April
May
June

357
351* "
261*

July
August
September
October
November
December
Year

215

—

100

—

—

2,321

507

233
1*60
273

190
1*28 •
2/265

60

—

Short-t;erm
State and l o c a l government b/
January
February
March

72
mm*

—

572

Federal agency 3J~
371
208
11*1*

638
1*30
505

205
337
153

209
161
325L

336
1*69
501

289
1*23
369

272
272
252

1*37
206
330

231
1*15
21*3

303
91*
169

1*51*
111*
137

3,910

3,271*

359
5oo
1*89

3,098

•

221*
370
512
1,238
255
116
5,51*3

2 / Preliminary.
1 / Data presented in t h i s exhibit d i f f e r from those in Exhibit E in that refunds
ing i s s u e s , as well as new capital i s s u e s , are included. Long-term securities are defined as those maturing in more than one year.
2 / Includes securities offered in the United States by foreign governments and
t h e i r subdivisions and by international organizations. Source: Securities and Exchange Commission.
2 / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
jj/
Principally tax and bond anticipation notes, warrants or c e r t i f i c a t e s and Public

Housing Authority notes. In some instances P&A. notes included may have a somewhat
http://fraser.stlouisfed.org/
longer term than one year. Source: Bond Buyer.

Federal Reserve Bank of St. Louis

Exhibit G

II. lit

Large Long-term P u b l i c S e c u r i t y I s s u e s f o r hew C a p i t a l
(Other than U. S. Treasury) 1/
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

1958 - A p r i l
May
June
July
August
September
October
November
December
1959 - January
February
March
April

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

725
35b
281
771
209
825
259
227
305
369
310
215
359

•

300
505
195
275
109
288
172
259
229
335
551
369
563

Other 2 /

653
1614
86
ia
18
209
100
79
nk
35
176
20

Large I n d i v i d u a l I s s u e s O f f e r e d May 1 through 8

Issuer

Type 3 /

Amount
Coupon
(millions
r a t e or . O f f e r i n g
Maturity
net i n t e r - yield
of
dollars)
est cost

Rating

CORPORATE
Alabama Power Co.
Textron, Inc.

1 s t mtg. bds.
Sub. deb.

20.0
25.5

1989
1981

L 7/8

L65

5.00

A
Ba

STATE AND LOCAL GOVERNMENT
None
OTHER

n.a.—Not available.
1 / I n c l u d e s c o r p o r a t e and o t h e r s e c u r i t y o f f e r i n g s of $15 m i l l i o n and o v e r ;
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 jlO m i l l i o n and o v e r .
2/ I n c l u d e s 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 R e c o n s t r u c t i o n and
Development i s s u e s and non-guaranteed i s s u e s by F e d e ra l a g e n c i e s .
3 / In t h e 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 g e n e r a l
o b l i g a t i o n s ; R e v . - U t . , revenue o b l i g a t i o n s secured only by income from p u b l i c u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev„-S;T., revenue bonds secured by revenue from s p e c i f i c t a x e s o n l y ; R e v . - R e n t . ,
revenue bonds s e c u r e d s o l e l y by l e a s e payments.




.114
Forthcoming Large Long-term P u b l i c S e c u r i t y O f f e r i n g s l o r New C a p i t a l
( O t h e r t h a n U. S. T r e a s u r y ) 1 /
Expected Proceeds f r o m Forthcoming Large I s s u e s
Subsequent t o
During month f o l l o w i n g
d a t e shown
d a t e shown
S t a t e and
S t a t e and
C o r p o r a t e l o c a l g o v t . Other 2 / C o r p o r a t e l o c a l g o v t . Other 2

computation

1958 - Apr. 30
May 29
June 30
J u l y 31
Aug. 29
S e p t . 30
Oct. 31
Nov. 28
Dec. 31
1959 - J a n . 30
Feb. 27
Mar. 31
Apr. 30

3#
266

768
161

#5

113
20U
301
210
270
198
396
21*6

150

ii93
177
225
55

36

' - 2 la

295
258 .

229
261

551

292

550

251

71
75
U5
20
50

561
h6h
1,0148
381
9114
216
326

to

370

365
279

176
3U6

193

208
235
125
h3S
5214

675

683
515
856
I48I
761
517

Forthcoming Large O f f e r i n g s , a s of May
Issuer

type

CORPORATE
Idaho Power Co.
Southwestern E l e c t r i c Power Co.
General American O i l Co. of Texas
B a l t i m o r e Gas & E l e c t r i c Co.
C o n s o l i d a t e d Edison Co.
Potomac E l e c t r i c Power Co.
---National S t e e l Corp.
Southern E l e c t r i c G e n e r a t i n g Co.
-"Public S e r v i c e E l e c t r i c & Gas Co.
-"-Florida Power & Light Co."5"
--Duke Power Co.
C o n s o l i d a t e d N a t u r a l Gas Co.
V i r g i n i a E l e c t r i c & Power Co.
"-Philadelphia E l e c t r i c Co.
-"-Spiegel, i n c .




1 s t l:iv. £ . fcds.
1 s t rntg. b d s .
Sub. deb.
Conv. deb.

15.0
16.0
15.0
19.9

May 13
nay 13
May 15
May 25
( r i g h t s expire)
1 s t &. r e f . rntg. b d s . 7 5 . 0
May 27
Com. s t k .
May 27
35.0
(rights expire)
1 s t rntg. b d s .
80.0
Nay 28
1 s t r-itg. b d s .
25.0
May 29
1 s t fr r e f . rntg. b d s . 50.rJune 3
1 s t n t r . bds.
June k
25.0
, Pfd. s t k .
June 10
2^.0
Cap. s t k .
June 10
10.0
( r i g h t s expire-)
Com. s t k .
June 18
20.0
( r i g h t s expire)
Com. s t k .
June 23
30.0
( rights expire)
Conv. s u b . deb.
June
I5.ll
( r i g h t s expire)

150
36

71
75
k$

20
50

H.lk

H-2
Forthcoming Large O f f e r i n g s , a s of l-iay 8 ( C o n t ' d )
Type

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

. CORPORATE ( C o n t ' d )
Commerce O i l R e f i n i n g Corp.
Glickman Corp.

Deb., b d s . & common
Com. s t k .

U5.0
31.0

Spring
Spring

STATE AND LOCAL GOVERNMENT
Los Angeles, C a l i f o r n i a
C i n c i n n a t i , Ohio
New York Thruway A u t h o r i t y
S t a t e of New J e r s e y
King Co. Sch. D i s t . No. 1, Wash.
Kanawha Co., W. Va.
P u b l i c Housing A u t h o r i t i e s
^Pennsylvania S t a t e Highway & Bridge
Auth.
-a-State of C a l i f o r n i a
Oroville-Wyandotte I r r i g a t i o n D i s t . ,
California
C a l i f o r n i a T o l l Bridge A u t h o r i t y
Chesapeake Bay Ferry Commission
Memphis, Tennessee
Oakland Co., Michigan
•^Commonwealth of Pennsylvania

A l b e r t a Municipal Financing Corp.

May
May
. May
May
May
May
May

12
12
12
13
13
20
26

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

15.0
26.9
50.0
25.0
1L5
18.0
ioli.8

Rev.-Ut.
G.O. .

10.0
100.0

June 3
June 6

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

62.0
3h.O
Ihh.O
10.0
12.7
120.0

June 11
June 2k
Spring
Spring
Spring
Spring

S . F . deb.

50.0

Way 21

*—Included i n t a b l e f o r f i r s t t i m e .
1 / I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of $15 m i l l i o n and over j S t a t e and
l o c a l government i s s u e s of $10 m i l l i o n and o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n
and Development i s s u e s and non-guaranteed i s s u e s by F e d e r a l a g e n c i e s .
N o t e . — D e l e t i o n s f o r r e a s o n s o t h e r t h a n s a l e of i s s u e : None.




H.lii

Exhibit I
Y i e l d s on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /

Date
1952 - 1957
.
High
Low
1958 - January
February
March
April
May
July 2
9
18
23
Oct. 7
15
28
29
Dec. 17
1959 - J a n . 7
20
28
Feb. 18
Mar. 11
25
26
31
Apr. 3
15
16
29
May 1

A-rated offering yields
Aa-rated offering y i e l d s
Amount above
Amount above
Actual
Actual
seasoned
y
i
e
l
d
s
(per cent)
( p e r c e n t ) seasoned y i e l d s
(basis points)
(basis points)
5.00(9/lU/57)
2.93(3/31/51)

87
-3

*3.60,/
3.89^
it. 08
3.91
3.87
3.87

-8
22
35
18
18
17

LOO
it. 10
it. 10
ii.57
it. 50
it.itO /
h.k2*
it.itit

25
28
29
25
22
12
lh
23

it. 60
it.65p/

3ii
itO

h.hoi/
it.it3
U.it3
b.U7

11
9
9
13

it.60
L59,
h.SSS/

22
21
7

5.50(11/7/57)
3.00(3/17/54)

*

123
-15

3.96%/
U.07
it. 16
it.01
it.07

3
9
-1
8
6

3 : ; ^

i

it. 3 5 ^

31

it. 7 5 ^

23

it.67

18

it. 85

17

* — S i n g l e o b s e r v a t i o n , n o t an a v e r a g e .
1 / Covers only 3 0 - y e a r f i r s t mortgage bonds, a s r e p o r t e d i n Moody's Bond
Survey. Except where i n d i c a t e d , t h e a c t u a l y i e l d f i g u r e and t h e amount above
seasoned y i e l d s a r e a v e r a g e s of o f f e r i n g s d u r i n g t h e i n d i c a t e d p e r i o d and of
t h e d i f f e r e n c e s between t h e s e new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r t h e same day. Average m a t u r i t y f o r t h e seasoned i s s u e s
v a r i e s from 26 t o 28 y e a r s .
2 / Provides f o r a 5 - y e a r p e r i o d d u r i n g which i s s u e may n o t be c a l l e d f o r
r e f u n d i n g a t a lower coupon r a t e . Monthly averages so marked i n c l u d e one o r
more i s s u e s w i t h such a p r o v i s i o n . O t h e r e i s s u e s have no such p r o v i s i o n .