Full text of H.16 Capital Market Developments : November 17, 1958

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Not for Publication

DECONTROLLED AFTER SIX MONTHS

H.lU

November 17, 1958
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing for new capital this
week is expected to be much larger than in recent weeks. During the
week ending November lit, State and local governments sold large issues
totaling $83 million and no large corporate issues were offered. This
week, large corporate issues, including expiration of subscription rights,
are expected to total $120 million. State and local government issues
with aggregate proceeds for $6l million and a $100 million issue of the
World Bank are also scheduled for sale.
• Bond yields - Bond yields continued to decline last week except those for lower-grade State and local government bonds, which remained stable. State and local government bond yields are now back to
late August levels while those for corporate bonds are near their midSeptember level.
Stock prices - Stock prices continued to increase last week.
.Standard and Poor's index of 500 common stocks increased nearly 2 per
cent, closing at 53.09 on November li|. Trading volume increased, averaging k. 2 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.




EXHIBIT

A

HIGH-GRADE B O N D YIELDS

i

M

LOWER - GRADE B O N D YIELDS




/

Exhibit B

H.l4

Tables for Exhibit A
High-grade Bond Yields

Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

State and
local govt.
Aaa y

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

(Per cent)
1953
•1951*
1957
1958

-

Oct.
Oct.
Oct.
Nov.
Nov.

17
24
31
7
lb £/

High
Low
High
High
Low

3.42 (6/19)
2.85 (1/23)
4.14 (9/27)
It. 13 (10/10)
3.55 (5/2)

3.19
2.45
3.76
3.83
3.07

1.09
4.10
4.12
4.11
1.10

3.74
3.77
3.75
3.75
3.71 .

(6/5)
(8/6)
(10/18)
(10/3)
(4/25)

2.73
1.90
3.45
3.31
2.64

(6/25)
(9/2)
(8/29)
(9/11)
(5/1)

3.21
3.23
3.21
3.19
3.17

.38
.30
.60
.51
-22

.83
.30
.47
.62
.34

.35
.33
.37
.36
.39

.53
.54
.54
.56
.54

Lower-grade Bond Yields

Date"

Corporate
Baa 1/

State and
local govt.
Baa y

Spread between
Aaa and Baa
iState and
Corporate
1local govt.

(Per cent)
1953
1954
1957
1956
Oct.
Oct.
Oct.
Nov.
Nov.

-

High
Low
High
High
Low

3.89
, 3.44
5.10
4.96
4.51

17
24
-31
7
14- e/.

4.94
4.91
4.90
4.89
4.88

(9/18)
(12/31)
(11/29)
(1/3)
(7/11)

3.79
2.93
4.51
4.34
3.64
4.26
4.24
4.16
4.12
4.12

(6/25)
(8/5)
(8/29)
(9/11) (5/D

.69
.52
1.27
. 1.28
.77
.85
.81
.78
.78
.78

,

1.21
.96
1.21
1.11
.93
1.05
1.01
.95
.93
.95

2/ Weekly, average of daily figures. Average term of bonds included is 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
2/ Thursday figures. Only general obligations bonds are included; average tern
is 20 years.
Note.—Highs and lows are for individual series and may be on different dates for
different series.




EXHIBIT C

STOCK MARKET
Million ol Dollars

•

1941 43 Averoge-10

L:- - : (

1953

1954




1955

; :

- ^ V O I U M E :::

1956

1957

I

1958

Exhibit D
Table for Exhibit C
Stock Market
Stock price
index 1/

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

Stock market customer credit
Bank
Customers'
Total debit bal- loans to
ances 4/ "others" 5/
(Millions of dollars)

1953 - High
Low
1954 - High
Low
1 9 # - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
September
October
Oct. 31
Nov. 7
Nov.. 14 2 /

!SSs
ii®

26.51 (1/2)
22.95
35.98
21.93
15.89
35.28
h9.6h
43.22
49.08
39.18
53.09
40.37

2.5
0.9

(1/8)^

1.5
3.1

U/iOi

(11/14)

(1/10)

48.85
50.95
51.33

52.26
53.09

1.5

4.2
1.4
4.9
1.7

3.4
4-1
4.1
4.0
4.2

4.32

5.82

4.08
4.41

2,455
2,055
3,436
2,405

4,030

4.34

3,537
4,047
3,914

i:8

3

3^576

3.69
3.52
3.50
3.14
3.39

4,313

3.82

1,665
1,314

2,388

780
664

1,048

1,653
2,805
2,517
2,823
2,740
2,887
2,482
3,114
2,487

1,267
1,155
1,163
1,054
1,317
1,051

3,114

-1,199

746
1,2/41

1,0X8

1,181
1,181

1,177

n.a. — N o t available.
g/ Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 194l-43"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 price index reached its high or low.
4/ End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government obligations.
Wednesday figures for weekly reporting member banks. Excludes loans for
purchasing or carrying U. S. 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 Bulletin.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




H.lii

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

JSy
1958

Januaiy
February
March
April
May
June
July
August
September
October
November
December
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

New capital
Corporate 1/
State and local 2/
1
1956
1958
1
1956
1
1957
1
1957
1,060
1,065
1,320

573
712
817

812
953
511

742
572
506

4o4
696
390

1,11A
600
881

1,153

818 '
1,146
811

798
895
551

765
546
393

378
490
735

E/I,IOI
P/471
e/1,100

1,003
924
973

1,063
654
838

804
li03
667

529
584
431

408
206
357

e/600
e/600

1,090
78 9
1,076

E/.447
e/600
1,088

698
633
698

639
347
409

3,135
2,622
e/2,672

3,445
3,119
2,89?
2,95k

2,102
2^805
2,556
2,922

2,276
2,21*1:
1,874

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

1,490
1,603
971
1,395

5,757
e/8,1+29

6,59k
9,1*3
12,447

1,907
7,163
10.38.li

3,524
5,069
7,099

3,093
4,064
5,459

723

P

.

s

Excluding finance companies
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

2,891
2,583
e/2,622

Year

3,237
2,889
2,582
2,810
11,516

1,617
2,541
2,21x6
2,826
9,260

J

e/ Estimated.
jo/ Preliminary.
1/ Securities and Exchange Commission estimates of net proceeds.
2/ Data through June 19$6 are Bond Buyer data classified as new capital by
Federal Reserve; later data are from the Investment Bankers Association of America ,
and are somewhat more complete as to coverage than the earlier data, particularly
for Federal Government loans.
\
3/ Includes $718.3 million AT&T convertible debenture issueJ
;
4/ Includes $571.5 million AT&T common stock issue.
^
—
% ] Total new capital issues excluding offerings of sales and consumer finance
companies.




H.IU-

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-term
Foreign government 2/~
Federal agency 37
1958
I
1957
I
1956
"1933"
m r

januaiy
February
March

196
53

81
19
30

37

April
May

139
198
120

123
18
h2

50

9
5

28
7
30

2
. 39
—

215

h
60
1

hh
5
21.

100

July
August
September
October
November
December
Year

507

8

1,163
251

72

523

125

April
May
. July
August
September

60

60

95

16U
109

300

169

572

Short-1
State and local government Ij/
Janyary •
February
March

1956

Federal apency 3/

233
1*60
273

326
L55
lti7

196
357
2U9

371
208
1UU

638
130
505

300
220
283

357
35k

125
252

209

26U

205
337
153

176

161

3#
169
501

323
31U
260

289
-123
2/362

272
272
252

195
207
179

22li
370
512

222
125
273

303
9l
159

29li
328
lii8

1,238
255

116

JU07
222
128

3,271

.2,706

5,5tt3

3,h57

October
November
December
Year

3#

330

e/ Estimated.
j0/ Preliminary.
1/ Data presented in this exhibit differ from those in-Exhibit E in that refunding issues, as well as new capital issues, 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
their"subdivisions and by international organizations. Source: Securities and Exchange Commission.
J / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
k/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing Authority notes. In some instances PilA notes included may have a somewhat
Digitized
for
longerFRASER
term than one year. Source: Bond Buyer.



H.lli

ExhiVit G
Latere Lon/j-tunu Public Security laauts for Nevi Capital
(Other than U. S. Treasury) 1/
Proceeds of Large lst,uej Offered
(Million:! of dollars)

Corporate

Month

1957 - October
November
December
1958 - January
February
March
April
May
June
July
August
September
October

State and
"local government

57U
120
399
318
605
1,093
725
356
281
771
209
025
259

393
3W*
1*01*
1*1 o
553
182
300
505
195
27?
109
288
172

Other 2/

15V
1,357
266
#3
161*
86
ia
18
209

Large Individual Issues Offered November 1 through ill

Type y

Amount
Coupon
(millions
Offering
Maturity
net inter- yield
of
dolla rs)
est cost

Rating

CORPORATE
Columbia Gas System, Inc.
Nat. Gas Pipeline Co.

Deb..
25.0
1st mtg.p.l.bdsJO.O

1983
1978

a 7/8
1* 5/8

li.60
1*.68

A
A

STATE A N D LOCAL GOVERNMENT
Chicago, Illinois
Baltimore Co., Maryland
Public Housing Authorities

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

Pert of Ke.vi York Auth.
G.C.
State of Ivi ryland
G.O.
Nassau Co., New York
0,0.
»' llcgheny Co. Son.Auth.,Pa. Rev.-Ut.
O'UiEIi
None




25.0
11.5
15.3

1961-83
1960-68
1959-99

3.82
3.1*6
3.35

A
3.10-3.85
A
2.25-3.55
1.75-3.1*5 , , Ana

25.0

1959-78
19 c,1-73
1959-87

3.57
2.7li
3.L9

2.10-3.65^ A
Aaa
2.05-2.85
A
2.00-3.65

16.8

21.6

20.0 1961.81,1996 3.73 2.50-3.Co,3.79 —

;

H.IU

G-2 •

n.a.—Not available.
1/ Includes corporate and other security offerings of &L5 million and over;
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.
3/ In the case of State and local government securities, G.O. denotes general .
obligations; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.
h/ 2 3/l;s of 1978 not reoffered.




H.l4
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation

•1957 - s ept r 30
Oct. 31
Nov. 29
.
Dec. 31
1958 - Jan. 31
Feb. 28
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 29
Sept. 30
Oct;. 31

During month following
date shown
State and
Corporate
Other 2/
local govt.
576
458
383
378
49 8
1,123
555
356
266
768
161
785
113 ,
204

•

33k
339
363
345
370
131
298
h93
177
225
55
241
2#
258

30
18
150
110
150
36

Subsequent to
date shown
State and
Corporate
local govt. Other 2/
6Itf
815
1,193
1,161
1,378
1,208
670
561
464
1,048
381
91k
216
326

551
513
558
564
487
341
330
493
208
235
125
435
524
675

15
45
63

165
110
150
36

.

Forthcoming Large Offerings, as of November 14
Type

„

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE

Pacific Telephone & Telegraph Co.
Martin Co.
General Public Utilities Corp.

Deb.
S.F. deb.
Common stk.

Northern ilatural Gas Co.
Arvida Corp.
^Pacific Gas & Electric Co.
-:.'Fotomac Electric Power Co.
^Public Service Electric & Gas Co.
P. Lorillard Co.

S.F. deb.
Common stk.
1st & ref. mtg. bds.
1st mtg. bds.
Common stk.
Common stk.

^Southern Bell Telephone 6 Telegraph
^Philadelphia Electric Co.
Pacific Telephone and Telegraph Co.

Deb.
1st & ref. mtg. bds.
Common st)c.

Consumers Power Co,
Montana Power Co.
Commerce Oil Refining Corp.
. Indiana & Michigan Electric Co.

Pfd. stk.
1st mtg. bds.
Deb., bds. & common
1st mtg. bds.




80.0
20.0
20.3

30.0
27.5

50.0

25.0
23.0
2^4.0

70.0

50.0
16.6
15.0

20.0
45.0
20.0

Nov. 19
Nov. 19
Nov*. 21
(rights expire)
Nov. 26
Nov.
Dec. 3
Dec. 3
Dec. 4
Dec. 9
(rights expire)
Dec. 10
Dec..11
Dec. 30
.
(rights expire)
Winter
Winter
Winter
Winter

ii , 1(4

h —2
Forthcoming Large Offerings, as of i.overaber lit (Cont'd;
Issuer

Type

Amount
(millions Approximate oate
of offering
of dollars)

STATE AND LOCAL GOVLRimWT
Los Angeles Sch„ Dist., Calif.
Grange Co., California
Philadelphia, Pennsylvania
*New York, New York
State of Ohio
State of California
East Baton Rouge Parish, Louisiana
New York_State Power Authority
Chesapeake Bay Ferry Commission
Detroit-Metro. Expressway
Massachusetts Port Authority

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

28.0
15.9
17.4
32.8
30.0
$0.0
22.5
200.0
lUi.o
35.0
75.0

Bonds
Bonds
Bonds

100.0
25.0
25.0

Nov.'18
Nov. 19
Nov. 20
Nov. 25
Dec. 2
Dec. 3
Dec, 10
Winter
Winter
Winter
Winter

OTHER
•--International Bank for Reconstruction
and Development
-^Republic of Austria
•::-Union of South Africa

Nov o 18
. Dec, 4
Dec, h

*—Included in table for first time.
1/ Includes corporate and other issues of §15 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: Florida State Board
of Education's 412,5 million revenue bond issue—sold in a number of small issues
during October and November.




H.lU

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

Date
1952 - 1957
High
Low

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields
(per cent) seasoned yields (per cent)
(basis points)
(basis points)
5.00(8M/57)
2.93(3/31/5U)

1958 • January
February
March
April
May 7
13
15

16

20
21
22
28
June 10
17
25
July 2

18

23
Oct. 7
15
28
29

87
-3

5.50(11/7/57)
3.00(3A7/51t)

-8
22
35

3.96%/
lt.07
it. 16
it.01
it.00

it.08
3.91

18

3.90

21

3.85
3.85

16

3.85
3,82
3.95

17
12
2it

LOO
it.10
it.10
It,57
it. 50

25
28

16

%

2§
3
9
-1
8
3

it.07
it. 35

it
32

it.00
3.95

s-l
-6

3.98%/
4.352/

31

22
12
lit

*—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 marked include one or more
issues with such a provision. Other issues have no such provision.
,