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

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Not for Publication DECONTROLLED AFTER SIX' M0HT2S
K.lU

November 2, 1959*
CAPITAL MARKET DEVELOPMENTS
(Including Quarterly Review of State and
Local Government Security Financing)

The volume of public security financing for new capital ia
expected to be much smaller this week than in other recent weeks. Last
week, ending October 30, corporations sold large issues totaling $116
million and State and local governments offered issues with aggregate
proceeds of $90 million. The calendar for this week includes only one
large corporate issue for $25 million and one large State and local
government issue for $11 million.•
Bond yields - Changes in yields on outstanding bonds were
mixed last week. State and local government and lower grade corporate
bond yields continued to decline, while high-grade corporate bonds
remained stable. Yields on U. S. Government bonds increased slightly.
Yields on corporate bonds increased somewhat in early October,
then levelled off, showing a slight net increase for the month. In
contrast, State and local government bond yields declined throughout
October, showing a decline of about 15 basis points. Yields on U. S.
Government obligations declined 18 basis points during the month.
A number of 30-year first mortgage electric utility bond
issues were offered to investors last week. Two Aa-rated issues were
offered at a yield of 5.15 per cent—10 basis points below that for a comparable offering made a week earlier, but 20 basis points higher
than the yield for a similar issue also sold last week, which had a
5-year refunding restriction. Two new A-rated issues were also offered
to the public, one to yield 5.25 per cent and the other $.h0 per centre and 25 basis points respectively below the yield for a comparable
offering made in mid-September.
FNMA secondary market operations - FNMA operations in September
reflected further pressures in residential mortgage markets. Offerings •
to FNMA under its secondary market operations increased again for the
eighth straight month, and FNMA purchases, which also rose, were much
larger than a year earlier when conditions were easier. These trends
prevailed despite FNMA's reduction of its mortgage commitment and purchase
prices in May, July, August, and twice in September.
In the third quarter of 1959, secondary market offerings to
FNMA were the largest in nearly three years, and FNMA's purchases were
the largest in over two years. FNMA sales, however, were the smallest
since the 'end of 1957.




H.llt

- 2 -

Security volume for November - Corporate security issues for
the month of November are estimated at a total of $750 million, the same
.as the revised estimate for <Qptober, but more than two-fifths larger
than in November 1958. Large-publicly offered issues are expected to
total about $1+00 million, including a $250 million debenture issue by
AT&T, which is expected to be sold at mid-month.
State and local government bond issues are expected to total
$b75 million in November. This total would be one-fifth smaller than
the volume last month, but about the same as in November last year.
Stock prices - Stock prices, as measured by Standard and Poor's
index of 500 common stocks, increased about'2 per cent last week, closing at 57.52 on October 30. Trading activity increased sharply, with
the daily volume averaging 3.8 million shares a day.
On balance, stock prices increased somewhat during October.
After fluctuating within a narrow range during the first half of the
month, prices dropped substantially, but subsequently more than recovered
the loss. For the month, trading activity averaged 2.8 million shares
a day, little different from the average volume for September.
State and Local Government Security
Offerings in the Third Quarter of 1958
State and local governments sold $L.6 billion of long-teim
bonds during the third quarter of 1959, one-sixth less than in the
corresponding period of 1958. Bond sales decline seasonally in the
third quarterj however, the decline was sharper this year than in other
recent years. For the first nine months this year, State and local
government security financing totaled 6.3 billion, only slightly below
the record total last year.
Purpose of issue - Nearly all bonds sold during the third
quarter were for the purpose of raising new capital, as the volume of
refunding issues continued to be relatively small.
School construction was the most important purpose of financing as it has been ,£or some years. Sales of bonds for this purpose
totaled only #6l million, however, one-fifth less than in the third
quarter of 1958. The decline was entirely in sales of bonds for financing elementary and secondary education; bond issues sold to finance
higher education were in somewhat larger volume this year.
New financing for highways, bridges and tunnels ranked second
in importance, totaling nearly $300 million, one-fourth larger than a
year earlier. Bonds sold to provide funds for veterans' aid was the
only other major type that were sold in larger volume in the third
quarter. It should be noted, however, that the total for this year
included a $120 million issue sold in August by the State of Pennsylvania.




Long-tern Security Issues of State and Local Governments
Third Quarter 1954-59
(In millions of dollars)
1959
tissuing authority;
•V State
% County and township
Municipality
| School district
f Special authority
•I Unidentified 1/
I
;
Total

,.
*

I 1958

1 1957

I 1956
119
87
295
29k
19k

I 1955

195^

1*67
lii6
176
26k
228

1436
126
70k
338
293

256
119
563

1,581

1,897

1,566

1,571

1,860

lt51ik

971

237
19U
35
260
96
120
339

57U
272
37
20
287
k7
75
232

k06
105
9
5
170
91
2
181

273
200
129
7
183
18
8
109
199

37

22

17

12

kk

1,581

1,897

1,566

1,136

1,232

Vpe of issue:
I General obligation
\ Revenue

999
120

1,200
Ml

1,110
393

680
2U8

681
333

59k
k99

y:
^
|
$

202
bS
117
57

i
s
100
159

30k
7
21
61

191
22
6
30

n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.
n.a.

161

2
215

6ii

61

122
1

136
3

1,581

1,896

1,566

988 . 1,136

1,232

p

Purpose of issue:
New capital total

\
I
<
.r
1
I
%
|
|
4

Schools 2J
Highways, bridges and tunnels
Residential buildings
Hospitals and institutions
Sewer and water
Misc. public service enterprises
Veterans' aid
Other
Unidentified 1/
Refunding
Total

Utility
Quasi-utility
Special tax
Rental

f Public Housing Authority
| Federal Government loans 3/
?

li6l
298
150
20
171
k9
152
270

Total

580

n

157
96
286

77
125
296
210
230
199

S
163

1,136

1,232

1A2L

1*188
272
271
iko
13
10.
106
159

n.a.—Not available.
;•
1/ Issues of less than $500,000 not further classified in 195U and 1955.
i
2/ Data for years prior to 1956 probably understate school issues by about one-fourth
because of unclassified small issues.
|
3j Coverage for 1956-1959 is broader than for earlier years.
|
Note.—Details may not add to totals because of rounding.
Source.-1954-1955, Bond Buyer and Federal Reserve; 1956-1959, Investment Bankers
Assoc.
of FRASER
America. Data for 1956-1959 not strictly comparable with data for earlier years.
Digitized for



-

h

-

Type of issuer - Municipalities and States were equally
important groups of issuers this third quarter with each type selling
bonds totaling about # 7 0 million. Last year, municipalities had
been much more important, selling bonds with proceeds of more than
$700 millionj States in this period sold bonds totaling $U36 million.
New financing by counties and townships was in larger volume than
last year, while financing by school districts and special authorities
was in much smaller volume.
gype of issue - All types of bond financing were in smaller
volume than a year earlier. General obligation financing, continuing
to be the most important type of issue, was one-sixth smaller in volume
than in the third quarter of 1958 and revenue bond financing was oneeighth smaller. Federal Government loans were one-fourth smaller.
It should be noted that the increased financing;of State and
local governments in the first half this year over thatIqf a year earlier
was a result of revenue bond financing, largely reffect&g the sale of
a number of very large issues. Thus far this year saleb of general obligations have continuously lagged behind the pace of 1958, while revenue
issues were larger than a year earlier until the third quarter.
Table 2
Proceeds from Selected Types of Issues
(Millions of dollars)
General obligation bonds
1959
1
1950
1st Quarter
2nd Quarter
3rd Quarter

1,239
1,365
999

1,565
1,66k
LtiOO

1st 9 months

3,621

h,h29

Revenue bonds
1959
1
1958
771
9k 6
U20

562
h6 7
181

2,137

1,510

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.




/
3

HIGH-GRADE

BOND

YIELDS

L-X

LOWER-GRADE

BOND

YIELDS




STATE

AND

10CAI

GOVT.

Exhibit b
Tables for Exhibit A
High-grade Bond Yields
Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

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 (U/23)
it.lit (9/27)
U.13 (10/10)
3-55 (5/2)
h.$l (10/9)
it.09 (1/9)

Oct.
Oct.
Oct.
Oct.
Oct.

ii

2
9
16
23
30 2/

It. 56
lt.56
it.56

2.15 (8/6)
3.76 (10/18)
3.8U (12/26)
3.07 (it/25)
It.30 (9/18)
3.83 (1/2)

1.90 (9/2)
3.U5 (8/29)
3.31 (9/11)
2..6U (5/1)
3.65 -(9/210
3.06 (3/26)

It. 21
It. lit
It. 13
It. 06
It. 09

3.6b

.36

3.58
3.53
3.1t9

&

3.61

Corporate
Baa 1/

State and
local govt.
Baa 2/

.16

\kl

Lower-grade Bond Yields
Date

.30
.60
.51
.22
.50

]j

f r
.72
.3U
.92
.53

1

.57-

Spread between
Aaa and Baa
State and
Corporate
local govt. •

(Per cent) ...
195lt - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.Wt (12/31)
5.10 (11/29)
lt.96 (1/3)
it. 51 (7/11)
5.29 (10/16)
it.83 (it/17)

2.93(8/5)
L51 (8/29)
it.3L (9/11)
3.6k (5/1)
it.it6 (7/2)
3.92 (3/26)

.52
1.27
1.20
.77
.77
.56

.96
1.21
1.11
.93
.98
.79

Oct.
Oct.
Oct.
Oct.
Oct.

5.26
5.28
5.29
5.28
5.26

it.itit
it.itl
it.itO
it.3it
it. 31

.69
.71
.73
.72
.70

.80
.80
.82
.81
.82

2
9
16
23
30 e /

2/ Preliminary.
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 due or callable in
10 years or more.
J/ Thursday figures. Only general obligation bonds 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

1*56
SECONDARY

1957
MARKET

H5I

1159

OPERATIONS

OMIIINOS 1

r
v^\\ //
Jj'•««««
1
V

\\i

r j f y c U

115$

1456




/ /
/ /

1157

V

1151

1151

/

Exhibit D - Tables for ExliibiL C
Stock Market
Stock price
index 1/

1953-1958 - High 1 5U.ll
Low
22.95
60.51
37

1959 - High
Low
August
September
Oct. 9
Oct. 16
Oct. 23
Oct. 30 2/

Common
stock
yields 2/
(per cent)

(12/21/58)
(9/18/53)
(7/31)
2/6

59.1*0
57.05
57.00
57.33
56.56
57.52

Trading
Stock market customer credit
volume y
Customers1
Bank
(millions Total debit bal- loans to
of shares)
"others" u
K
(Millions of dollars)

3.30
6.25
3.08
3.31

4.9
0.9
4.3
2.1

4,492
2,055
4,761*
4,443

3,285
1,31k
3,1(01
3,256

1,317
669
1,332 1,373
1,210 1,180

3.13
3.26
3.25 .
3.22
3.28
3.23

2.4
2.7
2.1;
2.3
2.8
3.8

4,528
4,443
n.a.
n.a.
n.a.
n.a.

3,269
3,250

1,259
1,193
1,195
1,180
1,190

n.a.
n.a.
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's rrmposite index of 500 oommon stocks, weekly closing prices, 1941-43*10. Monthly data,
are averages of daily figures rather than of Fridays' only. Highs and lows are for Fridays' data only.
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.
3/ Averages of dally trading volume on the New York Stock Exoluwige.
4/ tod of month figures for 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 0. S.
Government securities• Prior to July 1, 1959, such loans are excluded only at banks in New York and Chicago,
Weekly reporting hanks account for abotitr 70 per cent of loans to others. For further detail sea Bulletin.

Federal National Mortgage Association Secondary Market Operations 1/
Estimated Offerings to FNmA
Immediate Standby
Total
purchase commitment

Date

Purchases
by
mm

Sales
by
FNMA

(Millions of dollars)
1958 - Sept.
Oct.
Nov.
Dec.
1959 - Jan.
Feb.
Mar.
Apr.
May
June
. July
Aug.
Sept.

:

;

23.8
57.3
40.7
39.7
37.7
44.4
<2.4

<7.8
%.6
Bk. 4
109.5
123.1
141.3

22.0
49.6
39.2
35.3
33.9
h1.2
49.8
50.1 •
73.4
76.6
92.5
109.8 .
134.8

1.8
7.7
1.5
k.k
3.8
3.2
2.6
7.7
7.2
7.8
17.1
13.3
6.5

6.0
10.8
20.0
33.2
33.7
27.6
36.5
39.6
38.3
49.4
62.3
71.7
85.4

7.9
.8
1.1
.9
.3
.8
1.1
.6
.3
.3
*

•—Less thnn |50,000.
'
1/ Dxta represent unpuld principal balances of the mortgages involved, exclusive of premiums,
discounts, or other etrtrges. Offerings are amounts of applications received durinfi the period from
nellern proposing that FVMA execute ourchanlnn contracts. An immediate purohane contract covers
eriotlnr, mortgages which the seller muct deliver tofitHAwithin 45 day*. A standby commitment contract relates to proponed mortgages, on housing not yet under construction, which the seller must
usually deliver within one ye nr. Pur chases Include those under both 1 immediate purchase and standby
commitment contracts. Data crclixle PIMA activity under Special Asslotanoe and Management and
Liquidating Programs.




Exhibit E

H.14 ,

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

1959

New capita!
Corporate 1/
State and local 2/
1 1958 1 1957
1959
1 1958 1 1957

8

812

71*2
572
506

765
1,1*53

931
. 592
981

798
895
551

765
5146
393

ShO
1,114

1,003
924
973

566
' •. 516
• 2/488'

806
403
651

529
584
431

862
518
920

1,090
789
1,076

456
m
435

698
633
698

2,138•
2,276
3,IAS
2,50k - 2,2Wi
3,U9
1,860
2,899
a/i,57i
2,951..
1,365

1,820
1,704
1,51*4
2,029

6,59k

3,524
5,069
7,099

January
February
March

840
7 45
631

1,553^

1,060
1,065
1,320

April
May
June

899
791
874

1,1140
597
887

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

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

H
e/750
e/750

728

lf

2,216
. 2,#4
6/1,888.

3,139
2,623
2,760
2,300

. 4,780
e/6,668

5,762
8,522
10,823

4ft3

645

e/600
e/475

4,642
2/6,213

1,520

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

quarter
quarter
quarter
quarter

2,011
2,409
e/1,588.

Year

2,899
2,586
2,731
2,213

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

10,129

11,518"

e/ Estimated.
1/ Securities and Exchange Commission estimates of net proceeds,
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes 5718.3 million AT&T convertible debenture issue.
h/ Total new capital issues excluding offerings of sales and consumer finance
companies.




Exhibit F

H.lU

Other Security Offerings 1/
(In millions of dollars)
Long-tern
Foreign government 2/
Federal agency 3/
1^9
"1959
I 1950
I 1957
1958
1957
January
February
March

77
59
2

196
.53

April
May

56
50
42

139
198
120

July
August
September

73

9
5
17

1

October
November
December

123
74

Year

992

84
1*9
30

199

April
May
June
July
August
September

72

523

125

175

I

60

28
7
30

164

4
60

220

215
100

1

2,321

507

Short-term
.
State and local government V
January
February
March

1,163
251

572

Federal agency 3/"

190
128
295

233
460
273

326
455
147

359
500
489

371
208
144

638
430
565

563
411
245

357
354
264

205
337
153

486
675

209
161
329

336
469
501

2k6
1*67
E/325

289
423
369

272
252

272

727
365
665

437
206
330 .

224
370
512

231
415
243

5
459

454
114
137

1,238

3,910

3,274

3,098

5,543

October
November
December
Year

S

d/ Preliminary.
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.
4/ Principally tax and bond anticipation notes, warrants or certificates and Public

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

Federal Reserve Bank of St. Louis

Exhibit 0

H.lli

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

Month

1958 - September
October
November
December
1959 - January
February
March
April
May
June
July
August
September

Corporate

State and
local government

825
259
-227
305
369
3140
215
359
3I42
281*
110
363
199

288
172
259
229
335
551
369
563 258
635
19b
263
2lh

Other 2/

18
209
100
79
m
35
176
20
50
60
50
98
175

•

Large Individual Issues Offered during October

type.3/

CORPORATE
Boston Edison Co.
So. New England Tel. Co.
Columbia Gas System, Inc.
Northern Natural Gas Co.
Boston Edison Co.
Philadelphia Elec. Co.
American Elec. Pwr. Co.
So. Bell Tel. & Tel. Co.
Texas Gas Transm. Coip.
Florida Pwr. & Lt. Co.
Puget Sound Pwr. & Lt. Co.
Hilton Hotels Corp.
Northern Natural Gas Co.
Central & South West Corp.

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

1st mtg. bds. 15.0
Com. stk.
18.6
Deb.
25.0
20.0
Pfd. stk.
Com. stk.
I5.it
1st ref.mtg. bds .50.0
Com. stk.
55-5
Deb.
70.0
Pfd. stk.
15.0
1st mtg. bds. 20.0
1st mtg. bds. 20.0
Sub.S.F.deb. 25.0
S.F. deb.
25.0
Com. stk.
20.5

5.17

Aaa

1989

5 lA

1981

5 3/8

5.38

1989

5

lt.93

Aaa

A

199k

5 1/2

5.35

Aaa

1989
1989
1984
1979

5 V>
5 1/2
6
5 1/8

5.15
5.1*0
6joo
5.13

Aa
A
A

STATE AND LOCAL GOVERNMENT
Port of New York Authority
Wayne Co., Mich.

Rev.-Ut.
G.O.




25.0 1989
26.0 1962-68/^

U.37
L08

A
h.31
3.504.00 A

H0lU

G-2
Large Individual Issues Offered*during October (Cont'd)
Issuer

Coupon
Amount
rate or Offering Rating
Type 3/ (millions Maturity
net inter- yield
of
est cost
dollars)

STATE AND LOCAL GOVERNMENT
(Cont'd)""
G.O.
Denver, Colorado
17.0
18.0
G.O.
New York, New York
State of New Hampshire
G.O.
16.0
Public Housing Authorities • G.O.
102.1
Consumers Public Power
Dist., Nebraska
Rev.-Ut.
23.3
Los Angeles Flood Control
Dist., California
G.O.
21.2
Baltimore Co., Maryland
G.O. .
20.0
Rev.-Rent. 25.0
Penna. Gen. State Auth.

Montreal, Canada

Ext.S.F.deb. 20.0

_L
corporate and other

1970-98
1960-74
1960-88
1960-2000

3.65
3.65
3.22
3.86

3.25-3.75^ Aa
3.00-3.70 A
2.60-3.35 Aaa
2.75-3.93 Aaa
A-Baa

1963-92

1U5

3.25-L50

1961-83
1961-99
1962-86

3.70
3.77
3.76

2.90-3.75,, Aa
2.90-^.052/ A
3.00-3.80 —

1979

5 5/8

5.63

1/ Includes
security offerings of $15 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.
V Is of 1998 not reoffered.
jy 1997-99 maturities not reoffered.




H.lU

Exhibit H
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
— Octi 31
Nov. 28
Dec. 31
- Jan. 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30

Subsequent to
During month following
date shown
date shown
State
and
Other 2/ Corporate State and Other 2/
Corporate
local govt.
local govt.
20k
301
210
270
198
396
22*6
287
165
238
198
• 37k
385

258
229
261
551
292
550
2$k
2k?
Ik6
356
385
270
115

326
Uoi
370
365
279
k76
3k6
332
272
305
517
69k
509

71
75
k5
20
50

"

50
25

675
683
515
856
k81
761
517
761
500
lt06
Ii02
k70
336

71
75
h$
20
50
50
25
—•
—

Forthcoming Large Offerings, as of October 30
Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

CORPORATE
Sylvania Electric Products, Inc.
•Tennessee Qas Transmission Co.
S. Fidelity and Guaranty Co.
American Telephone & Telegraph 'Co.
Transwestern Pipeline Co.
Gulf States Utilities Co.
New York Electric & Gas Co.
•Arkansas Power & Light Co.
Publicf^Service Electric & Gas Co.
Corraafrrce Oil Refining Corp.
AmeAcan Educational Life Ins. Co.

S.F. deb.
Pfd. stk.
Cap. stk.

25.0
30.0
24.1

Deb.
Sub. deb. & stk.
1st mtg. bds.
Com. stk.

250.0
ko.o
16.0
15.0

1st mtg. bds.
Com. stk.
Deb., bds. & com.
Com. stk.

15.0
25.0
1*5.0
23.8

Nov. 5
Nov. 11
Nov. 17
(rights expire)
Nov. 17
Nov. 18
Nov. 25
Dec. 7
(rights expire)
Dec. 9
Dec. 16
Indefinite
Indefinite

STATE AND LOCAL GOVERNMENT
•Humboldt Bay Municipal Wtr.Dist.,Cal.
State of Mississippi
•State of South Carolina
State of New York
Philadelphia, Pa.
Los Angeles Sch. Dist., California




0.0.
0.0.
0.0.
0.0.
0.0.
0.0.

"

10.7
lii.O
10.0

55.1

2U.8

a.5

Nov.
Nov.
Nov.
Nov.
Nov.
Dec.

1*
10
17
18
19
1

H.LII

H-2

Forthcoming Large Offerings, as of October 30 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
Columbus3 Ohio
Chesapeake Bay Ferry Commission

G.O.
Rev.-Ut.

10.0
190.0

Dec. 1
Indefinite

OTHER
None
*—included in table for first time.
1/ Includes corporate and other issues of #l£ million and over3 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
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date

1952 - 1958
High
Low

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 ( 9 M / 5 7 )
2.93 (3/31/5U)

1959 - January
February
March
April
May 1

2

20
21
26
June h
17
26
July 9
10
15
. 30
Aug. 5
20
Sept. 18
Oct. 22
23
28

29
30

87
-3

#

37
U
10
17

4.95
1.95

I

5.oo

4.95

it. 93

38
29

31

4.85
4.80

24
22

L95E/
5.15

46
16
1*0

5.15

42

5.50 (11/7/57)
3.00 (3/17/54)
*4.75%/

123
-15
23

*4.67

18

4.85

5.06

17
13

5.13

27

4.923/
5.io .

6
24
19

5.oo

5.io

19
13

5.65

60

5.25
5.4o

$

5.io

*—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.
3/ Provides for a 7-year period during which issue may not be called for
refunding at a lower coupon rate.




Appendix 1
November 2, 1959

MONET AND CAPITAL MARKET DEVELOPMENTS IN CANADA
The successive declines since late September in Canadian money
market and bond yields came to an end last week. There were no signs
of significant market action by the Bank of Canada. On Friday, the
Canadian Government unexpectedly halted the flow of government funds
into low cost home mortgage loans. Direct 6 per cent loans to builders
were cut off because the demand had exhausted appropriated funds.
Parliament will be asked to vote new funds for direct loans next
January.
Money market rates - Last Thursday1 s auction rate on 91-day
bills rose to 5.02 per cent from lj.,93 per cent the week before. The
182-day bill rate also increased, rising to 5.53 per cent compared to
5.36 per cent a week earlier. The average of closing rates for dayto-day loans for the week ending Wednesday, down sharply to U«P5
per cent the week before, was at U.10 per cent. This general but
modest tightening in money market rates followed five weeks of consecutively
falling yields.
Bond market developments - Another large Canadian issue was
sold in the New York market last week as the Province of Manitoba
placed a $20 million private issue yielding 5.375 per cent. The issue,
which matures in 25 years, was the first borrowing by Manitoba in the
United States since 1951. The bond market in Canada was reported
rather congested due to last week's heavy provincial and municipal
offerings, totaling nearly $100 million. Yields on medium- and longterm government bonds rose slightly, interrupting a three week decline
for most issues. At midweek, spreads between comparable Canadian and
United States Government securities1 yields were:
1.00
1.03
0.79
1.15
1.05

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

91-day bills
182-day bills
9-year bond
a 20-year bond
a 36-year bond

Stock prices - Canadian stock prices firmed last week with
particular strength sffaown by western oil -companies with natural -gas
interests. At Friday's close, the industrial average on the Montreal
exchange was almost 2 per cent above the -close a week earlier.




O

Appendix 1-2
Selected Government of Canada Security Yields

Date

3-month
Treasury
bills!/

Intermediate
Govt.
bond2/

195U-55 - Low
1957 - High
1958 - High
Low
1959 - High
Low

0.78
U.08
3.65
0.87
6.16
3.25

2.81
U,81
U.52
3.31
5.30
U.U5

Longterm
Govt,
bondj/

Spread between
Discount
Canadian & U.S. rates on 3-ao.
long-tena
3-oo. . Canadian
bonds/
billsSZ dollar?/

3.33
U.35
U.U2 3.78
5.30
U.Ui

1.19
0.U7

2.96
0.30

1.3j8
Oct. 7
5.28
5.25
1.2k
5.27
2.19
114
5.1fl
5.01
1.66
,0.75
21
5.16
U.93
0.83
1.66
28
5.02
5.22
1.00
5.17
1.U2
Average yield at weekly tender on Thursday following Wednesday date shown.
2/ Government of Canada 2-3/1; per cent of June 15, 1967-68.
3/ Government of Canada 3-1/U per cent of 1979*
y U.Se Government 3-l/U per cent of 1978-83. Government of Canada 3 - l A per
cent of 1979.
5/ Spread between average auction rates: on Monday preceding Wednesday date
shown for the United States; on Thursday following Wednesday date shown for
Canada.
6/ Spread between 3-months forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Friday following Wednesday date shown.

IS

l;l

Sales of new Canadian Government Municipal and Corporate Bonds
(in millions of Canadian dollars)
1959
to Oct. 19
Government
Provincial
Municipal
Corporation
Less short-term financing
(less than one year)

6,933
1*99
328
282

B7E?
5,5b8

T5OT

1958
to Oct..19
7,110
608
319
628 .

3755*
5,581

57o5IT

Of the above, the following have been sold
Provincial
206
Municipal
86
Corporation
Ul
,
m

Sources

A. E. Ames & Co., Lixoitea.




. ' •• •

1957
to Oct. 21

in New York
170
108
107
3 8 ?

6,029
1*39
255
928

7T55?
5>280

2373
2