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

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I

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

DECONTROLLED AFTER SIX MOUTHS

H.lii

November 3* 1955
CAPITAL iiARXET DEVELOPMENTS

The volume of l a r g e s e c u r i t y i s s u e s o f f e r e d p u b l i c l y f o r
new c a p i t a l during the week ending October 28 t o t a l e d $U6 m i l l i o n
d o l l a r s f o r S t a t e and l o c a l governments and 58 m i l l i o n f o r c o r p o r a t i o n s . This week, S t a t e and l o c a l governments expect t o f l o a t 109
m i l l i o n d o l l a r s of l a r g e i s s u e s ; no l a r g e corporate o f f e r i n g s a r e
scheduled.
The hl$ m i l l i o n d o l l a r I l l i n o i s S t a t e T o l l Highway i s s u e ,
which was o f f e r e d on October 25 was w e l l r e c e i v e d by i n v e s t o r s , t h e
e n t i r e i s s u e having been sold by t h e following day. An o f f e r i n g of
122 m i l l i o n d o l l a r s of bonds i s s u e d by the Public Housing A u t h o r i t i e s ,
f l o a t e d t h e day a f t e r the turnpike o f f e r i n g , was l e s s f a v o r a b l y r e ceived; only about one-half of t h e i s s u e was s o l d the f i r s t day and
a s u b s t a n t i a l amount remains i n the syndicate account. This ^cont r i b u t e d t o t h e r e p o r t e d r i s e i n d e a l e r s 1 i n v e n t o r i e s l a s t week,
which a r e now g r e a t e r than a t any p o i n t s i n c e e a r l y J u l y .
Expected November volume - The estimated volume of new
c a p i t a l f o r both corporate and S t a t e and l o c a l government i s s u e s
i n November i s s u b s t a n t i a l , although w e l l helot? the very l a r g e October t o t a l s . Corporate i s s u e s a r e expected t o t o t a l 550 m i l l i o n d o l l a r s , almost twice t h e volume of l a s t November's unusually low t o t a l .
The estimate f o r S t a t e and l o c a l government o f f e r i n g s i s a l s o 550
million d o l l a r s , 30 per cent above the corresponding monthly t o t a l
i n 195b.
Bond y i e l d changes mixed - Treasury o b l i g a t i o n y i e l d s
decreased s l i g h t l y during the week ending October 28, while h i g h grade corporate and S t a t e and l o c a l government y i e l d s were s t a b l e .
Yields on S t a t e and l o c a l government Baa bonds r o s e t h r e e
b a s i s p o i n t s . Corporate Baa and S t a t e and l o c a l government revenue
bond y i e l d s decreased moderately.
The y i e l d on an A- r a t e d 30-year f i r s t mortgage e l e c t r i c
power bond o f f e r e d on October 27 was f o u r b a s i s p o i n t s lower than
y i e l d s on outstanding bonds of somewhat s h o r t e r m a t u r i t y . This
spread i s near t h a t of a s i m i l a r i s s u e o f f e r e d the preceding week
and s u b s t a n t i a l l y changed from mid-September when t h e y i e l d of a
newly-offered i s s u e was 23 b a s i s p o i n t s above seasoned y i e l d s .

#



)

—2—
Stock p r i c e s - The SEC index of 265 common stocks decreased
s l i g h t l y t o 25)1.6 during the week ending October 28. P r i c e s "were r e l a t i v e l y s t a b l e d u r i n g the f i r s t t h r e e days of t h i s week i n I O V T t r a d i n g
volume.
More d e t a i l e d information concerning recent c a p i t a l market
developments vd.ll be found i n t h e attached e x h i b i t s .

Business. Finance and C a p i t a l Markets Section ,
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 the F e d e r a l Reserve System,




H I G H - G R A D E B O N D YIELDS
Weekly

CORPORATE A a a

U. 5. GOVERNMENT

STATE AND LOCAL
GOVERNMENT A a a

Corporate
Aaa y

U. S. Govt.
long-term 2/

Spread between
U. S. (icnrfc. and
State and local
Corporate State and
govt., Aaa 2 /
Aaa
local Aaa
(Per cent)

1 # 2 - High
Low
1 9 # - High
Lor
1951* - High
Low
1 9 # - High
Low

3.03
2.91
3.1*2
2.99
3.09
2.85
3.11*
2.91

September 30
October 7
October lit
October 21
October 28

3.12
3.12
3.11
3.10
3.10

(1A)
(2A5)
(6/19)
(1/9)
(V8)
(1/23)
(9/9)
(1/7)

2.79
2.56
3.15
2.78
2.71*
2.a
2.91*
2.62
2.86
2.83
2.81
2.82
2.81

(12/27)
(5A7)
(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)

2.00
1.65
2.73
1.98
2.21
1.90
2.3U
2.05
2.27
2.27
2.25
2.21*
2.21*

(10/23)
(5/D
(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)

.37
.19
.38
.19
.1*3
.32
.31*
.13

1.02
.71
.81*
.30
.61
.29
.70
.51*

.26
.29
.30
.28
.29

.59
.56
.56
.58
.57

3/ Weekly average of daily f i g u r e s . Average term of bonds Included i s 25-26
years.
2 / Weekly average <tf daily f i g u r e s ; old s e r i e s . Average term to f i r s t c a l l
of bonds included i s 11-21* years.
3 / Thursday f i g u r e s . Only general obligation bonds are Included; average
term. I s 20 years.
Note.—Highs and loirs are for individual s e r i e s and may be on d i f f e r e n t dates
for different series.




EXHIBIT 6

L O W E R - G R A D E B O N D YIELDS
•Weekly

Per. cent p e r a n n u m

• i U t / \

m

j
s
1952

d

m

j
s
1953

d

Corporate
Baa y

3.5
STATE

m

j

s
1954

d

State and
local govt.
Baa V

m

J S
1955

D

State and
local govt.
rev, y

(Per cent)
1552 - High
Low
1953 - Higi
Low
195b - High
Low
1955 - High
Low

3.63
3Ji8
3.89
3.50
3.71*
3M
3.59
3Ut5

September 30
October 7
October lU
October 21
October 28

3.59
3.59
3.59

3.1s

OA)
(5/16)
(9/18)
(1/2)
(1/8)
(12/31)
(10/21)
(VIh)

2.98 (10/23)
Z M (V17)
3.79 (6/25)
2.96(1/8)
1-25 (9/22)
3.02 (1/6)

2.69
2.27
3.27
2.71
3.00
2.72
2.95
2.76

3.23
3.23
3.22
3.20
3.23

2.90
2.90
2.89
2.89
2.87

is

®

y Weekly average of daily f i g u r e s . Average term of bends
included i s 25-26 years.
2 / Thursday f i g u r e s . Only general obligation bonds are
included; average term i s 20 years.
2 / Friday f i g u r e s . Average rating of bonds included ia
between Baa and A; average term i s 20 years.
Note.—Highs and lows are for individual s e r i e s and may
be on d i f f e r e n t dates f a r d i f f e r e n t s e r i e s .




STOCK MARKET

Date

Stock p r i c e
index 3 /

aarket custcBar c r e d i t
Customers'
d e b i t b a l - loans t o
ances Bf "others" jy

volume 2 /
(millions y i e l d s V
of shares) (Per cent)

(Millions of d o l l a r s )
1952 - High
Low .
1953 - High
Low
1954 - Hi&
Low
1955 - High
Low

165.3
151.7
167.1
ll*l*.0
221.lt
156.5
269.7
217.lt

September

263.6
250.1*
21*5.9
252.8
251.6

October lit
October 21
October 28

(12/26)
(10/26)
(1/2)
(9/18)
(12/31)
(1/6)
(9/23)
(1/Ht)

2.0
0.9
2.5
0.9
3.7 .
1J*
lt.6
1.5

5.77
5.13
5.75
5.15
5.33
It .20
lt.22
3.78

1,986
1,80U
2,ltlt5
2,055
3,1*36
2,1*05
3,966
3,537

1,332
l,2ltl
1,665
1,311*
2,388
1,653
2,805
2,517

2.9
2.0
2J*
1.7
1.8

3.93

3,966

2,805

1,161

n.a.

1,159
1,150
n.a.

n.a.-

n.a.

656
552
780
661t
l,0lt8
71*6
1,177
1,018

n.a.—Not a v a i l a b l e .
1 / SEC index of 260 conmcn s t o c k s , weekly closing p r i c e s , 1939-100; converted
t o 1957-1*9-100 by Federal Reserve. The conversim f a c t o r i s 123.91.
2 / Averages of d a i l y t r a d i n g volume on the New York Stock Exchange.
5 f Moody's 200 conmcn s t o c k s ; end cf month f i g u r e s .
5 / End of month f i g u r e s f o r member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S . Government o b l i g a t i o n s .
Wednesday f i g u r e s f o r weekly reporting member banks. Excludes a l l loans
f o r purchasing or carrying U. S. Covernnents f o r 1952; since' 1953 cnly t h e s e . l o a n s
a t banks in New York and Chicago a r e excluded. Weekly r e p o r t i n g banks account f o r
about 72 per cent of loans t o o t h e r s .
Note.—Highs and loirs are f o r individual s e r i e s and may be on d i f f e r e n t dates
for different series.




H.lU

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

1955
January
February
March

Corporate
195U
1

666

532
312
538

b26

h9h

h97

779
675
1,123

h21

531
639
e/750

909

183
• 325
753

k70

October
November
December

635
656
8ii2

%
1,003 •
290

2,21,3
2,094
e/1,920

1,608
1,995
1,991
1,896
7,1+90

35°

6hl

e/235
^390

577
ih

•60k

.

1955

136
1,261
903
697

July
August
. September

New c a p i t a l
1953

:S

She

April
May
June

1st quarter
2nd q u a r t e r
3rd q u a r t e r
ljth q u a r t e r
Year

1

.

2

j

1,912
2,578

E"

a/900
S/550
1,385
1,1(18
5/1,095

S t a t e and l o c a l
1
195k
1
396

Ss

1953
390
360
L26
329
61i9

853

h3h

279
261

519
259
^75

6U9

877
1,372
2,33lt
1,188
1,89k
6,789

.

771
1,176
1,U12

as
5,477

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

1,791
1,912
e/l,Wi5

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

-

1,669
1,991
1,223
2,3a
7,227

e / Estimated.
1 / Includes 637,2 m i l l i o n d o l l a r AT&T c o n v e r t i b l e debenture i s s u e .
2f Includes 602„5 m i l l i o n d o l l a r AT&T c o n v e r t i b l e debenture i s s u e .
3 / 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 p e r s o n a l f i n a n c e
companies.
Note.—Details may not add t o t o t a l s due t o rounding.




H.14

1

Exhibit E
Large Public S e c u r i t y I s s u e s f o r N o t C a p i t a l
(Other t h a n U. S . T r e a s u r y ) 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

1954 - October
November
December
1955 - J a n u a r y
February
March
April
May'
June
July
August
September
October

I

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

Other 2 /

.

388
268
689
341
107
337
2#
152
403
278
65
234
716

433
,0
121
141
63
750
173
483
175
101
405
328
805

30
35
15

—

—

A
Large I n d i v i d u a l I s s u e s O f f e r e d during October

Issuer

Type 3 /

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

Rating

CORPORATE
Public Service E l e c t r i c
and Gas
American T e l . & T e l .
Southern B e l l T e l . & T e l .
Burlington Industries
N.Y. S t a t e E l e c t r i c & Gas
P a c i f i c Gas & E l e c t r i c
Long I s l a n d L i g h t i n g
Southern Mew England
Tel. & Tel.

Deb.
35.0
Conv. d e b .
637.2
. Deb.
30.0
Sub. conv. deb. 30.0
1st mtg, bds.
15.0
Pfd. stk.
25.0
1st mtg. b d s .
15.0
Com* s t k

17.9

G.O.
G.O.
G.O.
G.R.

4o.o
8.6
7.0
5o.o

1/2
7/8
1/4
1/4
3/8

1975
1967
1995
1975
1985

3
3
3
4
3

1985

3 3/8

3.35^
3 7/8
3.20
4.25
3.25

A
Aa
Aaa
Ba
A

3.30

A

STATE AMD LOCAL GOVERNMENT
Cook County, I l l i n o i s
S t a t e of Tennessee
I Monterey C o . , C a l i f .
N.Y. S t a t e Thruway Auth.




'

1956-75
1966-67
1957-95
1985-95

2.54
2.19
2.70
2.52

2.25-2.45
2.10
1.60-2.95
2.35-2.50

A'
A
A
Aaa

H.lLt

E-2
Large I n d i v i d u a l I s s u e s O f f e r e d d u r i n g October ( C o n t ' d )

Issuer

Type 2 /

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

Rating

STATE AND LOCAL GGVERM 5ENT
(Cont'd)
Orleans P a r i s h , La*
Philadelphia, Pa.
J e r s e y C i t y Sewerage Auth.
Corning, New York
I l l i n o i s Turnpike Auth.
P u b l i c Housing A u t h s .
C l e v e l a n d , Ohio

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

6.0
•1961-9?
1957-81
39.9
13.0
1959-93'
5 . 1 " 1956-04.
415.0
1995
122.3
1957-96
1960-83
9.0

.2.80
2.58
3.35
2.27
3.83
2.40
2.57

2.15-2.85
1.80-2.65
2.35-3.35
1.45-2.35
3o75
1.50-2.50
2.00-3.42

A
A <
Baa
Aa
—

Aaa
A

OTHER
None
over5 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 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 .
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 ; R e v . , revenue bonds; G . R . , g e n e r a l o b l i g a t i o n s a d d i t i o n a l l y s e c u r e d by '
f a c i l i t i e s r e v e n u e s ; a n d , L . L , l i m i t e d l i a b i l i t y o b l i g a t i o n s s e c u r e d by p l e d g e of
designated revenues.




HOlt

Exhibit F

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 I s s u e s
During month f o l l o w i n g
date shown
Corporate

Date of
computation
195U - Oct. 29
Nov. 30
Dec. 31
1955 - J a n . 31
• Feb. 28
Mar. 3 1
Apr. 29
May 31
June 30
J u l y 29
Aug. 31
S e p t . 30
Oct. 31
1

15
94
18b

16
710
211
425
160
67
1*07
222.

805
202

1*3 o
"661
567
682
52li
208
116
339
3UU
100

Subsequent t o
date shown
S t a t e and Other
Corporate
local govt.

30

l81t

813
330

135 ,
2U6
216
122
1,395
922
1,110.
850
830
1,135
920
909
1112

1,957
2,6%
2,1a
1,961
1,978
2,009
1,917
1,861
1,815
2,018
1,971
2,205
1,650

30
30
35
—
—

—
—
' —
/ —

Forthcoming Large O f f e r i n g s , as of October 28
Issuer

Type

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

CORPORATE
United Gas
New England Telephone & Telegraph
National Tea Company
Michigan Consolidated Gas
Commonwealth Edison
Southern Co.
^Wheeling S t e e l
^Pacific lighting
-^-Consolidated Edison Co. of New York
New J e r s e y B e l l Telephone
-KRadio Corporation of America
-MSheraton Corporation

1 s t mtg. b d s .
Deb.
Deb.
1 s t n t g ; bds
Common stock
Common stock
Deb.
P f d . stock
1st & r e f . bds.
Deb.
Deb.
Deb.

20.0
30.0
15.0
30.0
41.6
26,It
19.1
20.0
70.0
25.0
100.0
. 15.0

November
November
November
November
November
November
November
November
December
December
December
1956

10.6
60.0
7.5
10.0

November
November
November
November

9
15
15
16
16
22
6
lit

STATE AND LOCAL GOVERNMENT
F l o r i d a S t a t e Board of Education
S t a t e of C a l i f o r n i a
T e r r i t o r y of Hawaii
Port of New Orleans, Louisiana




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

1
2
2
3

H.lh

F-2
Forthcoming Large O f f e r i n g s , a s of October 28 ( C o n t ' d )
Issuer

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 )

STATE AND LCCAL GOVERNMENT ( C o n t ' d )
Hamilton-County, Ohio
W e s t Palm Beach, F l o r i d a
* S t a t e of Oklahoma
D a l l a s , Texas
S t , Louis Bd. of E d u c a t i o n , M i s s o u r i
•^Maryland S t a t e Roads Coranission
Commonwealth of M a s s a c h u s e t t s
^Sonoma Co. Flood C o n t r o l and Water
Conservation D i s t . , C a l i f .
•^Georgia R u r a l Roads A u t h o r i t y
Onondaga Co. Water A u t h o r i t y , N. Y.
Los A n g e l e s , C a l i f o r n i a
S t a t e of Colorado
;
C a l i f o r n i a T o l l Bridge Authority
C o n n e c t i c u t Expressway
I n t e r "American- Center A u t h . , F l a .
Texas Turnpike Company
Llichigan Turnpike A u t h o r i t y
C a l i f o r n i a T o l l Bridge A u t h o r i t y
L o u i s i a n a Turnpike Commission
Oklahoma Turnpike A u t h o r i t y
Pennsylvania Turnpike Commission
Washington S t a t e T o l l Bridge Auth.
* P o r t of New York A u t h o r i t y

G.O.
Rev.
G.O.
G.O.
. n.a*
n.a.
n.a.

6.7
lit .3
9.0
10.0
6.5
15.0
159 c9

November
November
November
November
November
November
November

3
3
9
10
15
15
16

n.a.
n«a.
Rev.
, n.a*
n.a.
Rev.
Rev.
Rev.
- Rev.
Rev.
Rev.
Rev,
Rev.
Rev.
Rev.
n.a.

5.7
12.6
20.0
8.0
ij.6.0
100.0
25.0
137.0
186.0
23^.0
100.0
11:6.0
62.0
227.0
16.0

November
November
December
December
December
December
19#
1955
1955
1955-56
1955-56
1955-56
1955-56
1955-56
1956
1956

17
22
6

'

6

6
13

OTHER
None
n.a,—Not available•
*—Included i n t a b l e f o r f i r s t time.
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 d o l l a r s and over5 S t a t e
. and l o c a l government i s s u e s of 5 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 .

•(




Exhibit G
Y i e l d s on New and Outstanding
E l e c t r i c Power Bends, Rated Aa and A 3 /

Date

Aa-rated offering yioldr
A-rated offering yields
Amount above
Amount above
Actual
Actual
(per c e n t ) seasoned y i e l d s (per c e n t ) seasoned y i e l d s
(basis points).
(basis points)

195)2 average

3.16

13

3.35

12

1953 average

3.46

16 .

3.78

26

195>h average

3.03

3

3.12

-3

195b - J a n u a r y
February
March
April
May
June
July
August
September
October
November
December

3.19
3.01
*2.93
2.99
3.00
*3.00
None
None
3.02
3.03
None
None

6
-1
0
5

3
3

*3.35
*3.20
3.05
3.10
3.Hi
3.1b
*3.13
3.11
*3.10
/ 3.10

2
-1
-10
• -6
0
-2
-1
-1
-3
-2

---

3.11

0

19$$ - January
. February.
March
April
May

*3.15
* 3 . lit
*3.17
None
*3.22
*3.20
None

None
*3.23
3.29
3.31
3.35
*3.30
None

9
lit
16
1b
10

3.57
3.50

30
23

July
August 3 1
September l b
21
October 19
20
27

3.32
3.22

b

l

13
7
8
10
7
—

10
7

3.25
3.30

—

-7
.-b

•

* 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 30-year 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 a n d ^ t h e amount above .
seasoned y i e l d s a r e averages 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 arid 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. The number of new i s s u e s i n c l u d e d i n t h e
monthly a v e r a g e s v a r i e s f r o m 2 t o it except f o r October 195b when 6 i s s u e s were
i n c l u d e d . 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 .