Full text of H.16 Capital Market Developments : October 10, 1957

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Not for Publication DECONTROLLED AFTER SIX MONTHS
H„lli

October 10, 1957
CAPITAL MARKET DEVELOPMENTS-

Large public security offerings for new capital during the week
ending October b totaled $19U million for corporations and $51 million for
State and local governments. This week, large corporate issues, including
expiration of subscription rights, amounting to $73 million are expected.
State and local government issues with total proceeds of $102 million are
also scheduled for sale. The State and local government financing total
includes Ohio's rescheduled $31 million major thoroughfare bond issue,
which was sold this week at a net interest cost of 3,32 per cent. On
September 10 Ohio had rejected, for technical reasons, a bid naming a
3=68 per cent interest cost for the Aa-rated issue«
Bond yields - Changes in yields on outstanding bonds were
mixed last weeko Yields on Baa-rated corporate bonds increased slightly,
while Uo So Government (old series) obligation yields remained stable.
Yields on corporate Aaa's, U= So Government (new series) and State and
local government bonds declined.
Stock prices - Stock prices, as measured by the Standard and
Poor's index of 500 common stocks, increased last week, closing at 1)2.79
on October Uo A sharp price decline on Monday of this week brought the
index to a new.low for the year, and some further decline occurred on
Tuesday, On Wednesday, the index remained substantially unchanged,
closing at hlo99o
More detailed information concerning recent capital market
developments is presented in the attached exhibits =

Business Finance and Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System0




CORPORATE

/ I I I
J

STATE AND LOCAL
GOVERNMENT Aao

U. S. Govt., long-term j£/
Date

Corporate
Aaa y

Old series

Kew series

Spread between
State and
U. S. Govt,
local govt. (old series) and
CorporatelState and
Aaa J /
Aaa
1local Aaa

(Per cent)
3.1*2
2.99
3.09
2.85
3.17
!.91
3.79

(6/19)
(1/9)
(1/8)
(1/23)
(12/23)
(1/7:
(12/28)

2:21^,
3.66 ( V 1 2 )

14.12

Lie

l*.lk
1*.12

3.15
2.78
2-71*
2.W*
2.9U

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

2.62 (1/7) :
3.U9 (12/21)

2.80 (2/17)
3.70 (6/21)
3.15 (2/8)

I'm

3.68
3.68
3.68

1/ Weekly average of daily figures.

n.a.
2.73
n.a.
1.98
n.a.
2.21
n.a.
1.90
3.03 (8/5; 2.3h
2.89 (6/10) 2.05
3.39 (12/28)3.05
2.92 (2/3) 2.17
3.66 (8/16) 3.1*5
3.22 (2/8) 2.76
3.61
3.59
3.63
3.61
3.60

3.U*

S

• 3.38

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)
(8/29)
(2/21)

iU3
*3U

'.a
.25
.51*
.51

:S
.1*1*

1
•is
.32

.11*

:S

.27
.30

Average term of bonds included is 25-26

2/ Weekly averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cent bonds due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to first call of the bonds Included declined from lU years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/1* per cent bond of 1978-83.
2/ Thursday figures. Only general obligation bonds are includedj average
term is 20 years.
*
Note.—Highs and lows are for individual series and may be on different dates
for different peries.




EXHIBIT B
L O W E R - G R A D E BOND YIELDS

Corporate
Baa 1/

State and
local govt.
Baa 2/

State and
local govt,
rev. y

(Per cent)
1953 - High
195U - High
1955 - High
1956 - High
1957 - High
Low
September
September
September
September
October U

6
13
20
27

3.89
3.50
3.7k
3.kh
3.63
3.15

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/lU)

luUl (12/28)

3.79 (6/25)

3.27 (6/26)

3.32 (1/7)
2.93 (8/5)
3.26 (12/29)

3.00 (1/1)

2.96 (1/8)

3.02 (1/6)

2.71 (1/2)

2.72 (8/13)
2.99 (12/30)

li.22 (12/27)

3.58 (3/9)

£ : W >

3.90 <

li.91
4.91

I.L9
U.h9
h.h9
h.hl
h.hS

h.9k
U.96
it. 97

3.70 (2/22)

y

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are included j average term is 20 years.
3/ Friday figures. Average rating of bonds included is
between Baa and Aj average term is 20 years.
h/ Series discontinued, as of March 15.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Date

Stock price
index 1/

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

Stock market custc)mer credit
Customers'
debit bal- loans to
ances h/ "others" 5/
(Millions of dollars)

1953 - High
1951* - High
Low
1955 - High
Low
1956 - High
1957 - High
August
September
September 20
September 27
October It

26.5k (1/2)

22.95
35.98
2l*.93
15.89
35.28
1*9.61*
1*3.22
1*9.08
1*2.55

(9/18)
(12/31)
(1/8)
(12/9)
(l/ll*)
(8/3)
(1/20)
(7/12)
(9/27)

1*5.81*
1*3-98
1*3.69
1*2.55
1*2.79

2.5
0.9
3.7
1.1*
1*. 6
1.5
3.1
1.5
2.7
l.l*

6.25
5.38
5.82
• 1**32
i*. 1*2
3.61* •
1*.35
3.82
1*.55

2,1*55
2,055
3.1*36
2,1*05
1*,030
3,537
L,01*7
3,911*
4,031
3,832

1,665
1,311*
2,388
1,653"
2,805
2,517
2,823
2,71*0
2,887
1,713

780
661*
1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163
1,092

1.9
1.8
1.6
2.5
1.6

U.15
l*.3l*
1*. 3U
1*. 1*5 •
It. 1*0

3,929
n.a.

2,833

• 1,096
1,093
1,105
1,093
n.a.

n.a.

. available.
~ij Standard and Poor's composite Index of 500 common stocks, weekly closing
prices, 19ltl-l*3»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.
J/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
h/ 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.
5/ 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.




•

Exhibit D

H.lh

Corporate and State and local Government
Security Offering and Placements
(In millions of dollars;

1957
January
February
"arch

- 1,063
1,071
l,3bb

New capital
Corporate
State ;xUu 3oc :Q "1/
1 . 1956
| 1955
I
1956 - I
1957
#3
712
817

535
ho7
1,223

712
573
#6

92b
771
1,189

818
1,11.6
61,1

667

7#
#6
39b

July
August
.September

e/1,075

1,063
651
838

597
61,b
670

bl8

October
November
December

e/1,000

April
May

^1st
2nd
3rd
bth

ouarter
quarter
ouarter
Quarter

1st half
Three quarters
Year

e/900
e/T,000

1.78 '
066

71.5 3/
1,089-2'
1,088

1,162-/
6#

52h
572
e/600

900

3,18U
e/2,975

2,102
2,005
2,556
2,922

2,165
2,052
1,911'
,
2,695

1,821
1,705
1,511J

6,663
e/9,638

1,907
7,1,63
10,381

It, 216
6,127
8,821

3,526
5,obo

3,179

X

1.014
696
3#

535
312
>38

376
1,90
735

1.27
350
61,?

1,06 •
206
3#

bo6

1.70 •
21.9

hop

639
31.7

919
658
1.08

1,190
1,6U3
971
1,395

1,365
1,1.16
1,12b
1,98b

3,093

2,802
3,927
5,911

b , o6U

5,159

.

Excluding finance companies b/
1st
2nd
3rd
bth

quarter
Quarter
quarter
Quarter

3,268
2,92k
e/2,675

Year

l,6h7
2,5L1
2,21,0
2,826
9,259

1,727
1,870 '
l,bbb
2,5bb
/ 7,595

1/ Data through June 1956 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 coverafe than the earlier data, particularly
for Federal Government loans.
£/ Includes #637.2 million AT&T convertible debenture issue.
3/ Includes $571.5 million AT&T common stock issue .
'
T[/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




H.lU •

Exhibit E
Lar^e Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
"

(Millions of dollars)

Month

Corporate

1956 - August
September
October
November
December
1957 - January
February
March.
April
May

State and
local government

217
$58
. 326
701
1*30.
#7
671
788
U77
329
877
5#
$26

July
August

.

35
iBh
383
135
201
386
306
19k
1,99
2kQ
176
265
357

Other 2/

37
35
100
50

-

125
25
39
25 •

Large Individual Issues Offered September 1 through October U

Issuer

Type j/

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

Rating

CORPORATE
Tampa Electric Co.
1st mtg. bds. 18.0
Duke Power Co.
S.F. deb.
50.0
60.0
El Paso Natural Gas Co.
Conv. deb.
Texas Eastern Trans. Co. 1st mtg.P.L.bds. . 30.0
New Jersey Bell Tel. Co. • Deb.
30.0
Speriy Rand Corp.
110.u
S.F. deb.
Lehigh Portland Cement Co. S.F. deb.
30.0
Philadelphia Elec. Co.
Ist&ref. mtg'.
bds.
10.0
Niagara Mohawk Pwr. Co.
Gen.mtg.bds
50.0
Consolidated Nat. Gas Co. Deb.
30.0
20.0
Pacific Power & Light Co. 1st mtg.bds
1st mtg. bds. 35.0
Consumers Power Co.
1st mtg.^bds. 15.0
Utah Power 8 Light Co.
Pacific Tel. 8- Tel. Co.
Common stk. 16.9
Gulf States Utilities Co. 1st mtg'. bds. 17.0
Southwestern Pell Tel.Co.
Deb.
100.0
Northern Natural Gas Co.
Pfd. stk.
16.0
Shamrock Oil 8- Gas Corp. Conv. sub. deb.17.5
Deb.
Columbia Gas System Inc.
25.0




1987
1982
1977
1977
1993
1982
1979

5
1,7/8
5 1A
5 5/8
h 7/8
5 1/2
1, 7/8

L. 85
h.7h
5.25
5.71
lj.75
5.50
U .88

Aa
Aa
Baa
Baa
Aaa
Baa
A
Aaa
Aa
Aaa
Baa
Aaa
A

1987
1987
1982
1987
1987
1987

.1,5/8
h 7/8
5
5 3/U
h 3A
5 lA

1.63
U.82
U.86
5.70
U.71
5.10

1967
1992

h 7/8 •
1, 3/ii

li.78
It.70

Aa
Aaa

1982
1982

5 1A
5

5.25
5.U0

Ba
A

V..lh
Lar| e Individual Issues Offered September I through October 1* (Cont'd)

Type 3 /

Amount 1
Coupon
(millions|
Offering
of
j Maturity net inter- yield
dollars) |
est cost

hating

STATE & LOCAL GOVERNMENT
Santa Monica U.S.P.,Calif..
G.O.
Dade Co., Spec. Tax S.D.
No. lj Florida
G.O.
Houston, Texas
Water rev.
Winnebago Co. S.D. No. 20$,
Illinois
G.O.
Cook Co., Illinois
G.O.
Los Angeles, Calif.
G.O.
Baltimore Co., M d.
G.O.
Wichita, Kansas
Water rev.
Springfield, Mass.
G.O.
Penna. Gen. State Auth.
RevBuffalo, New York
G.O.
Oakland U.S.D., Calif.
G.O.
Colorado Springs, Colo.
Util. rev.
Territory of Hawaii
Hwy. rev.
State of Colorado
Hwy. rev.
State of New York
0.0.
State of Oregon
G.O.
OTKFP
Kingdom of Belgium

1958-77

5.0

3.60

2.5U-3.65

Aa

9.5
10.0

1959-76/66
1958-91/67

1.30
L.59

3.10-1.25
3.uo-li.5o

A
Baa

5.5
10.0
5.0
23.6
hi. 8
5.?
25.0
8.b
10.,0

1958-73
1958-77
1958-77
1959-97
1962-87/70
1958-82
• 1959-83/57
1958-72
1958-82
1958-79/72
1959-87/66
1957-73/68
1958-72
1960-71/6?

3.W,
3.78
3.68
3.90
li .1,9
3.09
3.79
2.96
3.1*3
3.53
li-85
3.23
2.90
3.21

2.50-3.1i5

Aa
A
Aa
A
A
Aaa

3.25-1.80
2.60-3.25
2.25-2.90
2.70-3.25

5 1/2

5.75

5.5

12.5
8.0
2b .0
26.6

Ext.S.F.deb.30.0

•

1972

2.60-3.8U

2.60-3.75
2.80-1, .75
3.5o-L.50
2.30-3.-15
2.60-3.85

——

2.35-3.uo
2.5o-3.5u

Aaa
Aa
Aa
A
Aa
Aaa
Aa

2.50-3.50

—

State and local government security offerings of £5. million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government securities, G.O. denotes general
obligation; Rev., revenue bonds; G.R., general obligations additionally secured by
facilities revenues; L.L., limited liability obligations secured by .pledge of
designated revenues.

*



Exhibit F
Forthcoming Large Public Security Offering s for New. Capital
(Other than U.S. Treasury; 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State and Other 2j
State
and
•Other 2/ Corporate
Corporate
local govt.
local govt.

Date of
computation
29b6 - Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31
Feb. 28:
Mar. 29
Apr. 30
M ay 31
June 28
July 31
Aug. 30
- Sept. 30

315
683
1,36
176
591
7h0
I463
187
525
370
526
578
576

359
162
18
280
153
153
290
179
97
172
252
2h3
370

__

1,009
990
1,81
796
966
795

2.3
100
35
2525

I486

258
525
1.15
811
8L5
6b 7

25
30

1,197
955
979
763
618 '
631
862
396
- 388
L98
51b
L39
587

23
100
35
25
25
25
30
15

Forthcoming Large Offerings, as of October li
Issuer

Type

Amount
Approximate date
(mi]lions
of dollars) of offering

CORPORATE
Chemical Corn Exchange Bank

- Capital stk. •

I18.L

Pfd. stk.
Istfref.mtg.bds.
Conv.sub.deb.
Deb.
Conv.sub.deb.
Conv. deb.

25^0
60.0
15.0
250.0
17.5
35.2

*Merrimack Essex Electric Co.
Southern New England Tel. Co.

1st mtg. bds.
Common stk.

20.0
35.0

*0hio Power Co.

1st mtg. bds.

25.0

C.O.
Highway rev.
G.O.

28.9
31.0
5.3

Commonwealth Edison Co.
Consolidated Edison Co.
•^General Portland Cement Co.
Americain Telephone £ Telegraph Co.
National Cylinder Gas Co.
Consumers Power Co.

Oct. 7
(rights expire)
Oct. 9
Oct. 22
Oct. 2h
Oct. 29
Oct..
Nov. 1
(rights expire)
Nov. 7
Nov. 8
(rights expire,
Nov. 20

STATE'AND LOCAL GOVERNMENT
City 8 Co. of San Francisco, Calif.
State of Ohio
Cincinnati, Ohio
|




Oct. 7
Oct. 8
Oct. 8

F-2

fi.lb

Forthcoming Large Offerings, as of October li (Cont'd)
...

-

Issuer

%ype

Amount
Approximate date
(millions
of offering
of dollars;

STATE AND LOCAL GOVERNMENT (Cont'd)
Chicago Park Dist., 111.
G.O.
M
ecklenburg Co., N.C.
G.O.
Los Angeles Dept. of VJtr.£-Pwr., Calif.
Rev.
Dayton City Sch. Dist., Ohio
G.O.
San Diego Unified Sch. Dist., Calif.
G.O.
Commonwealth of Massachusetts
G.O.
Pittsburgh, Pa.
G.O.
Maryland State Roads Commission
G.O.
-^Boston, Massachusetts
G.O.
Washington Toll Bridge Auth.
Rev.
Milwaukee, Wisconsin
G.O.
State of California
G.O.
*Broward Co, Spec. Sch. Dist.No.l,Fla
G.O.
•^Territory of Hawaii
G.O.
State of Missouri
G.O.
State of Texas
G.O.
Jacksonville, Florida '
Utilities rev.
. University System Bldf. Auth., Ga.
Rev.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth., Fla.
Rev.
New York State Thruway Authority
G.O.

6.0
5.0
18.0
8.0,
10.0
65.0
6.6
15.0
16.0
30.5
5.5
85.0
12.5
7.0
30.0
12.5
30.0
12.0
62.0
20.0 ,
5o.o

Oct. 8 "
Oct. 8
Oct. 9
Oct. 10
Oct. 15
Oct. 15
Oct. 16
Oct. 16
Oct. 16
Oct. 17
Oct. 22
Oct. 23
Nov. 1
Nov. 19
1957
1957
1957
3957
1957
1957
1957

75*0
1$.0

Oct. 16
1957

OTHER •
* International Bank for Reconstruction
and Development
•Bonds
Union of South Africa
Ext. loan bds.

*—Included in table for first time.
|
1/ Includes corporate and other issues of £15, million and over; State and
local government issues of &5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development.issues.
Note.—Deletions for reasons other than sale of issue: None.




"ti.iu
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date

1952 - 1956
High
Low
1957 - January
February
March
April 3
10
12
May 10
15
16
21
- 23
29
June 5
7
11
July 3
10
11
16
17
August lU
September 5
6
25
October 1

A-rated offering yields „
Aa-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields!
(basis points)
Xbasis points)
U.30(12/12/56)
2.93(3/31/51)
it.itit
1.25
None
It. 29

.

it. 50
It. 38 2/

•

57
hk

•

50

.

It.63

75
87
>8
68
56

5.oo
it. 80
it. 85

75
51
56

U.78

16

it.62
None
• it. 50
it. 60
it. 50
it.53
it.53 2/
it.70

65
51

U.78
1.57
it.77
it.65 •"

it.58(12/6/56) • - 70
3.00(3/l7/5it)
-15

62
-3

.

6U
it5
59
it9
52
52
69

5.00
5.25

98
123

5.10

106

it.80 2/
it.88 2/

6it
7it

it.90

71

5.10

51

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.
2j Provides for a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Other issues have no such provision.