Full text of H.16 Capital Market Developments : October 11, 1956

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Not for Publication DECONTROLLED AFTER SIX MONTHS ;
H.lU

; October 11, 1956
CAPITAL MARKET DEVELOPMENTS

Large public security offerings issued for new capital
during the week ending October 5 totaled $73 million for corporations and §59 million for State and local governments. This week,
corporate security offerings are expected to t o t a l ^90 million and
State and local government issues for $55 million are scheduled for
sale.
- Pacific Finance Company's $25 million debenture issue origi n a l l y scheduled f o r s a l e in early May was reduced to $15 million
and offered for sale on October 9. The securities.carried a'10-year
no-call provision as did the recent offerings by CIT Financial Corporation and Commercial Credit Company. Another finance company
offering—the Seaboard Finance Company's sinking fund note issue—
originally scheduled f o r sale t h i s week was postponed. This would
have been the company's f i r s t issue sold publicly. All previous
sales of notes have been through private placements with i n s t i t u tional investors.
Bond yields - Changes in yields on outstanding bonds were
mixed l a s t week. Yields on corporate Baa-rated bonds increased s l i g h t l y
v;hile corporate Aaa-rated and State and local government revenue
bond yields were stable and yields on State and local government
Aaa- and Baa-rated bonds and U. S. Government obligations declined.
Offering yields on new issues continue to be r e l a t i v e l y
high. A new A-rated 30-year f i r s t mortgage electric u t i l i t y issue
was reoffered this week a t a yield of U.ilO per cent—1|0 basis points
above a similar offering made on August 1.
Stock prices - The SEC index of 265 common stock prices
increased fTT9 points l a s t week, closing at 275.2 on October 5.
Daily figures through Wednesday -of t h i s week indicate some f u r t h e r
increase in prices.
More detailed information concerning recent capital market
developments i s presented in the attached exhibits.

Business Finance and Capital Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




H I G H - G R A D E BOND YIELDS

CORPORATE

U. S. GOVERNMENT

STATE AND LOCAL
GOVERNMENT Acta

U. S
Corporate
Aaa 1 /

Date

long-term 2 /

Old s e r i e s

New s e r i e s

Spread between
S t a t e and
U. S. Govt,
l o c a l govt. ( o l d s e r i e s ) and
C o r p o r a t e ! S t a t e and
Aaa J /
Aaa
1local Aaa

(Per cent)
1953 - High
195k - High
1955 - High
1956 - High
Low
September
September
September
September
October 5

3.12
2.99
3.09
2.85
3.17
2.91
3.58
3.07

(6/19)
(1/9)
(1/8)
(L/23)
(12/23)
(1/7)
(10/5)
(3/2)

7
3.53
lit 3.55
21 3.56
28 3.58
3.58

3.15 (6/6)
2.78 (12/26)
2.7U (1/9)
2 . a (8/7)
2.9U (8/5)
2.62 ( 1 / 7 )
3.22 (9/7)
2.80 (2/17)

3.03
2.89
3.26
2.92

3.22
3.21
3.15
3.17
3.1U

3.25
3.26
3.2k
3.23
3.21

n.a.

1 / Weekly average of d a i l y f i g u r e s .

(8/5)
(6/10)
(9/11*)
(2/3)

2.73
1.98
2.21
1.90
2.3U
2.05
2.63
2.17
2.62
2.63
2.63
2.62
2.61

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(9/20)
(2/23)

.38
.19
• ii3
.32
• 3U
. .13
.a
.13
• 31
• 3li

.la

.w.
.a

.81*

.30
.61
.29
.70

>5h

.68
.U5
.60
.58
.52
.55
.53

Average term of bonds included i s 25-26

2 / Weekly averages of d a i l y f i g u r e s . The old s e r i e s i n c l u d e s f u l l y t a x a b l e ,
marketable 2 1/2 per cent bonds due or f i r s t c a l l a b l e a f t e r 12 y e a r s through
September 1955, and t h o s e due or c a l l a b l e i n 10-12 y e a r s t h e r e a f t e r ; t h e average
term t o f i r s t c a l l of the bonds.-ineluded d e c l i n e d from 1L years in e a r l y 1953 t o
11 1/2 y e a r s in e a r l y 1956. The new s e r i e s i s comprised of t h e 3 per cent bond
of 1995 and the 3 1/U per c e n t bond of 1978-83.
3 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds a r e i n c l u d e d ; average
term i s 20 y e a r s .
Note.—Highs 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
for different series.




EXHIBIT B

L O W E R - GRADE B O N D YIELDS

CORPORATE

STATE AND LOCAL GOVT

STATE AND LOCAL GOVT. REVENUE

Corporate
Baa 1/

State and
l o c a l govt.
Baa 2 /

State and
l o c a l govt.
rev. J /

(Per cent)
3.89
3.50
3.71*
3.a
3.63
3.15
U.iU
з.58

U.oi

U.05
1.09
1*.12
и.11*

(9/18)
(1/2)
(1/8)
(12/31)
(1^30)
(1/lU)
(10/5)
(3/9)

3.79 (6/25)
2.96 (1/8)
i:g
3.26
3.02
3.61
3.20
3.60
3.60
3.61
3.60
3.58

$?,
(12/29).
(1/6)
(9/20)
(3/8)

3.27
2.71
3.00
2.72
2.99
2.76
3.51
2.89

(6/26)
(1/2)
(1/D
(8/13)
(12/30)
(1/7)
(9/7)
(2/21*)

3.51
3.50
3.1*8
3.1*9
3.1*9

1 / Weekly average of d a i l y figures. Average term of bonds
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. .
3 / Friday f i g u r e s . Average rating of bends included i s
between Baa and A; average term i s 20 years.
Note.—Highs and lows are f o r individual s e r i e s and may
be on different dates f o 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

Trading
Common
volume 2 /
(millions yields J /
of shares) ( p e r cent)

Stock market customer c r e d i t
Customers'
d e b i t b a l - loans t o
"others" 5 /
ances v
(Millions of d o l l a r s )

1953 - High

1955 - High
Low
1956 - High
Low

167.1
lUlt.O
221.lt
156.5
270.7
217.U
295.5
257.U

August
September
September 21
September 28
October 5

290.0
278.2
277-3
269.3
275.2

195k - High

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/lk)
(8/3)
(1/20)

2.5
0.9
3.7
l.lt
„ li . 6
- 1.5
3.1
1.6
1.9
2.0
2.1
2.0
2.1

.

5.75
5.15
5.33
It. 20
L 22
3.78
14.21
3.86

2,Ut5
2,055
3,136
2,U05
M30
3,537
L,017
3,979

1,665
1,31b
2,388
1,653
2,805
2,517
2,810
2,7140

It. 02
lt.2lt

3,979

2,785

n.a.

n.a.

n.a.

780
661t
1,01*8
7lt6

1,21a

1,018
1,267
1,167
1,19k
1,170
1,167
1,170
n.a.

1 / SEC index of 265 common s t o c k s , weekly c l o s i n g p r i c e s , 1939"100; converted
t o 19u7-ii9=100 by Federal Reserve. The conversion 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.
3 / Moody's 200 common s t o c k s ; end of month f i g u r e s .
h / 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
carry margin a c c o u n t s ; excludes balances secured by U. S. Governmmt 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 banks. Excludes loans f o r
purchasing or carrying U. S. Government s e c u r i t i e s a t banks in New York and Chicago.
Weekly r e p o r t i n g banks account f o r about 72 per cent of loans to o t h e r s .
Note.—Highs 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
for different series.




H.lU

Exhibit D
Corporate and. State and Local Government
Security Offerings and Placements
(In millions of dollars)

1956

Corporate
1 1955
i

New capital

State and local
1 1955
1

1954

1956

70k

790

535
407
1,223

547
426
635

404
696
390

535
312
538

565

8l6
1,144
830

478
886
687

497
656
842

377
490
735

427
350
64l

. 734
748
853

July
August
September

e/1,120'
e/700
3/850

#7
6a
670

909
335
747

e/380
e/215
e/350

470
249
4o6

279
261
649

October
November
December

e/850

1,162 ^
632
900

1,003
290
6o4

e/625

919
658
408

594
423
877

2,165
2,052
1,911
2,695
8,821

1,608
1,995
1,991
1,896
7,490

1,490
1,603
945

1,385
1,418
1,124
1,984
5,9.11

January
February
March.
April
May
June

1st quarter
2nd quarter •
3rd quarter
4 th quarter
Year

579

2,073
2,790
e/2,670

.

'

1954
396

%

1,372
2,334
1,188
1,894 •
6,789

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

1,617
2,$20
e/2,470

1,727
1,870
1,434
2,554
7,569

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

^ gskmated.
• 1/ Includes $637.2 million AT&T convertible debenture issue.
2./ Total new capital issues excluding offerings of sales and personal finance
companies. .
iMote.—Details may not add to t o t a l s due to rounding.




H.lU

Exhibit E
Large Public Security Issues f o r New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate .

1955 - September
October
November
December
1956 - JanuaryFebruary
March
April
May
June
July
August
September

•

328
805
221
263 •
95
212
278
395
623
165
592
217
558

State and
local government

Other 2/

23k

716

.

koi

25
50

to

20

227
192
iiUU
163
157
233

50

16k

35

37

18k

Large Individual Issues Offered October 1 through 5
Issuer

Type 3/

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

CORPORATE
United Aircraft Corp.
Conv.pfd.stk.
Allegheny Ludlum
Steel Corp.
Conv. deb.
Columbia Gas System,Inc.
Deb.

31.8
16.3
25.0

1981
1981

.h

U 3/h

U.00
k.70

Baa
A

2.20-3.20
2.15-2.85
1.90-2.1+0

A
Aa
Aaa

STATE & LOCAL GOVERNMENT
Detroit, Michigan
State of California
Buffalo, New York
OTHER
None

•



G.O. •
G.O.
G.O.

12.3
35.0
11. ii.

1957-81
1958-77
1957-71

3.09
2.80
2.35

H.lU

E-2

1/ Includes corporate and other security offerings of $15 million and over; State and local .government security offerings of $5
million and over.
2/ Includes foreign government and International Bank f o r Reconstruction and Development issues 0
3/ In the case of State and local government s e c u r i t i e s , G.O.
denotes'general obligation; Rev., revenue bonds; G.R., general obligations additionally secured by f a c i l i t i e s revenues; L»L., limited
l i a b i l i t y obligations secured by pledge of designated revenues.




H.Ik

Exhibit F
Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) l / ,
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
Corporate State and Other 2/
local govt.

Date of
computation
1955 - Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31
June 29
July 31
Aug. 31
Sept. 28

805
202
215
70
176
123
380
568
198

1

h37

2U7
369 '
315

81i3
330
205
121
327
220
132
173
332
81
131
359

Subsequent to
date shown
Corporate State and Other 2j
local govt.

__

;

50

—«•

——

37

-

909

kl2

230
85
376
233
1,013
818
as
567
1,096
1,202
1,009

2,205
1,650
756
618
917
785
811
832
9iil
690
726
958
1,197

50
—

„

• ——

37

Forthcoming Large Offerings, as of October 5
Issuer

Type

Amount
(millions Approximate date
of offering
of dollars)

CORPORATE
Southern Bell Tel. & Tel. Co.
Pacific Finance Corp.
Texas Eastern Transmission Corp.
Long Island Lighting Co.
Georgia Pacific Corp.
Johns-Manville Corp.
Consolidated Edison Co.
^National Steel Corp.
Ohio Power Co.
American Tel. & Tel. Co.
Seaboard Finance Co.
J . P. Stevens & Co.
Michigan Wisconsin Pipe Line Co.
Commonwealth Edison Co.




Deb.
Deb.
Pfd. stk.
Conv. pfd. stk.'

60.0
15.0
15.0
18.0

Common stk.
Common stk.

15.0
25.9

1st & ref. mtg.bds. Uo.o
1st mtg. bds.
55.0
1st mtg. bds.
28.0
Common stk.
572.6
S.F. notes
5.F. deb.
1st mtg. bds.
Pfd. s t k .

15.0

28.7
25.0

1*0.0

October 9
October 9
October 11
October 15
(rights expire)
October 16
October 17
(rights expire)
October 23
October 25
October 30
; November 5
(rights expire)
1956
1956
1956
1956

H.lU

F-2
Forthcoming Large Offerings, as of October 5 (Cont'd)
Issuer

Amount
Approximate date
(millions
of offering
of dollars)

Type

STATE AND LOCAL GOVERNMENT
State of South Carolina
San Bernardino Co., Calif.
Territory of Hawaii
Baltimore Co., Md.
Washington Co., Md.
Hagerstown, Md.
Charlotte, N. C.
State of Massachusetts
F t . Pierce, Florida
St. Louis Bd. of Education, Mo.
New Jersey Highway Authority
•KFlxnt, Michigan
Philadelphia, Pennsylvania
^Boston, Massachusetts
-^Territory of Hawaii
^State of Maryland
-^Orlando, Util. Comm., Fla.
*Salt River Project & Agricultural
Improvement & Power D i s t . , Ariz.
State of Ohio
State of Connecticut
Harris Co., Texas
Chicago Bd. of Education, 111.
^Florida State Bd. of Education
Jacksonville Expressway Authority
Florida State Turnpike Authority
Memphis, Tennessee
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New York State Thruway Authority

G.O.
G.O.
Highway rev.
G.O.
G.O. .
G.O.
G.O.
G.O.
Elec. & water rev.
G.O.
Rev.
G.O. .
. G.O.
.
G.O.
G.O.
~
G.O.
Elec. & water rev.
G.O.
L.L.

.

Expressway rev.
G.O.
G.O.
G.O.
Rev.
Rev.
Elec. rev. Rev.
Rev.
Rev.
Rev.
G.O.

15.0
6,0
12.5
21.0
8.0
5.8
5.2
57.6
5.1
5.5
25.0
5.U
58.8
5.8
12.0
8.7
7.5
10.0
25.0
75.0
6.0
10.0 .
9.3
U2.0
185.0
135.0
65.0
62.0
227.0
31.0
50.0

October
October
October
October
October
October
October
October
October
October
October
October
October
October
October
October
October

10
10
10
11
16
16
16
17
17
18
18
22
23
23
23
23
2k

October 2h
October 25
October 30
November 9
November lU
November 27
Fall
Fall
Winter
1956
1956
1956
1956
1956

OTHER
None
*—Included in table for f i r s t time.
1 / Includes corporate and other issues of <i>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 f o r reasons other than sale of issue: Southern New England
Telephone Company, $20.h million issue—-canceled because of disagreement with
the Connecticut Public U t i l i t i e s Commission as to p r i c e .