Full text of H.16 Capital Market Developments : October 13, 1955

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Not f o r P u b l i c a t i o n DECONTROLLED AFTER SIX MONTHS
H.llt

' October 13, 1955
CAPITAL MARKET DEVELOPMENTS

Only one l a r g e p u b l i c o f f e r i n g f o r new c a p i t a l was f l o a t e d
l a s t week—a 35 m i l l i o n d o l l a r d e b e n t u r e i s s u e . No l a r g e c o r p o r a t e
issues- a r e scheduled f o r o f f e r i n g t h i s week; however p r o c e e d s from
t h e American Telephone and Telegraph 637 m i l l i o n d o l l a r c o n v e r t i b l e
d e b e n t u r e i s s u e w i l l be i n c l u d e d i n t h e t o t a l s i n c e s u b s c r i p t i o n
r i g h t s e x p i r e on October 1 3 . Although a s i g n i f i c a n t p r o p o r t i o n of
t h e r i g h t s had been e x e r c i s e d p r i o r t o t h e f i r s t of October, t h e
e n t i r e amount i s counted a t t h e time of t h e e x p i r a t i o n d a t e , S t a t e
and l o c a l governments a r e scheduled t o o f f e r l a r g e i s s u e s t o t a l i n g
112 m i l l i o n d o l l a r s .
Two of t h e l a r g e i s s u e s s o l d t h i s week r e p r e s e n t s e c u r i t i e s on which b i d s had been r e j e c t e d when f i r s t o f f e r e d t h i s summer.
On October 10, t h e Board of Commissioners of Cook County, I l l i n o i s
s o l d 1*0 m i l l i o n d o l l a r s of g e n e r a l o b l i g a t i o n bonds a t a n e t i n t e r e s t c o s t of 2,5)6 p e r c e n t compared t o t h e c o s t of t h e r e j e c t e d b i d
of 2 .69 p e r c e n t made i n mid-August. The follov/ing day, t h e New York
S t a t e Thruway A u t h o r i t y a c c e p t e d a b i d w i t h a n e t i n t e r e s t c o s t of
2 c5>l p e r c e n t on i t s 50 m i l l i o n d o l l a r g e n e r a l r e v e n u e i s s u e . I n
J u l y t h e s o l e b i d on an o f f e r i n g of 125 m i l l i o n d o l l a r s w i t h t h e
same m a t u r i t y would have r e s u l t e d i n a n e t i n t e r e s t c o s t of 2 . 7 9
p e r c e n t . Both o f f e r i n g s were f a v o r a b l y r e c e i v e d by i n v e s t o r s .
Bond y i e l d s - U. S . Government l o n g - t e r m bond y i e l d s d e c l i n e d t h r e e b a s i s p o i n t s l a s t week. Y i e l d s on o t h e r o u t s t a n d i n g
bonds remained s t a b l e .
In g e n e r a l , bond y i e l d s have f a l l e n d u r i n g t h e l a s t few
weeks frcm t h e 1955 highs which were r e a c h e d in e a r l y September.
D e s p i t e t h e d e c l i n e , y i e l d s a r e s t i l l above t h e averages p r e v a i l i n g
l a s t s p r i n g , b e f o r e t h e summer r i s e o c c u r r e d . C o r p o r a t e y i e l d s a r e
11 b a s i s p o i n t s h i g h e r and S t a t e and m u n i c i p a l Aaa and Baa bond
y i e l d s a r e 19 and 15 b a s i s p o i n t s h i g h e r , r e s p e c t i v e l y , t h a n l a s t
March l e v e l s .
Stock p r i c e s - The SEC i n d e x of 265 common s t o c k s dropped
6 . 7 p o i n t s d u r i n g t h e week ending October 7 t o 251,2 i n moderate
t r a d i n g volume, According t o d a i l y i n d e x e s , p r i c e s d e c l i n e d s h a r p l y
through Tuesday of t h i s week b u t . r e g a i n e d some of t h e l o s s on Wednesday.
More d e t a i l e d i n f o r m a t i o n c o n c e r n i n g r e c e n t c a p i t a l market
developments w i l l be fouiM i n t h e a t t a c h e d e x h i b i t s .

B u s i n e s s Finance and C a p i t a l Markets S e c t i o n ,
D i v i s i o n of Research and S t a t i s t i c s ,
of t h e F e d e r a l Reserve System.


Board of Governors


- EXHIBIT A

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

!

Corporate
Aaa 1/

Date

V'Y—

U. S. Govt,
long-term 2/

State and local
govt., Aaa 3/

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

(Per cent)

1 9 # - High
Law

3.03
2.91
3.1*2
2.99
3.09
2.85
3.Hi
2.91

September
September
September
September
October 7

3.lit
3.13
3.13
3.12
3.12

1 9 # - High
Lew
1953 - High
1954 - High

9
16
23
30

(1A)
(2/15)
(6/19)
(1/9)
(1/8)
(it/23)
(9/9)
(1/7)

2.79 (12/27)
2.56(5/17)
3.15 (6/6.)
2.78 (12/26) 2.71* (1/9)
2.1*1* (8/7)
2.91* (8/5)
2.62 (1/7)

2.00 (10/23)
1.65 (5/1)
2.73 (6/25)
1.98(1/8)
2.21 (6/10)
1.90 (9/2)
2.3U (9/8)
2.05 (5/26)

2.88
2.89
2.89
2.86
2.83

2.31*
2.32
2.27
2.27
2.27

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

•37
• .19
.38
.19
.1*3
.32
.31*
• .13
.26
.21*
.2k
.26
.29

•

.51*
.57
.62.
"g
. .56

1/ Vfeekly average of daily figures. Average terra of bonds included i s 25-26
years..
2/'Weekly average of daily figures; old series. Average term to f i r s t call
of bonds included i s 13-ll; years.
3/ Thursday figures. Only general obligation bends are includedj average
term i s 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

L O W E R - G R A D E B O N D YIELDS
Per cent p e r

Weekly

Corporate
- Baa 1/

State and
local govt.
Baa 2/

State and
local govt.
rev. 3/

(Per cent)
1952 - High
1953 - High
Low
1954 - High
1955 - High
September
September
September
September
October 7

9
16
23
30 .

3.63
3.48
3.89
3.50
3.74
3.a
3.59
3.45

(V4)
(5/16)
(9A8)
(1/2)
(1/8)
(12/31)
(10/7)
(1/14)

2.98 (10/23)
2.48 (4/17)
3.79 (6/25)

2.96 (1/8)

3.32 (1/7)
2.93 (8/5)
3.25 (9/22)

3.02 (1/6)

3.59 '

3.25

3*58

SSF
3.23
3.23

1:11

2.69
2.27
3.27
2.71
3.00
2.72
2.95
2.76

(12/19)
(4/25)
(6/26)
(1/2)
(1/1)
(8/13)
(9/2)
(1/7)

2.93
2.92
2.90
2.90
2.90

y Weekly average of daily figures. Average term of bonds
included i s 25-26 years.
2 / Thursday figures. Only general obligation bonds are
included; average term is 20 years.
y Friday figures. Average rating of bends included i s
' between Baa and Aj average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock price
index 3/

Common
volume 2 / .
(millions yields 3 /
of shares) (per cent)

Stock market customer credit

$

"others" %/

(Millions of dollars)
16$.3
151.7
167.1
144.0
221.4

(32/26)
(10/24)
(1/2)
(9/18)
(32/31)

2.0
0.9

2.5

156.5 (1/6)

0.9
3.7
1.4
4.6

254.5
263.6
269.7
257.9

1.8
2.9
2.It
4.3
2.1

269.7 (9/23)
217.1 ( l M )

251.2

1.5

5-77
5.13
5.75
5.15
5.33
4.20
4.22
3.78

1,986
1,804
2,445
2,055
3,436
2,405
3,911
3,537

.1,314
2,388
1,653
2,734
2,517

3.91
3.93

3,865

2,710

1,332
1,241

1,665

656
552
780
661*

1,018

716
1,177
1,018

y g
1,173
1,161

"
n.a.—Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19Cj-it9»100 by Federal Reserve. The conversion f a c t o r i s 123.91.
2 / Averages of daily trading volume on the New York Stock Exchange.
3 / Moody's 200 common stocks; end of month f i g u r e s .
h j End of month f i g u r e s for member f i r a s of t h e New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government obligations.
jj/ Wednesday figures for weekly reporting menber banks. Excludes a l l loans
for purchasing cr carrying D. S. Governments f o r 1952; since 1953 only these loans
at banks in New York and Chicago are excluded. TTeekly reporting banks account f o r
about 72 per cent of loans to others.
Note.—Highs and lows are for individual s e r ie s and may be on d i f f e r e n t dates
for different series.




Exhibit D
C o r p o r a t e and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of. d o l l a r s )

1955
January
February
March
April
May

sue

1,36
1,261

it?l»
903 •
697

July
August
September

53!
e/750
i/625

October
November
December

e/1,300 y

1st quarter
2nd q u a r t e r
3rd quarter
4th quarter
Tear

2,2li3
2,09k
e/1,905

Corporate
195k
1

. New c a p i t a l
S t a t e and l o c a l
!
1954
1

1953

1955

547
426
%

623
623
666

535
312
- 538

hll
565

390
360
426

497
656
842

779
675
1,123

427
350
641

73k
748
853

329
649
434

909
332
747

2*83
325
753

0 ,

279
261
649

519
259 .
475

1,003
290
601

577

e/1,050

594
423
877

453
408
774

1,385
. 1,418
e/1,095

1,372
2,334
1,183
1,894
6,789

1,176
1,412
1,253
1,636
5,477

1,608
1,993
1,991
1,896
7,490

4?

0

i j $ 2 /
1,912
2,578
I S
8,495

v

1953

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

1,791
1,912
3/1,730

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

1,669
1,991
a s
7,227

1 / I n c l u d e s 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 d e b e n t u r e i s s u e .
2 / I n c l u d e s 602.£ 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 d e b e n t u r e i s s u e .
2 / 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.
N o t e . — D e t a i l s may n o t add t o t o t a l s due t o r o u n d i n g .




H.Uj.

Exhibit E
Large Public S e c u r i t y Issues f o r He1.? C a p i t a l
(Other than Ue S . Treasury) 1/
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )

Month

Corporate

195k - September
October
November
December
1955 - January
February
March
- April
May
. June
July
August
September

S t a t e and
l o c a l government
455
388
268
689
341
107 '
337
238
152
r/403
~ 278
r/65
r/234

36b

433
0
121
liil
63
750
173
W3
175
101
405
328

.

Other 2 /

30
35
15

Large I n d i v i d u a l I s s u e s Offered October 3 through 10
Issuer

Type 3 /

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

CORPORATE
Public Service E l e c t r i c
and Gas

Deb.

35.0

1975

3 1/2

3.35

STATE AMD LCCAL GOVERNMENT

r/ R
e
v
i
s
e
d
.
'
'
;
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of 1£ m i l l i o n d o l l a r s and
over3 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 over*
2 / Includes 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 Reconstruction and
Development i s s u e s .
3 / In the 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 general
o b l i g a t i o n ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured by
f a c i l i t i e s revenues; and, 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 secured by pledge of
designated
revenues.
for FRASER

Digitized


H.Ik

Exhibit F
Forthcoming Large Public Security Offerings f o r Nevr 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 following
date shown
S t a t e and Other 2 /
Corporate
l o c a l govt.

Date of
computation
1954 - S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1955 - J a n . 31
Feb. 28
Mar o 31
Apr. 29
May 31
June 30
J u l y 29
Aug. 31
S e p t . 30

343
15
94
184
16
710
211
425
160
67
407
222
805

383
436
661
567
682
524
208
116
3#
344
ICO
184
843

Subsequent t o
date shown
Corporate J S t a t e and Other 2 /
1local govt,

30

—'

4l4135
246
216
422
1,395
922
1,141
850
830
1,135
920
909

2,158
1,957
2,682
2,144 .
1,961
1,978
2,009
1,917
1,861
1,845
2,018
1,971
2,205

__
30
30
/35

—

Forthcoming Large O f f e r i n g s , as of October 7
Issuer

Type

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

CORPORATE
American Telephone and Telegraph
Southern B e l l Telephone & Telegraph
Burlington I n d u s t r i e s
New York S t a t e E l e c t r i c and Gas
P a c i f i c Gas and E l e c t r i c
Long I s l a n d Lighting
Southern New England Telephone
and Telegraph
^United Gas
New England Telephone & Telegraph
Southern Co.
Southern C a l i f o r n i a Gas
*New Jersey B e l l Telephone
Freedom Insurance Company

Conv. deb.
Deb.
Sub. conv. deb.
1 s t mtg. b d s .
Pfd. stock
1st mtg. b d s .
Cornon stock
1 s t mtg. b d s .
Deb.
Common stock
. Bonds
Deb.
Common stock

637.2

30.0

30,0
15.0
25.0
15 cO
17.9

20.0
30c0

30.0
40,0
25.0
22.0

October
October
October
October
October
October

13
17
19
19
25
26

October 28
November 9
Noveiober 15
November 22
November
December lit
1955

STATE AND LOCAL GOVERNMENT
Cook County, I l l i n o i s
S t a t e of Tennessee
iionterey Co., C a l i f o r n i a




G.O.
G.O.
G.O.

40,0
8.6
7.0

October 10
October 10
October 11

H.lli

. F-2
Forthcoming Large Offerings,, as of October 7 (Cont'd)
Issuer

Type

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

STATE AND LOCAL GOVERNMENT (Cont'd)
New York S t a t e Thruway Authority
Orleans P a r i s h , Louisiana
I l l i n o i s Turnpike Authority
P h i l a d e l p h i a , Pennsylvania
J e r s e y C i t y Sewerage Authority
C o r n i n g , New York
"Public Housing A u t h o r i t i e s
Texas Turnpike Company
Cleveland, Ohio
F l o r i d a S t a t e Board of Education
->7jOs Angeles, C a l i f o r n i a
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
Commonwealth- of Massachusetts
C a l i f o r n i a T o l l Bridge Authority
Connecticut Expressway
Inter-American Center Auth., F l a .
Michigan Turnpike Authority
C a l i f o r n i a Toll Bridge Authority
Louisiana Turnpike Commission
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e T o l l Bridge Auth.

G.R.
GcO.

Rev.
G.O.
Rev.
Rev.
n„a«
n=a.
n P a«
n.a„
n.a*
Rev.
Rev,
Rev.
Rev..
Rev.
Rev.
Rev.
Rev.
Rev.

50.0
6.0
to.O
39.9

13.0

5.1
122.3
137.0
9.0

10.6

25.0

60.0

7.5
159.9
ii6 o 0

100.0

25.0
186.0
235.0
100 oO
ll|6,0

62.0

227.0

October 11
October 13
October 18
October 18
October 19
October 19
October 26
October 26
October 27
November 1
November 1
November 2
November 16
November 16
December 13
1955
1955
1955-56
1955-56
1955-56
1955-56
1955-56
1956

OTHER
None
n.a.—Not a v a i l a b l e .
*—Included i n t a b l e f o r f i r s t t i m e .
1 / Includes corporate and other i s s u e s of 15 m i l l i o n d o l l a r s and over; 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 over.
2 / Includes 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 Reconstruction and
Development i s s u e s .