Full text of H.16 Capital Market Developments : October 3, 1956

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Not_for^ublication

DECONTROLLED AFTER SIX MONTHS

H.lit

October 3, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of publicly sold security issues was substant i a l l a s t week, particularly for corporate s e c u r i t i e s , but i s expected to be somewhat smaller this week; During the week ending
September 28, corporations sold large issues totaling $17U million
while State and l o c a l government offerings amounted to &30 million.
This week subscription rights expire on two convertible issues with
aggregate proceeds of # 8 million and a corporate debenture issue
for $25 million i s scheduled f o r f l o t a t i o n . Three State and local
governmei-t offerings totaling $5? million are expected.
Bond yields - The leveling-off in bond yields continued
l a s t week, with*only slight changes reported in the averages for
outstanding bonds. Yields on corporate, U. S. Government (old
series) and State and l o c a l government revenue bonds increased
s l i g h t l y , while yields on U. S. Government (new series) and Aaaand Baa-rated State and l o c a l bonds each declined one basis,point.
Estimated October volume - Corporate security issues during October are expected to t o t a l $650 million, the same as the e s t imated September volume and one-fourth l e s s than the volume in October l a s t year. I t should be noted that over half of the October
1955 volume was accounted f o r by a $637 million AT&T debenture issue;
t h i s year, AT&T i s financing through a stock i s s u e , subscription
rights to which expire i n November. Included in the estimated t o t a l
f o r t h i s October are large public issues totaling $315 million.
State and l o c a l governments are expected to o f f e r $625
million of bonds during October. This would be an increase of
three-fourths over the estimated September f l o t a t i o n s and a decline
of about one-third from l a s t year's October volume which included
the # 1 5 million I l l i n o i s Turnpike issue.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, continued to decline during the week ending
September 28, closing at 269.3—the lowest since l a t e May. Daily
figures through Wednesday of t h i s week indicate particularly sharp
increases in prices on Tuesday and KeBnesday which more than o f f s e t a
sharp decline on Monday.
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 B O N D YIELDS
Weekly

A

a

m

j
s
1953

d

m

®

j
s
1954

d

U. S
Corporate
Aaa 1 /

Date

m

j

s
1955

long-term 2/

Old

series

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

New s e r i e s

o

m

j

1956

s

d

Spread between
S t a t e and
U. S. Govt,
l o c a l g o v t . ( o l d s e r i e s ) and
C o r p o r a t e I S t a t e and
Aaa 3 /
Aaa
( l o c a l Aaa

(Per cent)
1953 - High

1956 - High
Low

3.07 (3/2)

3.15
2.78
2.71*
2.a
2.9b
2.62
3.22
2.80

August 31
September
September
September
September

3.19
3.53
3-55
3.56
3.58

3.21
3.22
3.21
3.15
3.17

1951* - High
1955 - High

7
ll*
21
28

' 3.U2
2.99
3.09
2.65
3.17
2.91

(6/19)
(1/9)
(1/8)
(ii/23)
(12/23)
(1/7)

3.58 (9/28)

(8/5)
(V7)
(9/7)

(2/17)

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

n.a.

3.03
2.89
3.26
2.92
3.23
3.25'
3.26

3.2k

3.23

(8/5)
(6/10)
(9/lil)
(2/3)

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

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

.38
.19
• 1*3
.32

.3k

.13
.la
.13

.28
.31
.31*
.1*1
.1*1

.81*
.30
.61
.29
.70
.51*
.68
.1*5
..59
.60
.58
.52

.55

Average term of bonds included i s 25-26

2 / Weekly a v e r a g e s of d a i l y f i g u r e s . The o l d 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 ,
m a r k e t a b l e 2 1 / 2 p e r c e n t bonds due o r f i r s t c a l l a b l e a f t e r 12 y e a r s t h r o u g h
September 1955# and t h o s e due o r 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 a v e r a g e
term t o f i r s t c a l l of t h e bonds i n c l u d e d d e c l i n e d f r o m lii y e a r s i n e a r l y 1953 t o
11 1 / 2 y e a r s i n e a r l y 1956. The new s e r i e s i s comprised of t h e 3 p e r c e n t bond
of 1995 and t h e 3 1/k p e r 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 are i n c l u d e d ; average
term i s 20 y e a r s .
Note.—Highs and lows are 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.




.

LOWER - GRADE BOND YIELDS
Weekly

CORPORATE B a a

STATE AND LOCAL GOVT. B a a
/I1
| Moody. |
.|

I " I

I

I

STATE AND LOCAL GOVT. REVENUE

\kUJ

L-U-kk

State and
local govt.
Baa 2/

Corporate
Baa 1 /

State and
local govt.
rev.y

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

3.89
3.50
3.71*
3.hh
3.63
3.U5
1.12
3.58

August 31
September
September
September
September

3.97
14.01
U.05

7
lli
21
28

I1.09

h.12

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(l/lii)
(9/28)
(3/9)

:

3.79
2.96
3.32
2.93
3.26
3.02
3.61
3.20
3.60
3.60
3.60
3.61
3.60

(6/25)
(1/8)
(1/7)
(8/5)
(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)
(1/1)
(8/13)
(12/30)
(1/7)
(9/7)
(2/2W

3.51
3.51
3.50
3.148
3.U9

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are
included; average term i s 20 years.
3/ Friday figures. Average rating of bonds included i s
between Baa and A; 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

5200p—

r '

"

'

r

" I ' M

j "

/

/

Mi

K/
AX)

Vv
X

J\

A

k
rn
r
1

V r

—

——

—

i
j
i

!

M i l l
........

Stock p r i c e
index 1 /

V

1

/

/

V( I J

T7T,, i,, 1,, 1

Trading
Common
volume 2 /
(millions y i e l d s 2 /
of shares) (per cent)

r1

>.

Stock market customer c r e d i t
Customers 1
Bank '
debit b a l - loans t o
ances h / "others" 5/ .
(Millions of dollars)

167.1 (1/2)
m . O (9/18)

1953 - High
Low
1951* - High
Low
195> - High
Low
1956 - High
Low

156.5
270.7
217.1*
295.5
257.1*

September
September U*
September 21
September 28

290.0
278.2
281.3
277.3
269.3

221.1* (12/31)
(1/6)
(12/30)
(l/lli)
(8/3)
(1/20)

2.5
0.9
3.7
1.1*
U.6
1.5
3.1
1.6

5.75
5.15
5.33
1*.20
lt.22
3.78
1*.21
3.86

1.9
2.0
2.0
2.1
2.0

1*.02

2,1*1*5
2,055
3,1*36
2,1*05
1,030
3,537
It,01*7
3,979

1,665
1,311*
2,388
1,653
2,805
2,517
2,810
2,71*0

3,979

2,785

n.a.

780
661*
1,01*8
71*6
1,21*1
1,018
1,267
1,167
1,191*
1,182
1,167

available.
1 / SEC index of 265 common s t o c k s , weekly closing p r i c e s , 1939*100; converted
to 1957-1*9*100 by Federal Reserve. The conversion f a c t o r i s 123.91.
2 / Averages of daily t r a d i n g volume on the New York Stock Exchange.
3 / Mooch's 200 common stocks; end of month f i g u r e s .
5 / End of month f i g u r e s f o r member f i r m s of the New York Stock Exchange which
c a r i y margin accounts; excludes balances secured by U. S. Government o b l i g a t i o n s .
SJ Wednesday f i g u r e s f o r weekly reporting 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 i n New York and Chicago.
Weekly reporting banks account f o r about 72 per cent of loans to o t h e r s .
Note.—Highs and lows are for in d iv id u a l s e r i e s and may be on d i f f e r e n t dates
for different series.




H.l4
• -«/••

Exhibit D
Corporate and S t a t e and Local Government
Security Offerings and Placements
(In millions of d o l l a r s )

1956
January
February
March .
April
May June
July August
September
. October
November
December
1 s t quarter
2nd quarter
3rd quarter
4th quarter
Year

Corporate
1 1955
1

New capital
1954

1956

State and l o c a l
1 1955
1

1954

535
312
538

396
411
565

377
490
735

427
350
641

734
748
853

909
335
747

V380
e/215
e/350

470
249
406

279
261
649

e/625

919
658
408

594
423
877

1,385
1,418
1,124
1,984
5,911

1,372
2,334
1,188
1,894
6,789

579
704
790

535
107
1,223

547
426
635

llOU
696
390

816
1,144
830

178
886
687

49 7
6#
814-2

e/1,120
e/700
e/850

597
6a
670

e/850

1,162 ^
6#
900

1,003
290
6o4

2,073
2,790
e/2,670

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

1,608
1,995
. 1,991
1,896
7,U90

•

•
1,490
1,603
945

•

Excluding; finance companies 2 /
1 s t quarter
2nd quarter
3rd quarter
4th quarter.
Year

1,617
2,520
e/2,470

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

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

.

e / Estimated.
'
1 / Includes $637•2 million AT&T convertible debenture i s s u e .
"2/ Total 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 sales and personal finance
companies.
i\iote.—Details may not add t o t o t a l s due to rounding.




H.llt

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

Month

Corporate

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

State and
l o c a l government

328
805
221
263
95
212
278
395
623
185
592
217
558

Other 2 /
__

231
716
ItOl
227
192
kkk
163
157
233
163
16U
35
18U

25
50

50
20
37

Large Individual Issues Offered during September
Type . £ /

Coupon
Amount
Offering
(mill long Maturity rate or
net i n t e r yield
of
dollars)
est cost

Rating

CORPORATE "
Gulf States U t i l i t i e s Co.
General Telephone of Cal.
Southern Cal. Edison Co.
Northern States Power Co.
Procter & Gamble Co.
Detroit Edison Co.
Tennessee Gas Transmis*
sion Co.
Tennessee Gas Transmission Co.
CIT Financial Corp.
Southern Pacific R.R. Co.
North American Aviation, Inc.
Virginia Electric &
- Power Co.

1st mtg.bds.
1st mtg.bds.
Common stk.
1st mtg. bds.
Deb.
Conv. deb.

15.0
20.0
2k. 3
15.0
70.0
59.8

1986
1986

k l/k
h 1/2

It. 20
U.lii

Aa
' A

1986
1981
1971

k 1/k
3 7/8
3 3/h

U.17
3.88
3.7 5

Aa
Aa .
.A

1st mtg.bds.

50.0

1976

U3/k

U.70

A

Pfd. stk.
Deb.
1st mtg. bds.

20.0
75.0
35.0

1971
1983

k 1/k
5 lA

k»32
5.2 5

Baa

Cap. stk.

U3.5

1st mtg. bds.

20.0

1986

k 1/8

U.01




. Aa

H.3JU
Large Individual Issues Offered during September (Cont'd)
Issuer

Type 3 /

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

CORPORATE (Cont'd)
Commercial Credit Co.
Notes
New England Tel. & TeLCo. Cap. s t k .
P a c i f i c Tel. & Tel. Co.
Common s t k .

75.0
18.9
16.2

1971

b 1/h

b.33

mmm*

25.0

1986

3.52

3.bS

A

STATE & LOCAL GOVERNMENT
Port of New York Auth.
Rev.
New York
Allegheny Co. I n s t .
D i s t . , Pa.
G.O.
Oakland Unified School
G.O.
D i s t . , Cal.
New York, New York
G.O.
State of Michigan
L.L.
Los Angeles School Dists.,
G.O.
Calif.
Nassau Co., New York
G.O.
^ K a n s a s City, Mo.
Water rev.
^Kalamazoo School D i s t . ,
Michigan
G.O.
Washington State Toll
Bridge Authority
Rev.
Westchester Co., N. Y.
G.O.
Cook Co., High School
D i s t . , No. 209, 111.
G.O.

A

6.3

1957-86

3.17

2.20-3.20

10.0
30.0
25.0

1957-81
1957-71
1957-79

2.85
3.28
3.0U

2.10-2.90 Aa
2.25-3.30 A
2.15-3.00 . Aa

29.0
19.6
9.5

1957-81
1957-85
1961-86

. 3.08
3-3b
2.99

2.00-3.10
2.25-3.35
2.50-3.00

Aa
A
Aa

10.0

1957-82

2.69!

1.90-2.70

Aaa

5.U
7.3

1987
1957-81

U.U6
2.63

It. 35
1.90-2.70

Aa

6.8

:1957-75

3.7k

2.60-3.70

Baa

——

OTHER
None
State 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 million 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 issues.
3 / In the case of State and l o c a l government s e c u r i t i e s , G.O. denotes general
obligation; Rev., revenue bonds; G.R., general obligations 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; L.L., limited l i a b i l i t y obligations secured by pledge of
designated revenues.




H.lU

Exhibit F

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues

1 9 # - Sept. 30
Oct. 31
Nov. 30
Dec. 30
1 9 # - 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
U37
2h7
369
315

__

8U3
330
205
121
327
220
132
173
332
81
131
#9

50

37
'

Subsequent to
date shown
State and Other 2/
l o c a l govt.

I
!

During month following
date shown
State and Other 2 /
Corporate
l o c a l govt.

Date of
computation

—

.

909
Itl2
230
85
376
233
1,013
818
hhd
567
1,096
1,202
1,009

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

50

37
—

Forthcoming Large Offerings, as of September 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 A i r c r a f t Corp.
Allegheny Ludlum S t e e l Corp.
Columbia Gas System, Inc.
Southern Bell Tel. & Tel. Co.
P a c i f i c Finance Corp.
Seaboard Finance Co.
aTexas Eastern Transmission Corp.
Long Island Lighting Co.
-^Georgia P a c i f i c Corp.
*Johns-Manville Corp.
Consolidated Edison Co.
Ohio Power Co.
Southern New England Tel. Co.
A
w

American Tel. & Tel. Co.




Conv. pfd. s t k .

31.8

Conv. deb.

16. JU

Deb.
Deb.
Deb.
S.F» notes
Pfd. s t k .
Conv, p f d . s t k .

25.0
60.0
25.0
15.0
15.0
18.0

Common s t k .
Common s t k .

15.0
25.9

1st &ref. mtg.bds,
1st mtg. bds.
Common s t k .

40.0
28.0
20. k

Common s t k .

580.0

October 2
( r i g h t s expire)
October 2
( r i g h t s expire
October U
October 8
October -9
October 10
October 10
October 15
( r i g h t s expire)
October 16
October 17
( r i g h t s expire)
October 23
October 30
November 2.
( r i g h t s expire)
November 5
( r i g h t s expire)

H.lU

F-2
Forthcoming Large Offerings, as of September 28 (Cont'd)

^

Issuer

Type

Amount
(millions Approximate date
of offering
of dollars)

CORPORATE (Cont'd)
J. P. Stevens & Co.
- Michigan Wisconsin Pipe Line Co.
-^Commonwealth Edison Co.

S.F. deb.
1st mtg. bds.
Pfd. stk.

ko.o

G.O.
G.O. .
G.O.
G.O.
G.O.
Highway rev.
G.O.
G.O.
G.O.
G.O.
G.O.
Water rev.
G.O.
G.O.
L.L.
G.O.
G.O.
G.O.
Rev.
Rev.
Elec. rev.
Rev.
Rev.
Rev.
Rev.
Rev.
G.O.

12.3
35.0
11. u
15.0
6.0
12.0
21.0
8.0
5.8
. 5.2
58.0
5.1
5.5
58.8
25.0
75.0
6.0
10.0
12.0
185.0
135.0
65.0
62.0
227.0
. 31.0
25.0
50.0

28.7
25.0

1956
1956
1956

STATE AND LOCAL GOVERNMENT
Detroit, Michigan^
State of California
•^Buffalo, New York
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
*Ft. Pierce, Florida
*St. Louis Bd. of Education, 111.
^•Philadelphia, Pennsylvania
State of Ohio
•frState of Connecticut
^Harris Co., Texas
Chicago Bd. of Education, 111.
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 Jersey Highway Authority
New York State Thruway Authority

October 2
October 3
October 4
- October 9
October 9
October 9
October 10
October 16
October 16
October 16
October 17
October 17
October 18
October 23
October 25
October 30
November 9
November lU
Fall
Fall
Winter
1956
1956
1956
1956
1956
1956

OTHER
None
#—Included in table for f i r s t time.
1/ Includes corporate and other issues of $15 million and. over; State and
local government issues of $5 million and over.
j?/ Includes foreign government and International Bank f o r Reconstruction
and Development•issues.
Note.—Deletions f o r reasons other than sale.of issue: None.




H.lh

Exhibit G
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date
1952
1953
195U
1955

average
average
average
average

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned
yields
(per cent)
(per cent) seasoned yields
(basis points)
(basis points)
3.16
3.U6
3.03
3.23

1956 - January
February
March 8
16
23

.

13
16
3
9

None
*3.15
3.19

3
5

3.37

.18

3.77

ho

3.53
3.52

19
18

3.62
3.70

26
33

it.07
it. 20
It. 3.7
li.01

52
62
58
37

None
3.23

-5

3.35
.

30

,
•
April
U
h
11
25
May 9
16
2h
June 8
20
July 3
18
25
August 1
30
September 11
13
25

12
26
>3
12

3.35
3.78
3.12
3.33

"

7

3.55
3.57
3.60
3.67

25
23
26
29

3.80
3.73

32
2k

3.75
3.82

27
28

U.00

.

h3

'

1/ Covers only 30-year f i r s t 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 f o r the same day. The number of new issues included in the
monthly averages varies from 2 t o h except f o r October 1S$H when 6 A-rated .
issues were included. Average maturity f o r the seasoned issues varies from 26
to 28 years.

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