Full text of H.16 Capital Market Developments : October 9, 1959

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Not f o r Publication DECONTROLLED AFTER SIX MONTHS
H.lU

October 9, 1959
CAPITAL MARKET DEVisLOPMfcJtfTS

During the week ending October 9, corporations sold large
. issues, including the expiration of subscription rights, totaling
S6U million. One large local government issue f o r iy>26 million was
also sold. The calendar for this week includes corporate offerings
amounting to Si25 million and State and local government bond issues
with aggregate proceeds of $51 million.
Bond yields - Changes in yields on outstanding bonds were
mixed l a s t week. Yields on State and local and U. S. Government
obligations declined. Yields on lower grade corporate bonds continued
to increase, while those for high-grade corporates remained stable
f o r the f i r s t time since they began to r i s e in mid-August.
FNMA secondary market operations - Further pressures in
residential mortgage markets were indicated by secondary market operations of the Federal National Mortgage Association in August. Total
offerings to FNMA increased f u r t h e r despite the f a c t FNMA had reduced
i t s mortgage commitment and purchase prices early in July and again
in mid-August. FNMA purchases during August were the largest in
twenty-three months, and i t s sales continued to be negligible.
Stock prices - Stock prices fluctuated within a narrow range
l a s t week. Standard and Poor's index of 500 common stocks closed at
57.00 on October 9, 0.20 points lower than a week e a r l i e r . Trading
a c t i v i t y slackened somewhat with the daily volume averaging 2.1; million
shares a day.
More detailed information concerning other recent capital
market developments i s presented in the attached exhibits.

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,




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




H.llt fcxh.i.bit"B
Tables l'or tixhibifc A
High-grade bond Yields
Date

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

State and
local govt,
Aaa 3/

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

(Per cent)
2.85 (4/23)
Ill (9/27)

2.15 (0/6)

19514 - Low
1957 -High
1958 - High
Low
1959 - High
Low

U.13 ( 1 0 / 1 0 )

3.55 (5/2)
U.57 (10/9)
b . 0 9 (1/9)

3.8b
3.07
ii.30
3.83

Sept. 11
Sept. 18
Sept. 25
Oct. 2
Oct. 9 2/

ii.ii9
b.52
h.Sk
h.57
1.57

U.25
b.30 1.27
b.21
h.lh

3.76 (10/18)

(12/26)
(b/25)
(9/18)
(1/2)

1.90
3.U5
3.31
2.6b
3.65
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(9/2W
(3/26)

.30
.60
.51
.22
.39

3.59
3.63
3.65
3.6b
3.61

.16

.30
• b7
.72
.3b
.92
.57

.2b
.22
.27
.36
.b3

.67
.62
.57
.53

.66

Lower-grade Bond Yields
Date

Corporate
Baa 1/

State and
local govt.
Baa y

3.bb
5.10
k.96
1.51
5.28
b.83

2.93 (8/5)

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
195b - Low
1957 - High
1958 - High
Low
1959 - High
Low
S e p t . 11
Sept. 18

Sept. 25

Oct. 2
Oct. 9 p /

5.15
5.18
5.22
5.26
5.28

(12/31)
(11/29)
(1/3)
(7/11)
(10/9)
(b/17)

b . 5 l (a/29)

b.3b
3.6b
b.b6
3.92
h.Ul

li. hU
b.bb

h.hh

u.bl

(9/11)
(5/D
(7/2)
(3/26)

.52
1.27
1.20
.77

.96
1.21
1.11
.93

.77

.98

.65
.66

.82

.56

.68
.69
.71

.79

.81
.79
.80
.80

g/ Preliminary.
1/ Weekly average of daily figures. Average term of bonds included i s 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or morn.
2 / Thursday figures. Only general obligation bondc are included; average term
i s 20 years.
Note.—highs and lows are for individual series and may be on different dates for
d i f f e r e n t series.




STOCK

MARKET

...

1956
FEDERAL

1957
NATIONAL

SECONDARY

MARKET

MORTGAGE
OPERATIONS

/




PURCHASES

1958
ASSOCIATION

1959

Exhibit D - Tables for Exhibit C
Stock Market
Stock price
index 1/

1953-1958 - High
Low
1959 - High

5l.il
22.95
60.51
514.37

August
September
Sept. 18
Sept. 25
Oct. 2
Oct. 9 e /

59. ho
57.05
56.09
56.73
57.20
57.00

Trading
volujue 2/
yields 2/ (millions
(per cent) of shares)

(12/24/58)
(9/18/53)
(7/31)
(2/6)

Common

Stock market customer
credit
Customers1
Bank
Total debit bal- loans to
ances 4/ "others" 5/
(Millions of dollars)

3.30
6.25
3.08
3.3k

4.9
0.9
4.3
2.1

4A92 . 3,285
1,314
2,055
3,388
4,721
4,526
3,253

3.13
3.26
3.32
3.28
3.21
3.?5

2.4
2.7
2.4
3.2
2.7
2.1*

4,529
n.a.
n.a.
n.a.
n.a.
n.a.

1,317
669

1,332 1,277
1,210 1,193
1,259
1,193
1,240
1,222
1,193

3,270

n.a.
n.a.

n.a.—Not available.
g/ Preliminary.
1 / Standard and P o o r ' s T m p o s l t e Index of 500 common s t o c k s , weekly c l o s i n g p r i c e s , 1941-43=10. Monthly data,
a r e a v e r a g e s of d a l l y f i g u r e s r a t h e r t h a n of F r i d a y s ' o n l y . Highs and lows a r e f o r F r i d a y s ' d a t a o n l y .
2 / S t a n d a r d and P o o r ' s composite s t o c k y i e l d based on Wednesday d a t a converted t o weekly c l o s i n g p r i c e s by
F e d e r a l R e s e r v e . Y i e l d s shown a r e f o r d a l e s on which p r i c e index r e a c h e d i t s h i g h or low.
3 / Averages of d a i l y t r a d i n g volume on t h e New York Stock Exchange.
4 / 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 c a r r y margin a c c o u n t s ; e x c l u d e s
b a l a n c e s secured by U. S . Government 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 l o a n s f o r p u r c h a s i n g or c a r r y i n g U, S.
Government s e c u r i t i e s • P r i o r . ^ f i T J u l y 1 , 1959, such l o a n s a r e excluded only a t banks i n New York and Chicago.
Weekly r e p o r t i n g banks account f o r about 70 p e r c e n t of l o a n s t o o t h e r s . For f u r t h e r d e t a i l see B u l l e t i n .

F e d e r a l N a t i o n a l Mortgage A s s o c i a t i o n Secondary Market O p e r a t i o n s 1 /
•Estimated O f f e r i n g s t o 1'NmA
Immediate I Standby
Total
purchase j commitment

Purchases
by
l-tiMA

Sales
by
TN
' MA

( M i l l i o n s of d o l l a r s )

1958 - Aug.

Sept.

Oct.
1959

Nov.
Dec.
- Jan.
Feb.
Mar.
Apr.
May

10.1
23.8
57.3
40.7
39.7
37.7
44.4
52.4
57.8
80.6
84.4
109.5
123.1

9.3
22.0
49.6
392
35.3
33.9
41.2
49.8
5o.i
73.4
76.6
9%.5
109.8

.7
1.8
7.7
1.5
4.4
3.8
• 3.2
2.6
7.7
7.2
7.8
17.1
13.3

,

7.0
6.0
10.8
20.0
33.2
33.7
27.6
36.5
39.6
38.3
- 49.4
62.3
71.7

15.5
7.9
.8
1.1
.9
.3
.8
1.1
.6
.3
.3

ammmmeg
July
Aug.


oonwltmrnt o o n t r n o t * . Date. c r e l u d e
http://fraser.stlouisfed.org/
L i q u i d a t i n g Programs.
Federal Reserve Bank of St. Louis

FNMA a c t i v i t y under S p e c i a l A s s i s t a n c e and Management and

Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1959

Corporate 1/
1 1958
1

New c a p i t a l
1957

1959

State and local 2/
1 195b 1 1957

January
February
March

81*0 •
7k5
631

728
857
1/
1,5532/

1,060
1,065
1,320

636
856
61*5

812
953
511

7k2
572
506

April
May
June

899
791
87b

1,11*0

597
887

931
765
1,153

931
592
981

798
895
551

765
5k6
393

1,107
5W
1,11k

1,003
92k
973

567
' Jg/k98
e/525

1*03
651

806

529
581*
k31

862
518
920

1,090

e/600

1,076

1*56
l*7k
k35

698

3,139
2,623
2,760
2,300

3,hh5
3,lk9
2,899
2,95k

July
August
September

f r e

e/650

October
November
December

e/800

1st
2nd
3rd
l*th

2,216

quarter
quarter
quarter
quarter

e/1,975

1 s t half
Three quarters
Year

. 4,780
e/6,755

5,762
8,52?
10,823 .

789

6,59k
9,k93
12,1*1*7

.2,138
- 2,501*
e/1,590
k,61*2

2/6,232

698

633

2,276

1,820

1,365

1,860

a
2,029

k,520
6,380
7,71*6

3,521*
5,069
7,099

2,21,1*

Excluding finance companies hj
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

Year -

2,011

2,1*09
e/1,675
J

2,899
2,5%
2,731
2,213

3,237
2,889
2,582

10,129

11,518

2,610

e/ Estimated.
1 / Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
y Total new capital issues excluding offerings of sales and consumer finance
companies.




-

Exhibit F

1 . lii

Other Security Offerings 1/
(In millions of dollars)
Long-term
Foreig n government 2/
Federal agency' 3/
1950
|
19 59 1 1958
1959 1
1 1957
| 1957
Januaiy
February
March
April
May
June
July
August
September

77
59
2

V

56
50

1*2

7h

81*
1*9
30

196
53
—

199
175
__

28
7
30

161*

k
60
1

%20

507

2,321

Year

992

58
7h

.

—

January
Februa ry
March

190
128
295

233
1*60
273

326
1,55
11*7

April
May

1*11

563

357
351*
261*

205
337
153

289
123
369

272
272
252

231
1*15
21*3

303
9U
1+59

3,910

3,27U

&A62

October
November
December
Year

60

—

—

- -

215

—

100

—

Short-term
State and local government 1|/

2#

523

9
5
17
123

21*6

—

125

198
120

October
November
December

July
August
September

—

123
1+8
U2

139

72

1,163
251

Federal agency 3/
359
500
1*89
1*86

675
289

727
365

1

—

572

371
208
11*1*

638
1*30
505

209
161
329

336
1*69
501

1437
206
330

221*
370
512

1*51*
ill*
137

1,238
255
116

3,098

5,51*3

1/ Data presented in t h i s exhibit differ'from those in Exhibit E in t h a t refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and
t h e i r subdivisions and by international organizations. Source: Securities and Exchange Commission.
Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or c e r t i f i c a t e s and Public
Housing
Authority notes. In some instances PtiA notes included may have a somewhat

longer tenn than one year. Source: Bond, Buyer.



K.Ik

Exhibit G
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

Month

1958 - September
October
November
December
1959 - January
February
March
April
May

State and
local government

172
259
229
335
551

22?

305
369
3k0
215
359
3h2
281
110
363
199

1

. J

18
209
100
79
17h
35
176
20
50
60
50
98
175

288

825

259

July
August
September

Other 2/

369

563
258
635
19k
263

214

Large Individual Issues Offered October 1 through ?
Issuer
CORPORATE
Boston Edison Co.
So. hew England Tel. Co.
Columbia Gas System, Inc.
Northern Natural Gas Co.

type 2/

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

1st mt%. bds.
Com. stk.
Deb.
Pfd. stk.

15.0
18.8
25.0
20.0

1989
198b

-5.17

5 3/8

5-38

Aaa .
.
A

/.

STATE AND LOCAL GOVERNMENT
Port of New York Authority
Wayne Co., Mich.

5 1/U

Rev.-Ut.
G.O.

OTHER
None




25.0 1989
26.0 1962-68/65

h.tf
h.08

.

L.31
3.50-4.00

A
A

H.lli

Footnotes
n.a.—Not available,
1/ Includes corporate and other security offerings of $15 million
and over; State and local government security offerings of $.0 million and
over.
2/ Includes foreign government and International Bank f o r
Reconstruction and Development issues and non-guaranteed issues by Federal
agencies.
In the case of State and local government secur ities, G. 0.
denotes general obligations; Rev.-Ut., revenue obligations secured only
by income from public u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only
by revenue from q u a s i - u t i l i t i e s ; Rev.-S.T., revenue bonds secured by revenue
from specific taxes only; Rev.-Rent., revenue bonds secured solely by
lease payments.




Exhibit H

H.ili

Forthcoming Large Long-term Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 3 /
Expected Proceeds from Forthcoming Large Issues
During month following

Date of
computation

Corporate State and
l o c a l govt.

1958 - Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30
Feb. 2?
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30

113
204
301
210
270
198
396
2U6
287
• 165
238
198
37k

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

295
258
229
261
551
292
550
. 25k
21*7
116
. 356
385
270

216
326
401
370
365
279
476
31*6
332
272
305
517
69k

71
75
45
20
50
50
25
—

5214
675 .
683
515
856
481
761
517
7611
500

71
75
45
20

50
50

I1O6

402
470

25
.

—

Forthcoming Large Offerings, as of October 9
Issuer

Type

Amount
| Approximate date
(millions
of o f f e r i n g
of dollars)

CORPORATE
Boston Edison Co.
Philadelphia E l e c t r i c Co.
American E l e c t r i c Power
Southern Bell Telephone & Telegraph
Texas Gas Transmission Corp.
Florida Power & Light Co.
Puget Sound Power & Light Co.
Central & South West Coip.
Hilton Hotels Corp.
American Telephone & Telegraph Co.
•^Northern Natural Gas Co.
Commerce Oil Refining Corp.
Sylvania E l e c t r i c Products, Inc.

Com. s t k .
1st r e f . mtg. bds.
Com. s t k .
Deb.
Pfd. s t k .
1st mtg. bds.
1st mtg. bds.
Com. stk.
Sub. S.F. deb.
Deb.
S.F. deb.
Deb., bds. & com.
S.F. deb.

15.4
50.0
60.0
70.0
15.0
20.0
20.0
15.0
30.0
250.0
25.0
45.0
25.0

Oct. 13
( r i g h t s expire)
Oct. 15
Oct. 15
Oct. 21
Oct. 22
Oct. 28
Oct. 29
Oct. 30
Oct.
Nov. 17
Nov.
Indefinite
Indefinite

STATE AND LOCAL GOVERNMENT
Denver, Colorado
New York, New York
State of New Hampshire
Public Housing Authorities




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

17.0
18.0
16.0
102.1

Oct.
Oct.
Oct.
Oct.

14
15
15
20

h„lU

H-2 Forthcoming Large Offerings, as of October 9 (Cont'd)
Type

Amount
(millions Approximate date
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
-a-Consumers Public Power Dist. 3 Neb.
Los Angel.es Flood Control D i s t . ,
California
Baltimore Co., Md.
Pennsylvania General State Auth.
Columbus, Ohio
Chesapeake Bay Ferry Commission

'Rev.-Ut.

23.3

G.O.
G.O.
Rev.
G.Gu
Rev.-Ut.

21.2
20.0
25.0
10.0
190.0

Oct. 22
Oct. 27
Oct. 28
Oct. 28
Dec. 1
Indefinite

OTHER
-^-Montreal, Canada

Ext. S.F. deb.

20.0

Oct. 20

Included in t a b l e f o r f i r s t time.
1/ Includes corporate and other issues of ftl£ million and over; State and
local government issues of #10 million and over.
-2/ Includes forer^rv government and International Bank f o r Reconstruction
and Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None.




H.lli

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

1952 - 1958
High
Low

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields 1 (per cent) seasoned yields
(basis points)
(basis points)
5.00 (9/14/57)
2.93 (3/31/51*)

1959 — Jan. 7
20
28
Feb. 18
Mar. 11
25
26
31
Apr. 3
15
16
29
May 1
13
lh
20
21
26
June It
17
26
July 9
10
15
30
Aug. 5
20
Sept. 18

L60
h.ho?/
4.43
4.4 3
4.47
I4.60

87
-3
34
hO
4
11
9
9
13
22
21
7

14.95
14.95
5.oo
4.95

1.93

31

4.85
4. <30

21+
22

5.50 (11/7/57)
3.00 (3/17/54)

123
-15

k.7&

23

1+.67

18

14.85
5.06

17
13

5.13

27

lj.92^
5.10
5.10

6
2li
19

5.10
5.00

19
13

5.65

60

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. Average maturity for the seasoned issues
varies from 26 to 28 years.
2/ Provides for a 5-year period during which issue may not be called f o r
refunding at a lower coupon r a t e . Other issues have no such provision.
3/ Provides f o r a 7-year period during which issue way not be called f o r
refunding at a lower coupon rate.