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'Mot for Publication DECOmoLL® •H.llt APIB, six m -TSS September 15, 1958. CAPITAL MARKET DEVELOPMENTS The volume of new public security financing was large last week, particularly for corporate securities, and is expected to be only slightly smaller this week. Large public security offerings for new capital during the week ending September 12 totaled, §385 million for corporations, including a $350 million debenture issue of Sears, Roebuck and Company (which was quickly sold), and #60 million for State and local governments. The calendar for this week includes corporate offerings amounting to $250 million and State and local government issues totaling $110 million. types U; S. while bonds Bond yields - Yields advanced further last week for all of outstanding bonds. Yields for high-grade corporate and Government bonds are now only slightly below their 1957 highs, those for State and local government and lower-grade corporate are lit to 2lt basis points below those levels. Stock prices - Common stock prices continued to increase last week. Standard and Poor's index of 500 common stocks reached new highs for the year, closing at U8.53 on September 12. Trading activity also increased substantially last week with daily volume averaging 3.3 million shares. More detailed information concerning recent capital market developments is presented in the attached exhibits. Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System. H I G H - G R A D E B O N D YIELDS CORPORATE AGO STATE A N D LOCAL G O V E R N M E N T AOO CORPORATE !\ax' BOO D LOCAL GOVT. BAA. H.Ik Exhibit B Tables for Exhibit A High-grade Bond Yields Spread between U. S. Govt, and Corporate State and Aaa local Aaa State and local govt. Aaa y Corporate Aaa 1/ U. S. Govt, long-term 2/ High Low high High Low 3.1*2 2.85 it.lU 1|.07 3.55 3.19 (6/5) 2.it5 (8/6) 3.76 (10/18) 3.75 (9/12) 3.07 (it/25) 2.73 1.90 3.W 3.31 2.6U Aug. 15 Aug. 22 Aug. 29 . Sept. 5 Sept. 12 2/ 3.83 3.89 3.9k it.03 it. 07 3.61 3.62 3.67 3.72 3.75 3.0U 3.12 3.22 3.29 3.31 Date (Per cent) 1953 195U 1957 1958 - (6/19) (it/23) (9/27) (9/12) (S/2) (6/25) (9/2) (8/29) (9/11) (5A) .38 .30 .60 .51 .22 .83 .30 .1*7 .62 • 3it- .22 .27 .27 .31 .32 .57 .50 .h 5 .h3 .itit , Lower-grade Bond Yields Spread between Aaa and Baa State and Corporate local govt. State and local govt. Baa y Date Corporate Baa 1/ High Low High High Low 3.89 (9/18) 3.itit (12/31) 5.10 (11/29) it.96 (1/3) it. 51 (7/11) 3.79 (6/25) 2.93 (8/5) it.51 (8/29) it.3it (9/11) 3.6it (5/1) it. 66 it.71 it.7it it. 80 it. 86 it. 03 it.10 it. 21 it. 31 L3it (Per cent) 1953 195U 1957 1958 - Aug. 15 Aug. 22 Aug. 29 Sept. 5 Sept. 12 jo/ , " .69 .52 1.27 1.28 .77 .83 .82 .80 .77 .79 . 1.21 .96/ 1.21 1.11 .98 .99 .98 .99 1.02 1.03 2/ Preliminary. ' ~ 1/ Weekly average of daily figures. Average term of bonds included is 25-26 years. 2/ Weekly average of daily figures. The series includes bonds due or callable in 10 years or more. 2/ Thursday figures. Only general obligations bonds are included; average t e m is 20 years. Note.—Highs and lows are for individual series and may be on different dates for different series. 4 STOCK MARKET Exhibit D Table for Exhibit C Stock Market Date Stock price index 1/ Trading Stock market customer credit Common Customers' Bank stock volume 2/ (millions yields V Total debit bal- loans to ances 1*/ "others" 5/ of shares) (per cent) (Millions of dollars) 1953 - High Low . 195U - High Low 1955 - High Low 1956 - High Low 1957 - High Low 1958 - High Low July August Aug. 29 Sept. 5 Sept. 12 jd/ 26.51* (1/2) 2.5 22.95 (9/18) 0.9 35.98 (12/31) 2U.93 (1/8) l.l 1*5.89 (12/9) 1*.6 35.28 (1/llt) 1.5 1*9.61 (8/3) 1*3.22 (1/20) 1*9.08 39.1*8 1*8.53 1*0.37 (7/12) (12/20) (9/12) (1/10) 1*5.98 1*7.70 1*7.75 1*7.97 1*8.53 • S 5.38 6,25 1*.32 5.82 1*.08 1*.1*1 3.82 It. 2 1.1* 3.8 1.7 l*.3l* 3.91 1**72 3.71 1*.58 3.2 3.0 2.7 2.9 3.3 3.97 3.78 3.77 3.76 3.71 2,1*55 3 2 :?| 2,1(05 ll,030 3,537 3,911, S 1,665 1,311* 2,388 1,653 2,805 2,517 2,823 2,71*0 2,887 2,1*82 1*,251 3,551* 3,020 1*,251 n.a. n.a. n.a. n.a. 3,020 2,1*87 n.a. n.a. n.a. 780 661 1,01*8 71*6 1,21*1 1,018 1,267 1,155 1,163 1,051* 1,317 1,051 1,231 1,186 1,186 1,191 n.a.—Not available. g/ Preliminary. " " 1/ Standard and Poor's composite index of 500 common stocks, weekly closing prices, 19lil-U3"10. Monthly data are averages of daily figures rather than of Fridays1 only. Highs and lows are for Friday's data only. 2/ Averages of daily trading volume on the New York Stock Exchange. 2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. Yields shown are for dates on which price index reached its high or low. . hj End of month figures for member firms of the New York Stock Exchange whioh carry margin accounts; excludes balances secured by U. 5. Government obligations. £/ 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 E Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) 1958 New capital Corporate 1/ State and local 2/ 1958 1 1956 1957 1 1956 1 1957 January February March 723 851. y 1,5612/ 1,060 1,065 1,320 573 712 817 April May June 1,141 600 881 1,1*53 % 818 1,11*6 81*1 e/i,ioi e/500 e/1,200 1,003 921* 973 1,063 651* 838 1,090 789 1,076 i.olv 1,088 3,135 2,622 e/2,801 3,1*1*5 3,11*9 2,899 2,951* 2,102 2,805 2,556 2,922 5,757 e/8,558 6,591* 9,1*93 12,1*1*7 7,'to 10,381* July August September October November December 1st 2nd 3rd l*th quarter quarter quarter quarter 1st half Three quarters Year . . 81: 953 511 71*2 572 506 1*01* 696 390 798 878 551 765 546 393 378 1*90 735 639 2/382 e/600 529 581* 1*31 1*08 206 357 698 633 698 639 31*7 1*09 2,276 2,227 e/I,621 1,820 1,701* 1,510* 2,029 1,1*90 1,603 971 1,395 >,503 e/6,124 3,521* 5,069 7,099 4,064 5,1*59 Excluding finance companies 1st 2nd 3rd 4th quarter quarter quarter quarter r 2,891* 2,583 e/2,751 Year 3,237 2,889 2,582 2,810 1,61*7 2,51*1 2,21*6 2,826 11,518 9,260 e/ Estimated. w 1/ Securities and Exchange Commission estimates of net proceeds. 2/ Data through June 1956 are Bond Buyer data classified as new capital by Federal Reservej later data are from the Investment Bankers Association of America and are somewhat more complete as to coverage than the earlier data, particularly for Federal Government loans. 3/ Includes $718.3 million AT&T convertible debenture issue. 5/ Includes $571.5 million AT&T common stock issue. jy Total new capital issues excluding offerings of sales and consumer finance companies. H.lli Exhibit F Other Security Offerings 1/ (In millions of dollars) LongForeign government 2/ 1 1956 1950 1 1957 Federal agency 3/ 1958 1 1957 1 Januaiy February March 196 53 81* 1*9 30 37 April May June 139 198 120 123 1*8 1*2 50 9 28 7 30 — 215 1* 60 1 1*1* 5 21 100 July August September October November December Year 507 8 95 1,163 251 72 523 125 — 60 60 — l6U 2 39 • — — • 1956 109 — — 300 169 572 Short-term .State and local government k/ Federal agency 3/ January February March 233 I46O 273 326 1*55 Ht7 196 357 21*9 371 208 11*1* 638 1*30 505 380 220 283 April May 357 351* 26U 205 337 153 125 252 ,176 209 161 . 329 336 1*69 501 32331h 260 jg/286 272 272 252 195 207 179 601 22U 370 512 222 1*25 273 303 9k 159 29I 328 li*8 1,238 255 116 1*07 222 128 3,27k 2,706 July August September October November December Year 5,51*3 ' 3,1*57 - e/ Estimated. _ 1/ Data presented in this exhibit differ from those in Exhibit E in that 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 their subdivisions and by international organizations. Source: Securities and Exchange Commission. 2/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities and Exchange Commission; short-term, Federal Reserve. ij/ Principally tax and bond anticipation notes, warrants or certificates and Public Housing Authority notes. In some instances PHA notes included may have a somewhat longer term than one year. Source: Bond Buyer. Exhibit Q H.lU Large Long-term Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Month Corporate 1957 -August September October November December 1958 - January February March April May ^ July August ' State and local government 266 133 . 393 3hh hOh 1*10 553 182 300 505 195 275 109 526 537 57U 420 399 318 605 1,093 725 356 281 771 209 Other 2/ 2U5 15k 1,357 266 653 161* 86 la . Large Individual Issues Offered September 1 through 12 Issuer Type y Amount Coupon (millions rate or Offering Maturity net interRating of yield dollars) est cost CORPORATE 150.0 1983 Standard Oil Co. of Calif. S.F. deb. Texas Eastern Transm. Co. 1st mtg.p.l.bds. 35.0 1978 Sears Roebuck & Co. S.F. deb. 350.0 1983 k 3/8 5 5/8 k 3A h.hO 5.71 U.75 Aaa Baa Aa STATE AND LOCAL GOVERNMENT G.O. State of Delaware Indiana State Office Bldg. Rev.-Rent. Comm. G.O. State of Connecticut G.O. San Diego U.S.D., Calif. OTHER None 17.0 1959-78 3.26 1.50-3.50 Aa 30.0 1963-88 U.23 10.0 1961-80 3.61 3.00-1.25 1.60-3.50 2.25-3.85 Aa Aaa A 20.0 1959-88 3.2k u.lk G-2 1/ Includes cozporate and other security offerings of $l£ million and over; State and local government security offerings of $10 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues tgr Federal agencies. 2/ In the case of State and local government securities, 0.0. denotes general obligations5 Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilities; Rev.-S revenue bonds secured by revenue from specific taxes only; Rev.-Bent., revenue bonds secured solely by lease payments. H.1U Exhibit H Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U. S, Treasury) 1/ Expected Proceeds from Forthcoming Large Issues . Date,of computation 1957 - July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 Dec. 31 1958 - Jan. 31 Feb. 28 Mar. 31 Apr. 30 May 29 June 30 July 31 Aug. 29 Subsequent to During month following date shown date shown State and Other 2/ Corporate State and Other 2/ local govt. local govt. Corporate 526 578 576 1*58 383 378 1*98 1,123 555 356 266 768 161 785 218 183 33U 339 363 3k5 370 13l 298 1*93 177 225 55 2la 30 30 18 150 * 110 150 36 811 81*5 61*7 815 1,193 1,161 1,378 1,208 670 561 1*61* 1,01*8 381 911* 1*71 379 551 51*3 558 561* 1*87 31*1 330 1*93 208 235 125 1*35 30 15 1*5 63 165 110 150 36 Forthcoming Large Offerings, as of September 12 Type Amount (millions Approximate date of dollars) of offering CORPORATE Tennessee Gas Trans. Co. Standard Oil Co. of Indiana Consumers Power Co. Consumers Power Co. Public Service Co. of Indiana ^Peoples Gas Light and Coke Co. Universal-Cyclops Steel Corp. Montana Power Co. Commerce Oil Refining Corp. Martin Co. 1st mtg. p. 1. bds. Deb. 1st mtg. bds. Pfd. stk. Pfd. stk. Cap. stk. S.F. deb. 1st mtg. bds. Deb., bds. & common S.F. deb. 50.0 200.0 Sept. 17 Sept. 18 Sept. 21* 15.0 Sept. 21* Oct. 6 2k. 3 (rights expire) Oct. 17.0 (rights expire) 15.0 1958 20.0 1958 1*5.0 1958 25.0 1958 35.0 STATE AND LOCAL GOVERNMENT Colleges of the State of Texas Florida State Board of Education Los Angeles Co. Flood Hist., Calif, Rev. Rev. Rev.-Ut. 17.1 12.5 30#0 Sept. 16 Sept. 16 Sept. 16 H.lU H-2 : Forthcoming Large Offerings, as of September 12 (Cont'd) Issuer Type Amount Approximate date (millions of offering of dollars) STATE AND LOCAL GOVERNMENT (Cont'd) State of Oregon State of Ohio Commonwealth of Massachusetts, State of Washington ^Chicago, Illinois Chesapeake Bay Ferry Comm. State of California G.O. Rev.-S. T. G.O. Rev.-S; T. G.O. Rev.-Ut. G.O. ' 20.0 30.0 61.0 10.0 20.0 lUi.O 50.0 Sept. 17 Sept. 18 Sept. 2k Sept. 2k Sept. 25 Oct. Dec. 3 Bds. 15.0 Sept. 2k OTHER Kingdom of Norway included in table for first time. 1/ Includes corporate and other issues of jl5 million and over; State and local government issues of $10 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues by Federal agencies. Note—Deletions for reasons other than sale of issue: None. Exhibit I Yields on New and Outstanding Electric Power Bonds, Rated Aa and A l/ Date 1952 - 1957 , High Low Aa-rated <offering yields A-rated oJ^ferine yields Amount above Amount above Actual Actual seasoned yields seasoned yields (per cent) (basis m i n t s ) (per cent) (basis points) 5.00(8/11/57 ) 2.93(3/31/51) 1958 - January February March U 5 6 12 19 21 25 April 1 2 g " 87 -3 *3.60 3.893/ -8 22 L15 li.22 U.00 U.00 hh 50 28 26 U.05 3.98 ll. QO 31 23 25 : . g 3.962/ U.07 U.25 li-07 3.75 3.90 21 3.85 3.85. 16 16 3.85 3.82 3.95 17 12 2U LOO 25 fctt 123 -15 3 9 6 -7 3.98 5 U.OU U.00 11 3 1.07 U.35 U 32 U.00 3.95 -1 -6 5 29 May 7 13 15 16 20 21 22 28 . June 1 0 17 25 July 2 9 5.50(11/7/57) 3.00(3/17/510 g 3.98^ 1 It. 3 5 2 / 31 *—Single observation, not an average. 1/ Covers only 30-year first 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 for 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 for refunding at a lower coupon rate. Monthly averages so marked include one or more issues with such a provision. Other issues have no such provision.
@FedFRASER