Full text of H.16 Capital Market Developments : July 13, 1955
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No.t f o r P u b l i c a t i o n — . ; DECONTROLLED AFTER SIX MONTHS H.lii J u l y 13, 1 9 # CAPITAL 1.IARXET DEVELOPMENTS New c a p i t a l volume small l a s t week r- Only one l a r g e i s s u e was p u b l i c l y o f f e r e d f o r new c a p i t a l d u r i n g t h e week ending J u l y 8— a 5 m i l l i o n d o l l a r S t a t e and l o c a l government o f f e r i n g . T h i s week 161 m i l l i o n d o l l a r s of S t a t e and l o c a l i s s u e s and one 30 m i l l i o n d o l l a r c o r p o r a t e o f f e r i n g were scheduled f o r f l o t a t i o n . • I n c l u d e d i n t h i s week's S t a t e and l o c a l s c h e d u l e however, was 12^ m i l l i o n d o l l a r s of New Y o r k . S t a t e Thruway bonds, t h e only b i d f o r which was r e j e c t e d on J u l y 12 by t h e S t a t e C o m p t r o l l e r . I t was r e p o r t e d t h a t " t h e s u b s t a n t i a l change i n t h e m u n i c i p a l bond market s i n c e t h i s f i n a n c i n g was o r i g i n a l l y announced would have t h e e f f e c t of i n c r e a s i n g t h e c o s t of f i n a n c i n g t h e thruway. The Comp- . t r o l l e r has t h e r e f o r e d e c i d e d t o postpone t h e f i n a n c i n g u n t i l a more advantageous t i m e . " No i n d i c a t i o n was given as t o t h e t i m i n g of another o f f e r i n g . The s o l e b i d f o r t h e l a r g e s t tax-exempt i s s u e of t h e year would have produced a n e t i n t e r e s t c o s t of 2.7892 per c e n t . M a t u r i t y of t h e o f f e r i n g averaged about 35 y e a r s . The scheduled o f f e r i n g was an a d d i t i o n t o p r e v i o u s i s s u e s which were S t a t e - g u a r a n t e e d and r a t e d Aaa b y Moody's. The y i e l d on Moody's 20-year m u n i c i p a l Aaa bonds h a s r i s e n from 2 . 0 7 on June 10, when t h e New York f i n a n c i n g was announced, t o 2 . 1 9 f o r t h e week endi n g J u l y 8, r e f l e c t i n g t h e b u i l d - u p . i n the volume of expected new i s s u e s and t h e h i g h l e v e l of d e a l e r s ' i n v e n t o r i e s . Bond y i e l d s - Yields on o u t s t a n d i n g S t a t e and l o c a l government Aaa and Baa bonds r o s e 5 and 3 b a s i s p o i n t s r e s p e c t i v e l y d u r i n g t h e week ending J u l y 8. Treasury o b l i g a t i o n y i e l d s i n c r e a s e d one b a s i s p o i n t . . No change occurred i n t h e c o r p o r a t e or S t a t e , and l o c a l revenue bond y i e l d s . Stock p r i c e s - Stock p r i c e s , a s measured by t h e SEC index of 265 common s t o c k s , i n c r e a s e d '3»h p o i n t s t o a new h i g h of 257.0 l a s t week. L i t t l e change i n p r i c e s was i n d i c a t e d by d a i l y f i g i r e s f o r t h e f i r s t two days of t h i s week. 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 mark e t developments w i l l be found i n t h e a t t a c h e d e x h i b i t s . Business 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 , Board of Governors of t h e F e d e r a l Reserve System. EXHIBIT A H I G H - G R A D E BOND YIELDS Weekly (Per c e n t ) 1 9 # - High Loir 1953 - Higfr Low 195k - H i g i Low 1955 - High Low -June June June July July 10 17 2k 1 8 3.63 ( 1 A ) 3.U8 ( 5 / 1 6 ) 3.89 (9/18) sga 2.98 (10/23) 2.kd (kA7) 3.79 (6/25) 2.96 (1/8) 3.32 (1/7) 2.93 (8/5) 3.UU ( 1 2 / 3 1 ) 3.51 (7/8) 3.1*5 (1/1U) 3.114- ( 7 / 7 ) 3.50 3.51 3.06 3.07 11 3.02 (1/6) 3.10 2.69 2.27 3.27 2.71 (12/19) (V25) (6/26) (1/2) 3.00 (1/1) 2.72 (8/13) 2.84 (7/8) 2.76 (3/7) 2.79 2.80 2.80 2.81* 2.8k 1 / Weekly average o f - d a i l y f i g u r e s . Average term of bonds included i s 25-26 y e a r s . 2 / Thursday f i g u r e s . Only g e n e r a l 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 . 3 / F r i d a y f i g u r e s . Average r a t i n g of bends i n c l u d e d i s between Baa and Aj average term i s 20 y e a r s . Note.—Highs and l e w s a r e f o r i n d i v i d u a l s e r i e s and may b e on d i f f e r e n t d a t e s f o r d i f f e r e n t s e r i e s . EXHIBIT B L O W E R - G R A D E BOND YIELDS j r ' 1952 1953 Corporate Aaa 3 / I 1954 U. S. Govt. lcng-term 2 / 1955 S t a t e and l o c a l g o v t . , Aaa 3 / Spread between U . S . )ovt . and Corporate S t a t e and l o c a l Aaa Aaa (Per c e n t ) 1954 - High Low 1955 - High Lor 3.03 2.91 3.42 2.99 3.09 2.85 3.05 2.91 June June June July July 3.0k 3.Q5 3.05 3.05 3.05 1952 - High 1953 - High 10 17 24 1 8 (lA) (2/15) (6/19) (1/9) (1/8) (4/23) (7/8) (1/7) (12/27) (5/17) (6/6) (12/26) 2.7k (1/9) 2 . a (8/7) 2.82 ( 7 / 8 ) 2.62 ( 1 / 7 ) 2.00 1.65 2.73 1.98 2.21 1.90 2.19 2.05 2.74 2.75 2.78 2.81 2.82 2.07 2.08 2.09 2.1b 2.19 2.79 2.56 3.15 2.78 1 / Weekly average of d a i l y f i g u r e s . (10/23) (5/1) (6/25) (1/8) (6/10) (9/2) (7/7) (5/26) .37 .19 .38 .19 .43 .32 .34 .23 .30 .30 .27 .:2k .23 ' 1.02 .71 .84 .30 .61 .29 .70 .54 .67 .67 .69 .67 .63 Average term of bonds included i s 25-26 2 / Weekly average of d a i l y f i g u r e s ; old s e r i e s . Average term t o f i r s t c a l l of bonds included i s 13-14 y e a r s . 3 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average term i s 20 y e a r s . Note.—Hi$is 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 dates for different-series. STOCK MARKET 1952 Date • Stock p r i c e 1953 1954 Canmon Trading stock volume 2 / (millions yields 2 / of s h a r e s ) (per c e n t ) 1955 Stock market Customers 1 d e b i t b a l - loans t o ances 4 / " o t h e r s " 5 / ' Total • ( M i l l i o n s of d o l l a r s ) 1S52 - High Low 1953 - High low 1954 - High Low 1955 - High 165.3 151.7 167.1 144.0 221.lt 156.5 257.0 217.4 May 233.3 2 44.5 251.1 253.6 257.0 June 24 July 1 July 8 (12/26) (10/24) (1/2) (9/18) (12/31) (1/6) (7/8) (1/14) 2.0 0.9 2.5 0.9 3.7 1.4 4.6 2.0 5.77 5.13 5.75 5.15 5.33 4.20 It .22 3.87 1,986 1,804 2,445 2,055 3,436 2,405 3,787 3,537 1,332 1,241 1,665 1,314 2,388 1,653 2,704 2,517 2.2 2.7 2.7 2.3 2.3 4.14 3.87 3,787 2,684 n.a. n.a. n.a. . 656 552 780 664 1,048 746 1,163 1,018 1,103 1,160 1,163 1,160 n.a. t o 1947-49=100 by F e d e r a l 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. V Moody's 200 common s t o c k s ; end of month f i g u r e s . £ / 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 ; excludes c r e d i t extended on mcney borrowed f o r c a r r y i n g U. S . Government o b l i g a t i o n s . £ / Wednesday f i g u r e s f o r weekly r e p o r t i n g member b a n k s . Excludes a l l loans f o r purchasing or c a r r y i n g U. S . Governments f o r 1952; s i n c e 1953 only t h e s e l o a n s a t banks i n New York and Chicago a r e excluded. Weekly r e p o r t i n g banks account f o r about 72 per cent of l o a n s t o o t h e r s . n.a.—Not a v a i l a b l e . 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 an d i f f e r e n t d a t e s for different series. Exhibit D H.14 Corporate and S t a t e and Local Government Security Offerings and Placements ( i n millions of d o l l a r s ) 1955 Nevr c a p i t a l Corporate 1 1% rI 1953 1955 S t a t e and l o c a l 1 195IT \ 1953 January February March 546 436 1,261 547 426 63$ 623 623 666 535 312 538 396 411 565 3-90 #0 426 April May June e/500 497 6# 842 779 #5 1,123 427 e/350 e/630 734 748 853 329 649 434 909 335 747 483 ,325 753 e/600 279 261 649 519 259 475 July August September e/900 e/6?5 e/SQO October November December 1st quarter 2nd q u a r t e r 3rd q u a r t e r i+th q u a r t e r Year 2,243 e/2,075 1,003 290 604 577 429 i / 1,438 y 1,606 1,995: 1,991 1,896 7,490 1,912 1,385 e/1,405 2,578 1,561 w 2,a4 y 8,495 ' 594 423 877 453 408 774 1,372 2,334 1,188 1,894 .6,789 1,176 1,412 1,253 1,636 5,477 Excluding f i n a n c e companies 2 / 1st quarter 2nd q u a r t e r 3rd quarter 4th q u a r t e r Year 1,791 e/2,000 1,527 1,927 1,911 1,792 7,158 1,669 1,991 1,223 2,344 7,227 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 s a l e s and personal f i n a n c e companies. e / Estimated. Note.—Details may not add t o t o t a l s due t o rounding. . H.lb Exhibit : Large Public S e c u r i t y issues f o r New C a p i t a l (Other than U . S . Treasury) 1/ Proceeds of Large.Issues Offered (Millions of d o l l a r s ) Month Corporate 195U - June July . August . September October November December 1955 ~ January February March April May June S t a t e and l o c a l government 603 92, 86 455. 388 268 689 3U 107 337 238 152 350 • iill 75 , 362* U33 0 . 121 Ihl 63 750 . 175 ii83 182 Other 2 / 30 35 * 15 h09 l a r g e I n d i v i d u a l I s s u e s Offered J u l y 1 .through i Issuer Type 3 / Amount Coupon (millions O f f e r i n g Rating Maturity r a t e or of net i n t e r - • yield dollars) e s t cost CORPORATE None STATE AMD LOCAL GOVERNMENT T u l s a , Oklahoma $.h 1958-80 2.6? 1.80-3.05 A OTHER None ~ 1/ Includes corporate and other s e c u r i t y o f f e r i n g s of 15 m i l l i o n d o l l a r s and over5 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. H.14 Exhibit F Forthcoming Large Public S e c u r i t y Offerings f o r New C a p i t a l (Other than U. S . Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following date shown Date of computation• Corporate 1954 - June 30 J u l y 30 Aug. 31 S e p t . 30 Oct. 29 Nov. 30 Dec. 31 1 9 # - Jan. 31 Feb. 28 Mar. 31 Apr. 29 Kay, 31 June 30 336 100 1 94. 18k 16 710 211 160 67 Other 2 / Subsequent t o date shown S t a t e and Corporate l o c a l govt. Other £ .532 303 608 54 300 383 436 661 56? 682 % 208 116 339 344 4l4 30 135 246 . . 216 422 1,395 922 1,141 850 830 1,521 1,553 1,876 2,158 1,957 2,682 30 30 35 . 2,144 1,961 1,978 2,009 1,917 1,861 1,845 — Forthcoming Large O f f e r i n g s , as of J u l y 8 Issuer ^ ' Type Amount (millions Approximate date of o f f e r i n g of d o l l a r s ) CORPORATE I l l i n o i s B e l l Telephone P a c i f i c Finance American Natural Gas Consumer Power Goodyear Tire and Rubber Western Union Telegraph ^ P a c i f i c Telephone and Telegraph American Telephone and Telegraph Southern C a l i f o r n i a Gas Freedom Insurance.Company •1st mtg. b d s . Deb. Common stock Common stock Common stock Common stock Deb. . Conv. deb. Bonds Common stock 30.0 20.0 37.0 17.7 50.0 25.0 67.0 650.9 40.0 22.0 G.R. L.L. L.L. Rev. G.O. 125.0 15.0 5.1 8.0 8.3 J u l y 12 July 20 August 2 August 5 August 8 August 8 August 16 . 1955 1955 1955 STATE AND LOCAL GOVERNMENT ' New York S t a t e Thruway . Alabama Highway Authority Wayne County, Michigan L o u i s v i l l e , Kentucky Pierce Co., Wash., Taccma Sch. D i s t . . July July July • July July 12 12 12 12 14 H.lh F-2 Forthcoming Large O f f e r i n g s , as of J u l y 8 (Cont'd) Issuer Type _ Amount Approximate date "(millions of o f f e r i n g of d o l l a r s ) STATE AND LOCAL GOVERNMENT (Cont'd) S t a t e of Ohio . Public Housing A u t h o r i t i e s Chicago, I l l i n o i s Los Angeles, C a l i f o r n i a S t a t e of New Mexico Norfolk, V i r g i n i a Denver, Colorado ^Calcasieu P a r i s h , Louisiana -xLos An.geles, C a l i f o r n i a -*Los Angeles, C a l i f o r n i a Connecticut Expressway Inter-American Center Auth., F l a . Michigan Turnpike Authority S t a t e of Louisiana I l l i n o i s Turnpike Authority Texas Turnpike Company ^ Springfield,'Illinois Allegh eny C ounty, Pennsylvania, S a n i t a r y Authority C a l i f o r n i a T o l l Bridge A u t h o r i t y J e r s e y City Sewerage A u t h . , N. J . North Carolina Turnpike Authority Rev. Rev. Rev. . n.a. Rev. Rev. n.a. £2.0 121.5 25.3 25.0 lii.O ; 5.0 12.0 8.2 12.0 18.0 100.0 60.0 186.0 80.0 390.0 140.0 9.0 J u l y 20 J u l y 20 . July 26 J u l y 26 • J u l y 26 J u l y 26 J u l y 28 August 3 August 23 September 21 Summer 1955 1955 1955 1955 1955 1955 Rev. • Rev. Rev. n.a. 85.0 235.0 16.0 200.0 1955 1955 1955 1955 L.L. —— n.a. n.a. n.a. n.a. n.a. n.a. n.a. OTHER None 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 . n.a.—Not a v a i l a b l e . *—Included in t a b l e f o r f i r s t time. __