Full text of H.16 Capital Market Developments : May 19, 1955
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I Mot f o r P u b l i c a t i o n ^ ^ ^ ^ H.lli ' May 19, 1 9 # ' CAPITAL IIARIST DEVBL0P1IENT5 Volume of o f f e r i n g s f o r new c a p i t a l somewhat heavier than in recent -weeks - Four l a r g e corporate stock i s s u e s t o t a l i n g 111 m i l l i o n d o l l a r s and tliree l a r g e S t a t e and l o c a l government o f f e r i n g s v;ith proceeds of 36 m i l l i o n were p u b l i c l y f l o a t e d for new c a p i t a l during the week ending Hay 13. Included i n the c o r porate issueswere t h r e e s u b s c r i p t i o n o f f e r i n g s with r i g h t s exp i r i n g l a s t week. The volume of l a r g e s e c u r i t y i s s u e s expected this.week i s 87 m i l l i o n d o l l a r s . Bond y i e l d s on outstanding corporate Aaa bonds increased . two b a s i s p o i n t s l a s t week. Yields on U. S. Government long-term bonds and on S t a t e and l o c a l government Aaa bonds decreased two and one b a s i s p o i n t s r e s p e c t i v e l y . According t o d a i l y f i g u r e s , Treasury y i e l d s decreased on Monday and remained steady on Tuesday of t h i s week. Corporate y i e l d s did not change. Corporate Baa bond y i e l d s rose one b a s i s p o i n t l a s t week. S t a t e and l o c a l government Baa y i e l d s continued steady. Yields on S t a t e and l o c a l revenue bonds dropped one b a s i s point i n the f a c e of p r e s s r e p o r t s t o t h e e f f e c t t h a t ; l e g a l obstacles to two of t h e delayed t o l l road bond i s s u e s had been overcome and s a l e of t h e s e i s s u e s might take place in the near f u t u r e . As i n d i c a t e d in Exhibit G, the spread between y i e l d s on newly-offered 30-year f i r s t mortgage e l e c t r i c power bonds with A r a t i n g s and y i e l d s on s i m i l a r l y r a t e d outstanding bonds of somewhat s h o r t e r m a t u r i t y i s c u r r e n t l y about 13 b a s i s p o i n t s , about t h e same as e a r l i e r t h i s year and considerably l a r g e r than the spread in 195&. . Stock market c r e d i t - Customers' d e b i t balances, excluding borrowings f o r c a r r y i n g U. S . Government s e c u r i t i e s , of member firms o f . t h e New York Stock Exchange, increased £2 m i l l i o n d o l l a r s l a s t month t o t o t a l 2,704 m i l l i o n a t t h e end of A p r i l . Free c r e d i t balances f e l l s u b s t a n t i a l l y f o r the second month aid t o t a l e d 973 m i l l i o n a t the end of A p r i l , II.Ill -2- Bela/? are the March and April 1955 figures for stock market credit outstanding: ( M i l l i o n s of d o l l a r s ) March April Customers' d e b i t b a l a n c e s - t o t a l 2,701 2,752 Customers' d e b i t b a l a n c e s - excluding money borrowed f o r c a r r y i n g Government o b l i g a t i o n s 2,652 2 , 7 01; Money borrowed by member f i r m s m a i n t a i n i n g margin accounts 1,939 2,062 Money borrowed, by member f i r m s m a i n t a i n i n g margin a c c o u n t s , on c o l l a t e r a l o t h e r than Government obligations ; 1,861 Customers' f r e e c r e d i t b a l a n c e s 1,022 Bank loans t o o t h e r s f o r p u r c h a s i n g and c a r r y i n g . s e c u r i t i e s ( l a s t "Wednesday of month-weekly r e p o r t i n g member b a n k s , excluding Governments f o r New York and Chicago r e p o r t i n g banks) 1,080 1,988 , 973 1,081 Stock p r i c e s d e c l i n e - Stock p r i c e s , a s measured by t h e SEC i n d e x of 265 common s t o c k s , d e c r e a s e d 2 . 8 p o i n t s t o 231.2 d u r i n g the week ending May 13 i n t h e l o w e s t average d a i l y t r a d i n g v o l ume of t h e y e a r . D a i l y i n d e x e s i n d i c a t e t h a t p r i c e s d e c l i n e d on Monday and Tuesday of t h i s week b u t r e c o v e r e d somewhat on Wednesday. More d e t a i l e d i n f o r m a t i o n concerning r e c e n t c a p i t a l market 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 T 13 50 / W53 Corporate Aaa y U. S. Govt. long-term 2/ 1955 - High. Lew 3.03 2.91 3.12 2.99 3.09 2.85 3.OU 2.91 2.79 (12/27) 2.56 (5/17) 3.15 (6/6) 2.78 (12/26) 2.71* (1/9) 2 .111* (8/7) 2.77 (5/6) 2.62 (1/7) April 15 April 22 April 29 May 6 May 13 3.01 3.01 3.01 3.02 3.0b Date State and local govt., Aaa j / Spread between U. S. Govt, and Corporate State and local Aaa (Per cent) 1952 - High Low 1953 - High Lew 1951* - High (1A) (2/15) (6/19) (1/9) (1/8) (k/23) (5/13) (1/7) 2.76 2.77 2.77 2.77 2.75 1/ Weekly average of daily figures. 2.00 (10/23) 1.65 (5/1) 2.73 (6/25) 1.98 (1/8) 2.21 (6/10) 1.90(9/2) 2.11 (2/10) 2.06 (1/6) 2.08 ' 2.08 2.08 2.08 2.07 .37 .19 .38 .19 '.1*3 .32 .31* .21* 1.02 .71 .81* . .30 .61 .29 .69 .51* .25 .22* .21* .25 .29 .68 .69 .69 .69 .68 Average term of bonds included i s 25-26 2/ Weekly average of daily figures; old s e r i e s . Average term to f i r s t c a l l of bonds included i s 13-Hi years. 3/ Thursday figures. Only general obligation bends are included; average term i s 20 years. Note.—Highs and lews 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 BOND YIELDS Weekly \ i V " \ STATE A N D LOCAL GOVT. B e e i I\ Date Corporate Baa 1 / f v V ' ' State and l o c a l govt. Baa If State and l o c a l govt, revenue 3 / (Per cent) 1952 - High Lew 1953 - High 195k - High Lou 1955 - High Low 3.63 3.LB 3.89 3-50 3.7k 3.1*1* 3.50 3.1*5 April 15 April 22 April 29 May 6 May 13 3.1*8 3.1*8 3.1*9 3.1*9 3-50 (VU (5/16) (9/18) (V2) (1/8) (12/31) (5/13) (lM) 2.98 2.1*8 3.79 2.96 3.32 2.93 3.08 3.02 3.08 3.08 3.08 3.08. 3.08 (10/23) (1*/17) (6/25) (1/8) (1/7) (8/5) (5/32) (1/6) 2.69 2.27 3.27 2.71 3.00 2.72 2.80 2.76 (12/19) (4/25) (6/26) (1/2) (1/1) (8/13) (1*/15) (1/7) 2.80 2.78 2.78 2.78 2.77 included i s 2>-2o years. 2 / Thursday f i g u r e s . Only general obligation bonds are included; average term i s 20 years. 3 / Friday f i g u r e s . Average rating of bonds included i s between Baa and A; average tern i s 20 years. Mote.—Highs and lows are for individual s e r i e s and may be on d i f f e r e n t dates for d i f f e r e n t s e r i e s . STOCK MARKET Date Stock p r i c e Common Trading • volume 2 / ( m i l l i o n s y i e l d s "if of s h a r e s ) (per c e n t ) Stock market c r e d i t Customers' d e b i t b a l - loans t o 11 others" 5 / ances k/ Total ( M i l l i o n s of d o l l a r s ) 1955 - High Low 165.3 151.7 167.1 144.0 22l.ii 156.5 231.0 217.1 l&rch April A p r i l 29 May 6 Kay 13 225.6 231.it 233.6 231.0 231.2 1952 - High Low 1953 - High Low 195b - High (12/26) (10/21*) (1/2) . (9/13) (12/31) (1/6) (5/6) (1/Uj) 2.0 0.9 2.5 0.9 3.7 1.4 4.6 2.2 5-77 5.13 5.75 5.15 5.33 4.20 4.22 4.12 1,986 1,80k 2,445 2,055 3,431 2,105 3,785 3,537 1,332 1,241 1,665 1,314 2,388 1,653 2,70k 2,517 656 552 780 , 664 1,048 746 1,083 1,018 2.9 2.7 2.6 2.3 2.2 4.21 4.22 3,732 3,735 2,652 2,704 n.a. n.a. n.a. 1,080 1,081 1,081 1,083 n.a. ; t o 1947-49»100 by Federal Reserve. The c o n v e r s i o n f a c t o r i s 1 2 3 . 9 1 . 2 / Averages of d a i l y t r a d i n g volume on t h e New York Stock Exchange. 3 / Moody's 200 common s t o c k s ; end of month f i g u r e s , U/ 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 carry margin a c c o u n t s ; excludes money borrowed f o r c a r r y i n g U. S . Government o b l i gations. jj'tj Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes a l l loans on U. S . Governments f a r 1952; s i n c e 1953 only l o a n s secured by Governments a t banks i n New York and Chicago are excluded. Weekly r e p o r t i n g banks account f a r about 72 per cent of lomns t o o t h e r s . n.a.—Not available. Note.—Hi^is 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 on d i f f e r e n t d a t e s for different s e r i e s . H.1U Exhibit D Corporate 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 (In m i l l i o n s of d o l l a r s ) 19# JanuaryFebruary March 546 436 1,261 S&7 426 632 April May e/500 e/850 197 6^6 81(2 July • August September . " 1st quarter 2nd quarter 3rd quarter 4th q u a r t e r Year 2,243 1,003 290 60k 1,608 1,99S 1,991 1,896 7,U9.0 . S t a t e and l o c a l 1 1954 1 1953 1953 1955 g 532 312 e/540 #6 411 565 389 360 426 e/425 e/300 734 748 853 #9 649 434 483 325 753 279 261 649 519 259 475 577 429 1,438 - / 594 423 877 453 408 774 666 909 3# 747 October . November December Nevr c a p i t a l Corporate 1 r / 1954 1 779 . 675 1,123 1,912 2,578 e/1,385 8,495 1,372 2,334 1,188 1,894 6,709 - 1,176 1,412 1,253 1,636 5,477 Excluding f i n a n c e companies 2 / 1 s t quarter 2nd quarter 3rd q u a r t e r 4th quarter Year 1,791 • 1,^27 1,927 1,911 1,792 7,158 1,669 1,991 . 1,223 2,344 7,227 r / Revised. 1 / Includes 602.5 m i l l i o n d o l l a r AT&T 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 s a l e s and personal finance ..companies. e / Estimated. Mote.—Details may not add t o t o t a l s due to rounding. . . H.lh ' Exhibit E 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 I s s u e s Offered (Millions of d o l l a r s ) Corporate Month 166 32h 350 . 336 .75 335 . U13 0 9k lit! ' 72 750 175 195U - April May June July s August September October November December 1955 - January February March April , S t a t e and l o c a l government - 557, 603 92 86 kSS 383 268 689 3a 107 337 238 Other 2 / 30 35 15 Large I n d i v i d u a l Issues Offered Hay 2 through 13 Issuer Type 3 / Amount Coupon (millions Maturity r a t e or : O f f e r i n g Rating of yield net i n t e r dollars) est cost CORPORATE Public•Service of Indiana, I n c . P a c i f i c Morthwest Pipeline American Trust Co. of San Francisco Transamerica Corp. Pfd. stock Com. stock 21.3 15.5 Com. stock Com. stock 19.5 5b.5 Rev. G.O. Rev. 6.6 19.7 6.0 1957-77 1956-95 1956-35 3.02 2.10 2.28 1.80-3.05 1.05-2.15 1.05-2 9.9 1960-81; 2.87 2.00-2.90 STATE AND LCCAL GOVERNMENT Wash. Tivp.-Uarion Co. Sch. Bldg. Corp., Ind. C i n c i n n a t i , Ohio Los Angeles, C a l i f o r n i a Louisiana S t a t e B u i l d ing Authority •OTHER None L.L. . . „ Aaa Aa Baa .2-2 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 over; 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 Recons t r u c t i o n and Development i s s u e s . 3/ In the case of S t a t e and l o c a l ^overmaent s e c u r i t i e s , G t 0 . denotes general o b l i g a t i o n ; Rev., revenue bonds; 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 P u b l i c S e c u r i t y O f f e r i n g s f o r Hew C a p i t a l • (Other t h a n U. S . T r e a s u r y ) l / Expected Proceeds from Forthcoming Large I s s u e s During month f o l l o w i n g d a t e shown S t a t e and Other 2 / Corporate l o c a l govt. Date of computation 1954 - Apr. 30 Hay 28 June 30 J u l y 30 Aug. 3.1 S e p t . 30 Oct. 29 Nov. 30 Dec. 31 1 9 # - J a n . 31 Feb. 28 Mar. 31 Apr. 29 323 332 3# 100 33U 343 15. 94 184 16 710 211 425 • #6 86 27 % 300 383 436 66l 567 682 524 208 116 30 Subsequent t o d a t e shown S t a t e and Other 2j Corporate local govt. 617 #6 #2 303 608 4l4 135 216 216 bZ2 1,395 922 l,l4l 2,322 1,971 1,52k 1,553 1,876 2,158 1,257 2,682 2,144 1,961 1,978 2,009 1,917 27 30 30 35 Forthcoming Large O f f e r i n g s , a s of May 13 Issuer Type Amount ( m i l l i o n s Approximate d a t e of o f f e r i n g of d o l l a r s ) CORPORATE Ohio Edison Co. W. R. Grace Bethlehem S t e e l Co. Alabama Power D e t r o i t Edison ^General Telephone Corp. Lockheed A i r c r a f t Corp. V i r g i n i a E l e c t r i c and Power Southern C a l i f o r n i a Edison Peoples Gas Light & Coke Consolidated N a t u r a l Gas American. Telephone and Telegraph Southern C a l i f o r n i a Gas Co. 1 s t mtg. bonds 30.0 Conv. s u b . deb. 30.0 Conv. d e b . 191.7 1 s t mtg. bonds 15.0 60.0 Genl.&ref. mtg.bds . P r e f e r r e d stock 15.0 Conv. s u b . d e b . 30.0 1st & ref.mtg.bds. 25.0 Conv. deb. lii.o Common s t o c k 15.5 Common s t o c k 25.1 Conv. d e b . 6#.9 Bonds 4o.o May 17 May 18 Kay23 • May 24 May 24 May 24 May 2$ •June 7 June 14 June 24 • June 1955 1955 II. 11; F-2 Forthcoming Large O f f e r i n g s , as of May 13 (Cont'd) Issuer Type Amount (millions Approximate date of o f f e r i n g of d o l l a r s ) STATE AND LOCAL GOVERN! ENT S t a t e of Maryland Memphis, Tennessee S t . Paul, Minnesota Port of New York Authority Chicago, I l l i n o i s Allegheny County, Pennsylvania Oakdale > C a l i f o r n i a South San Joaquin, C a l i f o r n i a •^Maryland S t a t e Roads Commission ^Kansas C i t y , Kansas F l o r i d a S t a t e Turnpike Authority Inter-American Center Auth., P l a . Michigan,Turnpike Authori t y S t a t e of Louisiana I l l i n o i s Turnpike Authority 'Connecticut Expressway Texas Turnpike Authority Sam Houston Turnpike Corp. Texas Turnpike Company Dade County Port Authority, F l a . Springfield, Illinois Allegheny County, 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 Authority J e r s e y City Sewerage Auth., N. J . North Carolina Turnpike Authority G.O. • G.O. G.O. Rev. . G.O. G.O. Rev. Rev. n.a. Rev. Rev. Rev. Rev. Rev. Rev. Rev. Rev. Rev. Rev. n.a. Rev. Rev. Rev.' 1U6.O liiO.O 21.0 9.0 Hay 17 May 17 May 18 Hay 23 May 2k May 2k May 25 Hay 25 June June 1955 1955 1955 1955 1955 1955 * 1955 1955 1955 1955 1955 85.0 235.0 16.0 200.0 1955 1955 1955 1955 11.3 8.3 6.9 30.0 6,0 W 20.8 20.8 25.0 7.0 7h .0 60.0 186.0 80.0 390.0 100.0 OTHER None / ' 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 ancl over 5 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 -International 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 . -x—Included i n t a b l e f o r f i r s t t i m e . Exhibit G Yields on New and Outstanding E l e c t r i c Power Bonds, Hated Aa and A l / Date Aa-rated o f f e r i n g y i e l d s | A-rated o f f e r i n g y i e l d s Amount above Amount above Actual Actual seasoned y i e l d s seasoned y i e l d s (per c e n t ) ( b a s i s p o i n t s ) (per c e n t ) ( b a s i s points') 1952 average 3.16 13 1953 average 3.43 195k average - 3.0k 195k - January February March April May June July August September October November December 3.20 3.02 *2.93 2.99 3.00 *3.00 None None 3.02 3.03 None None 1955 - January February March April *3.12 *3.Hi *3.17 None May 11 11 3.35 12 15 3.79 27 3 3.12 -3 6 0 0 5 k 1 *3.35 *3.20 3.0S 3.10 3.14 3.H, *3.13 3.11 *3.10 3.10 None 3.11 2 -1 -10 -6 0 -2 -1 -1 -3 -2 3 3 13 7 8 — • • 0 None *3.23 3.29 3.31 9 1k . 16 3-35 3.32 Ik 11 Survey. Except where i n d i c a t e d , the a c t u a l y i e l d f i g u r e and the amount above seasoned y i e l d s a r e averages of o f f e r i n g s during t h e i n d i c a t e d p e r i o d and of the d i f f e r e n c e s between t h e s e new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s of s i m i l a r q u a l i t y for the same day. Average m a t u r i t y f o r the seasoned i s s u e s v a r i e s from 26 to 28 y e a r s . *—Single observation, not an average.