Full text of H.16 Capital Market Developments : May 10, 1956

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Not f o r Publication DECONTROLLED AFTER SIX MONTHS
H.1U

May 10, 1956
CAPITAL MARKET DEVELOPMENTS

/

The volume of large publicly o f f e r e d s e c u r i t i e s was; moderate during the week ending May U. Corporate issues t o t a l i n g £60
million and $6U million of State and l o c a l government i s s u e s were
sold. This week, ending May 8, $21 million of large State and local,
issues and $1*6 million of corporate s e c u r i t i e s are scheduled f o r s a l e .
In addition subscription r i g h t s expire on two convertible debenture
issues with aggregate proceeds of $77 mi l l i o n .
Bond y i e l d s - Pressure on bond p r i c e s appears to have moderated somewhat l a s t week, and y i e l d s on outstanding corporate and
general obligation State and l o c a l bonds were unchanged from previous
week's l e v e l . Yields on U. S. Government and State and l o c a l revenue
bonds declined. For t h e Aaa corporate y i e l d s , t h i s was the f i r s t week
since March 9 t h a t they have not increased; during t h i s period y i e l d s
have r i s e n 23 basis p o i n t s . Yields on Aaa-rated State and l o c a l
bonds have also increased p r a c t i c a l l y without i n t e r r u p t i o n since
l a t e February; the increase in these y i e l d s has been 3h basis points.
Pressure on new o f f e r i n g yields also seems to have moderated somewhat, although no c l e a r pattern has emerged from t h i s
week's f l o t a t i o n s . Two e l e c t r i c u t i l i t y mortgage bond issues were
r e o f f e r e d on Wednesday, May 9; one, rated Aa, was priced to y i e l d
3*55 per cent while the other, rated A, was priced to y i e l d 3*80
per cent. Reception of both issues was reported to be slow. The
Aa r e o f f e r e d y i e l d was 22 b a s i s points below the y i e l d on the l a s t
previous i s s u e of April 25, while the A-rated issue was o f f e r e d a t
13 basis jpoints above the l a t e s t e a r l i e r o f f e r i n g of April 11.
Stock prices - Common stock p r i c e s , as measured by the
SEC index of 265 stocks, increased 3*2 points t o end the week of
May h a t 290.0. Daily indexes indicate some decline on balance
through Wednesday of t h i s week.
More d e t a i l e d information concerning recent market developments i s presented in the attached e x h i b i t s .

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 BOND YIELDS
Weekly

CORPORATE A a a

\

U. S. GOVERNMfcNf

STATE AND LOCAL
GOVERNMENT A a a

L, i, i I •' i i \xJ

1.50

U. 5. Govt., long-term
Corporate
Aaa 1/

Old series

Spread between
0. S. Govt.
State and
(old series) and
New series local govt. Corporate
Istate and
Aaa 3/
Aaa [local Aaa
(Per cent)

3.U2
2.99
3.09
2.85
3.17
2.91
3-30
3.07

(6/19)
(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(5/U)
(3/2)

3.16
3.21
3-27
3-30
3-30

3.15
2.78
2.7U
2.UU
2.9h
2.62
3.08
2.80

(6/6)
(12/26)
(1/9)
(8/7)
(8/5) 3.03(8/5)
(1/7) 2.89. . (6/10)
.
.
(h/20) 3-13 (U/20)
(2/17) 2.92 (2/3)

2.21
1.90
2.3k
2.05
2.51
2.17

3.03
3-06
3.08
3.07
2.99

3.07
3-09
3-13
3.H
3.08

2.13
2.51
2.51

(6/10)
(9/2)
(9/8)
(5/26)
(5/3)
(2/23)

.8U

.38
.19
•U3

:£

.13
.31
.13

1
.U8

:S

.13
• 15
.19
.23
• 31

.29

;§
I

] / Weekly average of daily figures. Average term of bonds included i s 25-26 .
2/ Weekly averages of daily figures. The old series includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to f i r s t call of the bonds included declined from Hi years in early 1953 to
11 1/2 years in early 1956. The new series i s comprised of the 3 per cent bond
of 1995 and the 3 l/U per cent bond of 1978-83.
3/ Thursday figures. (My general obligation bonds are included; average
term i s 20 years.
Note.—Highs and lows are for individual series^and may be on different dates
for
differentFRASER series.

Digitized for


LOWER - GRADE BOND YIELDS

Corporate
Baa 1/

Date

State and
local govt.
Baa £ /

State and
local govt,
rev. 3/

(Per cent)
1953 - High
Low
1951 - High
Low
1955 - High
Low
1956 - High
Low

3.89
3.50
3.7k
3.B
3.63
3.L5
3.72
3.58

April
April
April
April
May k

3.6k
3.67
3.70
3.72
3.72

6
13
20
27

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/lii)
(5/U)
(3/9)

3.79
2.96
3.32
2.93
3.26
3.02
3.W
3.20
3-33
3.35
3.U0
3.U;
3-Wi

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(5/3)
(3/8)

3.27
2.71
3.00
2.72
2.99
2.76
3.12
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(U/27)
(2/2U)

3.01
3.06
3.10
3.12
3.10

Average term of bonds
included i s 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 f o r individual series and maybe on d i f f e r e n t dates f o r d i f f e r e n t s e r i e s .




STOCK MAKKET

Stock price

Common
Trading
volume 2/
stock
(millions yields 3/
of shares) (per cent)

Stock market customer credit
Customers'
Bank
debit baJ,- loans to
"others" 5 /
(tflllions of dollars)

1953 - High

167.1
HUi.O
221.1*
156.5
270.7
217.U

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(l/lit)

1956 - High
Low

257.1* (1/20)

2.5
0.9
3.7
1.1*
l*.6.
1.5
3-1
2.0

March
April
April 20
April 27
Hay U

283.2
286.8
281*. 6
286.2
290.0

2.7
2.6 •
2.3
2-5
2.6

195U - High
1955 - High

290.8 (l*/6)

5.75
5.15
5-33
a. 20
u.22
3- 78
I4.O8
3.68

2,1*5
2,055
3,k36
2,L05
. U,030
3,537
U,ol*o
3,991

1,665
1,311*
2,388
1,653
2,805
2,517
2,786
2,71*0

780
661*
1,01*8
7U6
1,21*1
1,018
1,267
1,21*9

3.68
3.69

1,038

2,786

1,252
1,255

1,260

1,255

n.a.—Not available.
'
— — — — — — — — — —
1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19H7-U9-100 by Federal Reserve. The conversion factor i s 123.91.
2 / Averages of daily trading volume on the New York Stock Exchange.
~$f Moody's 200 common stocks; end of month figures.
%J End of month figures for member firms of the New York Stock Exchange which
carry-margin accounts; excludes balances secured by U. S. Government obligations.
$J 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 72 per cent of loans to others.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D

H.lU

Corporate and S t a t e and Local Government
S e c u r i t y Offerings and Placements
(In m i l l i o n s of d o l l a r s )

1956
January
February
March
April
May
June

1951*

1956

S t a t e and l c c a l
1
1955
I

195U

1*87
708
e/875

51*6
1*36
1,261

5U7
1*26
632

1*01*
696
e/375

535
312
538

396
1*11
565

e/800
e/1,0#

U9U
903
697

1*97
656
81*2

e/350
E/375

1*27
350
61*1

731*
71*8
853

90?
335
71*7

1*70
21*9
1*06

279
261
61*9

1,003
290
601*

919
658
1*08

591*
1*23
877

July
August
September

#3
6%
680

October
November
December

1,207-2/
631
921

^ l s t quarter
W2nd quarter
3rd q u a r t e r
l*th quarter
:
Year

New c a p i t a l

Corporate
1
1955
1

e/2,070

2,21*3
2,091*
1,917
2,760
9,011*

.

'

1,608
1,995
1,991
1,896
7,1*90

e/l,l*75
"
-

1,385 ^
1,1*18
1,121*
1,981*
5,911

1,372
2,331*
1,188
1,891*
6,#?

Excluding finance companies 2/
1 s t quarter
2nd quarter
3rd q u a r t e r
l*th quarter
Year

e/1,670

1,791
1,912
1,1*1*1
2 / #
7,762

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

e / Estimated.
T / Includes $637*2 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
If 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.
Note.—Details may not' add to t o t a l s due to rounding.




I

Exhibit E
Large P u b l i c S e c u r i t y I s s u e s f o r New C a p i t a l
(Other t h a n U. S . Treasury) 1 /
Proceeds of Large I s s u e s O f f e r e d
( M i l l i o n s of d o l l a r s )
S t a t e and
l o c a l government

Corporate

Month
1955 - A p r i l •
MayJune
July •
August
September
October
.November
December
. 1956 - JanuaryFebruary
March April

173
1*8 3
'
175
.101 .
h0$
326
60S
.221 '
263
95
. 212
278
#5

Other 2 /

238
1#
U03
278
65
2 3b

15

r/kOl
r/227
• ™ 192
r/hkh
~ 163
157

25
SO

,716

50

Large I n d i v i d u a l I s s u e s O f f e r e d May 1 through U

Issuer

Type 3 /

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

Rating

CORPORATE
Duke Power
Kaiser Aluminum & Chem.

1st & r e f .

mtg. b d s .
30.0
Conv. p r e f . s t k . 30,0

1986

. 3 5/8

3.50

Aaa

STATE & LOCAL GOVERNMENT
Allegheny Co. S a n i t a r y
A u t h . , Pa.
Baltimore, Maryland
La Mesa, Lemon Grove
& Spring Valley
I r r i g a t i o n D i s t . , Cal.
Los Angeles, C a l i f .
Dept. of Water & Pwr.
Chesapeake Bay F e r i y
D i s t . Commission, Va.
OTHER

DigitizedNone
for FRASER


Rev.
G.O.

25.0
25.0

1961-96
1958-82

3.35
2.81

2.75-3.35
2.10-2.80

Aa

G.O.

5-2

1966-96

3.90

3.30-3.85

Baa

Rev.

9.0

1957-86

2.9U

2.10-2.95

Aa

Rev.

20.0

1986

n. a.

n.a.

—

—

H.lU

E-2

r / Revised.
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 mid 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 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; L . L . , limited 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.lU

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

Date of
computation
1955 - Apr. 29
May 31
June 30
July 29
. Aug, 31
Sept. 30
Oct. 31
-'Nov. 30
Dec. 30
1956 - Jar.. 31
Feb. 29
Mar. 30
Apr. 30-

During month following
d a t e shown
Corporate
125
160
67
1*07
222
805
202
215
70
176
123
380
568

116
3kh
100

18U

813
330
205
121
327
220
132
173

50

Subsequent to
date shown
S t a t e and Other 2 /
Corporate
l o c a l govt,
'i,ua
850
830
1,135
920
90 9
h!2
230
85
376
233
1,013
818

1,917
1,861
1,81*5
2,018
1,971
2,205
1,650
756
618
• 917 .
785
811
832

50

Forthcoming Large O f f e r i n g s , as. of May U
Amount
( m i l l i o n s Approximate date
of d o l l a r s ) ( of o f f e r i n g .
CORPORATE
General Telephone
C a l i f o r n i a Oregon Power
General American Transportation
Niagara Mohawk Power
General E l e c t r i c
Northern I l l i n o i s Gas
Consolidated Edison
Southern C a l i f o r n i a Gas
#Lockheed A i r c r a f t
-"-Pacific Finance
American Telephone and Telegraph




Conv. deb.

53.0

1 s t mtg. bds.
Conv. deb.

16.0
23.8

G e n ' l . mtg." bds.
30.0
Deb.
300.0
1 s t mtg. bds.
15.0
1 s t &ref. mtg. bds.
30.0
1 s t mtg. bds.
liO.O
Deb.
30.0
Deb.
25.0
Deb.
250.0

May 7
( r i g h t s expire)
May 9
May 9
( r i g h t s expire)
May 9
May 15
May 16
May 23
May 23
May 23
May
June

H.lU

F-2
Forthcoming Large O f f e r i n g s , as of May U (Cont'd)
Issuer

Amount
( m i l l i o n s Approximate date
of o f f e r i n g
of d o l l a r s )

' Type

STATE AND LOCAL GOVERNMENT ••
Great F a l l s , Montana
Pasadena, C a l i f .
Tulsa, Oklahoma
S a l t River P r o j e c t , Arizona
Toledo, Ohio
Dade Co., F l o r i d a , Special Tax
School D i s t . No. 1
Orleans P a r i s h , La.
•fcOmaha, Nebraska
e s t a t e of Minnesota
Cleveland, Ohio
Georgia Rural Roads Authority
^•Denver, Colorado
^Tallahassee, Florida
S t a t e of C a l i f o r n i a
Florida S t a t e Turnpike Auth.
- Oklahoma Turnpike Authority
^ Pennsylvania Turnpike Commission
Washington S t a t e Toll Bridge Auth.
Inter-American Center Auth., F l a .

G.O.
G.O.
Rev.
n.a.
Rev.

5.0
11.0
5.0
11.0
5-0

G.O.
G.O.
G.O.
G.O.
G.O.
Rev.
G.O.
Rev.
G.O.
RevRev.
Rev.
• Rev.
Rev.

15.0
5.0
20.0
10,0
16.2
. 15.5
5-3
6.0
50.0
185.0
6^.0
62.0
227.0
70.0

.

May
May
May
May
May

7
8
8
15
16

May 16
May 16
May 21
May 22
May 22
May
June 6
June 7
June 13
Summer
1956
1956
1956
1956

OTHER
None
#—Included i n t a b l e f o r f i r s t time.
n.a.—Not a v a i l a b l e .
1 / Includes c o r p o r a t e and other i s s u e s of $15 m i l l i o n and over; S t a t e and
local~"government i s s u e s of $5 m i l l i o n and over.
2J 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 .

I




I