Full text of H.16 Capital Market Developments : August 9, 1956

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dot f o r P u b l i c a t i o n
H.lli

DEC0NTR0LLED

AFTER SIX MONTHS

__

August 9, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of l a r g e p u b l i c l y sold s e c u r i t y i s s u e s was small
.during the week ending August 3 , c o n s i s t i n g only of a $25 m i l l i o n
p r e f e r r e d stock o f f e r i n g and a $9 m i l l i o n S t a t e and l o c a l government
bond i s s u e . No l a r g e public f l o t a t i o n s a r e expected t h i s week) ending August 10. The only o f f e r i n g o r i g i n a l l y scheduled—the $75 m i l l i o n GIT f i n a n c i a l debenture issue—was again postponed. O r i g i n a l l y
r e g i s t e r e d with t h e SEC in t h e spring f o r s a l e in e a r l y June, t h e
i s s u e was postponed then because of market c o n d i t i o n s . The most
r e c e n t postponement was r e p o r t e d l y due t o d i f f e r e n c e s between the
company and the underwriters as t o t h e a p p r o p r i a t e i n t e r e s t r a t e
under current market c o n d i t i o n s . The postponement of another i s s u e ,
a $U0 m i l l i o n mortgage, bond o f f e r i n g of Southern C a l i f o r n i a Edison
scheduled f o r s a l e in e a r l y September, was a l s o announced t h i s week.
The u t i l i t y s a i d i t was planning a smaller common stock o f f e r i n g i n stead.
Bond y i e l d s - Yields on a l l types of outstanding bonds
increased s h a r p l y during t h e week ending August 3, most reaching new
highs f o r t h e y e a r . Corporate and U. S. Government bond y i e l d s are
w i t h i n l e s s than 10 basis, p o i n t s of t h e 1953 h i g h s , but S t a t e and
l o c a l government y i e l d s a r e s t i l l considerably below the 1953 l e v e l s .
Stock p r i c e s - Common stock p r i c e s , as measured by the SEC
index of 265 s t o c k s , advanced t o new record l e v e l s l a s t week, closing
on F r i d a y , August 13, a t 295.5. Daily indexes i n d i c a t e some recovery
on Tuesday and Wednesday, following a sharp drop on Monday a s s o c i a t e d
with r i s i n g t e n s i o n s i n t h e Middle E a s t .
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented 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 ,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




EXHIBIT A

H I G H - G R A D E BOND YIELDS

CORPORATE

\

U. S. G O V E R N M E N T : ^

STATE AND LOCAL
GOVERNMENT A a a

!954

5

U. S.
Corporate
Aaa 1 /

Old s e r i e s

long-term 2/
New s e r i e s

Spread between
S t a t e and
U. S. Govt,
l o c a l govt. (old s e r i e s ) and
Aaa 3/
Corporate 1State and
Aaa
J l o c a l Aaa

(Per cent)
1953 - fiigh

1955 - High
low
1956 - High
Low

3.12
2.99
3.09
2.85
3.17
2.91
3.35
3.07

July 6
J u l y 13
J u l y 20
J u l y 27
August 3

3.26
3.27
3.28
3.30
3.35

195U - High

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

(6/6)
(12/26)
(1/9)
(8/7)
2.9k (8/5)
2.62 (1/7) .
3.08 ( V 2 0 )
2.80 (2/17)

3.03
2.89
3.13
2.92

2.90
2.95
2.98
3.02
3.06

2.98
3.01
3.05
3.10
3.13

3.15
2.78
2.7U
2.1;k

n.a.

(8/5)
(6/10)
(7/3)
(2/3)

2.73
1.98
2.21
1.90
2.31
2.05
2.51
2.17
2.38
2.38
2.1,0
2.Ill'

.

2.US

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(5/3)
(2/23)

.13

.8k
.30
.61
.29
.70
•fli
.68
.15

.36
.32
.30
.28
.29

.52
.57
.58
.61
.61

.38
.19
.13
.32
.3U
.13

.to

Weekly average of d a i l y f i g u r e s .
2 / Weekly averages of d a i l y f i g u r e s . The old s e r i e s includes f u l l y t a x a b l e ,
marketable 2 1/2 p e r cent bonds due or f i r s t c a l l a b l e a f t e r 12 y e a r s through
September 1955) and t h o s e due or c a l l a b l e in 10-12 y e a r s t h e r e a f t e r ; the average
term t o f i r s t c a l l of t h e bonds included declined from lit years i n e a r l y 1953 t o
11 1/2 y e a r s in e a r l y 1956. The new s e r i e s i s comprised of t h e 3 p e r cent bond ,
of 1995 and the 3 1/h p e r cent bond of 1978-83..
j / Thursday f i g u r e s . Only general o b l i g a t i o n bonds a r e included; average
term i s 20 y e a r s .
•
.
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 on d i f f e r e n t d a t e s
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS
Weekly

Per cent per onnui

V

1953

!

1954

Corporate
Baa 1 /

Date

1955

State and
local govt.
Baa y

1956

State and
local govt,
rev. 3/

(Percent)
1953 - High
Low
1951 - High
Low
1955 - High
1956 - High
Low

3.8? (9/18)
3.50 (1/2)
3.7k (1/8)
3.hh (12/31)
3.63 (12/30)
3.U5 (l/lii)
3.85(8/3)
3.58 (3/9)

3.79
2.96
3.32
2.93
3.26
3.02
3'hh
3,20

July 6
July 13
July 20
July 27
August 3

3.78
3.78
3.79
3.82
3.85

3.31
3.3k
3.35
3.37
3.U2

(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
3.16
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(8/3)
(2/2U)

3.0k
3.05
3.08
3.11
3.16

included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are
included; average tern i s 20 years. .
3/ Friday figures. Average rating of bonds included i s
between Baa and Aj average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates f o r different series.




STOCK M A R K E T

Date

Stock p r i c e

Trading
Common
volume j?/
(millions yields 3/
of shares) (per cent)

Stock market customer c r e d i t
Customers'
d e b i t b a l - loans t o
ances k / "others" 5 /

Total

(Millions, of d o l l a r s )
1953 - High
195k - High
1955 - High
1956 - High
Low
June
J u l y 20
J u l y 27
August 3

167.1
lkk.0
221.lt
. 156.5
270.7
217.k
295.5
257. k

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(VU»)
(8/3)
(1/20)

275.5
290.1
292.8"
292.2
295.5

2.5
0.9
3.7
l.U
k.6
1.5
3.1
1.6
1.8
2.2
2.3
2.1
2.3

.

5.75
5.15
• 5.33
k. 20
It.22
3.78
c/k.21
c/3.86

2,a5
2,055
3,136
2,k05
It,030
3,537
a,0lt7
3,991

1,665
1,31k
2,388
1,653
2,805
2,517
2,810
2,7k0

780
66k
l,0it8
716
l,2kl
1,018
1,267
l,211t

c/k.01
3.87

It,009

2,786

n.a.

n.a.

1,223
1,21k
1,219
1,21k
n.a.

n.a.

n.a.—Not a v a i l a b l e .
c / Corrected.
V SEC index of 265 common s t o c k s , weekly closing p r i c e s , 1939=100; converted
t o 19k7-k9 c 100 by Federal 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.
3 / Moody's 200 common s t o c k s ; end of month f i g u r e s .
It/ End of month f i g u r e s f o r member f i r m s of the New York Stock Exchange which
carry - margin accounts; excludes balances, 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 loans f o r
purchasing or c a r r y i n g U. S. Government s e c u r i t i e s a t banks in Mew York and Chicago.
Weekly r e p o r t i n g banks account f o r about 72 per cent of loans to o t h e r s .
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 on d i f f e r e n t d a t e s
. for different series.




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
( I n m i l l i o n s of d o l l a r s )

1956
January
February
March

New c a p i t a l
195a

1956

S t a t e and 1.ocal
1
1
1955

195U

579
701*
790

535
407
1,223

Shi
126
635

1*01*
696
390

535
312
538

396
1*11
565

April
May
June

e/890
e/1,100
e/760

1*78
886
687

197
656
812

377
1*90
e/730

1*27
350
6Ul

731*
71*8
853

July
August
September

e/1,150
e/700

597
61*1*
670

909
335
7h7

e/350
e/200

1*70
2l*9
1*06

279
261
61*9

919
658
1*08

591*
1*23
877

1,385
1,118
1,121*
1,981*
5,911

1,372
2,331*
1,188
1,891*
6,789

October
November
December
z

Corporate
1
1955
1

1st quarter
2nd quarter
3rd q u a r t e r
l*th q u a r t e r
Year

2,073
e/2,750

1,162 ^
632
900

1,003
290
6ol*

2,165
2,052
1,911
2,695
8,821

1,608
1,995
1,991
1,896
7,190

Excluding f i n a n c e companies
1st quarter
2nd q u a r t e r
3rd q u a r t e r
Uth q u a r t e r
Year

1,617
e/2,550

1,727
1,870
1,1*31*
2,55k
7,569

'
1,1*90
e/1,597

c

2/

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

e / Estimated.
1 / I n c l u d e s $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 .
_2/ T o t a l 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 p e r s o n a l f i n a n c e
companies.
N o t e , — D e t a i l s may n o t add t o t o t a l s due t o rounding.




I

H.llt

Exhibit. E

i

Large Public Security Issues f o r New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Month

|

1 9 # - July
August
September
October
November
December
1956 - January .
February
March
April
May
. June
July

Corporate

S t a t e and
l o c a l government

101
k05
328
805
221
263
95
212
278
395
623
185
592

z

Other 2 /

278
65
23U
716
U01
227
192
iM
163
157
233
U63
i6U

25
50

50
20
—

Large Individual Issues Offered July 1 through August 3
Issuer

Type 3 /

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

> CORPORATE
Florida Power Corp.
P a c i f i c Gas & E l e c t r i c
Tennessee Gas Trans.
American Tel. & Tel. Co.
Union E l e c t r i c Co.
Superior Oil Co.
Inland S t e e l Co.
Sperry Rand Corp.
I l l i n o i s Power Co.
. Food Mach. & Chem. Corp.
Champion Paper & Fiber
El Paso Natural Gas Co.

1st mtg.bds.
20.0
Common s t k .
36.6
Deb.
30.0
Deb.
250.0
1st mtg.bds.
Uo.o
Deb.
15.7
1st mtg. bds. 50.0
Common s t k .
52.7
1 s t mtg. bds. 20.0
S.F. deb.
30.0
S.F. deb.
16.5
-Pfd. s t k .
25.0




1986
r 1977
1990 •
1986
1981
1981
1986
1961
1981

3 7/8

3.82

A

4
3
3
3
3

1/2
7/8
3/U
3A
1/2

L50
3.73
3.62
3.75
3.U7

Baa
Aa
Aa
A
Aa

3 3/h
3.80
3 3A

3.70
3.80
3.75

Aa
A
A

H.Ik

E-2

Large Individual Issues Offered July 1 through August 3 (Cont'd)

Issuer

Type j /

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

STATE & LOCAL GOVERNMENT
Commonwealth of Mass.
Puerto Rico Water Res.
Auth.
State of Michigan
Tulsa, Oklahoma, Ind.
School D i s t r i c t
Dearborn, Michigan,
School D i s t r i c t
Md. S t a t e Roads Commission
Jacksonville, Florida
Oklahoma City, Oklahoma
Salt Lake City, Utah
Chicago, I l l i n o i s
Milwaukee Co., Wisconsin

G.O.

38.5

1957-2005

2.63

1.99-2.80

Elec. rev.
G.O.

22.0
16.0

1958-93
1959-79

n.a.
2.81

Baa
2.60-3.75
2.00-2.75 . Aa

G.O.

5.5

1958-71

2.62

2.10-2.60

G.O.

lU.o

1956-73

2.93

2.00-3.00

A

15.0
lll.O
8.8
7.5
13.5
8.8

1957-71
1958-76
1958-81
1957-71
1958-82
1957-71

2.77
2.67
2.78
2.28
It. 28
. 2.31

1.90-2.75
2.05-2.70
2.10-2.80
1.70-2.25
y
1.70-2.30

Aa
Aa
A.
Aa

G.O.
Elec. rev.
G.O.
G.O.
Parking rev.
G.O.

Aa

A

w<e'

Aaa

OTHER
None
n.a.—Not a v a i l a b l e .
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of $15 million 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 million and over.
2 / Includes foreign 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 State and l o c a l government s e c u r i t i e s , G.O. denotes general
obligation; Rev., revenue bondsj G.R., general obligations 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 obligations secured by pledge of
designated revenues.
k / Not r e o f f e r e d .




Exhibit F

H.Ih

Forthcoming Large Public S e c u r i t y O f f e r i n g s 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
S t a t e and Other 2/
Corporate
l o c a l govt.

Date of
computation
1955 - J u l y 29
Aug. 31
, / S e p t . 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31
June 30
J u l y 31

k07
222
805
202
215
70
176
123
380
568
198
U37
2it7

100
18U
813
330
205
121
327
220
132
173
332
81
—

__

.
50
mmmm
mmmm

37

Subsequent t o
date shown
S t a t e and Other 2/
Corporate
l o c a l govt.
1,135
920
909
1+12
230
85
376
233
1,013
818
. hhQ.
567
1,096

2,018
1,971
2,205
1,650
756
618 •
917
. 785
811
832
9hl
690
726

50
——

37

Forthcoming Large O f f e r i n g s , as of August. 3
Issuer

Type

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

CORPORATE
Consumers Power Co.
General Acceptance Corp.
Commercial Credit Co.
P a c i f i c Telephone & Telegraph Co.
•^Commercial C r e d i t Co.
^Associates Investment Co.
•^Minneapolis-Honeywell Co.
Mack Trucks, Inc.
Northern S t a t e s Power Co.
D e t r o i t Edison Co.
Consolidated Natural Gas Co.
*New England T e l . & Tel. Co.
American T e l . & Tel. Co. 3 /
J . P. Stevens & Co.
CIT F i n a n c i a l Corp.
P a c i f i c Finance Corp.
Michigan Wisconsin Pipe Line Co.
Southern C a l i f . Edison Co.




1 s t mtg. bds.
Deb.
Notes
Deb.
Notes
• Deb.
S.F. deb.
S.F. deb.

1*0.0
20.0
50.0
78.0
50.0
50.0
25.0
19.2

1 s t mtg. bds.
Conv. deb.

15.0
59.8 .

Deb.
Cap. s t k .
Common s t k .

30.0
18.9
575.0

S.F. deb.
Deb.
Deb.
1 s t mtg. bds.
1 s t mtg.' bds.

28.7
75.0
25.0
25.0
1*0.0

August lit
August 111
August lit
August 21
August 21
August 23
August 23
August 30
( r i g h t s expire)
September 12
September ll*
( r i g h t s expire)
September
September
November 5
( r i g h t s expire)
1956
1956
1956
1956
1956

H.1U

F-2
Forthcoming Large O f f e r i n g s , as of August 3 (Cont'd)
Issuer

Type

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

STATE AND LOCAL GOVERNMENT
Washington S t a t e T o l l Bridge Auth.
New J e r s e y Highway Authority "•
New York S t a t e Tliruway AuthorityJacksonville Expressway Authority
Memphis, Tennessee
F l o r i d a S t a t e Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e To ll Bridge Auth.
Inter-American Center A u t h . , F l a .

Rev.
Rev.
G.O.
Rev.
Elec. rev..
Rev.
Rev. .
Rev.
Rev.
Rev.

.

5.U
25.0
5o.o
1+2.0
135.0
185.0
65.0
62.0
227.0
70.0

August 21
Summer
Summer
September
September
Fall
1956
1956
1956
1956

36.5

August 15

OTHER
Municipality of Metropolitan Toronto

Deb.

*—Included in t a b l e f o r f i r s t
1 / Includes corporate and o t h e r i s s u e s of $15 m i l l i o n and over; 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 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 / Subject t o s t o c k h o l d e r s ' approval on September 5# 1956.