Full text of H.16 Capital Market Developments : January 31, 1957
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Not f o r Publication DECONTROLLED AFTER SIX MOUTHS H.lii January 31, 1957 CAPITAL MARKET DEVELOPMENTS The volume of public security financing continues to be substantial. Curing the week ending January 25, corporations sold large i s s u e s totaling §111 m i l l i o n , including expiration of subscription rights f o r a %p6l million stock i s s u e , and State and l o c a l government offerings amounted to $32 million. This week rights expire on a million debenture i s s u e and two other corporate debt i s s u e s with aggregate proceeds of #60 million are expected. Two large State and l o c a l government o f f e r i n g s t o t a l i n g &79 m i l l ion are scheduled for s a l e . ^ Bond y i e l d s - Yields on a l l types of outstanding bonds declined l a s t week, with the decline being quite sharp l o r Government bonds and the higher grade corporate and State and l o c a l government bonds. The Port of New York Authority offering t h i s week of A-iated consolidated revenue bonds was only 3 points above a comparable issue i n September of l a s t year and U8 basis points above a comparable i s s u e i n May of 1956. The r i s e i n y i e l d s o'ri these Authority issues over t h i s 8-month period has been much l e s s than the increase i n y i e l d s on comparable outstanding revenue bonds, which have increased more than 30 points since September. - May 21, 1956 Sept. 6 , 1956" Jan. 29, 1957 Amount (millions of dollars) Maturity Net interest New i s s u e 30.0 25.0 50.0 1986 1986 1987 3,0k 3.52 3.5h 3.00 3.15 3.1*8 1 / As measured by Dow-Jones 10 revenue bond average. Yield Outstanding 1 / 3. Oil 3.51 3.8k — 2 — Estimated February volume - The corporate volume of new capital issues f o r February i s estiinated a t $1,000 m i l l i o n s l i g h t l y below the estimated January volume but t w o - f i f t h s greater than the volume i n February l a s t year. Large publicly offered i s s u e s are expected to t o t a l nearly $600 mill ion, including the expiration of subscription rights f o r the very large i s s u e s of Socony Mobil Oil Company and P h i l l i p s Petroleum Company, State and l o c a l government i s s u e s for February are currently estimated at %pit00 million. This t o t a l would be 1*0 per cent below both the volume t h i s January and in February of l a s t year. I t shox^Ld be noted, however, that the combined t o t a l f o r the f i r s t two months of t h i s year i s only s l i g h t l y l e s s than the corresponding t o t a l f o r 19#. Stock prices - Stock prices, as measured by the SEC index of 265 common stocks increased s l i g h t l y l a s t week, closing at 268.2 on January 25. Daily f i g u r e s through Wednesday of t h i s week indicate some further increase i n p r i c e 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. EXHIBIT A H I G H - G R A D E BOND YIELDS V A U. S. Govt., long-term 2/ tote 1956 ,955 1953 Corporate Aaa 1 / Old s e r i e s New s e r i e s Spread between State and D. S. Govt, l o c a l gort. (old s e r i e s ) and CorporatelState and Aaa J / Aaa 1local Aaa (Per cent) 3.1*2 2.99 3.09 1951 - High Low 2.85 3.17 1955 - High LOW : 2.91 1956 - High!1 3.79 Low 3.07 1953 - High December 28 January It January 11 January 18 January 25 (6/19) (1/9) (1/8) (li/23) (12/23) (1/7) (12/28) (3/2) 3.79 3.82 3,81 3.78 3.73 3.15 2.78 2.7k 2.kk 2.9k 2.62 3.U9 2.80 (6/6) (12/26) (1/9) (8/7) (8/5) (1/7) (12/21) (2/17) 3.1*8 3.53 3.k5 3-30 3.22 1 / Weekly average of d a i l y f i g u r e s . n.a. 3.03 2.89 3.39 2.92 2.73 1.98 2.21 1.90 (8/5) 2.3k ( 6/10) 2.05 (12/28) 3.05 (2/3) 2.17 3.39 3.U5 3.kk 3.37 3.31 3.05 3.05 3.05 3.02 2.96 (6/25) • .38 (1/8) .19 (6/10) .k3 (9/2) .32 (9/8) .3k (5/26) .13 (12/27) .kk (2/23) .13 .8k .30 .61 .29 .70 •5k .66 .32 • .k3 .k8 .kO .28 .26 .31 .29 .36 .k8 .51 Average term of bonds included i s 25-26 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 per cent bonds due or f i r s t c a l l a b l e a f t e r 12 years through September 1955j and those due or c a l l a b l e in 10-12 years t h e r e a f t e r ; the average term to 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 years i n early 1956. The new s e r i e s i s comprised of the 3 per cent bond of 1995 and the 3 l / k p e r cent bond of 1978-83. 2 / Thursday f i g u r e s . Only general obligation bonds a r e included; average term i s 20 y e a r s . Note.--Highs 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. LOWER - GRADE BOND YIELDS 1956 Corporate Baa 1 / State and local govt. State and local govt. " • y (Per cent) 1953 - High Low 195k - High Low 1955 - High Low 1956 - High Low 3.89 3.50 3.7k 3.W 3.63 3.U5 It.ltl 3.58 (9/18) 3.79 (1/2) 2.96 (1/8) 3.32 (12/31) 2.93 (12/30) . 3.26 (I/Hi) 3.02 (12/28) It. 22 (3/9) 3.20 December 28 January It January 11 January 18 January 25 lt.ltl 1 h.h6 j U.h9 lt.50 lt.lt8 It. 22 It. 22 It. 22 14.17. It. 13 3.27 (6/26) 2.71 (1/2) 3.00 (1/1) 6) 2.72 2.99 2.76 3.98 2.89 (8/13) (12/30) (1/7) (12/28) (2/2lt) 3.98 3.98 3.95 3.90 3.81 1/ Weekly of daily. figures, Average term of bonds . average w .uoed i s 25-26 years. included 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 A; average term i s 20 years. Note.—Kighs and lows are for individual series and may be on different dates for different series. Stock price index 1/ Trading Common volume 2/ (millions yields ^ / of shares) (per cent) Stock market customer-credit Customers1 debit balances It/ "others" 5 / (Millions of dollars) 1956 - High Low . 1957 - High Low 221.U 156.5 270.7 217.it 295.5 257.lt 279.2 267.lt November December January 11 January 18 January 25 273.1 277.7 277.1 267.lt 268.2 195U - High . Low 1955 - High (12/31) (1/6) (12/30) (1/lU) (8/3) (1/20) (1/U) (1/18) 3.7 l.lt U.6 1.5 3.1 1.5 2.7 2.1 5.33 It. 20 It. 22 3.78 it. 25 3.86 3,U36 2,lt05 U,030 3,537 U,0U7 3,9Ht 2,388 1,653 2,805 2,517 2,823 2,7lt0 1,0U8 7lt6 l,2ltl 1,018 1,267 1,155 1,163 1,1U7 2.2 2«It 2.U 2.3 2.1 It. 25 It. 13 3,91*6 3,981t 2,781t 2,823 n.a. n.a. n.a. 1,162 1,161 1,157 l,llt7 n.a. n.a.—Not; available 1/ SEC index of 265 common stocks, weakly closing prices, 1939-100; converted to 19u7-U9*100 by Federal Reserve. The conversion f a c t o r i s 123.91. 2/ Averages of daily trading volume on the New York Stock Exchange. 3/ Moody's 200 common stocks; end of month f i g u r e s . V/ End of month figures f o r member firms of the New York Stock Exchange which carry margin accounts; excludes balances secured by U. S. Government obligations. 5/ Wednesday figures f o r weekly reporting member banks. Excludes loans f o r purchasing or carrying U. S. Government s e c u r i t i e s a t banks i n New York and Chicago. Weekly reporting banks account f o r about 72 per cent of loans to others. Note.—Highs and lows are f o r individual series and may be on d i f f e r e n t dates for different series. H.lU i x h i b i t D. Corporate and State and Local Government Security Offerings and Placements %' (In millions of dollars) 1957 January February March New capital 1955 U78 886 687 377 Ii90 - 735 6I4JL 1,066 669 836 597 6hk 670 376 199 333 . 778 g / e/1,057 * e/950 1,162'^ 632 900 2,073 2,790 2,571 e/2,785 U,863 7,U3U e/10,219 April May June 816 l,lhk 830 JulyAugust September October November December 1 s t half Three quarters Year e/660 . e/hCO 1955 535 312 538 535 U07 1,223. quarter quarter quarter quarter State and l o c a l 1957 I 1956 I UOU 696 390 579 70ii 790 jjlst 2nd 3rd Uth e/1,050 e/l,0C0 Corporate 1 1956 1 U27 U70 2U9 W6 6U5 3(325 e/liOO 919 658 li08 2,165 2,052 1,911 2,695 1,190 1,603 908 e/1,370 1,385 1,148. 1,12k 1,981 k,2l7 6,128 8,821 3,093 4,001 e/5,371 2,803 3,927 5,911 excluding finance companies j / 1st 2nd 3rd Uth quarter quarter quarter quarter Year 1,617 2,520 2,263 3/2,600 1,727 1,870 l,b3h 2,55k e/9,060 7,569 1 / Includes #637.2 million AT&T convertible debenture issue, 2 / Includes $571«5 million AT&T common stock i s s u e . 3 / Total new capital issues excluding offerings of sales and consumer finance companies. Note,—Details may not add to t o t a l s due to rounding, 9 (' -- Exhibit E ' - Large Public Security Issues for New Capital (Other than U. S. Treasury) Proceeds of Large Issues Offered (Millions of dollars) Month Corporate State and l o c a l government Other 2 / 263 95 212 278 395 623 185 592 217 558 386 701 U30 227 192 kkh 163 •157 233 U63 16U 35 18U . 383 135 201 50 1955 - December 1956 - January February March April. May June July August September October . November December 50 20 37 35 — Large Individual Issues Offered January 1 through 25 Issuer ^ "type 3 / Amount Coupon Offering (millions rate or Maturity * of yield net i n t e r dollars) est cost Rating . CORPORATE 1 s t mtg. bds,, . 'Idaho Power Co. S.F. deb. Standard Oil Co. of Ohio Deb, Aluminum Co. of America Deb. New England Tel.& Tel. Co. S.F; deb. I n t e r s t a t e Oil PL Co. Sears Roebuck Accept. Corp. Deb. Deb. Household Finance Corp. Louisiana Power & Light Co. 1st mtg. ods. Oklahoma Gas & E l e c t r i c Co. 1 s t mtg.bds. Conv. sub. deb. P a c i f i c Petroleums, Ltd. 20.0 25.0 125.0 35.0 25.0 50.0 30.0 20.0 20.0 15.0 1987 1982 1982 1986 1987 1972 1977 1987 1987 1977 • h 1/2 hl/h h 1/b 4 3A UlA h 5/8 L5/8 4 3/k L5/8 5 ' .L50 U.25 1,25 L.60 L25 1.57 li.6o b.6 7 U.U3 a.38 Aa Aa Aa Aac Aa A Aa • — H.Ik B-2 Large Individual Issues Offered January 1 through 25 (Cont'd) Issuer Type 1 / Amount Coupon rate or [millions Maturity net i n t e r of dollars) e s t cost Offering y i e l d Rating CORPORATE (Cont'd) P a c i f i c Gas & E l e c t r i c Co. 1st & ref. mtg. bds. " Armco S t e e l Corp. Common stk. 35 .0 1986 h 1/2 U.50 Aa 3.76 2.80-3.75 A 3.58 3.38 U.51 3.U9 3.31 3.33 3.33 . 3.37 2.70-3.80 A 2.50-3.50 Aa 3.00-U.50 Baa 2.50-3.25 A 2.50-3.35 A 2-.ltO-3.25, M 2.50-3.55%a 2.50-3.35 Aa 3.00-3.75 A 60.9 STATE AND LOCAL GOVERNMENT San Antonio Ind. Sch, D i s t . , Texas G.O. 5.0 1958-75 Fort Worth Ind, Sch. D i s t . , Texas G.O. 5 . 0 1958-82 G.O. Los Angeles, California 18.0 1958-87 Port Lauderdale, Florida Wtr. icswr.rev. 11.0 1957-86 Caddo Parish Sch. Dist.,La G.O. 5.0 1958-77 Dallas, Texas G.O. 10.0 1957-76 ^ D a l l a s , Texas Rev,. 5 . 0 1957-77 #R)range Co. Flood D i s t . , Cal. G.O. 10.0 1958-96 State of Michigan L.L* 27.0 1958-77 • Ga. Rural Roads Auth. L.L. 17.5 1958-72 Spokane Co. Sch. Dist. No. 81, Washington G.O. 6 . 0 1958-80 King Co. Sch.Dist. No. 1, WasMngton G.O. 10.0 1959-77 State of California G.O. 85.0 1958-83 Alabama Highway Authority L.L. 4 . 0 1959-76 San Antonio, Texas Elec.&gas rev. 20.0 1958-80 Wichita Sch. D i s t No. 1, Kan. G.O. 6.0 1958-77 Denver, Colorado G.O. 20.0 1968-95 Columbus Sch. D i s t . , Ohio,, G.O. 5 . 0 1958-81 Tulsa, Oklahoma G.O. 6 . 5 1959-82 Birmingham, Alabama G.O. 6.7 1957-87 De Kalb Co.Sch.Dist., Ga. G.O. 5 . 1 1958-82 Boston.Metro. D i s t . , Mass. G.O. 8.2 1957-87 3.81 2.96 2.10-2.90 Aa 3.39 3.32 3.69. 3.36 3.33 3.02 3.^5 3.U3 2.92 2.65-3 .UO 2.60-3 iiO 2.90-3 70 2.50-3 30 2.60-3 35 2.65-3, 05 2:25-2, 85 2.60-3, 35 2.50-3, 50 2.50-3. 50 2.10-3. A Aa A Aa A Aa Aa A A A h 1/2 U.39 2.81 OTHER Int. Bank for Reconstruct i o n & Development # Bds. 100.0 1977 .H.Ik /E-3 1 / Includes corporate and other security o f f e r i n g s of $15 m i l l i o n and over; State and l o c a l government security o f f e r i n g s of m i l l i o n and over, 2j, Includes foreign government and International Bank for Reconstruction and Development i s s u e s . — 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 obligation3 Rev., revenue bonds; G.R., general obligations additionally 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 / I s of 1993-96 not reoffered. Exhibit F H.ih Forthcoming Large Public Security Offerings for Now Capital (Othor than U. S. Treasury) 1/ Expected Procoeds from Forthcoming Large Issues Date of computation 1956 • Jan* 31 Feb. 29 Mar. 30 Apr. 30 May 31 June 29 July 31 Aug. 31 Sept. 28 Oct. 31 Nov. 30 Dec. 31 1 9 5 7 - Jan. 31 During month following date shown State and Other 2 / Corporate local govt, 176 123 380 568 198 k V 21+7 369 315 683 436 U76 591 327 220 132 173 332 81 Subsequent to date shown State and Corporate local govt. Other 2 / 37 131 s 23 100 35 1+8 280 153 917 785 811 832 91+1 690 726 958 . 1,197 955 979 763 6I4.8 376 233 1,013 818 W+8 567 1,096 1,202 1,009 990 1+81 796 966 — — — - - — 37 23 100 35 Forthcoming Large Offerings, as of January 25 Type CORPORATE Niagara-Mohawk Power Co. Amount Approximate date (millions of offering of dollars) Conv. deb. 146.2 Mountain State Tel. & Tel. Co. May Stores Realty Corp. Carrier Corp. Douglas Aircraft Co. •Stanrock Uranium Mines# Ltd. •Potomac Electric Power Co. •Ohio Edison Co. Deb. Gen. mtg. bds. Conv. sub. deb. Conv. sub. deb. 1st mtg. bds. Deb. Common stk. 35.0 •Southern California Edison Co. Socony Mobil Oil Co. 1st &rof. mtg. bds. Common stk. 37.5 200.0 Conv. S.F. deb. 19.9 Phillips Petroleum Co. Conv. deb. 171.8 American Natural Gas Co. Common s t k . 28.0 Preferred stk. 15.0 Colorado Fuel & Iron Corp. •Potomac Electric Power Co. -- 25.0 18.0 30.0 26.0 18.0 27.0 January 28 (rights expire) January 29 January 31 February 6 February 6 February 6 February ll+ February 15 (rights expire) February 19 February 19 (rights expire) February 23 (rights expire) February 25 (rights expire) February 25, (rights expire) February 28 H.1U F-2 Forthcoming Large Offerings, as of January 25 (Cont'd) Issuer Type Amount Approximate date (millions of offering of dollars) CORPORATE (Cont'd) •Anaconda Co. Common s t k . American Tel. & Tel. Co. Michigan Wisconsin Pipe Line Co. Deb. 100.0 250.0 1st mtg. bds. 25.O Port of New York AuthorityRev. State of .Connecticut G.O. Milwaukee Co., Wisconsin G.O. San Diego Unified Sch. D i s t . , C a l i f . G.O. New York, New York G.O. Fresno Unified Sch. D i s t . , C a l i f . G.O. Public Housing Authorities State of Missouri G.O;. •Allegheny Go. Sanitary Auth., Pa. Swr» rev. San Francisco (City & Co.), C a l i f . G.O. • S t . Louis, Missouri G.O. El Paso Co. Sch. D i s t . No. 11, Colo. G.O. Houston Ind. Sch. D i s t . , Texas G.O. Pennsylvania Turnpike Commission Rev. Inter-American Center Auth., Fla. Rev. New York State Thruivay Authority G.O. Jacksonville Expressway Authority Rev. Florida State Turnpike Authority Rev. Oklahoma Turnpike Authority Rev. Expressway rev. State of Connecticut 50.0 29.2 11.2 5.0 25.2 5.5 28.6 20.0 15.0 23.6 12.1 6.9 16.8 62.0 20.0 50.0 1+2.0 185.0 65.O 54.0 March 5 (rights expire) March 26 (rights expire) Winter STATE AND LOCAL GOVERNMENT January 29 January 30 February U February 5 February 5 February 5 February 6 February 13 February 1k February 18 February 19 February 20 March 1 Winter Winter Winter Winter Winter Winter Winter OTHER Qaebec Hydro-Electric Commission Deb. 35.0 February 7 •—Included in table for f i r s t time. 2 / Includes corporate and other issues of $15 million and over; State and l o c a l government issues of £5 million and over. 2 f Includes foreign government and International Bank for Reconstruction and Development i s s u e s . Note.—Deletions for reasons other than sale of issue: None. H.lU Exhibit G Yields on New and Outstanding Electric Power Bonds, Rated Aa and A 1 / Date 1952 1953 195k 1955 1956 1956 average average average average average - January . February March April May June July 3 18 25 Augpst 1 30 September 11 13 25 October 10 31 November 21 December 6 12 1957 - January 8 16 18 A-rated o f f e r i n g y i e l d s Aa-rated offering 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 cent) (basis points) (per cent) (basis points) 3.16 3.U6 3.02 3.23 3.81 None *3.15 3.28 *3.77 *3.53 *3.52 3 11 Uo 19 18 3.62 3.70 26 33 U.07 -It. 20 It. 17 4.01 52 62 58 37 It. 20 4.30 U8 52 it.30 hi 4.50 62 4.U3 56 h.bo 53 13 16 2 9 35 . . 3.35 3.78 3.12 3.33 3.73 None 3.23 3.U5 3.61 3.77 *3.75 3.82 J \ 11 26 -3 12 27 -6 15 26 28 27 28 1+.00 it3 U-.U0 63 It.58 70 it. 6 7 70 U.56 57 • *—Single observation, not an average, 1 / Covers only 30-year f i r s t mortgage bonds, as reported in Moody's Bond Survey. Except where indicated, the actual y i e l d f i g u r e and the amount above seasoned y i e l d s are averages of offerings during the indicated period, and of the differences between these new offering y i e l d s and y i e l d s on seasoned i s s u e s of similar quality for the same day. Average maturity for the seasoned i s s u e s varies from 26 to 28 years.