Full text of H.16 Capital Market Developments : June 8, 1959

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Not f o r P u b l i c j t i o n

j^TER SIX MONTHS

H.li*

June 8, 1959
CAPITAL MARKET DEVELOPMENTS

The volume of l a r g e public s e c u r i t y f i n a n c i n g continues t o
be s u b s t a n t i a l . During t h e week ending June 5 , corporations sold l a r g e
i s s u e s , including e x p i r a t i o n of s u b s c r i p t i o n r i g h t s , amounting to ^93
million and S t a t e and l o c a l government o f f e r i n g s a l s o t o t a l e d $93 m i l l i o n .
This week, l a r g e corporate i s s u e s a r e expected.to t o t a l
million.
State and l o c a l government i s s u e s with aggregate proceeds of $173 m i l l i o n
a r e scheduled f o r s a l e , including a $100 m i l l i o n bond i s s u e by the S t a t e
of C a l i f o r n i a .
There were a number of s u b s t a n t i a l a d d i t i o n s t o the June calendar
of municipal bond s a l e s l a s t week and i t now appears t h a t June bond s a l e s
may be about #800 m i l l i o n , $150 m i l l i o n more than estimated l a s t week.
Bond y i e l d s - Yields on corporate and U. S. Government bonds
increased s l i g h t l y l a s t week, while those on S t a t e and l o c a l government
bonds remained s t a b l e .
O f f e r i n g y i e l d s on new corporate bonds declined s l i g h t l y l a s t
week. A new Aa-rated, f i r s t mortgage e l e c t r i c bond i s s u e was o f f e r e d
t o i n v e s t o r s on Thursday to y i e l d k.9S
5 b a s i s points below t h a t f o r
a comparable o f f e r i n g made a week e a r l i e r .
The o f f e r i n g of New York City bonds l a s t week a f f o r d s an opp o r t u n i t y t o compare c u r r e n t S t a t e and l o c a l government bond y i e l d s with
the postwar peaks reached i n August of 1957. New York City a l s o sold a
s i m i l a r A-rated issue a t about the time y i e l d s on outstanding bonds
reached t h e i r peaks. The comparison of y i e l d s on these two i s s u e s tends
t o confirm the movement i n the Moody's s e r i e s on outstanding bond y i e l d s ,
which i s s t i l l somewhat below t h e 1957 peaks. (Other municipal y i e l d
s e r i e s — Standard and P o o r ' s , Bond Buyer and Dow-Jones — have surpassed
t h e i r 1957 h i g h s . ) New o f f e r i n g y i e l d s f o r s h o r t e r term bonds are 25-35
b a s i s p o i n t s lower than in August 1957, while those f o r the longest term
(Ik years) a r e 11 b a s i s points lower. Yields on outstanding A-rated bonds
a r e c u r r e n t l y 8 b a s i s p o i n t s below the l e v e l of August 1957.
New York City Bond I s s u e s
A m o u n t N e t
(millions
interest
of d o l l a r s ) [
cost
Aug. 15, 1957
June 5, 1959

2*0.0
27.0

3.76

Yield by years t o maturity (per cent)
New issue
Outstanding!/
5
I 10 I 14
_L
2.75
2.1*0

3.1*0
3.15

3-70
3.50

3.80

3.69

1 / Moody's A-rated State and l o c a l government bond y i e l d averages.




3.91
3.83

H.li;

Stock p r i c e s - Stock p r i c e s declined s u b s t a n t i a l l y l a s t week.
Standard and P o o r ' s index of 500 common stocks closed a t 57.51 on June
2 p e r cent lower than a week e a r l i e r . The volume of t r a d i n g again averaged
3.0 m i l l i o n shares a day.
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented in the a t t a c h e d e x h i b i t s .

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.




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




H.lit

Exhibit b
Tables f o r E x h i b i t A
High-grade bond Yields

Date

U. S. Govt,
long-term 2 /

Corporate
Aaa 1 /

Spread between
U. S. Govt, and
Corporate IState and
Aaa
1local Aaa

S t a t e and
l o c a l govt.
Aaa 1/

(Per cent)
19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
it.lit
it. 13
3-55
it. a
it.09

May 8
May 15
May 22
May 29
June 5 2/

it. 33
it. 36
it. 39
k.h2
it. a

(lt/23)
(9/27)
(10/10)
(5/2)
(6/5)
(1/9)

2.it5
3.76
3.8U
3.07
it. 11
3.83

(8/6)
(10/18)
(12/26)
(it/25)
(5/22)
(1/2)

it.05
it. 09
it.ll
it. 08
it. 10

1.90
3.U5
3.31
2.61*
3.31
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(6/W
(3/26)

3.23
3.30
3.31
3.31
3.31

.30
.60
.51
.22
.3it
.16

.30
.1*7
.72
• 3it
.92
.65

.28
.27
.28
.3it
.3it

.82
.79
.80
.77
.79

Lower-grade Bond Yields

Date

Corporate
Baa 1 /

State and
l o c a l govt.
Baa | /

Spread between
Aaa and Baa
State and
Corporate
l o c a l govt.

(Per cent)
195it - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.itlt
5.10
it.96
it. 51
5.03
it.83

May 8
May 15
May 22
May 29
June 5 2 /

it.93
it.9it
it.97
5.01
5.03

(12/31)
(11/29)
(1/3)
(7/11)
(6/5)
(it/17)

2.93(8/5)
it. 51 (0/29)
it.3it ( 9 / 1 1 )
3.6ii (5/1)
it. 20 (6/1*)
3.92 ( 3 / 2 6 )
it.12
it.19
it.20
it. 20
it. 20

.52
1.27
1.20
.77
.77
.58

.96
1.21
1.11
.93
. .98
.86

.60
.58
.58
.59
.59

.89
.89
.89
.89
.89

2 / Preliminary.
1/ Weekly average of 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 / Weekly average of daily f i g u r e s . The s e r i e s includes bonds due or c a l l a b l e in
10 years or moro.
2 / 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 years.
-z
Note.—highs and lows are f o r individual s e r i e s and may be on d i f f e r e n t dates f o r
different series.




Averofle elO

Millions

MORTGAGE

AND

BOND




YIELDS

Exhibit D - Tables f o r Exhibit C

n.iU

• Stock Market
Trading
, Common
stock
volume 3j
yields 2/ (millions
(per cent) of shares)

Stock p r i c e
index 1 /

Stock market customer c r e d i t
Customers 1
Bank
debit b a l - loans t o •
ances k / "others" 5 /
(Millions of d o l l a r s )
Total

|1953-1958 - High
1
Low
11959 - High
i
Low

54.11
22.95
58.68
54.37

3.30
6.25
3.16
3.3k

4.9
0.9
14.3
3.0

4,1492
2,055
14,719
14,527

3,285
1,314
3,399
3,253

1,317
669
1,332
1,210

March
April
May 22
May 29
June 5 £ /

56.15
57.10
58.33
58.68
57.51

3.25
3.25
3.19
3.16
3.23

3.9
3.4
3.2
3.0
3.0

. k,597
4,719
n.a.
n.a.
n.a.

3,305
3*399

1,2 92
1,320
1,3214
1,326

n.a.—Mot a v a i l a b l e .
g / Preliminary.
1/ Standard and Poor's composite Index of 500 common stocks, weekly closing prices, 1941-43-10, Monthly data
are averages of daily f i g u r e s r a t h e r than of M d a y s 1 only. Highs and lows are for M d a y s 1 data only.
2/ Standard and Poor's composite stock yield based on Wednesday data converted t o weekly closing prices by
federal Reserve. Yields shown are for dates on which price index reached i t s high or low.
3/ Averages of daily trading volume on the New York Stock Exchange.
4 / End of month figures f o r meuber firms of the New York Stock Exchange which carry margin accounts; excludes
balances secured by U. S. Government obligations.
5/ Wednesday figures for weekly reporting member banks. Excludes loans for purchasing or carrying U, S, Government s e c u r i t i e s a t banks in New York and Chicago. Weekly reporting banks account for about 70 per cent of loans t o
others, flor further detail see Bulletin.

Mortgage and Bond Yields 1/
Date

FHA
mortgages 2/

Aaa corporate
Spread between new
corporate bonds and
bonds 1 /
New 3/ IStiasoned I4/ FHA mortgagee|Seasoned bonds

1953-1958 - High
Low

5.62
14.56
5.60
5.57

I4.8I

1959 - High
Low

2.74
14.53
14.29

I4.ll
2.85
14.23
14.12

1.96
.514
1.29
1.05

.90
- .12
.30
.15

1958 - Dec.
1959 - Jan.
Feb.
Mar.
Apr.

5.60
5.60
5.58
5.57
5.58

I4.I4I4
14.36
14.29
4.30
14.53

14.12 •
I4.H4
L13
14.23

I4.O8

1.16
I.2I4
1.29
1.27
1.05

.36
.24
.15
.17
.30

1/ Neither mortgage nor bond yields take i n t o account servicing coots which are much higher for mortgage a than
bonds. Generally, bonds pay i n t e r e s t semi-annually; mortgages, monthly. Mortgage yields, i f computed as equivalent
to a semiannual i n t e r e s t investment, would be s l i g h t l y higher than given In the t a b l e .
2/ Based on FHA f i e l d - o f f i c e opinions about average bid prices i n the private secondary market f o r new-home
mortgages for i m e d i a t e delivery. Since l a t e 1955, data r e l a t e only to 25-year mortgages with downpayraents of 10
per cent or more, weighted by probable volume of transactions. Yields computed by FRB, assuming 25-year mortgages
are paid off in 12 years. Dashed l i n e s indicate periods of adjustment t o changes In the contractual i n t e r e s t r a t e .
3/ F i r s t National City Bank of New York. Averages of offering yields of a l l new issues of publloly-aold bonds
rated Aaa, Aa or A by Moody's Investors Service (except s e r i a l and convertible issues and offerings of natural gas
and foreign companies) weighted by size of i ssue . Yields on Aa and A issues are f i r s t adjusted to an Aaa basis
by the spread between yields of outstanding bonds in these categories and those on fiaa-rated bonds. The series r e f l e c t s crvtngeo in Industrial oomp oaitlon, maturity, type, e t c . of new o f f e r i n g s .
4/ Moody's Investors Service. Monthly averages of daily d a t a . See Exhibit B,




Exhibit E

H.llt

Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1959
January
February
March
April
May
June

1

81*0
7k5
631

723
851.,
l,56li/

1,060
1,065
1,320

636
855
639

812
953
511

71*2
572
506

1,11*1
600
881

931
765
1,453

! S
e/800

798
8#
551

765
51*6
393

1,102
538
1,1U,

1,003
921*
973

806
1*03
651

529
581*
1*31

858
1*73
911i

1,090
78 9
1,076

1*56
1*71*
1*35

698
633
698

2,216
e/2,h00

3,135
2,622
2,781*
2,2#

3 ,1*1*5
3,11*9
2,899
2,951*

2,130
e/2,285

2,276
2,21*1*
1,860
1,365

1,820
1,701*
1 ,$Hh
2,029

e/kf 616

5,757
8,51a
10,791

6,591*
9,1*93
12,1*1*7

eA,l*l5

1*,520
6,380
7,71*6

e/800

July
August
September
October
November
December
1st
2nd
3rd
i^th

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

New ca p i t a l
Corporate 1/
State and local 2/
1 1958
1958
1959
1 1957
1 1957

.

3,521*
5,069
7,099

Excluding finance companies h/
1st
2nd
3rd
l*th

quarter
quarter
quarter
quarter

e/2,016
e/2,150

Year

2,89k
2,583
2,7#
2,161

3,237
2,889
2,582
2,610

10,391

11,518

2/ Preliminary.
—
1 / Securities and Exchange Commission estimates of net proceeds,
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue,
Z/ Total new c a p i t a l issues excluding offerings of sales and consumer finance
companies.




i

Exhibit F

h.Ui

Other Security Offerings 1 /
(In millions of dollars)
Long-term

!

1959

JJanuary
February
|March

1

1956

1

1957

1959
199

1

1956

1

1957

—

81*
1*9
30

—

—

139
200
120

123
1*8
1*2

523

125

9
5
17

28
7
30

161*

October
November
December

57
123
7k

1*
60
1

220

Year

995

77
59
2

1 April
May
| June
July
: August
; September

197
51*

72

GO

— .

215

—

100

—

507

Short-1
State and l o c a l government i*/
January
February
March

175

1,163
251

2,321

572

Federal agency 3/

233
I460
273

326
1*55
11*7

359
500
1*89

371
208
11*1*

638
1*30
505

357
351*
26h

205
337
153

1*86

209
161
329

336
1*69
501

July
August
September

289
123
369

272
272
252

1*37
206
330 /

221*
. 370
512

October
November
December

231
1*15
21*3

303
9li
1*59

1*51*
111*
137

1,238
255
116

3,910

3,271*

April
May
June

190
#6'^5
fi/^97

Year

3/98

5,51*3

1 / Data presented in t h i s exhibit d i f f e r from those in Exhibit E in that refunding i s s u e s , as w e l l as new c a p i t a l i s s u e s , are included. Long-term s e c u r i t i e s are defined as those maturing i n more than one year.
2 / Includes s e c u r i t i e s offered in the United States by foreign governments and
t h e i r subdivisions and by international organizations. Source: Securities and Exchange Commission.
2 / Issues not guaranteed by the U. S. Government. Sources long-term, Securities
and Exchange Commission5 short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or c e r t i f i c a t e s and Public
Housing Authority notes. In some instances PAdA notes included may have a somewhat
Digitized
FRASER
longerfor
term
than one year. Source: Bond Buyer.



Exhibit G

H.lii

Large Long-term Public S e c u r i t y Issues f o r New Capital
(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

1958 - May

1959

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

356
281
771
209
825
259
227
305
3#
3U0
215
359
342

July
August
September
October
November
December
January
February
March
April
May

505
195
275
109
288
172
259
229
335
551
369
$63
258

Other 2/

164
86
a
18
209
100
79
174
35
176
20
50

Large Individual I s s u e s Offered June 1 through 5
Type 3/

Coupon
Amount
(millions Maturity r a t e or
Offering
of
net i n t e r - y i e l d
dollars)
est cost

Rating

CORPORATE
Pub. Service Elec.—& Gas
Florida Power Corp.
Florida Power & Light Co.

1 s t &ref. mtg. bds. 50.0
Com.stk.
17.6
1 s t mtg. bds. 25.0

1989

5 1/8

1989

5.00

Aa

4.95

Aa

STATE AND LOCAL GOVERNMENT
Los Angeles Co. Flood Cont r o l L i s t . , California
Memphis, Tennessee
Pennsylvania S t a t e Hwy. &
Bridge Authority
New York, New York
OTHER
None




G.O.
G.O.
Rev.-Ut.
G.O.

iiO.O 1961-89
16.0 1960-89

3.96
3.52

10.0 1961-80/6? 3.55
27.0 1960-74 n . a .

2.40-4.00, , Aa
2.30-4.204/ Aa
2.60-3.65
2.40-3.69

Aa
A

i|

H.lii

G-2
Footnotes

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 m i l l i o n and overf
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 $10 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 and non-guaranteed i s s u e s by Federal agencies.
3/ In the case of Sta te 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 s ; Rev.-Ut., revenue o b l i g a t i o n s secured only by income from public u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c t a x e s only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.
h/ 1/hs of 1989 not p u b l i c l y r e o f f e r e d .




11. Ill

Exhibit ii
Forthcoming Large Long-term Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues

Date of
computation
- May 29
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
- Jan. 30
Feb. 27
Mar. 31
. Apr. 30
May 29

Subsequent t o
date shown

During month following
date shown
Corporate
266
768
161
785
113
201*
301
210
270
198
396
21*6
287

^ h e r Zj
177
225
55
21*1
295
258
229
261
551
292
550
25U
21*7

Corporate
1*61*
1,018
381
91k
216
326
l*oi
370
365
279
1*76
3U6
332

36

71
75
1*5
20
50
—

Forthcoming Large O f f e r i n g s , as of
Type

g * . J o t h e r 2/
208
235
125
1(35
521*
675
683
515
856
1*81
761
517
761

36

71
75
1*5
20
50
—

June 5

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

CORPORATE
Duke Power Co.
Consolidated Natural Gas Co.

Pfd. s t k .
Cap. s t k .

25.0
38.6

Virginia E l e c t r i c & Power Co.

Com. s t k .

23.lt

Spiegel, Inc.

Conv. sub. deb.

Philadelphia E l e c t r i c Co.

15.1

Com. s t k .

-^Philip Morris, Inc.
Northern I l l i n o i s Gas Co.
Long Island Lighting Co.
I n t e r n a t i o n a l Recreation Corp.
Commerce Oil Refining Corp.

29.1

S.F. deb.
/
1 s t mtg. bds.
1 s t mtg. bds.
Com. s t k .
Deb., bds. & common

1*0.0
20.0
25.0
17.2
1*5.0

June
June
(rights
June
(rights

10
10
expire)
18
expire)
19
( r i g h t s expire)
23
( r i g h t s expire)
June 23
June 21*
June 25
June 26
Summer

STATE AND LOCAL GOVERNMENT
S t a t e of Maryland
S t a t e of C a l i f o r n i a
*State of Connecticut
*Port of New York Authority




--

G.C1.
G.C1.
Rev.-Ei.T.
Rev.- u t .

10.5
100.0
62.5
30.0

June
June
June
June

9
10
10
17.

H.lii

H-2
Forthcoming Large O f f e r i n g s , a s of June 5 ( C o n t ' d )
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 )

STATE AND LOCAL GOVERNMENT CCont'd)
^ F l o r i d a S t a t e Bd. of Education
C a l i f o r n i a T o l l Bridge A u t h o r i t y
*Los Angeles Dept. of V.Ttr. & Pwr.,
California
•a-Birmingham, Alabama
T e r r i t o r y of Hawaii
-*State of New York
Chesapeake Bay F e r r y Commission
Commonwealth of Pennsylvania
New York Thruway A u t h o r i t y
Grant Co. Public U t i l i t y D i s t . No. 2,
Washington

Rev.
Rev.-Ut.

12.0
3lu0

June 23
June 2it

Rev.-Ut.
Rev.-Ut.
G.O.
G.O.
Rev.-Ut.
G.O.
Rev.-Ut.

15.0
22.8
19.8
50.0
lkh.0
120.0
50.0

June 2k
June 25
June 25
June 30
Summer
Summer
Summer

Rev.-Ut.

200.0

Summer

S.F. deb.

33.2

July 1

OTHER
•^Municipality of Metro. Toronto, Can.

*—Included i n t a b l e f o r f i r s t
1 / I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of $15 m i l l i o n and o v e r ; S t a t e and
l o c a l government i s s u e s of $10 m i l l i o n and o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n
and Development i s s u e s and non-guaranteed i s s u e s by F e d e r a l a g e n c i e s .
Note. — D e l e t i o n s f o r reasons o t h e r t h a n s a l e of i s s u e : None.




Exhibit I

H.llt

Yields onjtiew and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
Date
1952 - 1958
High
Low
1958 - May
June
July
August
September
October
November
December
1959 - Jan. 7 .
20
28
Feb. 18
Mar. 11
25
26
31
Apr. 3
15
16
29
May 1
13
T
"14
20
21
26
June 4

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
( p e r cent) seasoned y i e l d s 1 ( p e r cent) seasoned y i e l d s
( b a s i s points)
( b a s i s points)
5.00 (9/14/57)
2.93 (3/31/54)

87
-3

3.87
3.87,,
4.07^/

18
17
28

U.hT*/

18

*k~hk

23

4.60

34

h.kol/
4.43
4.43
4.47

11
9
9
13

4.60

22

»

i

4.95
4.95

38
34

5.00
4.95

38
29

5.50 (11/7/57)
3.00 (3/17/51)
4.07

123
-15
6

4.162/

15

4.75^

23

4.67

18

4.85
5.06

17
13

5.13

. 27

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage bonds, a s reported i n Moody's Bond
Survey. Except where i n d i c a t e d , t h e 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 the 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 these 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 f o r the same day.
Average maturity f o r the seasoned i s s u e s
v a r i e s from 26 t o 28 y e a r s .
2/ Provides f o r a 5-year period during which issue may not be c a l l e d f o r
refunding a t a lower coupon r a t e . Monthly averages so marked include one or
Digitizedmore
for FRASER
i s s u e s with such a p r o v i s i o n . Other i s s u e s have no such p r o v i s i o n .