Full text of H.16 Capital Market Developments : April 10, 1958

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DECONTROLLED AFTER SIX MONTHS
• Not for Publication
H.lU

|
,

April 10, 1958.

CAPITAL MARKET DEVELOPMENTS
(Including Quarterly Review of State and
Local Government Security Financing)
Large public security offerings jfor new capital during the
week ending April It, totaled $71 million for corporations and $60
million for State and local governments. Foreign government issues
with aggregate proceeds of $93:million' were also sold. The calendar
for this week includes corporate offerings amounting to $310 million
and State and local government issues totaling
million.
Bond yields - Bond yields showed little change last week.
Yields on outstanding corporate* bonds remained stable last week,
while those for State and local government and U. S. Government obligations declined slightly.
Stock prices - Stock prices, as measured by the Standard
and Poor's index of 500 common stocks, declined 2 per cent last
week, closing at 1&.U8 on April 3. Prices increased, on balance,
in trie early part of this week, closing at hi.65 on Wednesday.
State and Local Government Security
Offerings in the First Quarter 1958
State and local governments sold $2.3 billion of bonds
during the first three months of 1958, a record first quarter volume
and nearly one-fourth greater than last year. New.issue volume was
unusually large in January and February, but declined markedly in
March as some congestion developed in the market. A number of issues
postponed in late 1957 were successfully offered during the first
quarter of this year, and despite some increase in interest rates
in February and early March, postponements of announced offerings
were less frequent than last year.
Purpose of issue - School construction was the most important purpose of financing as it has been in other recent years.
However, the volume of #779 million was only 3 per cent higher in
the first quarter this year than a year earlier.
New financing for highways, bridges and tunnels showed
the largest increase in the first three months of 1958 as compared
to 1957. These issues, aggregating $392 million, were more than
twice as large in volume as in the corresponding period of 1957.




H.lU

2 -

Long-Term Security Issues of State and Local Governments
First Quarter
(In millions of dollars)
1958
Issuing authority:
State
County and township
Municipality
School district
Special authority
Unidentified 1/
Total
Purpose of issue:
New capital total
Schools 2/
Highways, bridges, and tunnels
Residential buildings'
Hospitals and institutions
Sewer and water
Misc. public service enterprises
• Veterans' aid
Other
Unidentified 1/
Refunding
Total
Type of issue:
General obligation
Revenue
Utility
Quasi-Utility
Special tax
Rental
Public Housing Authority
Federal Government loans 3/
Total

633

1957

1956

340

270
94
444
270
253
186

111;

106

615
I4.76

420

604
527
252

—

—

1955

1954

344

217
126
412.
232
#8
139

109

333
. 294
167

162

2,258

1,829

1,517

1,409

1,384

&250

3*821

1^490

1,385

1*372

779
392
99
85
292
145
ill
348

753
164
151
28
252

449
176
175
30
159
77
82
79
159

405
145
182
15
186
70
67
167
137

—

68

53
351
—

401

280

111

22
264
80
147
186

7

8

27

24

11

2,258

1,829

1,517

1,409

1,384

960

1,004

1,55k 1,312
560 .
385
289
m
24
33
62
31
41
54
67
29.,.
• 102 "
76
2,258

1,829

44i
n.a.
n.a.
107
9
1,517

286
n.a.
n.a.
n.a.
n.a.
118
1

1,409

909
354
HX
n.a.
n.a.
119
2

1,384

1/ Issues.of less than $500,000 not further classified.
~
2/ Data for years prior to 1957 probably understate school issues by about
one-fourth because of unclassified small issues.
2/ Coverage for 1957 and 1958 is broader than for earlier years.
Note.—Details may not add to totals because of rounding.
Source.—1954-1956, Bond Buyer and Federal Reserve; 1957-1958, Investment
Bankers Association of America. Data for 1957 and 1958 not strictly comparable
.with
data
for earlier years.

ri.a.—Not available.



.

Issues to obtain funds for hospitals and institutions,
miscellaneous public service enterprises and veterans' aid also
were sold in larger volume this year than last. Residential building bonds were the only major type of issue sold in smaller volume
in the first quarter than a year earlier. .
Type of issuer - States were the most important group of
issuers during the first three months of 19583 selling bonds totaling $633 millione This volume accounted for nearly 30 per cent of
total offerings and was 85 per cent greater than in 1957» A larger
volume of offerings for financing veterans' aid and highway con- .
struction accounted for most, of the increase.
Offerings of special authorities also increased significantly, -while issues of counties and townships and municipalities
were in moderately larger volume than last year. Financing by
school districts declined, however, as a larger proportion of
educational issues were offered by municipalities and special
authorities than in the first quarter 1957.
Type of issue •= General • obligations continued to be the
most Important type of issue. However, the proportion of total
sales accounted for by such bonds declined from 72 per cent in the
January-March 1957 peribd to 69 per cent this year as the share of
revenue bond financing increased. Federal Government loans were
in smaller volume this first quarter, while Public housing Author-.
ity offerings increased.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




H I G H - G R A D E B O N D YIELDS

1953

1954

Corporate
Aaa 1/

1955

1956

U. S. Govt,
long-term 2/

State and
local govt.
- Aaa y

1957

1958

Spread between
U. S. Govt, and
Corporate I State and
Aaa
)local Aaa

(Per cent) .
1953 - High
Low
195U - High
Low
1955 - High
1956 - High
1957 - High
Low
1958 - High
March
March
March
March
April

7
iL
21
28
h

3.U2 (6/19)
2.99 (1/9)
3.09 (1/8)
. 2.85 (1/23)
3.17 (12/23)
2.91 (1/7)
3.79 (12/28)
3.07 (3/2)
U.Ut (9/27)
3.66 (V12)
3.68 (1/3)

3.56 (1/31)

3.62
3.62
3.63
3.6k
"3:624

3.19
2.714
2.71
2.15
2.97
2.6k
3.1x5
2.81*
3.76
3.18
3.28
3.19
3.27
3.27
3.21
3.21
3.19

(6/5)

(12/31)
(1/8)

(8/6)
(8/5)
(1/7)

(12/28)
(2/17)
(10/18)
(2/8)
(1/31)

(VW

2.73 (6/25)

1.98 (1/8)
2.21 (6/10)
1.90 (9/2)
2.31 (9/8)
2.05 (5/26)
3.05 (12/27)
2.17 (2/23)
3.1:5 (8/29)
2.76 (2/21)
2.86 (1/9)
2.65 (1/23)
V
2.78
2.78
2.79
2.79

- 2:77'

.38

.83
.33
.62

.20
.1*3
.30
.27
.11
.hi
.12
.60
.27
.he
.28

' .L7
.15
.62
.3h

.35
.35
.39
.L3
.hS

• 1*9
.li9
.145
.1*2
.1*2

.30
.76
.57
.71

.32

1/ Weekly average of daily figures. Average term of bonds included is 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
3/ Thursday figures. Only general obligations bonds are included; average term is
20 years.
"
Note.—Highs and lows are for individual series and may be on different dates for
different series.




LOWER - GRADE B O N D YIELDS

STATE AND LOCAL GOVT. Ba<

Corporate
Baa 1/

Date

State and
local govt.
Baa 2/

Spread between
Aaa and Baa
1 State and
1local govt.

Corporate

(Per cent)
1953 - High

1957 - High
Low
1958 - High
Low

3.89
3.50
3.7U
3.a
3.63
3.15
U.Ul
3.58
5.10
h.h2
1.96
U.61i

March
March
March
March
April

U.66
a. 67
U. 68
I4.69
a. 69

195k - High
1955 - High
Low
1956 - High

7
lU
21
28
it

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1M)
(12/28)
(3/9)
(11/29)
(U/12)
(1/3)
(2/21)

3.79
2.96
3.32
2.93
3.26
3.02
h.22
3.20
U.51
. 3.90
3-92
3.73
3.85
3.86
3.89
3.90
3.88

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/27)
(3/8)
(8/29)
(2/21)
(1/2)
(1/23)

.69
.1*2
.68
.52
•5U
•ii5
.63
.h2
1.27
•6U
1.28
1.01*

1.21
.98
1.16
.93
1.03
.87
1.17
.89
1.21
l.Olt
1.11
1.02

1.0k
1.05
1.05
1.05
1.05

1.07
1.08
1.10
1.11
1.11

1/ Weekly average of daily figures. Average term of bonds includes is
25-20 years.
2/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
N o t e . — H i g h s and lows are for individual series and may be on different
dates for different series.




STOCK

MARKET

Bate

Stock price
index 1/

Common
Stock market custamer credit
Trading
Customers1
volume 2/
debit bal- loans to
(millions yields 3/
of shares) (per cunt)
ance, V "others" 5/
(Millions of dollars)

26.51 (1/2)
22.95 (9/18)
35.98 (12/31)
2L.93 (1/8)
1*5.69 (12/9)
35.28 (1/Ut)
U9.6U (8/3)
1956 - High
1*3.22 (1/20)
1*9.08 (7/12)
195? - High
Low
39-1*8 < 12/20)
1*2.1*2 (3/21)
1958 - High
Low • 1*0.37 (1/10)
1953 - High
Low
195L -'High
Low
1955 - High

February
March 28
April 1,

1*1.26
1*2.11
1*2.1*2
1*2.20
1*1.1*8

2.5
0.9
3.7
1.1*
1*.6
1.5
3.1
1.5
1*.2
1.1*
2.5
1.7

6.25
5.38
5.82
1*.32
1* .1*2
3.61
U.35
3.82
1*.72
3.91
I».58
1*.33

2,1*55
2,055
3,1*36
2,1*05
1*,030
3,537
It,01*7
3,911*
It,031
3,576
3,679
3,551*

1,665
1,311*
2,368
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82
2,580
2,1*87

2.2
2.3
2.2

1*.1*9
It. 35
It. 33
1*-35

3,679 ' 2,580

780
66L
1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163 •
1,051*
1,198
1,051
1,099
1,198
1,117
1,198

n.a.—Not available.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 191*1-1*3-10. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Fridaj's data only.
2/ Averages of daily trading volume on the New York Stock Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
h/ 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.
2/ 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 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D

H.Ik

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

,

1958

January
February
March
April
May

e/800
e/87S„/
e/1,500^

1,063
1,071

e/900

92k
771
l,k89

July
August
September

1,055
792
1,086

quarter
quarter
quarter
qunrtar

e/3,175

3,181

6,662
9,5kO

12,173
-

quarter
quarter
quarter
quarter

3,L79
2,878
2,933

1st half
Three quarters
Year

1st
2nd
3rd
kth

l,3hk

991
91k
973

October
November
December
1st
2nd
3rd
kth

Corporate
1957. I

New capital
1956

1958

State and local 1/
1 1956
1 1957
7k2
572
506

kok

765
5k6
#3

378
k90
735

1,063
' 65k
838

529
585
k31

k08

7k5
1,089 3/

698
633
698

639
3k7
k09

573
712
817

812

952
k86

818
l,lk6
811 •

e/650

1,088

2,102
2,805
2,556
2,922

2,250

1,820

1,70k
2,029
3,52k
5,069
7,099

i;E
10,381)

696
390

206

357

l,k90.
1,603
971
1,395
3,093
k,06k

5,k59

Excluding finance companies k/
e/2,875

Year

3,268
2,92k
2,560

1,6147

2,51a

2,788
•ll,5h0

.

9,260

^ Estimated.
~
1/ Data through June 1956 are Bond Buyer data classified as new capital by
Federal Reserve; later data are from the Investment Bankers Association of America
and are somewhat more complete as to coverage than the earlier data, particularly
for Federal Government loans.
2/ Includes §716.3 million AT&T convertible debenture issue.
3/ Includes $571-5 million AT&T common stock issue.
5/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to total; due to rounding.




H.lU

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Month

Corporate .

1957 - March
April
May
June
July
. August
September
October
November
December
1958 - January
February
March

State and
local government

Other 2/

1914
k99
. 2li8
176
26$
357
185

k n

329

877
525
#6
537

125
25
39
25
30
75

h35

57k

1*20
399
318
605
1,093

386
139
506

215
15

629

26k

Large Individual Issues Offered April 1 through ii

Issuer

Type 3/

Amount
Coupon
rate or Offering
(millions
Maturity net inter- yield
Rating
of
dollars)
est cost

CORPORATE
Wisconsin Elec. Pwr. Co. 1st mtg. bds. 30.0
Gen. American Transp. Corp. E. T. ctfs. 20.0
General Telephone Corp.
Com. stk.
21.1+

1988 .
1978

U 1/8
h 1/8

3.98
ii.13

Aa
A

2.05-3.00
1.20-3.50
1.00-3.35

Aa
A
Aa
Baa
A

STATE AND LOCAL GOVERNMENT
Texas Veterans Land Board
G.O.
Comm. of Puerto Rico
G.O.
Los Angeles, California
Rev.-Ut.
Lafayette Par. S.D.#1, La.
G.O.
Tampa, Florida
Rev.-Ut.

12.5 1966-88/68 2.89
18.3
1959-73 3.39
13.5
1959-88 3.15
7.0 1961-88/69 n.a.
8.U 1959-87/68 3.56

1.25-3.70

• OTHER
Ontario, Canada
Ontario, Canada
Edmonton, Alberta, Canada




Ext. deb.
Ext. deb.
Ext. deb.

25.0
50.0
18.0

1963
1983
1983

3

1 / k

U
h 3 / h

3.h0

U.13
14.93

A
A .
Baa

H.lli

E-2

n.a„—Nat available.
1/ Includes corporate and other security offerings of $15 million and overj
State and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government securities, G.O. denotes general
obligations3 Rev.-Ut,3 revenue obligations secured only by income from public
utilitiesj Rev.-Q.Ut., revenue bonds secured by revenue of quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev„-Rent„a
revenue bonds secured solely by lease payments.




H.lU
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown

Date of
computation

Coiporatell^Jt

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

1*61 187
525
, 370 526
578
576
1*58
.383
378
198
1,123
555

290
179
97
172
252
21*3
370
369
387
383
1*29
175
3li0

Subsequent to
date shown

Other 2/ W a t e J ^ J o t h e r ^
25
25
25
30
30
18
150
110

1*86
258
525
1*15
811
81*5
61*7
815
1,153
. 1,161
1,378
. 1,208
670

862
3#
388
1*98
511*
1*39
587
573
589 '
611*
51*6
389
372

25
25
25
30
15
1*5
63"
165
110

Forthcoming Large Offerings, as of April 1*
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Duquesne Light Co.
Joseph E.. Seagram & Sons, Inc.
American Can Co.
Douglas Aircraft Co.
Aluminum Co. of America
Pacific, Petroleums Ltd..
Richfield Oil Corp.

1st mtg. bds.
Deb.
Deb.
S.F. deb.
Deb,
S.F. deb.
Conv. sub. deb.

Commonwealth Edison Co.
1st mtg. bds.
Diamond Gardner Corp.
S.F. deb.
Mississippi Power & Light Co.
1st mtg. bds.
Southern Counties Gas Co.
1st mtg. bds.
^Central Hudson Gas & Electric Corp. 1st mtg. bds.
^•Philadelphia Electric Co.
1st mtg. bds.
frPotomac Electric Power Co.
Conv. deb.




15.0

Apr. 10 .
Apr. 10
Apr. 10
60.0
Apr. 11
Apr. 11
125.0
30.0
Apr. 11
Apr. lit 19.0
(rights .expire)
Apr. 16
50.0
25.0 .
Apr. 16
15.0
Apr. 17
Apr. 21*
i5.o
18.0
Apr. 21*
z
1*0.0
Apr. 30
May 6
19.7
(rights expire)
1*0.0
1*0.0

H.lU

F-2
Forthcoming Large Offerings, as of April ii (Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE (Cont'd)
Consolidated Edison Co.. of New York
Commerce. Oil Refining Corp,
Natural Gas Pipeline Co, of America
Tennessee Gas Transmission Co,

ref. mtg, bds.
,bds. & common
it mtg. bds.
Deb.

5o.o
1*5.0
Uo.o
30.0

June ij.

5.0
2l*,6
7.5
6.5

Apr. 8
Apr, 8
Apr. 9
Apr, 10
Apr. ll;
Apr. 15
Apr, 16
Apr..17
Apr. 17
Apr. 22
Apr, 23
Apr. 2h
Apr. 30
May 20

1958
1958
1958

;

STATE AND LOCAL GOVERNMENT
Anne Arundel Co., Maryland
Statie of Maryland
- Chicago, Illinois
Erie Co, Water Authority, N. I.
xSan Francisco, California
^Washington Sub. San. Dist., Md.
State of Massachusetts
Louisiana State University
-^Babylon U. iV Sch, Dist, No, 3, N.I.
*Burbank, California
State of California
Washington Toll Bridge Auth,
Philadelphia, Pa,
State of Ohio

• G.O,
G.Oo
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
Rev.-Q.Ut.
G.O.
G.O.
G.O.
Rev.-Ut.
G.O. Rev.—S.To

2hc2

10.0

96.9
7.5
5.5
5.6
100.0
5.2
31.9

32.0

OTHER
Belgian Congo
•^Commonwealth of Australia

Ext. loan bds.
. Bonds

15.0
25.0

Apr. 1?
Apr. 23

*—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issue: None.




R.Ik

Exhibit G
• Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points) .

Date
1952 - 1957
High
Low
1958 - January 8
9
17
21
23
February 5
. Hi
20
21
25
26
28
March li
5
6
12
19
21
25
April 1
2

5.00(8/lV57)
2.93(3/31/510

87
-3

3.60

-8

3.80. ,
3.8CW

13
12

3.95
Loo

28
33

U.15
U.22
luOO
U.oo

5o
28
26.

1.05
3.98
U.oo

31
23
25

-5-50(11/7/57)
3.00(3/17/51*)

123
-15

k.07.
It. 101/
3.85
3.80

9
13
-3 •
-8

3.90

-3

3.92

-3

li.iiO
k.25

35
6

h.07

-7

.

hh

*—Single observation, not an average. .
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey, Except where indicated, the actual yield figure and the amount above
seasoned yields are averages of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned issues of
similar quality for the same day. Average maturity for the seasoned issues varies
from 26 to 28 years.
2/ Provides for a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Other issues have no such provision.