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Hot for i-ublication DECONTROLLED AFTER SIX MONTHS
h.lir

April 11, i960
(CAPITAL MiiKEciDEVELOPI-jENTS
flU THE UNITED STATES A J ) C A M DA
il

Part I - United States
During the week ending April 8, corporations sold large
public security issues totaling $75 million and State and local governments sold bonds with aggregate proceeds of $37 million. A $1*7 million
long-tern issue for new capital was also sold by the Federal Land Banks.
This week, large corporate issues, including the expiration of subscription rights, are expected to total $12u million. State and local
government issues amounting to $30 million are also scheduled for sale.
As shown in Exhibit E, the volume of corporate security offerings in February has been revised upward to $739 million. This revision
largely reflects a much larger volume of takedowns of private placements
than previous info m a t ion had indicated.
Bond yields - Changes in yields on outstanding bonds were
mixed, but minor last week. Yields on U. S. Governments increased;
yields on State and local government bonds remained stable; and those
on corporate bonds continued to decline slightly.
Two new first mortgage electric utility bond issues were offered
to the public last week. An Aa-rated issue was offered to yield it.85 per
cent, 5 basis points below the yield for a comparable offering made in
mid-March. The yield to investors for the A-rated issue was 11.96 per
cent, 5 basis points above that for a similar offering made near the end
of March.
FNMA secondary market operations - Secondary market offerings
to PUMA during March declined slightly further in dollar amount, according to preliminary estimates. FNMA purchases rose again, and at $L35
million were the largest since January 1957, when FNMA. bought a record
$lU5 million. Data for recent months include purchases of several large
mortgages on multi-family properties—a type of mortgage FNMA never
bought prior to this year under its secondary market operations.
Stock prices - Stock prices and trading activity increased last
week. Standard and Poor's index of # 0 common stocks closed at 56.39 on
April 8, 2 per cent higher than a week earlier. The volume of trading
averaged 2.9 million shares a day, the highest since mid-March.
Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




HIGH-GRADE

BOND

YIELDS




A

/-STATE

AND

LOCAL

GOVT.

lee.

- 3H.lU

Exhibit B - Tables for Exhibit A
High-grade Bond Yields
State and
local govt.
Aaa 3/

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

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

2.85 (4/23)
4.14 (9/27)

2.15(8/6)
3.76 (10/18)

1.90 (9/2)
3.1t5 (8/29)
2.64(5/1)
3.65 (9/24)
3.06 (3/26)
3.53 (1/7)
3.28 (4/7)

.30
.60
.22
.50
.16
.46
.19

.30
.47
.34
.92
.53
.89
.68

4.11
4.0 5
LOO
4.07
1.10

3.37
3.35
3.32
3.28
3.28

.40
.43
.46
.37
.34

.74
.70
.68
.79
.82

(Per cent)
1954
1957
1958
1959

- Low
- High
-.Low
- High
Low
1960 - High
Low
Mar. 11
Mar. 18
Mar. 25
April 1
April 8 2/

£§ 1%,
a is®,

i>.a (V8)
it. 51
li.48

k.U6

3.07
U.37
3.83
4.42
• LOO

(4/25)
(12/31)
(1/2)
(1/8)
(3/25)

Lower-grade Bond Yields
Corporate
Baa 1/

State and
local govt.
Baa 3/

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1954
1957
1958
1959

Low
High
Low
High
Low
1960 - High
Low
Mar.
Mar.
Mar.
Apr.
Apr.

-

11
18
25
1
8 e/

3.a
5.10
4.51
5.32
4.83
5.36
5.17

(12/31)
(11/29)
(7/11)
(12/31)
(4/17)
(2/12)
(4/8)

5.28

5.26
5.22

5.18
5.17

2.93 (8/5)
it. 51 ( 8 / 2 9 )
3,61: (5/1)
I.16 (7/2)
3.92 (3/26)
4.46 (1/7)
4. 22 (V7)
4.31

k.29
4.26

4. 22

1.22

.52
1.27
.77
.77
.56
.79
.71
.77
.78
.76
.74
.73

.96

1.21
.93
.98
.79
.97
.93
.94
•94
.94

g/ Preliminary.
1/ Weekly average of daily figures. Average term of bonds Included Is 25-26 years.
2/ Weekly average of divily figures. The series includes bonds due or callable in 10 years or more.
3/ Thursday figures. Only general obligation 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.




STOCK

FEDERAL

NATIONAL

SECONDARY

MARKET

MORTGAGE
OPERATIONS




MARKET

CREDIT

ASSOCIATION

Exhibit D - Tables for KxliibiL C
Stock Market
Stock price
index 1/

Common
stock
yields 2/
(per cent)

1957-59 - High
Low
I960 - High
Low

60.51 ( 7 / 3 1 / 5 9 )
39.78 (12/27/57)
59.50 (1/8)
5 1 2 1 (3/11)
1.I

3.07
U.66
3.18
3.51

February
March
Mar. 18
Mar. 25
Apr. 1
Apr. 8 2/

55.69
55.02
55.01
55.98
55. U3
56.39

3A5
3.a
3.1*0
3.12
3.37

Date

'

Trading
Stock market customer credit
volume y
Customers1
Bank
(millions
Total debit bal- loans to
of shares)
ances u/ "others11 5/
(MillLions of dollars)

' i:2 , ' S
It a
3.0

a
:::

2.9

U,27lt
n.a.
n.a.
n.a.
n.a.
n.a.

3 ,1*01
2,1*82
3,198
3,129

1,373
1,060
1,167
1,130

3,129
n.a.
n.a.
n.a.
n.a.
n.a.

1,H*5
1,130
1,128
1,125
1,130
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor'* rpmposite Index of 500. oomnon stocks, weekly closing prices, 1941-43»10. Monthly data
are averages of,dally figures rather than of Fridays' only. Highs and lows are for Fridays' data only.
2/ Standard and Poor's composite atook yield baaed on Wednesday data converted to weekly closing prices by
Federal Reserve. Yields shown are for dates on which price Index reached Its high or low.
3/ Averages of daily trading volume on the New York Stock Bcoliange.
4/ 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.
5/ Wednesday figures for weekly reporting member banks. Be eludes loans for purchasing or carrying U. S,
Government securities* Prior to July 1, 1959, such loans are exolud#;d only at banks in New York and Chicago.
'Weekly reporting banks account for about 70 per cent of loan* to others. For further detail see Bulletin.

Federal National Mortgage Association Secondary Market Operations 1/
Date

Estimated Offerings to FNMA.
Standby
Immediate
Total
purchase commitment

Purchases
by
MIMA.

Sales
by
FNMA

(Millions of dollars)
1959 - Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
'Dec.
1960 — Jan.
Feb.
Mar. g/

52.ll
57.8

80.6

8I1.U
109.5

123.1

11*1.3
108.3
105.6
116.3
137.9
135.5
133.2

1*9.8
50.1
73.1*
76.6
92.5
109.9
131*. 8
101.8
100.3 .
111.1*
128.6
128.6
121*. 6

2.6
7.7
7.2
7.8
17.1
13.3
6.5
6.5
5.3
1*.9
9.3
6.9
8.6

36.5
39-6
38.3
191
*.*
62.3
71.7
85.1*
105.5
92.6
92.2
86.1
116.7
135.0

A H K

eonwlteicnt
 ©ontmotfi. Data exclude
Liquidating Programs.


.8
1.1
.6
.3
.3

—

PI81A activity under Special Assistance and Management and

-o-

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

I960
January
February
March

&

New c
flpital
Corporate 1/
State and local 2/
1
1958
I960
1
1959
1
1959
1
1958

E/ 596

BhO
71*5
631

728
857v
1,553^

SI

e/725

899
791
87k

1,11*0
597
887

e/700

July
August
September

531
718
.709

1,107

i,iii*

October
November
December

887
8<£
936

862
518
920

April
May

1st
2nd
3rd
&th

quarter
quarter
quarter
quarter

2/2,085 .

IS

1,958
2,688 ,

1st half
Three quarters
Year

It,780
5/762
6,738
. 8,522
10,823
.. 9,li27 -

812
953
511

931
593.
1,006

798
895
551

567
51U
1*68.

5Uo

3,139
2,623
2,760
2,300

638
858
6I46

593 .
'513..
%/hkk
e/1,803

t$
2,ll*2

EA,5S0

806
10
*3
651 '
1*56
17*
*1
135
2,276
2,2 hh
1,860
1,365
1,520

E/7,773

Excluding finance companies L/
1st
2nd
3rd
Lth

quarter
quarter
quarter
quarter

e/1,735

Year

2,011 ~
• 2,li09
1,695
2,51*9
8,665

2,899
2,586
2,731
2,213
10,1*29

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.
5/ Total new capital issues excluding offerings of sales and consumer finance
companies.




Exiiibit F

H.l4

Other Security Offerings 1/
(In millions of dollars)
Long-teim
Foreign government 2/
Federal agency ;
M
I960
| 1959
1 1958
I960
I 1959
f
January
FebruaryMarch

77
59
2

196
53

April
May-

56
50
42

139
198
120

July
August
September

85
1
36

9
5
17

October
November
December

33
42
70

58
123
74

992

1958

86

558

707

Year

182

175

—

190
h28
295

233
460
273

April
May
June

563
iill
22*5

July
August
September

268
2/340

October
November
December
Year

—

523
—

—

164
98
150

—

220

Short-term
State and local government h/
January
February
March

1,163
251

199

—

2,321

Federal agency 3/
359
500
489

371
208
144

357
354
264

486
675
289

209
161
329

246
1:6?
399

' 289
423
369

727
365
665

437 206
330

- 235
343
358

231
415
243

733
471
288

454
114
137

3,910

6,047

4,179

479
463

/

3,098

E/ Preliminary.
1/ Data presented in this exhibit differ from those in Exhibit E in that refunding Issues, ao well aa new
capital issues, are included. Long-term securities are defined as those maturity in more than one year.
!/ Includes securities of fired In the United States by foreign governments and their subdivisions and by
International organizations. Source: Securities and Exchange Commission.
3/ Issues not guaranteed by the U. S. Government. Sourcei long-term, Securities and Exchange Commission*
short-term, Federal Reserve.
4/ Principally tax and bond anticipation notes, warrants or certificates and Public Housing Authority
notes. In some Instances PHA rotes included may have a somewhat longer term than one year. Sourcei Bond Bvprcr.




Exhibit G
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars) '
Corporate

Month
1 9 # - March
April
May

Other 2/

369
563
258
635

215
3#

July
August
September
October
November
December
I960 - January
February
March

State and
1
local government |

110
363
199
IO
tO

3h2
28k

176
20
50
60
50
98
175
20

19k

263
2H4
29U
163
217
388
283
225

k21

230
279
262
38U

70
100
320
191

Large Individual Issues Offered ' April 1 through 8

Issuer

Type y

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

Rating

CORPORATE
Carolina Power & Lt, Co.
Commonwealth Edison Co.
Alabama Power Co.

1st mtg. bds.
1st mtg. bds.
1st mtg. bds.

25.0
30.0
19.5

1990
1990
1990

ti-7/8
ti-5/8
5

4.85

U.63

4.98

Aa
Aaa
A

STATE AND LOCAL GOVERNMENT
State Pub. Sch. Bldg. Auth.
Rev.-Rent.
Pa.
N. Y. City Hsg. Auth.
G.O.f

16.0 1962-99/65 L o o
20.5 1962-2010/5'5 1.01

3.10-L05
2.85-1.02

A

OTHER
Federal Land Banks




Bds.

U6.0

1961;

k-1/2

I.l
tiO

—

G-2

-9-

Footnotes

1/ Includes corporate and other security offerings of $Lf> million and over;
State and local government security offerings of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
y
In the case of State and local government securities, G. 0. denotes general
obligations3 Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease/payments.




Exhibit ti
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State and
Other 2/
Corporate
Other 2/ Corporate
local govt.

11
P

Date of
computation

1959 - Mar. 31
Apr, 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31
I960 - Jan. 29
Feb. 29
Mar. 31

396
21*6
28?
165
238
198

37k

385
226
210
207
301
2 99

550
25 *
1

20
50

116
356
385
270
115
295
115
**
210
255
250

50

2k7

25
70
30
15
*
35

1*76
31*6
332
272
305
517

69k

509
271
280
252
372

3hk

761
517
761
500 .
J4O6
1*02
1*70
336
1*85
515
310
385
280

20
50
50
25
70
30
15
*
35

Forthcoming Large Offerings, as of April .
8
Issuer

National Fuel Gas Co.
Kratter Corp.
Mountain States Tel. & Tel. Co.
Iowa-Illinois Gas & Electric Co.
United States Plywood Corp.
Transcontinental Gas Pipeline Co.
Puget Sound Power & Light Co.
Metropolitan Edison Co.
Cincinnati Gas & Electric Co.
Columbia Gas System, Inc.
Uris Building Coip.
Milwaukee Gas Light Co.
Commerce Oil Refining Corp.




Type

S.F. deb.
Pfd. stk.

Amount
Approximate date
(millions
of offering
of dollars)

18.0
26.0

1*0.0
Deb.
1st mtg. bds.
^15.0
S.F. deb.
25.0
1st mtg. bds.
35.0
20.0
1st mtg. bds.
1st mtg. bds.
15.0
1st mtg. bds.
30.0
20.0
Com. stk.
20.0
S.F. deb.
22.0
1st mtg. bds.
Deb., bds. & com.
1*5.0

Apr, 12
Apr, 12
(rights expire)
Apr. 13
Apr, l *
l
Apr. 1 *
1
Apr. 21
Apr. 21
Apr. 27
Apr. 29
May 5
May 11
May 18
Indefinite

H.llt

—11—

H-2
Forthcoming Large Offerings, as of April 8 (Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Puerto Rico Water Resources Auth.
Chicago, Illinois
State of California
Triborough Bridge &. Tunnel Auth.
Philadelphia, Pa.
Cleveland, Ohio
Los Angeles City Sch. Dists., Calif,
State of Tennessee
New York, New York
Sacramento Hun. Ut. Dist., Calif.
Ventura Port Dist., Calif.
^Public Housing Authorities
s-State of Minnesota
Jacksonville, Fla.
-^-Cincinnati, Ohio

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

20.0
10.0
25.0
100.0
29.3
13.3
16.0
15.0
75.0
30.0
10.0
105.0
1*8.8
30.0
12.2

Apr. 12
Apr. Ik
Apr. 19
Apr. 19
Apr. 20
Apr. 26
Apr. 26
- Apr. 27
Apr. 27
Apr. 28
Apr.
May i
i
May 5
May 10
May 17

Bds.

25.0

Apr. 21

OTHER
^Commonwealth of Australia

*—Included in table for first
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None.




-12-

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Date

1952 - 1958
High
Low
1959 - January
Februaiy
March
April
May
June
July
Aug.
Sept.
Oct.
Nov. 25
Dec. 8
9
10
1960 - Jan. 7
Feb. 25
26
Mar. 15
16
18
29
Apr. 6
8

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned yields (per cent) seasoned yields
(per cent)
(basis points)
(basis points)

5.00 (9/11/57)
2.93 (3/31/5U)

tk.5t&
|
h.97

*1.95
*h.93
k.83

87
-3

.2
17
37
29
31
23

5.13^/
5.08
5.30

36
12
*
63

5.08
5.10
li.90 .
lt.73^

16
*
32
17

I . 85
t

kh

33

5.50 (11/7/57)
3.00 (3/17/51)
*L75%/

123
-15
23

*L67

18

5.07

%
17

*5.65
5.33

60
l3
i

5:ob/

5.1*5
5.W2/
5.30^

51
50
28

5.00
4.93

11
7

lt.98

21

*—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. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.
y Includes one issue which provides for a 7-year period during which the
issue may not be called for refunding at a lower coupon rate.




April 11, I960
Part II - Canada

-13-

The rise in the Canadian Treasury bill rates at last Thursday's
auction brought them slightly above comparable United States bill yields.
The Bank of Canada continued to purchase relatively large amounts of
Treasury bills and sell short bonds. The Canadian dollar declined nearly
one cent during the week. Stock prices rose moderately.
Money market conditions. After eight straight weeks of declining
rates, the short Treasury bill rate; staged a modest recovery, increasing
from 3.01 per cent a week ago to 3.2U per cent at last Thursday's auction.
The yield on the 6-month bill also rose from 3.23 per cent the previous
week to 3.U7 per cent last Thursday. During the week the Bank of Canada
increased its holdings of Treasury bills by $28 million and sold net
$30 million of bonds. On the other hand, the public continued to reduce
its bill holdings for the seventh week; the chartered banks were also
modest sellers last week. The average rate on the day-to-day loans eased
slightly from 3.25 per cent the previous week to 3.If) per cent last week.
The rise in the 3-month bill rate was greater than the rise in
the United States bill rate, thus bringing the spread between the Canadian
and the United States rate again slightly in favor of the Canadian bill
by 0.19 basis points. The forward discount on the Canadian dollar remained unchanged at 0.21* per cent per annum* however.
Bond market developments. Canadian bond yields declined during
the week for all issues. The spread between comparable Canadian and
United States securities (Thursday yields for bills and Wednesday closing
for bonds) were as follows (figures in parenthesis refer to the previous
week):
0.19
0.17
0.97
0.98
1.Ul

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

a 91-day bill (-0.01)
a 182-day bill (-0.15)
an 8-year bond (0.9U)
a 20-year bond (1.09)
a 35-year bond (1.U8)

The bond market showed further strength last week with the heavy
demand for an Ontario 5-1/2 per cent $60 million issue. The two-part
open-end issue was priced at 99.25 to yield 5.6 per cent on 10-year
maturities and 97.50 to yield 5.71 per cent on 20-year maturities. Both
issues went to a premium in early trading. According to the press, the
success of this issue is expected to prompt a number of potential borrowers
to go ahead with their financing plans soon.
Exchange rate. There was a decline of about three-fourths U.S.
cent in the Canadian dollar last week. The price decline followed the
Minister of Finance's statement in his budget speech on Thursday a week ago
that he "would welcome the development of circumstances that would reduce




-llithe external price of our dollar provided this was brought about bymeans other than an arbitrary and artificial attempt by the government to
work against basic economic forcese" He warned that
"those who undertake commitments in terms of United States
dollars or other external currencies expose themselves to
the risk of having to repay at a time when the exchange
rate for the Canadian dollar may be quite different from
what it is today« This is a risk which the borrower ...
must bear himself and is a danger which I clearly wish to
stresso"
In addition, the Minister announced that the Canadian Government's requirements for borrowing in the current fiscal year would be about $210 million
as compared with $900 million the previous year 0 With reduced Federal
Government cash needs, the prospects are for heavier Canadian local
government borrowing in Canadaa The recent easing in the Canadian dollar
rate is in part a reflection of the recent reduction of such Canadian
borrowing in the New York markete
Stock markets. Prices of Canadian industrial stocks on the
Toronto and Montreal market continued to rise over the past week as shown
in the following tables
March 29
Toronto industrials
Montreal industrials
New York-Standard and
Poors industrials




April 5

U95.31

U96O27

28U.U

286o6

59.51

59.65

-15-

Selected Government of Canada Security Yields

Date
1957 - High
1958 - Low
1959 - High
Low
I960 - High
Low

a

Intermediate

U.08
0.87
6.16

a

U.81

3.31

Long-.
term

b^Z
U.35
3.78

Spread between
Canadian & U.S. rates
bms£/

2k

31
April 7

f

5.55
5.07

5.U2
5.15

U.02
3cia
3.01
3.2U

Mar. 17

5»ili
3.01

5.20
5.19
5.17
5.08

5.29
5.21
5.22
5.13

2.96
0.30
0.90
-0.01

1.22
1.20
1.09
0.98

5.30

u.ia

0.72
0.2U

0.58
0.55
-0.01
0.19

1.19
0.U7
1.22
0.91

3.25

5.30
U.U5

Discount
on 3-moe
Canadia
dollar®

0.U8
0.2U
0.2U
0.2U

Average yield at weekly tender on ttiursday.
Government of Canada 2-3A per cent of June 15, 1967-68 •
Government of Canada 3-1/U per cent of 1979*
5/ U.S. Government 3-l/U per cent of 1978-83. Government of Canada 3-1/U per
cent of 1979. Bond prices are Wednesday closing quotations.
5/ Spread between Canadian auction rate and composite market yield for the
U.S. bill on the close of business on Thursday.
6/ Spread between 3-months forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Thursday.

Canada?

(net sales, millions of Canadian dollarsJ
United States
residents

1957
1958
1959 thru Nov.
I960 January
Canadian issues
Govt, of Canada - direct
Govto of Canada - guaranteed
Provincial
Municipal
Railway (not guaranteed)
Other corporations
Foreign issues
Total bonds and debentures
Total other securities

Other
countries

Total

U&2

161.3
29.6
102
10.0

116.1
100.5
18U.1
13.35

70.9
81.7
3.35
0.67
3.32

1.62
l.lU
0.68
0.U3
0.01
-5.59.
0.15

2.29
U0U6
0.52
0.02
-0.12
-2.L7
0.08

6.9U

-2.16

U.78

-3.59

12.16

8.57

QM

-o.ia
-0.13
3.12
MD.07

Source s Dominion Bureau of Statistics monthly supplements.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102