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

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Not for Publication
DECONTROLLED AFTER SIX MONTHS
H.lk

April 16, 1958.
CAPITAL MARKET DEVELOPMENTS

The volume of large public security offerings for new capital
continues to be substantiale During the week'ending April 11, corporations sold large issues amounting to $310 million and State and local
governments offered issues totaling $14j. million. This week, corporate
issues, including the expiration of subscription rights, are expected
to total $139 million and State and local government issues with
aggregate proceeds of $lltlt million are expected„ A foreign govem• ment offering is also scheduled for sale.
; Bond yields - Yields declined last week for all categories
of outstanding bonds. The decline was moderate for corporate bonds,
but sharp for yields on State and local and U. S„ Government obligations.

Stock market credit - Customer credit in the stock market
(excluding that for U, S„ Government securities) increased again in
March, after rising sharply in February. Totaling $3,863 million at
. the end of the month, such credit is about 9 per cent higher than when
margin requirements were reduced in January and about U per cent below
the June 1957 peak. In March, net debit balances increased $85 million.
Bank, loans to "others" increased $99 million reaching $1,198 million,
the highest since July 1956. Borrowings by member firms of the NYSE
maintaining margin accounts (excluding borrowings on U. S. Government
securities) also increased last month. Customers' net free credit
balances continued to increase slightly, totaling
million at the
end of March. These and other data on stock market credit for March
and February are shown in the following table.
End of month
Mar.
1 Feb.
Customer credit
Excluding U. S. Govt, securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
"Bank loans to others for purchasing or carrying
U. S. Government securities
Broker and dealer credit
Money borrowed except on U. S„ Govt, securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances
i
c/ Corrected.




Change

(millions of dollars)
+181:
3,863
3,679
2,665
2,580
+85
1,198
+99
1,099
111
102
+9
86

79

+7

1,781*. - 1,61*7
1,165
c/1,392
206
199
95k
939

+137
+73
+7
+15

- 2 -

Stock prices - The Standard and Poor's index of 500 common
stocks increased last week, closing at 1+1.7U on April 11. Prices
increased further, on balance, in the early part of this week, closing at 1+2.10 on Wednesday.
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

Date

State and
local govt.
Aaa 1/

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

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

3.12
2.99
3.09
2.85
3.17
2.91
3.79
3.07
k.lk
3.66
3.68
3.56

3.19 (6/5)
2.73 (6/25)
1.98 (1/8)
2.7k (12/31)
2.7k (1/8)
. 2.21 (6/10)
2.U5 (8/6)
1.90 (9/2)
2.3k (9/8)
2.97.(8/5)
2.6k (1/7)
2.05 (5/26)
3.U5 (12/28)
3.05 (12/27)
2.8k (2/17)
2.17(2/23)
3.76 (10/18)
3.k5 (8/29)
3.18 (2/8) 2.76 (2/21)
3.28 (1/31)
2.86 (1/9) .
3.19 (k/k)
2.65 (1/23)

.38
.20
.k3
.30
.27
.11
.kl
.12
.60
.27
•k7
.28

.83
.33
.62
.30
.76
.57
.71
.32
.k7
.15
.62
•3k

3.27
3.2k
3.21 '
3-19
3.15

.35
.39
.k3
•k5
.k7

.k9
.k5
.k2
.k2
.k5

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

lit
21
28
it
11

(6/19)
(1/9)
(1/8)
(V23)
(12/23)
(1/7)
(12/28)
(3/2)
(9/27)
(k/12)
(1/3)
(1/31)

3.62
3.63
,3.6k
3.61
3.62

2.78
2.79
2.79
2.77
2.70

'

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.
2/ 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.




EXHIBIT

B

L O W E R - G R A D E B O N D YIELDS

1953

1954

Date

1955

Corporate
Baa 1/

1956

State and
local govt.
Baa 2/

1957

J

1958

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

(Per cent)
1953 - High

1958 - High
Low

3.89
3.50
3.7U
3.a
3.63
3.1*5
4.lA
3.58
5.10
h.h2
li.96
L6L

March
March
March
April
April

Ii.67
L68
L69
L.69
1.67

195U - High
1955 - High
1956 - High
1957 - High

lit
21
28
k
11

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

3.79
2.96
3.32
2.93
3.26
3.02
14.22
3.20
li.5l
3.90
3.92
3.73
3.86
3.89
3.90
3.88
3.81

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

.

.15
.63
• U2
1.27
.6U
1.28
1.0U

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

1.05
1.05
1.05
1.05
1.05

1.08
1.10
1.11
1.11
1.11

.69
.1*2
.68
.52

• $k

1/ Weekly average of daily figures. Average term of bonds includes is
25-26years.
2/ 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 MARKET

Stock price

Trading
Common
Stock market customer credit
volume 2/
Customers'
Bank
(millions yields 3/ Total debit bal- loans to
of shares)
ances It/ "others'! 5/
(Millions of dollars)

1953 - High
Low
1951* - High
Low
1955 - High
1956 - High
1957 - High
Low
1958 - High
February
March 28
April 11

26.5!* (1/2)
22.95 (9/18)
35.98 (12/31)
2k.93 (1/8)
1*5.69 (12/9)
35.28 (1/lii)
19.61, (8/3)
1*3.22 (1/20)
1*9.08 (7/12)
39.U8 (12/20)
1*2.1*2 (3/21)
1*0.37. (1/10)

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

1*1.26
1*2.11
1*2.20
1*1.1*8
1*1.71*

2.0

6.25
' 5.38
5.82
li.32
• 1*.1*2 "
3-61*
1*. 35 3.82
1*.72
3.91 '
U.58
U.33
It.1*9
1*.35
1*. 35
1*.1*2
1*.1*0

2,1*55
2,055
3,1*36
2,1*05
i*,030
3,537
l*,0l*7
3,911*
L,031
3,576
3,679
3,551*

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82
2,580
2,1*87

3,679

2,580

780

66k
1,018

•71*6
1,21*1
1,018
1,267

i;iif

l,051i
1,205
1,051
1,099
1,198
1,198
1,205

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 Hew 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 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.lli

Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital
1958
January
February
March
April
May
June

e/800
e / ® /
e/900

1

Corporate
1
1957
1,063

i s
92l*
771
1,1*89

July
August
September

991
9Hi
973

October
November
December
lat
2nd
3rd
Iith

quarter
quarter
quarter
quarter

1958

573
712
817

812
952
1*86

71*2
572
506

1*01*
696
390

818

6/650

7 65
51*6
393

378
1*90
735

529

1*08
206
357

•

838

1,055
792
1,086
e/3,125

a

2,878
2,933
6,662
9,51*0
12,U73

let half
Three quarters
Year

State and local 1/
1
1956
1
195?

1956

2,102
2,922
U 6 3 .
10,381*

2,250

g;
698
633
698

3U7
1*09

1,820
1,701*
1,51*1*
2,029

1,1*90
1,603
971
1,395

7,099

3,093
1*,06U
5,1*59

Excluding finance companies h j
let
2nd
3rd
Uth

quarter
quarter
quarter
quarter

e/2,825

Year

3,268
2,921*
2,560
2,788
11,5L0

1,61*7
2,51*1
2,21*6
2,826
9,260

e/ Estimated.
1J 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 $718.3 million AT&T convertible debenture issue.
V Includes $571.5 million AT&T common stock issue.
U/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




H.lh

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) l/
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

788
1*77
329
877
525
526
537
57U
1*20
399
318
605
1,093

-

Other 2/

19k
1*99
21*8
176
265
357
185
135
386
1*39
506
62 9
261*

125
25
39
25
30
75
215
15

Large Individual Issues Offered April 1 through 11

Issuer

.

Type 3/

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

Rating

CORPORATE

Wisconsin Elec. Pwr. Co.
1st mtg. bds. 30.0
20.0
Gen. American Transp. Corp, E. T. ctfs.
Com. stk.
21.1*
General Telephone Corp.
Duquesne Light Co.
1st mtg. bds. 15.0
J. E. Seagram & Sons, Inc.
Deb.
1*0.0
American Can Co.
Deb.
1*0.0
Douglas Aircraft Co.
S.F. deb.
60.0
Aluminum Co. of America
Deb.
125.0
Pacific Petroleums Ltd.
S.7. deb.
30.0

1988
1978

1* 1/8
1* 1/8

1988
1983
1988
1978
1983
1973

3
k
3
5
3
5

3/1*
1/1*
3/1*
7/8
1/2

3.98
1*.13

Aa
A

3.71*
1*.38
3.75
5.00
3.90
5.30

Aaa
A
Aa
Baa
Aa
Ba

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




G.O.
G.O.
Rev.-Ut.
G.O. Rev.-Ut.•

12.5 1966-88/68
18.3
1959-73
13.5
1959-86)
7.0 1961-88/69
8.1* 1959-87/68

2.89 2.05-3.00
3.39 1.20-3.50
3.15 1.00-3.35
1*.03 2.20-3.90
3.56 1.25-3.70

Aa
A
Aa
Baa
A

H.lii

E-2
Large individual Issues Offered April 1 through 11 (Cont'd)

Type j/

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

Rating

STATE AND LOCAL GOVERNMENT
(Continued)
Anne Arundel Co., Maryland
State of Maryland
Chicago, Illinois
Erie Co. Wtr. Auth., N. Y.

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

5.0
2U.6
7.5
6.5

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

25.0
50.0
18.0

1960-83
1961-73
•1960-71
1961-97/67'

2.98
2.31
2.1|6
3.69

l.iiO-3.20^
1.25-2.50
1.20-2.70
1.75-3.70

A
A
Baa

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

1963
1983
1983

3 l/U
k
k 3A

3.40
ii.13
1.93

A
A
Baa .

1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
j/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured by revenue of quasi-utilities;
Rev.-S.T.j revenue bonds secured by revenue from specific taxes only; Rev.-Rent., ,
revenue bonds secured solely by lease payments.
k/ 1982-83 maturities not reoffered.




Exhibit F

H.IU

Forthcoming Large Public Security Offerings for New Capital
(Other thin U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
date shown

During month following
date shown

Bate of
computation

C o * P o r a t e | i ^ e g » £ | Other Z/

19.57 - Mar. 29
Apr. 30
May 31
June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec; 31
1958 - Jan. 31
Feb. 28
Mar. 31

U6l
187
525
370
526
578
576
^Ii58
383
378
1*98
1,123
555

-

290
179
97
172
252
2U3
370
369
387
383
U29
175
3U0

25
25
25
30
30
18
.150
• . 110

C Q i p o r a t e U ^ J o t h e r 2/
I486
258
525 .
W.5
811
815
61x7
815
1,193
1,161
1,378
1,208
670

862
396
388
2*98
51U
U39
587
573
589
61I4
5U6
389
372

25
25
25
30
15
hS
63
165
110

Forthcoming Large Offerings, as of April 11
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Richfield Oil Corp.
Commonwealth Edison Co.
Diamond Gardner Corp.
Mississippi Power & Light Co.
Tennessee Gas Transmission Co.
Southern Counties Gas Co.
Central Hudson Gas & Electric Corp.
. Philadelphia Electric Co.
*Texas Co.
Potomac Electric Power Co.
•^Public Service Co. of Oklahoma
•it-Long Island Lighting Co.
Consolidated Edison Co.
Commerce Oil Refining Corp.
Natural Gas Pipeline Co. of America




Conv. sub. deb,

19.0

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

50.0

1st mtg. bds,
1st mtg. bds.
1st ref. mtg. bds.
Deb.,bds. & common
1st mtg. bds.

25.0

15.0
30.0

15.0

18.0
liO.O

150.019.7 '

16.0
20.0
50.0

145.0
liO.O

Apr. Ill
(rights expire)
Apr. 16
Apr. 16
Apr. 17
Apr.
Apr. 2k
Apr. 2h
Apr. 30
May 1
May 6
(rights expire)
.May 13
May 15
June k
1958
1958

H.U:

F-2
Forthcoming Large Offerings, as of April 11 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
San Francisco, California
Washington Sub. San.'Dist., Md.
State of Massachusetts
Louisiana State University
Babylon U. F. Sch. Dist. No. 3, N.Y.
Burbank, California
*City and Co. of Honolulu, Hawaii
State of California
Washington Toll Bridge Auth.
•^Baltimore, Maryland
^Colleges of the State of Texas
W a k e Co., North Carolina
Philadelphia, Pa.
^Cincinnati, Ohio
•^Pittsburgh, Pennsylvania
State of Ohio

G.O.
G.O.
G.O.
Rev.-Q.Ut.
G.O.
G.O.
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.
G.O.
Rev.-S.T.

2U.2
' 10.0

96.9

7.5
5.5
5.6 •
7.3
100.0
5.2
2U.2
15.U
.

6.3

31.9
13-U
5.0
32.0

Apr. 1U
Apr. 15
Apr. 16
Apr. 17
Apr. 17
Apr. 22
Apr. 22 ;
Apr. 23
Apr. 2h
Apr. 29
Apr. 29
Apr. 29
Apr. 30
May 13
May 20
May 20

OTHER
Belgian Congo
,
Commonwealth of Australia
^Montreal, Canada

Ext. loan bds.
Bonds
S.F. deb.

15.0
25.0
25.0

Apr. 16
' Apr. 23
May 1

*—Included in table for first time.
1/ Includes corporate arid other issues of §15 million and over5 State and
local government issues of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Mote.—Deletions for reasons other than sale of issue: None.




Exhibit G

H.Ik

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

Date
1952 - 1957
High
Low

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)
5.00(8/lit/57)
2.93(3/31/510

1958 - January 8
• 9
17
21
23
February 5
lit
20
21
25
26
28
March 1*
5

6

12
19
21
.
25
April 1
2

87
-3

3.60

-8

3.80_ ,
3.805/:

13
12

3.95
Loo

28
33

U.15
It. 22
It. 00 .
lt.OO

a
50
28
26

lt.05
3.98
it. 00

31
23
25

5.50(11/7/57)
3.00(3/17/54)

123
-15

it.°7 ,
it.ioE/
3.85
3.80

9
13
-3
-8

3.90

,

-3

3.92

-3

U.ltO
it. 25

35
6

it.07

-7

*—Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moocty'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.