Full text of H.16 Capital Market Developments : April 25, 1960

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Not for Publication DECONTROLLED AFTER SIX MONTHS

E.lh

.

.

'

April 25, I960.
ITAL .MARKET DEVELOPMENTS
IN T^E UNITED STATES AND CANADA

APR J ) '^0
_(Includikig Review of Foreign Security
DEP.AL ^-"skies' in the United States during 1959)
r-r p;cH?'OKD
1
Part I - United States

Corporations sold large public security issues totaling $68
million and State and local governments sold bonds with aggregate proceeds
of $15U million. An Australian government offering for $25 million was
also sold8 The calendar for this week includes corporate issues with
aggregate proceeds of
million and State and local government issues
totaling $1/4.9 million.
Bond yields - Changes in yields on outstanding bonds were
mixed last week. Yields on high-grade corporate and State and local
government bonds were stable, while those on U. S. Government bonds and
lower grade corporate bonds increased. Yields on lower grade State and
local government bonds declined slightly.
A new A-rated, first mortgage electric utility bond issue was
sold last week to investors to yield 5.30 per c e n t — 3 2 basis points higher
than the yield for the last comparable issue, an offering made early this
month.
Mortgage and bond yields - Secondary market yields on certain
FHA-insured 5~3/4 per cent new-home mortgages, which rose sharply last
fall, changed little in March for the fifth consecutive month. >At 6.22
per cent, they were about 65 basis points above a year earlier, and the
spread between yields on new Aaa corporate bond issues and mortgages was
the widest since July 1958.
Stock prices - Standard and Poor's index of 500 common stocks
declined. 2 per cent last week, closing at 55.1*2 on April 22. Trading
activity increased with the daily volume of trading averaging 3.0 million
shares a day.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Canadian capital markets are presented in
Part II at the end of this report.
Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




H i t 4-GRADE

BOND

YIELDS

r

V\/

MU.S.

GOVERNMENT

3.0

LOWER-GRADE

BOND

YIELDS
6,0.

5.5

V
J

•r\v

'

/
/
\

/

V

JJ

COi

VV

1957




/ x_

X y "

\ f'

,z

J

1958

V\
.

loa

4.T

v^ZTXvJ
~T9T9~

1940

Exhibit B - Tables for Exhibit A

ii.ia

High-grade Bond Yields
Spread between
U. S. Govt, and
State and
Corporate
local Aaa
Aaa

State and
local govt.
Aaa 2/

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

195it - Low
1957 - High
1958
1959 - High
Low
I960 - High
Low

2.85 (it/23)
Ji.ll* (9/27)
3.55 (5/2)
it.6i (12/31)
ii.09 (1/9)
it. 61 (1/29)
it.Wt ( V 8 )

2.15(8/6)
3.76.(10/18)
3.07 (1/25)
it. 37 (12/31)
3.83 (1/2)
it.it2 (1/8)
li.00 (3/25)

1.90
3.it5
2.6it
3.65
3.06
3.53
3.28

Mar.
Apr.
Apr.
Apr.
Apr.

it.it6
it.it5
it.iiit
it.it5
it.it5

Loo
It. 07
It. 10
it. 18
it. 21

3.32
3.28
3.28
3.29
3.29

Date

(Per cent)

25
1
8
15
22

2/

(9/2)
(8/29)
(5/1)
(9/2it)
(3/26)
(1/7)
(li/7)

•30
.it?

.30

.60

-3U
.92

.22
.50
.16
.U6

.53

.92
.68

.19

.68
.79
.82
.89
.92

.it6

• 37

•3k

.27

.2lt

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa 2/

Spread, between
Aaa and Baa
State and
- Corporate
local govt.

(Per cent)
195it
1957
195.8
1959

-

Low
High
Low
High
Low
I960 - High
Low

Mar.
Apr.
Apr.
Apr.
Apr.

25
1
8
15
22 2/

3 . a (12/31)
5.10 (11/29)
. L 5 1 (7/11)
5.3 2.(12/31)
it.83 (it/17)
5.36 (2/12)
5.17 (it/8)
5.22
5.18
5.17
5.18
5.21

2.93 (6/5)
it. 51 (8/29)
3.6it X 5 / D
it.it6 (7/2)
3.92 (3/26)
it.it6 (1/7)
it. 22 ( V 7 )
it. 26
it. 22
it. 22
it.2ii
it. 23

.52
1.27
.77
•77
.56
.79
.71

.96
1.21
.93
.98
.79
.97
•93

.76
.7it
.73
.73
.76

.9k
•9k
.9k
.95
.9it

g/ Preliminary. f
1/ Weekly average of daily figures. Average term of bonds included is 25-26 years.
2/ Weekly average of dully 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.--Hlghe and lows are for individual series and may be on different dates for different series.




STOCK

MARKET

MORTGAGE

AND

BOND

HOME

1955"

YIELDS

MORTGAGES - FHA




Exhibit

D

- Tablx-u

for Exhibi v C

-5-

Stock Market
Stuck price
indox 1/

Date

1957-59 - High
Low
I960 - High
Low
February
March
Apr. 8
Apr. 15
Apr. 22 2/

1

60.51
39.78
59.50
54.24

Common
•Trading
volume y
yields 2/ (millions
(per cent) of stores)

(7/31/59)
(12/27/57)
(1/8)
(3/11)

3.07
4.66
3.18
3.51

^5.69
55.02
56.39
56.43
55.42

n.a,—Not available.

3.38
3.45
3.37
!:g

Stock market customer credit
Customers1
Bank
debit bal- loans to
ances 4/ "others" 5/
(Mil]Lions of do:.lars)

Total

3.6
2.4

4,761t
3,Mi,
It, 365
it, 156

3.0
2.9

i:8$

u

d

1:1
3.0

3,401
2,482
3,198
3>028

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

3,129
3,028
n.a.
n.a.

1,145
1,130
1,120
1,112

g/ Preliminary..

1/ Stimd&rd and Poor's —mposite Index of 600 co.rmon stocks, weekly closing prices, 1941-43=10. Monthly data,
are averages of dally figures rather than of Fridays1 only. Highs and lows are for Fridays' data only.
7j Standard end Poor's c'jmposltt atook yield based on Wednesday data converted to weekly closing prloau 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 Exoluinge.
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. Excludes 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.
WeaKiy reporting banks account for about 70 par cent of loans to others. For further detail see Bulletin.

Mortgage and Bond Yields 1/
Date

FHA
mortgages 2/ •

Spread between new
Aaa corporate
corporate bonds and
bonds 1/
New 3/ |Seasoned U/ FilA mortgages|Seasoned bonds

1953-1958 - High
Low
1959 - High
Low

5.63 (11/57)
4.56 (2/55)
6.23
5.57

U.81 (6/57) 1.12 (9/57)
2.7k (3/54) 2.85 (4/54)
5.29
U.58
4.29
1.12

1959 - November
December
1960 - January
February
March

6.23
6.23
6.21*
6.23

5.07
5.16
4.95

6.22

a. 96
11.66

4.56
1.58

4.61
4.56
4.49

1.96

.90

.54
1.29
.83

-.12

1.16

.51

1.07
1.29

l:56

.77
.15

I

.17

1/ Nelthnr mortgage nor bond yields take into account servicing eootc which arc much higher for mortgages thim
bonds. Generally, bonds pay interest semi-annually; mortgages, monthly. Mortgage yields, If computed as equivalent
to a semiannual interest investment, would bo slightly higher than given In the table.
2/ B*nod on FHA field-office opinions about average bid prices in the private secondary market for new-home
mortgages for Immediate delivery. Since late 1955, data relate only to 25-yeor mortgages with downpaymento of 10
per cent or more, weighted by probable volume of transactions. Yields computed by FHB, assuming 25-ycnr mortgagee
are paid off In 12 yearn. Danhed linns indicate periods of adjustment to changes in tho contractual Interest rate.
3/ First National City Bank of New York. Averages of offering yields of all new issues of publloly-sold bonds
rotod Aaa, Aa or A by Moody's Inventors Service (except serial and convertible issues and offerings of natural gas
and foreign comp'-nlea) weighted by size of issue. Yields on Atv. and A issues are first adjusted to an Aaa basis
by tho sprmd between yields of outstanding bonds in those categories ond those on ,\aa-rated bonds. The series re.
fleets cKtn/-;e;i In 1 ndu.i tr Je 1 oomp onltlon, miturlt.v, tjpe, etc. of new offerings.
A/ Knotty1* Investora Service. Monthly avereg^s of daily data. See Exhibit B.




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

I960
January
February
March
April
May

E/S96

2/725

1,553^

899
791
871

1,140
597
887

70 9

October
November
December
quarter
quarter
quarter
quarter

840
7 45
631

s

July
August
September

1st
2nd
3rd
itth

New capital
Corporate 1/
State and local 2/
I960
1
1958
1
1958
1
1959
1
1959

e/2,085

1st half
Three quarters
Year

728

2/728

1fS
e/700

567 . "
Silr
468-

l,llh

862
518
920

2,216
2,564
1,9#
2,688

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

1,780
6,738
9,127

5,762
8,522
10,823

%

1,006

1,107
540

887
8#
936

638
858
616

593
513
2/444
e/1,803

812

I n
798
895
551
806
403
651
456
474
435

2,142 •
2,531
1*549
E/l,550

2,276
2,244
1,860
1,365

4,673
6,223
E/7,773

4,520
6,380
7,746

Excluding finance companies 4/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/1,735

Year.

2,011
2,409
1,695
2,549

2,899
2,586
2,731
2,213

U,665

10,it29

e/ Estimated.
g/ 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.
hf Total new capital issues excluding offerings of sales and consumer finance
companies.




n,:-..;libit, i*

-7r

Other Security Offerings 1 /
(In millions of dollars)
Long-•tern
Federal agency 3/
Foreign government 2/
I960
|
I960
1959
1
1958
1
1959
1
January
February
March

77
59
2

196
53

April
May

56
50

U2

139
198
120

July
August
September

85
1
36

9
5
17

October
November
December

h2

33

58
123

1U7

70

Year

558

182
150

2# '
3ltS •
E/363

April
May
July
Aupu st
September
October
November
December
Year

190
128
295

175
523

I61i
98
150

-

220

Ik .

86

992

233
U60
273

1958
1,163
251

-

707

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

199

k79
W

2,321

Federal agency 3/
359
500

371
208

m

1kh

hll
2hS

a
26k

I486
675
289

20 9
161
329

2U6
16?
399

289
ii23
3#

727
365
665

U37
206
330

358

231 1*15
2143

733
U71
288

U5U
lilt
137

6,017

3,098

563

i,179

3,910

.

EZ Preliminary.
1/fts-tapresented in this exhibit differ from those in Exhibit E in that refunding issues, an well aa new
capital issues, are included. Long-term securities are defined as those m t u r i n g in more than one year.
2/ Includes securities offered in the United States by foreign governments and their subdivisions e n d by
international organizations. Source: Securities and Exchange Commission.
3/ Issues not guarantied by the U. S. Government.. Source: long-term, Securities and Bcohang# Commission}
short-term, Federal Reserve.
4/ Principally tax and bond anticipation not*a, warrants or certificates acd Public Housing Authority
not<**. In some instances PHA notes Included may have a somewhat longer term than one year. Source: Bond Buyer.




Largo Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
State and
local government

rporate

Month

215
359

1959 - March
April
May
June
JulyAugust
September
October
November
December
1960 - January
February
March

110
363
199

kOO

1*21
230
279
262
38U

Type 1/

176
20
50
60
50
98
175
20

369
563
258
635
19U
263
21ii
29U
163
217
388
283
225

3h2
2flh

Large Individual Issues Offered

Other 2/

70
100
320
191

April 1 through 22

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

I

Rating *

CORPORATE
1st mtg. bds.
Carolina Power & Lt. Co.
1st mtg. bds.
Commonwealth Edison Co.
1st mtg. bds.
Alabama Power Co.
National Fuel Gas Co.
S.F. deb.
Kratter Corp.
Pfd. stk. "
Deb.
Mountain Sts.Tel.&Tel.Co.
Iowa-111. Gas & Elec. Co. 1st mtg. bds.
United States Plywood Corpi S.F. deb.
Middle South Utilities,Inc. Com. stk.
Trar.neon.Gas Pipeline Co. 1st mtg. bds.
Transcon.Gas Pipeline Co.
Com. stk.

25.0
30.0
19.5
18.0

23.6

ilO.O
15.0
25.0
l6.it

35.0

1990
1990
1990
1985

1-7/8

4-5/8

lt.85
a. 63

5

5-1/8

L98

5.65

2000
1990
1985

5
5
5-l/L

L87
5.25

Aa
Baa

1980

5-l/k

5.33

Baa

. 16.2

h.9h

Aa
Aaa
A
Aa

STATE AND LOCAL GOVERNMENT
State Publ ScL. Bldg.
Ayth., Pa.
Rev.-Rent.
Fh Y. City Hsg. Auth.
0.0.
Puerto I'dco Wtr.Res. Auth.
Rev.-Ut.
Chicaro, Illinois
G.O.
State of California
I
[ G.O.




16.0
20.5
20.0
10.0
25.0

1962-99/65
1962-2010/75
1962-97
1962-79
1962-86/81

h.00
U.01

h.hO

3.60
3.8U

3.10-1.05
2.85-U.02
3.00-1.38
2.85-3.65
2.80-3.91

A
Baa
A
Aa

Large Individual Issues Offered April 1 through 22 (Cont'd)

H.lli

Issuer

Type 3/

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

~9~

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd)
Triborough Br. & Tun.Auth.
Philadelphia, Penna.

Term
Serial
G.O.

29.3

Bds.
Bds„

22.0

7U.0

26.0

1985
1970-75
1961-90

14.03
3.77

Loo
3.50-3.75
2.1iO-3.88

A

OTHER
Federal Land Banks
Commonwealth of Australia

U6.0

I96U

1980

U-l/2

5-iA

lt-.iiO

S.hS.

1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $L0 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
3/ In the case of State and local government securities, G.O. denotes general
obligations5 Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev„-Q0Ut„, 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.




-10--

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

Date of
computation

During month following
date shown
Corporate State and
Other 2/
local govt.

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
216
28?
165
238
198
371

385

226
210
207
301
299

55o

. 25k

2ii7
116
356
38 5
270
115
2 95

Wi5

210
255
250

20
50

50
25

70
30

k5

35

Subsequent to
date shown
State and
Other 2/
Corporate
local govt.
176
3 k6
332
272
305
517
69I1
509
271
280
252
372

3kk

761
517
761
500 .
ko 6
1+02
1*70

20
50
50
25

336

1*85

5k5

310
385
280

70
30

k5
35

Forthcoming Large Offerings, as of April 22
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
1st mtg. bds.
Metropolitan Edison Co.
1st mtg. bds.
Cincinnati Gas & Electric Co.
S.F. deb.
Uris Building Corp.
Com. stk.
Columbia Gas System, Inc.
E.T.
General American Transportation Corp
Deb.
^Wisconsin Telephone Co.
1st mtg. bds.
Milwaukee Gas Light Co.
Deb.
Texas Eastern Transmission Corp.
1st mtg. bds.
-^Midwestern Gas Transmission Co.
1st mtg. p. 1. bds.
-^Michigan Wisconsin Pipe Line Co.
Deb., bds. & com
Commerce Oil Refining Corp.

15.0
30.0
20.0
20.0
30.0
20.0
22.0
25.0
60.0
30.0
45.0

Apr. 27
Apr. 29
May 3
May I*
May 11
May 11
May 18
May
May
June 2
Indefinite

STATE AND LOCAL GOVERNMENT
Cleveland, Ohio
Los Angeles City Sch. Dists., Calif.
1
State of Tennessee
New York, New York
Sacramento Mun. Ut. Dist., Calif.
Public Housing Authorities




G.O.
G.O.
G.O.
G.O.
Rev.
G.O.

13.3
16.0
15.0
75.0
30.0
133.4

Apr. 26
Apr. 26
Apr. 26
Apr. 2?
Apr. 28
May it

H.lii

H-2

.11.

Forthcoming Large Offerings, as of April 22 (Cont'd)

Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
State of Minnesota
Jacksonville, Fla.
Cincinnati, Ohio

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

1|8.8
30.0
12.2

May 5
May 10
May 17

OTHER
None
-x-—Included in table for first time.
1/ Includes corporate and other issues of &L5 million and over; State and
local government issues of 4pl0 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: Ventura Port District,
California's #10 million revenue bond issue—being sold on best efforts basis.




inhibit I
Yields on iLw and Outstanding
Electric Power Bonds, Rated Aa and A 1/

Late

1952 - 1 9 #
High
Low
1959 - January
February
March
April
May
July
Aug.
Sept.
Oct.
Nov. 25
Drc. 8
9
10
i960 — Jan. 7
Feb. 25
26
Mar. 15
16
18
29
Anr. 6

8
. 1U
21

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 (9/lk/#)
2.93 (3/31/5U

i . l k
h.97
*1.95
-it. 93
It. 83
5.13^
5.08
5.30

5.08
5.10

87
-3
37

h

10
17
37
29
31
23

36

. h2
63 '

5.50 (11/7/57)
3.00 (3/17/5W

123
-15

*iu75^

23

5.01.
5.01^/
5.07

18
25
15
17

*5.65
5.33

60

h3
51
50
28

hh
h6
32
17

L85

33

h.9h

39

5.00
it.93

11
7

L98

21

5.30

50

*—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.
7] Provides for a 5-year period during which issue m y not be called for
refunding at a lower coupon rate. Monthly average•- so marked include one or more
issues v?itn such a provision. Other issues have no such provision.
y Includes one issue which provides for a 7-year period duringjwhich the
issue may not be called for refunding at a lower coupon rate.




April 25, I960
Part II - Canada

-13-

The Treasury bill rates declined slightly while the Bank of Canada
continued to increase its bill holdings. Both the public and the chartered
banks were sellers. The 3-month forward rate on the Canadian dollar continued at a premium for the second week. Bond yields were stable during
the week.
Money market conditions. The short Treasury ti.ll rate declined
8 basis points from the previous week to 3*50 per cent air last week's
auction. The yield on the 6-month rate declined 12 basis points to 3*71
per cent. The Bank of Canada increased its Treasury bill holdings by
$1U million but the chartered banks reduced their holdings by $U million
and the public theirs by $11 million. The Bank also sold $3 million of
over-two-year bonds and bought $3 million of under-two-year bonds. Since
February h the Bank has been a continuous purchaser of bills and a net
seller of bonds: during this period, its bill holdings have risen from
$206 million to SU8l million and its bond holdings have declined from $2,267
million to $2,117 million. The average rate on day-to-day loans increased
0.0U per cent
from 3.38 per cent a week ago to 3.U2 per cent last week.
The decline in the 3-month bill rate was less than the decline
in the United States rate: as a result, a slight spread in favor of the
Canadian bill of 0,1$ per cent appeared. The 3-month forward Canadian
dollar continued at a premium of 0,12 per cent per annum.
Bond market developments, Canadian bond yields showed little
change during the week. The spread between comparable Canadian and United
States securities (Thursday yields for bills and Wednesday yields for bonds)
were as follows (figures in parenthesis refer to the previous week):
0,15
-0,05
0,83
0.99
1.U3

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

a 9 1 - d a y bill (0»06)
a 182-day bill (0,00)
an 8-year bond (0,86)
a 20-year bond (0.98)
a 35-year bond (l,kl)

According to the press, an Alberta Gas Trunk Line issue will soon
be offered as follows: $15 million, 6-1/2 per cent, 21-year debentures at
par and $15 million, 6-l/U per cent preferred shares, at par of $100,
A $U million Halifax County, Nova Scotia, 5 - 3 A per cent noncallable l-to-20
year serial debenture was offered, priced to yield 6.11 per cent. The
proceeds are to be used for municipal works. The Investment Digest of
April 11 reported the offerings of a $6 million, 6-l/U per cent Province of
Newfoundland debenture at the following prices: 1970 maturity at 98,25
to yield 6,14-9 per cent3 1980 maturity at 97 to yield 6.52 per cent.
Exchange rate. The spot rate on the Canadian dollar eased
slightly during the week to 103*67 U.S. cents and the premium on the




-lU-

3-month. forward rate continued, at 0,12 per cent (annual rate)# Recent
market rates for the Canadian dollar follow (in United States cents)i

March 17
31
April 7
lit
21

Spcft

3 mos.
forward

105.27
101.38
10U.00
103.86
103.67

105.1k
10U.31
103.97
103.89
103.70

Discount ( - )
or premium (+]
at annual rate
—
+
+

0.1*8
0,2U
0.12
0.12
0.12

Chartered bank loans. After a steady 6-month decline from
September 1959 s bank loans began to turn up again in February<> During
March s loans rose by $39 million on a seasonally adjusted basis„ The turnaround in loans has been accompanied by some decline ^Ln chartered bank
holdings of government securities. Their holdings have changed as follows
since February (in millions of Canadian dollars)8
Treasury
bills
Feb. U-25
March 3-30
April 6-20

-115
- 11
• - h7

Bonds
+ 79
+17
+ lk

Net
securities
- 36
+ 6
- 33

Stock market. Prices of industrial stocks in the Canadian
exchanges continued to decline slightly following a short period of rising
prices during late March and early April (see Table).

Toronto
March 18
2$
April 1
8
15
20

U87.02
U92.82
U95.23
501.19
U97.U8
U90.52

Montreal
281.7
283.7
285.U
293.1
290.0
286.8

British Commonwealth Section
Division of International Finance
Board of Governors of the Federal Reserve System




New York
Standard & Poor
58.71
59.75
59.1b
60.21*
60.29
59.15

-15-

Selected Government of Canada Security Yields

3-month
Date

Intermediate

Longterm

Spread between
Canadian & U.S. rates

Discount
on 3-mo.

bills:

1957 = High
1958 - Low
1959 - High
Low
I960 - High
Low

U.08
0.87
6»l6
3.25
5.1k
3.01

Uo8l
3-31
5.30
U.U5
5.55
5.07

U.35
3.78
5.30
u.ia
5.U2
5.15

1.19
0.U7
1.22
0.91

2.96
0.30
0.90
-0.01

0.72
(P)0.12

Mar» 31
April ?

3.01
3.2k
3.58
3.50

5.17
5o08
5.16
5.17

5.22
5.13
5.22
5.25

1.09
0.98
0.98
0.99

-0601
0.19
0.06
0ol5

0.2U
P.12
(P)0.12
(P)0.12

f

21

Average yield at weekly tender
Government of Canada 2-3A per
Government of Canada 3-1/U per
U/ U.S. Government 3-1/U per cent

cent of 1979.

on OJiursday.
""" '
cent of June 15, 1967-68.
cent of 1979.
of 1978-83* Government of Canada 3-l/U per

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-oonths forward and spot price of the Canadian dollar,
expressed as per cent per annum, onlbursday.

Canadas Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
• ^^jj2ions 0 f dollars, par value)
~
Bank of Canada
freas.
Bonds
bills
March 3
10
17
23
30
6
13
20

Government
Total

Chartered banks
Treas.
Bonds
bills

General public
Total

- 6
= 3
~ 18
-17
- 10

+ 12
- 33
- 1
+ 9
+ 2

VlU
= 10
- 3
0
+ 16

- 33
> 21

+ 25

•=> u
- 7
- 10
- 9
- 3U

+ 23
+ 37
lU

<= 30
0
0

3
- 11
+ 3

- 10
- 33
-

+ 9
+' 3
+ 2

+ 13
- 3
~ 21

• 31
+ 33• 13.

<- h3

1

k

Weekly Financial Statistics.




+ 23
- 29
-

1

-16-

Appendix 1
Foreign Security Issues in the United States in 1939

During 1959# new sales of foreign security issues in the
United States, both privately and publicly placed, totaled
$698 million. This figure does not include delayed deliveries of
International Bank for Reconstruction and Development bonds, Israel
bonds "retailed" in the United States, nor issues of Canadian companies
almost wholly U.S.-owned, which the Department of Commerce includes in
the U. S. "direct investments'^ figure in the U. S. balance of payments.
Of the total amount, $690 million was bonds and the remainder stocks.
During the year, Canada was again the principal borrower.
Borrowings were as follows: Canada ($459 million); Western Europe
($163 million); Sterling Area ($38 million); Japan ($30 million);
and other countries ($2 million). The Japanese bond issue and
$50 million, or almost one-third, of the Western European borrowings
were floated in conjunction with loans to these countries from the
International Bank.
Canadian borrowings were mainly by provinces and municipalities; corporations borrowed $49 million. Of the European borrowings,
$122 million was by Governments and the remainder was by businesses.
In 1959# foreign security issues purchased by U. S. investors amounted
to $570 million, or 82 per cent of the total of all foreign issues.
Some issues, including most of the Canadian ones, have been taken up
entirely or almost entirely for U. S. domestic account.
The 1959 U. S. balance of payments "new issues" figure',
which is the amount of U. S. funds actually transferred to security
issuers l/ was $600 million compared with $955 million in 1958,
$597 million in 1957, and ,$453 million in 1956 • Foreign flotations
declined from the high level in 1958 primarily because, for the first
year since 1955, no International Bank bonds were issued in the United
States. The International Bank had borrowed $400 million in the United
States in 1958.
A comparison of quarterly balance of payments "new issues"
figures for recent years follows:
1/ The amount the securities sold for, minus underwriters *
commissions.
International Financial Operations Section
Division of International Finance
Board of Governors of the Federal Reserve System




Appendix 1-2
II III
(in millions of dollars)

I

1959
1958
1957
1956

163
338
218
103

115
350
181
105

IV

2/l47
168
110
l4l

175
99
88
104

bJ The 1959 fourth quarter "balance of payments "new issues" figure
is larger than the Commerce Department's fourth quarter foreign security
issues figures "because, in arriving at the "balance of payments figure,
issues recorded on the Department's work sheets for other quarters were
shifted to the fourth quarter as more exact information became available.
Canadian institutions borrowed $140 million in the first quarter,
$84 million in the second, $149 million in the third, and $86 million in the
fourth. A summary of all publicly placed and some privately placed non-Canadian
foreign bond flotations in the U. S. markets follows:
Sales
Borrower

Amount
(Millions of
Dollars)

IS
Denmark
Jamaica
Japan
KIM (Netherlands)

20
10

Maturity
(Year)

2,5.
15
15

1974
1974
1960-64
1974
1962-64

18.5

1979

4.75

22.3

1974

2/5.25

20
10

1974
1963-64

5.5
5.75
5.5

n

97.5
95.5
99.1

Offering
Yield
(Per
cent)
5.75

6.16

Underwriter's
Commission
[Per
cent)
2.7
2.75 -

1.0

5.8
5.7,
4.5/4.75

1.37
1.37

4.75

2.25

100

5.25

1.5

97.5

I'M

3.125
0.5

98.6

IIQ

Belgium
Southern Italy
Development
Fund

5.5.
4.75

100

IIIQ
Australia
Mbntecatini
(Italy)
SAS (Sweden)

25

1979

5.5

97.0

5.75

2.5

10
12

1979
1975

5.5

6.0

100

5.5

2.375

IVQ
France

50

1979

5.5

95.5

5.89

2.5

a/ A supplementary interest rate of O.75 per cent is paid to the original
subscribers.
-