Full text of H.16 Capital Market Developments : April 29, 1968

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(
iblication

DECONTROLLED AFTER SIX MONTHS

April 29, 1968.

CAPITAL MARKETS DEVELOPMENTS
IN THE UNITED STATES
and municipal bond markets. The volume of new
municipal securities expected this week will about equal
I volume of the past year, while the corporate volume will
be substantially lower. Featured among the municipal issues will be the
negotiated offering of $96.5 million of New York State Housing Finance Agency
revenue bonds. The largest corporate issue will be the Columbia Gas System's
$50.0 million of debentures.
Long-term Public Security Offerings
(In millions of dollars)

Corporate
New Capital I Refunding

1/

State and local Government
New Capital I Refunding

Sold:
52 week avg.
April 19
26

324

248

r/398
162

r/216
182

175

250

Scheduled:
May
1/

3

Federal Reserve estimates are based upon published reports of I
issues sold and scheduled for offering; corporate rights offerings
are included as of date subscription rights expire.

Yields on new and seasoned corporate bonds advanced last week. The
new issue series set a new high, one basis point above the previous ::ecord set
the week of February 10, 1968. The increase in the new issue series, however,
was somewhat overstated owing to the non-representative level it showed the
previous week. The main component of last week's series—the Pennsylvania
Bell Telephone issue--carried the highest net interest cost for a Be LI system
issue since 1921. The new record yield, however, led to a rapid sell-out of
the issue.
Yields on municipals advanced sharply last week, but in thiis market
new issues were not as well received. By the end of the week, about 65 per cent
of the week's offerings had been sold. There was, however, little hange in
the volume of dealer inventories advertised in the Blue List.
Home-mortgage interest rates. With pressures on mortgage rates as
well as other rates mounting further, secondary market yields on FHA-insured
new-home mortgages, which had fallen slightly in February to 6.78 per cent,
turned upward again in March to a record high of 6.83 per cent. Interest rates




H. 14

Yields on Security Markets
High-Grade
Notes and Bonds

Change from
preceding week

Levels Latest Week

Corporate
New
Seasoned

6.65
6.22

23
2

5.33
5.88

5
18

• U.S. Government
. Long-term :
3-5 year
State and local Govt.
10
10

4.18
4.47

Moody's Aaa
Std. & Poor's high grade
Money Market

5.68

Federal funds
Treasury bills
3-month
6-month

24
1

5.63
5.50
Corporate Bonds Still in Syndicate

Date
Offered
4/18
4/17

Amount
(millions of $)
50.0
15.0

Issuer

'

Reoffering
Yield

Province of Quebec,
7's - 1989

Rating

Estimated proportion sold

85%

7.25

Massachusetts Electric,
7-1/8 's - 1998
6.85

30%

Blue List of Municipal "Dealers' Advertised Inventories
Latest Week
606(4/23/68)




End of Previous Week
599

Recent jligh
849(4/26/67)

H. 14

on conventional mortgages for new homes also rose by 5 basis points t:o
reach the rate for existing homes at 6#80 per cent — a record level for
both types of mortgages as reported by the Federal Housing Adminstrat:ion.
However, while new-home mortgages were reaching this average for the first
time in March, existing home mortgages continued about unchanged since a
10 basis point rise in January.
Related data for conventional first mortgage loans on sing;le-family
homes from the Federal Home Loan Bank Board indicated a similar pattei:rn
toward further tightening injlarch. The FHLBB series, which tends t0 lag
the FHA series, showed a 3-basis point increase in the contract rate on
loans for new homes to 6.50 per cent, also a new high, with the rate for
existing home loans unchanged from February, at 6.58 per cent.
While lenders remained quite selective in March, average maturities and loan-to-price ratios for qualified borrowers continued to be
relatively liberal, according to the FHLBB. Average maturities for such
loans actually lengthened further during March, from 25.5 to 25.6 years
for new and from 22.6 to 23.1 years for existing homes. Loan-to-price
ratios, even though dipping somewhat in both cases, were still near earlier
highs, at 74.1 per cent for new and 73.2 per cent for existing homes,, Moreover, average loan amounts continued to rise as purchase prices increased.
Savings Flows. Seasonally-adjusted March inflows to nonbaik
depositary institutions continued the improvement shown in February. Financial
conditions during that period, including moderated short-term market yields
and slackened stock market activity, contributed to increased inflows. The
first quarter growth rate (seasonally adjusted) for mutual savings banks
was well above that for the fourth quarter, while at savings and loans
associations first quarter growth was slightly below the fourth quarter rate--reflecting primarily the adverse January experience at savings and laans
associations.
More information on savings flows in presented in the tabl
page', $.
Stock market credit. Figures for stock market credit extended by
brokers continue to be distorted by the wide swings in trading volume which
have been occurring this year. Thus, although customers' net debit balances
showed a decline of $169 million in March, margin debt increased $80 million
during the month. The more reliable series on securities loans to others
than brokers and dealers by large banks showed a drop of $47 million, but
this decline may merely reflect the loss of credit extended to purchasers of
convertible bonds, who, since March 11, have been able to do their Convertible
bond margin trading more easily, and on the same terms, at brokerages
Customers' free credit balances declined $76 million, but these net withdrawals
may simply have been made to meet April 15 tax payments. Thus, the true
direction of stock market credit let alone the underlying reasons fcjr the
movements in the data are definitely in doubt in most cases, and it
imprudent to attach any significance to the changes at this point.




Stock prices. Common stock prices rose sharply last week in
trading volume which was heavy by any standards other than those of the
past few weeks. At the close Friday the Standard & Poor's index of
500 stocks stood at 97.21, up 1.36 from the previous Friday and only
0.36 below the all-time high reached last September 25. Trading volume,
averaged 13.7 million shares a day.
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. 14

STOCK MARKET CREDIT
(In millions of dollars)

Months

Outstanding:
1955-56 High
1957-•58 Low
1959
1960
1961
1962
1963
1965

-

High
Low
High
Low
High
Low

1964 - Dec;
1965 - Dec.
1968 - Mar.

Total

Customer
Net Debit
balances with
NYSE member
firms

4,047 (5/56) 2,823 (12/56)
3,554 (1/58) 2,482 (12/57)

1,255 (4/56)

1,873

430

1,069 (1/55)

1,060 (11/57)

1,344

188

807 (4/57)

1,373(5)
1,121 (5)
1,377 (8)
1,269 (9)
1,727 (12)
1,865 (2)

2,044
1,801
2,572
1,856
3,892
2,882

318
237
385
235
597
446

3,393
2,889
n. a.

517 | 1,169
687 | 1,666
n. a.! 2,692

4,876 (7)
7,298 (11)
6,833 (7)

3,401
3,004
4,259
3,562
5,586
4,863

7,053
7,705
9,586

5,079
5,521
7,212

1,974
2,184
2,374

369
101
107
240
437
4
218
185
43
830
-122
-380
-169

24
60
9
8
30
65
75
86
19
22
-32
-11
-47

4,764 (4)
4,142 (5)

5,602 (12)

.

(4)
(7)
(12)
(7)
(11)
(7)

Broker & Healer Credit
Credit
Customers
Money
Bank loins to others
net free
orrowed
than brokers and
dealers for purchas- Cust.I Other credit
balances
& carrying secur, coll.I coll

1,257
940
1,508
1,091

(3)
(4)
(4)
(9)

1,211 (U)
1,192 (8)

Change in
outstanding:
1967 - Mar.
Apr.
MayJune
July
Aug.
Sept.
Oct.
Nov.
Dec.
1968 - Jan.
Feb.
Mar.

393
161
116
248
467
69
293
271
62
852
-154
-391
-216

n.a. 1
n.a.!
n.a.
n.a.
n.a.
n.a.

n.a.
n.a.
n.a.

n.a.
n.a.
n.a.:
n.a.
n. a.

199
-57
142 11
110
-60
120
112
-13
263
179
-174
-76

MMiiliSli-li'li"



SAVINGS FLOWS AT NONBANK DEPOSITARY INTERMEDIARIES
($ millions)

Date

Mutual Savings Banks
Regular Deposits
Annual
Net
Growth .
Rate
Flow

Net
New £'
Money

Savings & Loan Asso<Nations
Share Capital
Annual
Net
Net
Growth
New 2 /
Rate
y
MoneyFlow

Total
Deposits
Annual
Growth .
Net
Flow
Rate —

Net
New 2 /
Money —

Not Seasonally Adjusted
1965
1966
1967

3,563
2,591
5,079

7.4%
4.9
9.3

1967 - Jan.
Feb.
Mar.

433
319
727

•W

1968 - Jan.
Feb.
Mar.r/

262
350
645

——

.
—

--

,

8.3,
3.3
9.1

1,527
227
2,376

8,396
3,656
10,686

331
286
260

309
764
1,457

——

162
301
117

-251
584
1,255

--

4,458e
-552
6,136

--

—-

11,959
6,247
15,765

290
741
787

742
1,083
2,184

-270
560
539

11
934
1,900

8.0%
3.8
9.2
——
-—

5,985e
-325
8,512
621
1,027
1,047
-108
861
656

— mm
--

"

Seasonally Ad lusted
1967 - Oct.
Nov.
Dec.

338
340
302

6.9
6.9
6.1

——

1968 - Jan.
Feb.
Mar.

244
439
427

4.9
8.8
8,5

——

1/

—
—

-—

652
544
560

6.4
5.3
5.5

249
615
866

2; 4
6.0
9,3

--

11,892
10,596
10,356

6.6
5.8
5.7

5,916
12,648
15.516

3.2
6.9
8.4

.

---

Net New Money is deposits net of both withdrawals and interest. Data for S&Ls are for insured associations
only, which represent 96% of the total resources of the industry.
SOURCES: National Association of Mutual Savings Banks and Federal Home Loan Bank Board.
Estimated.
£,/ Preliminary.




'

EXHIBIT

A. Part 1

LONG-TERM BOND YIELDS, HIGH-GRADE
Weekly

/»

fer

CORPORATE Aaa

U.S.

r
STATE AND LOCAL GOVERNMENT Aaa

1963



1964

1965

1966

1167

Iff!

cewt

Exhibit A -- Jfaru jlI

Date

1959-60 - High
1966 - High
- Low
1967 - High
- Low

Corporate
j Aaa 1/

4.61(1/29/60)
5.52(9/9)
4.73(1/7)
6.24(12/29)
5.00(2/10)

State and
U.S. Govt. |
local
long-term 2/, government
Aaa 3/
(per cent)
4.42(1/8/60)
4.87(9/2)
4.42(1/7)
5.49(11/17)
4.37(2/3)

3.65(9/24/59)
4.04(8/25)
3.39(1/13)
4.15(12/28)
3.25(2/9)

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

.59(8/5/60)
.84(12/30)
.14(2/18)
.92
.44

.92(4/22/60)
1.19(2/11)
.77(9/2)
1.51
.74

1.13
1968 - Mar. 29
5.41
4.28
6.17
.76
6.20
5.25
1.07
4.18
.95
Apr. 5
5.21
12
1.13
6.19
4.08
.98
6.20
.92
4.08
5.28
19
1.20
26p/ 6.22
5.33
4.18
1.15
.89
£/ Preliminary.
1/ Weekly average of daily figures. Average term of bonds included is 22-24 years.
2/ Weekly average of daily 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. For spreads, high refers to widest, and low to narrowest.




EXHIBIT B, Pari 1

L O N G - T E R M B O N D YIELDS, LOWER GRADE
Weekly

CORPORATE Baa

STATE AND LOCAL GOVERNMENT Baa

1963



1964

1966

1117

Exhibit B —

Corporate
Baa 1/

Date

Part II

State and
local govt.
Baa 3/
(per cent)

Spread between
Aaa and Baa
State and
Corporate
local j>ovt.

1959-60 - High
Year end- 1965
1966 - High
Low
1967 - High
Low

5.36(2/12/60)
5.04
6.18(12/30)
5.05(1/14)
6.97(12/29)
5.81(4/14)

4.46(1/7/60)
3.79
4.55(8/25)
3.78(1/20)
4.73(12/28)
3.85(4/13)

.84
.31
.81
.31
.82
.63

1.08
.39
.62
.31
.81
.37

1968 - Mar. 29
Apr. 5
12
19

6.93
6.98
6.98
6.95
6.96

4.91
4.84
4.83
4.83
4.84

;76
.78
.79
.75
.74

.63
.66
.75
.75
.66

26D/
KTA4*N •

E./

I?ZM

Preliminary.




EXHIBIT

C. Part

S H O R T - A N D I N T E R M E D I A T E - T E R M INTEREST RATES
GOVERNMENT
Weekly

6-MONTH m i s

3-3 YEA* ISSUES

r.W. IISCtUNT RATE

3-MONTH DLLS
M a r k e t Yields

1963



1964

1965

1966

1117

Exhibit C -- Part II

Discount
rate

1959-60 - High
Year end - 1965
1966
1966 - High
Low
1967 - High
Low

1968 - Mar. 29
Apr. 5
12
1
19
26p / |

4.00
4.50
4.50
4.50
4.50
4.50
4.00
5.00
5.00
5.00
5.50
5.50

3-month
bills y

4.59(1/8/60)
4.47
4.80
5.52(9/23)
4.39(6/24)
4.99(12/29)
3.41(6/9)

5.14
5.20
5.35
5.39
5.63

Yields
6-month
bills 2/
(per cent)
5.07(1/8/60)
4.66
4.92
5.92(9/23)
4.53(6/24)
5.50(12/15)
3.74(6/2)
5.32
5.29
5.44
5.51
5.50

3-5 year
issues U

Spread between yields on
3-mo. bills and yields on
6-mo. bills 13-5 vr. issues

5.00(12/24/59)
4.90
4.86
5.83(9/2)
4.80(4/8)
5.80(11/10)
4.36(4/7)

.79
.19
.12
.52
o 09
.62
.01

1.81
.43
.06
.78
.01
1.61
. 02

.18
5.77
.09
5.53
.09
5.48
.12
5.70
-13
5.88
at the Federal Reserve Bank or

Series of 3-5
2/ Market yield; weekly averages computed from daily closing bid prices
~ year issues consists of selected notes and bonds.
Note—Highs and lows are for individual series and may be on different dates for
different series. For spreads, high refers to widest, and low to nariowest.
g/ Preliminary.




.63
.33
.13
.19
.25

EXHIBIT

D, Port

1

S H O R T - A N D I N T E R M E D I A T E - T E R M INTEREST RATES,
B A N K S A N D OTHER P R I V A T E BORROWERS
Weekly

PRIME RATE
FINANCE CI
Directly p l a c e d .
3-6 M o n t h *




F.R. DISCOUNT RATE
FEDERAL FUNDS

1964

1965

1966

1HI

Exhibit D —

Date

Prime rate 1/

Part II

Finance
company
•paper 2/

Federal funds 3/

Spread between
3-mo. bills and
finance co. paper

(per cent)
1959-60 - High
Year end- 1964
1965
1966
1966 - Low
1967 - High
Low

5.00
4.50
5.00
6.00
5.00(3/4)
6.00(12/29)
5.50(12/1)

5.13(1/22/60)
4.06
4.75
5.88
4.75(1/7)
5.75(1/6)
4.38(6/23)

4.00(5/13/60)
4.00
4.63
5.63 ,
3.55(1/21)
5.25(1/6)
3.40(10/27)

1.02
.23
.28
1.08
.20
1.33.
.21

.26
5.35
6.00
5.50
1968 - Mar. 29
.30
5.50
5.73
Apr. 5
6.00
5.58
.15
12
6.00
5.50
19
.24
5.63
5.70
6.50
.12
5.68
5.75
26a/ 6.50
1/ Weekly rate shown is that in effect at end of period. Prime rate is that
charged by large banks on short-term loans to business borrowers of the highest
credit standing.
2/ Average of daily rates published by finance companies for directly placed paper
for varying maturities in the 90-179 day range.
3/ Weekly average of daily effective rate, which is the rate for the heaviest
volume of purchase and sale transactions as reported to the Federal Reserve
Bank of New York.
Note.-Highs and lows are for individual series and may be on different dates for
different series. For spreads, high refers to widest, and low to narrowest.
I)/ Preliminary.




EXHIBIT

E, Port 1

STOCK MARKET

STOCK MARKET CREDIT

YIELDS

1

1

"ii iii Ii i i i M II
i 1
I 1
i U
1 I
1.1. 1 1 II 1 1 i IIi i i i. i i1
1 1 I I 1. 1 I'l l I
1963 v



1964

1965

19B6

1117

1 1 1 U
1 11.1

N i l III

Exhibit E -- Part II

Stock price
index 1/

Common
stock
yields 2/
(per cent)

Trading
Stock market customer credit
volume 2/
Customers'
Bank
(millions
Total
debit bal- loans to
of shares)
ances 4/
"others"5/
(In millions of dollars)

1961-62 - High
Low
1966 - High
Low
1967 - High
Low

72.04(12/8/61)
52.68(6/22/62)
93.77(2/11)
73.20(10/7)
97.26(10/6)

82.18(1/6)

2.82
3.96
3.01
3.97
3.01
3.58

10.1
2.4
10.7
5.0
12.3
6.9

1968 - Feb.
Mar.

90.75
89.09

3.28
3.34

9.2
9.2

5,602(12/61) 4,259(12/61) 1,418(5/9/62)
4,424(1/61)
3,253(1/61) 1,161(3/8/61)
7,997
5,835
2,241(7/6)
7,302
5,169
2,097(12/14)
10,347(12/67) 7,883(12/67) 2,507(11/1)
7,345(1/6)
5,290(1/67) 2,055(1/25)
9,802
n.a.

7,381
n.a.

2,421
2,374

96.53
3.09
n.a.
15.9
n.a.
2,349
n.a,
95.85
n.a.
3.11
14.9
r/2,356
97.21
3.07
13.7
n.a.
n.a.
n.a. Not Available. £/ Preliminary, r/ Revised.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing prices, 1941-43=10.
Monthly data are averages of daily figures rather than of Friday's only. Highs and lows are
for Friday's data only.
2/ Standard and Poor's composite stock yield based 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 Exchange. Year-end figures are averages
of daily figures for the year. .
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. Weekly reporting banks account for about 70 per cent of loans to
others,. For further detail see Bulletin.
1968 - Apr. 12
19

JM.




EXHIBIT F. Port I

MORTGAGE AND BOND YIELDS^

HOME MORTGAGES:

Aaa CORPORATE BONDS:

r\

1959

1960

1961




1962

1963

1964

1965

1966

1967

1968

U
v

Exhibit F

Conventional
mort25-year 30-year gages 3/
m
mortgages

1957
1958
1959-60
1961-66
1966
1967

-

High
Low
High
Low
High
High
Low

5.63
5.35
6.24
5.43
6.73
——
—

——
—
—

5.44
6.81
6.81
6.29

6.00
5.55
6.30
5.80
6.70
6.65
6.40

Part II

Spread between yields
on conv. &
FHA mort-,
y
gages
.47
.15
.23
.25
.30
.11
-.12

Aaa (:orporate
Bonds

Spread between
yields on new cor6/ porate bonds and
New*' Seasoned"" FHA ijatgs. Seasoned
M
I bonds
4.94
3.65
5.25
4.12
5.82
6.53
5.20

4.12
3.57
4.61
4*19
5.49
6.07
5.03

1.:58
B8
l.i69

V

'

l.:LI
1 26
*i
24

1.03
.05
.73
-.16
.46
.46
,17

6.53
.46
-.12
6.07
.24
n.a.
6.65
Nov.
6.77
.32
.30
6.51
6.19
n.a.
6.81
6.70
-.11
Dec.
.07
6.24
n.a;
-.06
6.17
6.81
6.75
Jan.
1968
-.03
6.29
6.10
.49
.19
n.a.
Feb.
n. a.
.45
Mar.
-.03
.27
6.56
6.11
Neither mortgage nor bond yields take into account servicing costs which are much
higher for mortgages than bonds. Generally* bonds pay interest semi-annually;
mortgages, monthly. Mortgage yields, if computed as equivalent to a sepi-annual
interest investment, would be slightly higher than given in the table.
2/ Based on FHA-field-office opinions about average bid prices in the private secondary
market for new-home mortgages for immediate delivery. Separate data available for
25-year and—beginning July 1961—30-year mortgages with minimum downpay
yments,
weighted by probable volume of transactions. Yields computed by FHA, apssuming prepayment period of 12 years for 25-year mortgages and 15 years for 30-year mortgages.
Over the period for which they can be compared, the movement of the two mortgage
yield series has been similar. Dashed lines indicate periods of adjustment to
changes in contractual interest rates.
3/ Based on FHA-field-office opinion on typical interest rates (rounded) oi conventional
first mortgages prevailing in the market areas of insuring office cities. Beginning
with April 1960, rate relates only to new-home mortgages; prior to that date, rate
iicates this
related to both new as well as existing-home mortgages. Dashed line infi
change in the series.
L
4/ FHA mortgage yield data are for 25-year mortgages through June 1961; 30 -year mortgages thereafter.
5/ See note for Exhibit G.
6/ Moody's Investor Service. Monthly averages of daily data. See Exhibit A.
n.a. Not available.
1967

17




a#

EXHIBIT F, Pari HI

C O N V E N T I O N A L M O R T G A G E TERMS

y

MATURITY
NEW
EXISTING

1
LOAN/PRICE

RATIO

NEW

EXISTING

1964




1966

1968
* CHANGE IN SERIES

80

Exhibit F

Part IV

New Homes
Con- Fees & EffecLoan/
Con- Fees &
tract Charges tive
Maturity Price Loan
tract Charges
Rate
(Per
Rate
(Years) Ratio Amt.
Rate
(Per
(Per
cent)
(Per
cent)
($000) (Per
cent)
3/
2/
cent)
2/
cent)

Existing Homes
Loan/
EffecMaturity Price Loan
tive
Rate
(Years) Ratio Amt.
(Per
($000)
cent)
. 3/

1967-

Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

6.34
6.31
6.25
6.23
6.31

6.28

6.31
6.34
6.33
6.41

0.82

72.8

0.76
0.84

6.47
6.43
6.37
6.35
6.43
6.40
6.44
6.47
6.45
6.54

24.6
24.8
25.3
25.2
25.2
25.2
25.3
25.4
25.3
25.4

73.2
74.0
74.0
73.9
73.7
74.2
73.8
73.4
72.7

0.86

6.52

25.4
25.5
25.6

72.9
74.5
74.1

0.77
0.77
0.76
0i77
0.78
0.78

0.82

19.4
19.8
20.4

0.78
0.74
0.70
0.67
0.70
0.72
0.73
0.78
0.77
0.83

6.44
6.34
6.29

20.8 6.28

21.0 6.30
21.0 6.34
2L4

6.36

21.5

6.51

21.7
22.2
22.4

6.57
6.58
6.58

21.2 6.39
21.2 6.42

19686.39
Jan.
Feb. vi 6.47
Mar. j>/ 6.50
Notes

0.94

0.88

6.62
6.64

0.82
0.81
0.78

6.56

6.46

22.5
22.3
22.3

6.46

22.8

6.40
6.39
6.41

22.8
22.7

6.47
6.52
6.55
6.64

22.5
22.5
22.7
23.1

6.70
6.71
6.71

22.6

22.7

23.1

17.0
17.2
17.5

72.5
72.6
72.7
72.5
72.9
73.4
72.7
73.0
72.9
73.1

17.4
17.3
18.3
18.4

73.7
73.6
73.2

18.4
18.0
18.7

18.2
18.1
18.1

New series beginning 1965 as shown in table; related revision of chart isj pending,

r/ Revised.
~1J Compiled' by Federal Home Loan Bank Board in cooperation with Federal Deposit Insurance
Corporation. Data are weighted averages based on probability sample survey of characteristics of conventional first mortgages originated by major institutional lender groups,
(including mortgage companies) for purchase of single family homes. Data exclude loans
for refinancing, reconditioning, or modernization; construction loans to home-builders;
a n d — i n this exhibit—permanent loans which are coupled with construction loans to
owner-builders. Data prior to 1965 on a comparable basis with the new series are pending. Related series on conventional mortgage rates only, based on unweighted opinions
of regional-office directors of the Federal Housing Administration, are available
somewhat sooner than the results of the FHLBB-FDIC survey, and are included-)-in the case
of new home mortgage rates—in Exhibit F Parts I and II.
2/ Fees and charges—expressed as a percentage of the principal mortgage amount—include
~~ loan commissions, fees, discounts, and other charges which provide added income to the
lender and are paid by the borrower. They exclude any closing costs related solely to
transfer of property ownership.
3/ Includes fees & charges amortized over a 10 year period in addition to the c
~ interest rate.




-tOr

A. \

''

EXHIBIT

yields o n

new

and

seasoned c o r p o r a t e

G. Pari 1

bonds

Weekly

I.S

Adjusted to

Aoo

Basil

NEW ISSUES

II

5.8

5.0

SEASONED Aaa

4.5

4.1

1964



1965

IMS

$
Exhibit G - II
Yields on New Corporate Bond Issues Adjusted\to an Aaa basis

Number
of
issues

Number |Am't. of issues Average
of
included (mill.
yield
(per cent)
issues 1 of dollars)

Am't. of issues Average
yield
included (mill*
(per cent)
of dollars)

Monthly averages:
1968 - Jan
Feb.
Mar.

13
13
10

567.0
564.5
350.0

6.24
6.29
6.56

Feb.

Mar.

6.21

2
9
16
23

76.0
237.0
42.5

6.23
6.30
6.29

1
8
15
12
29

70.0

6.48

85.0
135.0
130.0

6.44
6.58
6.64

205.0

2
4
4

6.58
50.0
5
1
Apr.
6.41
25.0
12
1
Weekly averages
6.42
215.0
19
3
6.65(4/26/68)
High
6.65
125.0
fa/ 2
6.18(1/12/68
Low
Note: Averages of offering yields on all new issues of publicly offered corporate bonds rated Aaa,
Aa, and A by Moody's Investors Service (except serial and convertible issues, offerings of natural
gas pipeline and foreign companies, and bonds guaranteed by the Federal Government) weighted by
size of offering. Before averaging, new offerings are adjusted to a composite Aaa basis by
deducting from the actual reoffering yield the excess of the weekly average yield for seasoned
bonds of the appropriate industry-quality group over the composite average for seasoned Aaarated bonds (Moody's). Averages considered unrepresentative because of special characteristics
of the offerings included are denoted by an asterisk.




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

January
February
March
April
May
-June

£/ 1,689
£/ 1,566
e/ 2,010
.

e/ 1,725

July .
August
September
October
^November
December
1st
2nd
3rd
4th

Quarter
Quarter
Quarter
Quarter

e/ 5,265

let half
Three quarters
Year

Corporate
1967

pltal

5

1

1968p/

1966

State and local 2/
1968p/
1966
1967

1,648
1,399
2,317

1,302
1,237
2,446

1,134
£/l,175
£/1,356

1,482
1,194
1,439

1,188
858
865

1,973
1,474
2,611 "

1,553
1,058
2,364

e/1,100

1,111
1,222
1,497

1,193
901
1,141

2,454
2,407
1,723

1,039
1,670
1,382

943
858
1,324

701
773
1,020

2,289
1,467
2,336

829
1,085
1,635

974
1,424
1,060

755
969
940

4,115
3,830
3,125
3,458

2,911
3,235
2,494
2,664

7,945
11,070
14,529

6,146
8,640
11,304

5,364
6,058
6,584
, 6,092

4,985 ,
4,975
4,091
3,550
9,959
14,050
17,601

11,421
18,007
24,098

£/3,665

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

Quarter
Quarter
Quarter
Quarter

Year

£/
V
2J
Y/

5,207
5,913
6,338
5,657

4,924
4,884
3,969
3,188

23,115

17,269

Preliminary.
Securities and Exchange Commission estimates of net proceeds.
Investment Bankers Association of America estimates of principal amounts.
Total new capital Issues excluding offerings of sales and consumer finance companies.




-18.-

Exhibit I
New Corporate Security Issues, Type of Issue
and Issuer
(In millions of dollars)
Gross proceeds for new capital
and refunding 1/
Common Memo:
Bonus
Foreign
Publicly Privately and
pfd. issues
Offered Placed
stock included

Net proceeds

Quarter
or
Month

Total

1966 - IV

3,669

2, 047

L ,247

375

117

1,232

984

417

1967 - I
II
III
IV

5,464
6 ,208
6,833
6,294

3, 263
4,,017
4,604
3,,107

1.,811
1,,465
1,,551
2 ,137

390
726
678
1,051

60
65
234
93

997
2,442
3,014 1,268
2,792 1,219
1,255

543
548
595
269

1968

le/

5,421

2,459

2;,013

949

77

1,446

353

1967

Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

2,362
2,016
1,519
2,673
2,589
2,481
1,763
2,409
1,500
2,385

1.,618
1;,368
965
1:,684
1 ,889
1 ,813
902
1 ,375
645
1 ,087

601
410
396
659
486
418
647
566
551
1 ,020

143
238
158
330
214
250
214
469
304
278

15
16
32
17
213
13
8
34
19
40

503
394
403
471
446
509
265
573
404
278

145
107
91
350
39
356
200
119
82
68

1968

1,757
1,604
Mat. e.'2,060

903
796
760

326
223
400

61
n.a.

418
543
485

182
146
25

is#

—j—preliminary,

e/

528
585 900

16

Public CommuniUtility cations Iss

Mfg.

1,128
588
1,298
925
1,229
637
906

I

Estimated by Federal Reserve, n.a. - Not available.

and othet

I

transportation, real estate and finance, and commercial and other.
SOURCE: Securities and Exchange Commission.




-rt-

Exhibit J
Other Security Offerings
(In millions of dollars)

Gross Long-term 1/
Federal Agency 3/
Foreign Government 2/
1966
1967
1968 p/
1967
1*68 £/
January
February
March
April
May
June
July
August
September
October
November
December

Year

123
49

196
——

223
27
. 13
170
22
586
193
66
142
18

1,656

•

12
40
40
66
69
76
72
7
50
23
74
68

597

999
550

8,180

6,806

January
February
March
April
May
June
July
August
September
October
November
DecemberJan. - Mar. p /

-215

/

Year

-177

1,721

422

__

503
410
392
699
1,030
1,084
799
400
450
800
239

New short-term 4/
State\ and local Government 5/
Federal Agency
1
179
103
490
-179
300^/
'
387
39
-552
436
89£
-594
-319
-454
-604£/
827
580
-559
515
462
109
-334
-187
93
-103
-158
20
270
-262
593
•
-161
1,407
32
-48
606
414
503
49
573
-570
36
-514
-28

1966

1,251
783
750
650
810
650
407
250
599
708
710
612

660

;

3/
308
-24
450
718
85
284
-590
-270
-652
-555
-283
219

310

£/ Preliminary, e/ Estimated by Federal Reserve, n.a.—Not available. 1/ These data
differ from those in Exhibit H in that refunding issues, as well as new capital issues,
are included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the U.S. by foreign governments and their political
subdividions and international organizations. Source: Securities and Exchange Commission.
3/ Issue's not guaranteed by U.S. government. Source; Long-term, Securities and Exchange
Commission; short-term, Treasury Dept. & Fed. Reserve. 4/ These data differ from those
in Exhibit H and above in that they represent new offerings less retirements, whether
from the proceeds or refunding issues or from other funds. Data include only issues with
original maturity of one year or less. 5/ Principally tax and bond anticipation notes, «
warrants, or certificates and Public Housing Auth. notes. In some instances PHA notes
included mav have a somewhat longer maturity than 1 year. Source: Bond Buyer & Federal
Reserve.
_<*„




Exhibit K
Large Long-term Public Security Iaauea for New Capital
(Other than U. S. Treaaury) 1/
Proceed# of Large Iaauea Offered
(In milliona of dollara)

Total

1967 - Mar.
Apr.
May
June
July
Aug.
Sept.
Oct,
Nov.
Dec.
1968 - Jan.
Feb.
Mar.

Bonia
(other than

1,435
956
771
1,072
890
1,288
473
897
461
460
652
575
415

1,638
1,311
870
1,666
1,340
1,705
794
1,458
826
978
904
757
788

Convertible
bonda
140
213
55
409
317
350
257
285
150
437
168
105
135

Stocka

and
local
sovernmenta

63
142
44
185
133
67
65
276
215
81
85
77
238

669
512
496
875
483
473
847
505
865
633
785
591
736

Other

2/

1,000
540
391
825
85
221
400
50
845
627
1,095
389 !
1,030

Lferge Individual Issues Offered April 1 through April 26.

laauer

Type £/

Keystone Steel & Wire Co.
New Jersey Bell Tele. Co.
Sundstrand Corporation
Southland Corporation
Indiana Head, Inc.
Potomac Edison Co.

Amount
(millions
of
dollars)

S.F. debs.
30.0
Debs.
50.0
Conv. sub, debs. 30.0
Com. stk.
18.4
25.0
Conv. debs.
1st mtg. & coll.
tr. bds.
25.0
Sears, Roebuck Inc.
S.F. debs.
100.0
Allied Chemical
Debs.
100.0
Gtaphic Sciences
Conv. debs.
15.0
20.0
Massachusetts Electric Co. 1st mtg. bds.
Cum. pfd. stk.
35.0
Duke Power Co.
Debs.
Bell Telephone of Pa.
100.0
Conv. debs.
28.0
Lucky Stores
General Telephone of the
Southwest
1st mtg. bds.
25.0




Maturity

Coupon
rate or
net inters
est cost

Offering
yield

Rating

7.25

1993
2008
1993

7-1/4
6-5/8
5

6.60
5.00

Baa
Aaa
Ba

1993

5-1/2

5.50

B

1998
1993
1993
1983
1998

7.00
6-3/8

6.80
6.38

6
7-1/8

A
Aa
A

6.85

2008
1993

6.82
5.00

6.75
5.00

1998

6-7/8

6.90

-IW

v1

6.60

6.60
6.00

Aaa
B

Large Individual Issues Offered April 1 through April 26. (Cont'd)

Issuer

Type

3/

Amount
(millions
of
dollars)

Maturity

Coupon
Offerrate or
ing
net interyield
est cost

Rating

State & local Govt, (cont'd)
San Francisco, California
San Francisco, California
Washington Suburban Sanitary
District, Maryland
Detroit, Michigan
California Dept. of Water
Resources
California Dept. of Water
Resources
California Dept. of Water
Resources .
Penna. State Highway & Bridge
Authority
Oakland Co., Michigan
Montgomery Co., Pennsylvania
Calcasieu Parish, Louisiana
State of Rhode Island
San Diego Unif. Sch. Dist.,
California
San Franisco B.A.R.T.
m
Vermont (Montpelier)
New York City
Puerto Rico Water Resources
Authority
.Houston Ind. Sch. District
Baltimore, Maryland
State of Rhode Island

G. 0.
G.O.

21.3 1969-1988
10.5 1969-1988

4.07
4.06

3.50-4.10
3.40-4.10

Aa
Aa

Rev. -Ut.
G.O.

25.0 1969-1998
13.9 1969-1992

4.55
5.13

3.60-5.25
3.90-5.25

A
Baa

Rev. -Rent.

26.01998

A-1

101.0 2018

5.20

A-1

4.00-4.80

A-l
Aa
A-l
Aa
Baa
A-l

Rev.-Rent.

23.0 1972-1988

5.20 1

Rev.-Rent.
G.O.
G.O.
Rev. -Rent.
G.O.

75.0
16i9
11.0
12.5
15.1

1968-1989
1972-2002
1969-83
1984
1970-88

4.48
4.94
3.94
5-5/8
4.10

3.90-5.05
3.90-5.00
3.40-3.95
4.50-5.10
3.60-4-1/8

G.O.
G.O.
G.O.
G.O.

10.0
70.0
25.0
98.1

1971-90
1972-99
1969-1987
1969-98

4.27
4.48
4.92

3.75-4.30, ,A 1
3.75-4.60-^ Aa
3.40-4.00 Aaa
3.85-5.20 Baa-1

Rev.-Rent.
G.O.
G.O.
G.O.

38.0
14.0
16.0
18.0

1970-2000
1969-93
1970-98
1970

4.54
4.53
4.23

4 - 5.06
A
3.70-4.63 ,A
3.85-4.65^ A
4.00

S.F. debs.

75.0 1993

7-1/8

7.17

S.F. debs.
Debs.
Bonds

20.0 1993
50.0 1989
225.0 1970

7
7

7.15
7.25
5.95

Other
Lakehead Pipeline
New Brunswick Higher Ed. Comm.,
'Canada
Province of Quebec
Federal Home Loan Bank Board




6.00

K-3
FOOTNOTE;
* Rights offering.
1/ Includes corporate and other security offerings of $15 million and
State and local security offerings of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruct lion
and Development issues and non-guaranteed issues by Federal Agencies.
3/ In the case of State and local Government Securities, 6.0. denotes general
obligation; Rev.-Ut., revenue obligations secured only by income from
public utilities; Rev.-Q.-Ut., revenue bonds secured only by income from
quasi-utilities; Rev.-S.T., revenue bonds secured by revenue from specific
taxes only; Rev.-Rent., revenue bonds secured solely by lease payments.
4/ Bonds due 1998-1999 were not reoffered.
5/ Bonds reoffered to yield 4% due 1993^98 were not reoffered.




L\

H. 14
Exhibit L
Forthcoming Large Long-term Public Security Offering for M w Capital
(Other than U.S. Treasury) V
Expected Proceeda from Forthcoming Large Iaauea
(In milllone of dollars)

During month following
Amt* ahown
State and
Other %f
Corporate
local
1967 -Mar.
Apr.
May
June
July
. Aug.
Sept.
Oct.
Nov.
Dec.
1968 - Jan.
Feb.
Mar.

31
30
31
30
31
31
30
31
30
31
31
29
31

767
963
1,449
1,636
1,261
694
534
1,357
826
968
531
873
758

227
326
596
401
512
783
768
505
865
633
449
683
494

-—

70
100
40
--

100
65
50
845
402
60
130
15

Corporate

Subsequent to
date shown
State and
local govt.
247
346
616
402
575
903
889
743
684
,076
937
,079
624

905
1,262
2,065
1,922
1,576
1,335
1,090
2,694
2,129
1,892
736
1,105
935

Other H
15
85
115
70
150
159
126
260
875
502
75
265
125

Forthcoming Large Offerings as of April 26, 1968.

Issuer
.8

Amount
(millions
of
dollars)

Type

Approximate date of
offering

Corporate

Indiana & Michigan Electric Co.
Indiana & Michigan Electric Co.
National Aviation Corporation
Dial Fiance Company
Universal Oil Products Co.
Columbia Gas System
Chase Manhattan Bank
Consumers Power Co.
El Paso Electric Company
Commonwealth Edison
Northern States Power Company
Northern States Power Co.
Chesapeake & Potomac Tel. Co. of
Virginia
SCM
Wisconsin Electric Power Co.
Indianapolis Power & Light Co.
Appalachian Power Company

Virginia Elec. & Power Company



S.F. debs.
1st mtg. bds.
Com. stk.
Debs.
S.F. debs.
Debs.
Conv. cap. notes
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Pfd. stk.
Debs.
Conv. debs.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Com. stk.

^
op)

15.0
35.0
24.2
25.0
25.0
50.0
150.0
55.0
16.0
50.0
45.0
20.0
70.0
41.5
35.0
25.0
55.0
50.0

§

April
April
April
May
May
May
May
May
May
May
May
May

30
30
30(rts.exp.)?
1
1
2
6(rts. exp.l
7
8
9
13
13

May
May
M&y
May
May
May

14
14(rts. exp.)
15
20
21
22

L-2
Forthcoming Large Offerings as of April 26, 1968. (Cont'd)

Type

Amount
(millions
of
dollars)

Approximate date of offering

Corporate (Cont'd)
Michigan Wisconsin Pipeline Co.
Iowa-Illinois Gas & Electric Co.
^Northern Natural Gas
^American Hoist & Derrick
Illinois Bell Telephone
^Burroughs Corporation
Piedmont Aviation
Dow Chemical Company
Montana Power
Monongehela Power Company
Ogden Corporation
LTV Ling-Altec Inc.
National Equipment Rental Ltd.
Fidelity Corporation
Collins Radio Company

1st mtg. p.1.
bds.
Debs.
Debs.
Conv. debs.
Com. stk.
Conv. debs.
Conv. debs.
Com. stk.
1st mtg. bds.
1st mtg. bds.
Conv. debs.
Sub. debs, w/wts.
Conv. sub. debs.
Conv. debs.
Debs.

50.0

20.0

50.0
15.0
83.
50.
15.

100.

30.
20...
50.10
15 JO
25.0

16.0

35.0

May 23
May 23
May 28
May
Indefinite (rts.exp.)
Indefinite!
Indefiniti
Indefiniti
Indefinite
Indefiniti
Indefinite
Indefinite
Indefiniti
Indefinite
Indefinite

State and local Government
State of Texas
*New York State Housing Finance
Agency
Cleveland, Ohio
Kansas City, Missouri
^California, State of
Los Angeles Flood Control Dist.
East Baton Rouge Parish, La.
Jefferson, La., Parish-wide Sch.
District
*Delaware, State of
Dallas Co. Jr. Coll. Dist., Texas
Detroit, Michigan
Los Angeles Co. S.E. Gen'1. Hasp.
Authority
Cincinnati, Ohio
Buffalo, New York
^Florida State Bd. of Education
*Philadelphia, Pennsylvania
^Housing Assistance Administration
Houston, Texas
*Austin, Texas
Kentucky Turnpike Authority
Los Angeles Dept. of Airports
Other
^Montreal Catholic Sch. Comm.
^Canadian Utilities Ltd.




30.0

April

29

96.5
27.1
. 10.0
100.0

April
April
.May
May
May
May

30
30

G.O.
Rev.-Rent.
G.O.
Rev.-Rent.
G.O.
G.O.
G.O.

10.0
21.0

15.0
22.2
26.5
32.0

G.O.
G.O.
G.O.
G.O.

22.4
13.9
13.3
25.0
29.4
145.6

Rev.-Rent.
G.O.
G.O.
G.O.
G.O.
Bonds
G.O.
G.O.
Rev.-Q.-Ut.
Rev.-Rent.
S.F. debs.
S.F. debs w/wts.

20.0

16.0
120.0
35.0

20.0
-#)-

15.0

1

May
May
May
May
May
May
May
May
May
May
May
May
Indefinit
Indefinit
May
15
Indefinite

FOOTNOTES:
*—Included in table for first time.
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 of Federal Agencies.
Notej Government of Jamaica $15.0 million issue.
postponed due to "market
conditions".




Exhibit M
Foreign Government and Corporate Security Offerings
and Placements in the United States
Part I:

Sale Date

Amount
(millions
of
dollars)

Public Offerings

Issuer and Description of Issue

A.

Sold:

Mar. 1 through April 26, 1968.

March

28

150.0

International Nickel Company -- Debentures
maturing 1993, reoffered to yield 6.85%.

April

16

75.0

Lakehead Pipeline Co. — 7-1/8% S.F. debent «res,
maturing 1993, reoffered to yield 7.17%.

April

17

20.0

New Brunswick Higher Education Commission - (Canada) —
7% S.F. debentures maturing 1993, reoffei ed to yield
7.15%.

April

18

50.0

Province of Quebec — 7% debentures maturing 1989,
reoffered to yield 7.25%.
j

B.
Indefinite
Indefinite
May 15

15.0
15.0
20.0

^

Prospective Offerings
New Zealand -- Bonds ***
Canadian Utilities, Ltd., -- S.F. debs.-with warrants.
Montreal Catholic School Commission -- S.F. debentures.

* - Included in table for first time.
** - Issues sold to investors outside of U.S.
*** - Issue subject to interest equalization tax.
NOTE: Government of Jamaica $15.0 million issue, postponed due to "market conditions".




M-2

PART II:

Private Placements - Reported January 1 through April 26, 1968.

Date Reported

/

Amount
(millions
of
dollars)

Issuer and Description of Issue

1/1/68

1.5

Nicaraguan Hotel Co. — U.S. guaranteed
6% note, maturing June 1, 1987.

1/8/68

12.0

Republic of Portugal -- notes due 1968.

1/15/68

7.0

Home Oil Co. Ltd. (Canada) -- Secured
15 year bonds.

2/5/68

1.5

Caribbean Finance Co. (Puerto Rico) Senior
notes due 1/15/80.

2/26/68

"6.0

Aluminio, S.A. de C.V. (Mexico) U.S.
7-1/2%, maturing 1980.
. debentures —

3/1/68

12.0

Edmonton (City of Alberta, Canada),
U.S.. 6-3/4% debentures maturing Jan., 1993.

3/15/68

35.0

Mexico - (United Mexican States) external
7-1/4% bonds due 3/1/73.

Note: For retrospective data on aggregate foreign corporate and government security
offerings in the United States see Exhibits I and J. There is no simple relationship
between the data shown in the Exhibit and that shown in Exhibits I and J because the latter
includes privately placed securities in the period in which funds are actually taken down
but only in the amount of takedown while the placements shown in this exhibit are included
when reported, frequently with little or no information concerning timing of takedown.
,
Full or partial takedown may take place both prior and subsequent to the date a placement
is reported.




-36^