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DECONTROLLED AFTER SIX MONTHS
Not for Publication

.
.
.

—

!

"

I

H.lii

j
_ ^ £ I T a 4 j M E T

:
.

April

i960

developments--7

IN THE UNITED STATES AND CANADA
(Including Quarterly Review of
Corporate Security Financing)
Part I - United States
Public security financing for new capital continues to be
moderate. During the week ending April 1, corporations sold large
issues totaling $100 million and State and local governments sold
bonds with total proceeds of $35 million. A $150 million long-term
issue by the Federal National Mortgage Association was also sold.
This week, laige corporate issues are expected to total $75 million
and State and local government issues $37 million.
Bond yields - Yields continued to decline last week for all
categories of outstanding bonds, except those for U. S. Government
bends, which increased. The effect on long-tern Government yields of
the announcement of the offering as a It—1/H per cent 25-year bond issue,
callable after 15 years, was moderate. The Government average was I . I .
4O4
per cent on Thursday prior to the announcement and closed at It.08 per
cent on Friday.
Offering yields on new corporate issues also declined last
week. A new A-rated, first mortgage electric utility bond issue was
offered to investors to yield k.93 per cent, 7 basis points lower than
the yield for a comparable offering made on March 18.
Bond yields generally declined throughout March with the decline being about 10 basis points for corporate and State and local
government bonds. The decline for U. S. Governments was more than 20
basis points.
Mortgage recordings - Mortgage recordings declined more than
usual in January, with decreases registered for each type of loan.
The seasonally adjusted annual rate continued downward in December to
$29.8 billion, about one-tenth below the all-time peak in mid-1959.
Stock prices - Stock prices and trading activity declined
somewhat last week. Standard and Poor's index of 500 common stocks
closed at 55*1:3 on April 1 , . 5 5 points lower than a week earlier. The
volume of trading averaged . . t million shares a day, the lowest this year.
2i
Prices on balance declined I per cent during March as the
increases in late March were not enough to offset the sharp declines
early in the month. Trading activity, declining slightly, averaged 2.9
million shares a day last month.




Corporate Security Offerings in 1959
Corporate security issues totaled $2.7 billion in the fourth
quarter of 1959, bringing the total for the year to $9.6 billion. This
volume was one-sixth less than the issues sold in 1958 and one-fourth
smaller than the record volume in 1957. Refunding of outstanding issues
was very small—$, 2 billion as compared with $.5 billion in 1958 when
interest rates were much lower.
Net proceeds for new capital - Corporations sold $9.h billion
of security issues to obtain new capital in 19593 one-eighth below the
volume a year earlier as corporations relied heavily on internal funds
to finance plant and equipment expenditures. Most major groups of
issuers sold a smaller volume of offerings last year than in 1958.
Electric, gas and water utilities were the most important
group of issuers, offering securities with proceeds of 4>3.2 billion and
accounting for one-third of all corporate offerings. This total was oneeighth below the volume in 1958, however.
New financing by manufacturing companies, amounting to $2.0
billion, was two-fifths smaller than in 1958. Nearly all types of
industrial producers sold a smaller volume of securities last year.
Iron and steel and electrical machinery companies were the most important
groups of issuers among manufacturers.
New capital offerings by financial and real estate companies
in 1959 totaled $1.8 billion. This volume was three-fourths larger than
the unusually small volume a year earlier. New issue volume by sales
and consumer finance companies was nearly twice as large as in 1958,
but substantially below that for other recent years despite the sharp
rise in consumer credit.
Offerings,bj communication, railroad and mining companies were
in smaller volume than in 1958, while offerings by transportation (other
than railroad) and commercial and other companies were in somewhat larger
volume.
Total gross proceeds •- Gross proceeds from corporate offerings,
which includes refunding issues and costs of flotation, were #9.6 billion
in 1959. PubLicly-offered issues, totaling $6.0 billion were one-fourth
smaller than a year earlier, while private placements were one-tenth larger.
The decline in new financing last year from that of a year
earlier occurred largely in publicly offered bond issues. The total of
public bond sales was two-fifths analler than in 1958, while privately
placed bond financing was one-tenth larger. Common stock financing was
one-half larger than in 1958, with most of the increased volume occurring
in the first half of the year. Preferred stock issues were slightly
smaller than in 1958. Financing through convertible bonds totaled i p 6
j.
billion and accounted for nearly one-tenth of all debt offerings. This
was a slightly smaller proportion than in 1958 when the total included
FRASER
a S.7 billion AT&T convertible debenture issue.

Digitized for


H.1U
Table 1
Corporate Security Offerings for New Capital
by Type of Business of Issuer
1955-59
(Net proceeds in millions of dollars)
1959
Total corporate offerings
Refunding
New capital
Manufacturing
Primary iron and steel
Electrical machinery
Chemicals
Other transportation equipment
Nonelectrical, machinery
Foods
Paper
Primary nonferrous metals
Stone, clay and glass products
Textiles and apparel
Fabricated metal products
Rubber products
Tobacco
Petroleum and refining
Lumber and wood products
Other 2/
Electric, gas and water utilities

1958

1957

1956

1955

9,588

11,372

12,661

10,7k9

10,0k9

160
9jkZL

519
10,823

21k
12,kk7

36k
10,38k

1,227
8,821

1,966
298
251
198
128
125
103
91
73
70
69
67
52
50
k6
a
301

3,265
I1O8
139
220
218
233
116
207
306
75
31
135
12
26
600
3k
505

k,10k
313
129
2kk
k8
- 689
51
111
517
169
60
106
22

3,336
.198
kl9
23k
9k
362
113
298
136
180
130
68
56
8
kl3
' 157
k70

2,397
313
195
163
95
-168
91.
119
107
60
82
93
• 152
6
100
, 2k
626

876
k9
720

3,178

3,605

3,821

2,k7k

2,25k

Communication

709

1,29k

l,kkl

1,38k

l,0k5

Railroad

172

206

326

365

221

Other transportation

788

572

k75

329

323

Commercial and other

6?0

630

309

28k

362

Mining

168

237

270

398

386

1,777
758
1,019

1,01k
39k
620

1,701
929
772

1,815
1,125
690

1,612
1,227
#5

Financial and real estate
Sales and consumer finance
Other

2/ Includes small volume of foreign issues not further classified in the manufacturing gjoup.
Note.—Details may not add to totals due to rounding.
Source.--Securities and Exchange Commission and Federal Reserve.




Table 2
Total Corporate Security Offerings by Type of Issue
1955-59 (Gross proceeds in millions of dollars)
1958

1957

' 1956

1955

Total coxporate offerings

9,803

11,558

12,88k

10,939

10,21*0

Type of offering'
Public
Private

5,981
3,822

8,068
3,190

8,959
3,925

7,053
3,886

6,763
3,177

Type of security
Bonds and notes
Public
Private

VM
3,697

III

1959

111

Type of issue

8,002
4,225
3,777

7,1*20
li,119
3,301

(Memo: Convertible)

(617)

(1,147)

(1,061)

(925)

Preferred stock
Common stock

535

#1

W.1

636

635

2,015

1,33k

2,516

2,301

2,185

n.a.—Not available.
Note. —Details may not add to totals due to rounding.
Source.—Securities and Exchange Commission.
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 Systan.




HIGH-GRADE

BOND

YIELDS

r

LOWER-GRADE

BOND

YIELDS




MU.S.

GOVERNMENT

-7-

Exhibit B - Tables for Exhibit A

u.lli

High-grade Bond Yields

Date

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

Spread between
U. 5. Govt, and
State and
Corporate
local Aaa
Aaa

State and
local govt.
Aaa y

(Per cent)
195U
1957
1958
1959

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

-

I
t
11
18
25
1 2/

2.85 (U/23)
I . i (9/27)
tlt

2.15 (8/6)

1.90 (9/2)

l*.6l (12/31)
lt.09 (1/9)
i . 61 (1/29)
t
U . a (U/l)
lt.51t
it. 5 1
lt.lt8

h.h6
LWt

is i $
$>

I . 22
t
lull
li.05
lt.00
It.07

3.55 (5/2)

3.76 (10/18)
3.07 (1/25)
i . 37 (12/31)
t
3.83 (1/2)
U.k2 (1/8)
it.OO (3/25)

3. I O
t
3.37
3.35
3,32
3.28

3.65 (9/210

3.06 (3/26)

3.53 (1/7)
3.28 (3/31)

.30

.0
6

1

.22

.50
-16
.lt6
.19

.92

.53

.89

.8
6
.82

'.ho

.7lt

:
S
.79

.37

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa y

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

(Per cent)
-

Low
High
Low
High
Low
I960 - High
Low

j l l <12/31)
.tt
5.10 (11/29)
I . 51 (7/11)
t
5.32 (12/31)
It.83 U/17)
5.36 (2/12)
5.18 (1./1)

2.93 (8/5)
I . 51 (8/29)
t
3.61 (5/D
l . t (7/2)
tl6
3.92 (3/26)
I . 16 (1/7)
t
I . 22 (3/31)
t

Mar.
Mar.
Mar.
Mar.
Apr.

U
11
18
25
1 2/

5.31
5.28
5.26
5.22
5.18

I . 35
t
I . 31
t
I . 29
t
I . 26
t
k. 22

195k
1957
1958
1959

.

.52
1.27
.77
.77
.56
.79
.71
.76
.77
.78
.76
.l
7t

.

.96
1.21
.93
.98
.79
.97
.93
.95
.l
9t
.91
.9lt
. .l
. 9t

g/ Preliminary.
1/ Weekly average of dally figures. Average term of bonds Included Is 25-26 years.
2/ Weekly average of dully figures. The series Includes bonds due or oallable In 10 years or more.
3/ Thursday figures. Only general obligation bonds are lnoluded; average term is 20 years.
Note.—Highs and lews are for Individual series and may be on different dates for different series.




STOCK

MARKET

MORTGAGE RECORDINGS AND LOANS




Exhibit D - Tables for Exhibit C
Stock Market
Date

Stock price
index 1/

1957-59 - High
Low
I960 - High
Low

60.51
39.78
59.50
5U.ZU

January
February
Mar. 18
Mar. 25
Apr. 1 2/

58.03
55.69
55.01
55.98
55.1.3

Common
Trading
stock
volume y
yields 2/ (millions
(per cent)

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

Stock market customer credit
Customers1
Bank
Total debit bal- loans to
ances 4/ "others" 5/
(Millions of dollars)

3.07
i . 66.
t
3.18
3.51

4.3
1.4
3.6
2.4

4,764
3,55k
4,365
*,274

3,to
• 2,482
3,198
3,129

1,373
1,060
1,167
l,lk5

3.28
3.38
3.44
3.U0 I
3.1*2 i

3.2
3.0
2.6
2.7
2.4

4,365
4,274
n.a.
n.a.
n.a.

3,198
3,129
n.a.
n.a.
n.a.

1,167
1,11*5
1,128
1,125
n.a.

n.a,—Not available.
g/ Preliminary.
1/ Standard and Poor's rrmposlte index of 500.oomnon stocks, weekly closing prices, 1941-43=10. Monthly data
are averages of daily figures rather than of Fridays1 only. Highs and lows are for Fridays' 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 dales on which price index reached its high or low.
3/ Averages of daily trading volume on the New York Stock Bcoluvnge.
4/ End of month figures for member firms of the New York Stock Exchaise which carry margin accounts; excludes
balenoes 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 excluded only 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.

Nonfarm Mortgage Recordings and Loans 1/
Date

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

Total
Unadjusted
Seasonally
Unadjusted
FHA
-VA.
adjusted 2/
(Millions of dollars)
2,677
2,631
2,663
2,683
2,757
2,780
2,787
2,769
2,650
2,639
2,589
2,485
n.a.

2,352
2,245
2,586
2,776
2,768
2,974
3,100
2,871
2,834
2,799
2,442
2,487
2,079

585
506
530
490
478
521
524
504
510
523
448
451
417

276
238
260
231
211
221
227
202
221
238
220
241
195

Conv.

1,491
1,500
1,796
2,055
2,079
2,233
2,349
2,165
2,103
2,039
1,775
1,794
1,467

n.a.—Hot available.
1/ Total recordings data are estimates based on reports from about 450 areas and include
mortgages of $20,000 or less secured by nonfarm real astate, primarily residential properties.
FHA-insured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA and FHA loans are not strictly comparable in concept or timing.
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Source1 Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration,




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

I960
January
February
March

e/^06
S/7,50'

New capital
Corporate 1/
State and local 2/
I960 1 1959
1 1958
1 19 59 1 1958
81*0

728

m

H/72B

638
858
646

812
953
511

931
593
1,006

798
895
551

£

1,553^

8 99
791
874

1,140
597
887

July August
September

531
718
709

1,107
540
1,114

468

806
403
651

October
November
December

887
86^
936

862
518
920

593
513
2/444

456
474
435

2,216
2,#4
1,958
2,688

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

2,142
2,531
1,549
2/1,550

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

1,780
6,738
9,427

5,762
8,522
10,823

4,6?j
6,223
E/7,773

4,520
6,380
7,746

April
May

1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/725

's/l,9lt6

1st half
Three quarters
Year

g/700

§ »
s

e/1,803

Excluding finance companies 4/
1st quarter
2nd quarter
3rd quarter
l t quarter
ih

e/l,5?6

Year

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

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

6,665

10,429

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




H.ll*

Exhibit F

-H-

Other Security Offerings 1/
(in millions of dollars)
Long-term
Foreign government 2/
Federal agency ;
V
I960
1 1959
1 1958
I960
I 1959
1
January
FebruaryMarch

77
59
2

196
53

April
May
June

56
50
12
*

July
August
September

85
1
36

9
5
17

33
12
*
70

58
123
7U

86

558

992

707

1958

139
198
120

October
November
December
Year

182

175

—

268 '
p/3li0

190
128
295

233
l6
*o
273

April
May
June

563
111
2L5

July
August
September

2U6
1*67

October
November
December
Year

1,163
251
—

523
—

II.
64

98
150

—

220

Short-term
State and local government 1 /
*
January
February
March

199

—

2,321

Federal agency 3/
359
500
189

371
208
l**
ll

357
351
261* =

1*86
675
289

209
161
329

399

289
123
369

727
365
665

1*37
206
330

235
3U3
358

231
1*15
2*
13

733
1*71
288

1*51
ill*
137

li,179

3,910

6,017

3,098

17
*9
1*63

EZ Preliminary.
1/ Data presented in this exhibit differ from those in Exhibit E in that refunding Issues, an well as new
capital issues, are included. Long-term securities are defined as those naturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and their subdivisions and by
International organisations. Source: Securities and Exchange Commission,
3/ Issues not guaranteed by the U. S. Government. Sourcet long-term, Securities and Exchange Commission;
short-term, Federal Reserve.
4/ Principally tax and bond anticipation notus, warrants or certificates ar.d Public Housing Authority
not**. In some Instances PHA cotes included may have a somewhat longer term than one year. Source: Bond Buyer.




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

State and
local government

3h0
215
359
3U2
281+
110
363
199
10
*0
1*21
230
279
262

1959 - FebruaryMarch
April
MayJune
July
August
September
October
November
December
I960 - January
February

Other 2/

551
369
563
258
635
19U
263
21U
29k
163
217
388
283

35
176
20
50
60
50
98
175
20
70
100
320

Large Individual issues Offered March 1 through April 1

Type 3/

States Steamship Co.
Imperial Investment Co.,
Ltd.
Coastal Sts. Gas Prod. Co.
Gen. Motors Accept. Corp.
Chesapeake & Potomac Tel.
Co.. of W. Va.
Gen. Tel. Co. of Fla.
No. Ind. Pub. Sv. Co.
Gen. Tel.&Electron. Corp.
Genesco, Inc.
Louisiana Pwr. & Lt. Co.
Niagara Mohawk Power Co.
Mid-Amer. Pipeline Co.

Ins. bds.

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

Aaa

20.2

19K1

5

5.00

Coll.tr.bds. 15.0
S.F. deb.
20.0
Deb.
100.0

1980
1980
1981

6-1/2
6
5

6.50
6.00
5.oli

Deb.
25.0
1st nrtg. bds. 15.0
1st mtg. bds. 15.0
Com. stk.
57.1
Com. stk.
16.8
1st mtg. bds. 20.0
Gen. mtg. bds. 50.0
,
Sub.deb.&stk. 30.1

2000 '
1990
1990

5
5
W/8

I . 88
t
5.05
lt-73

Aaa
A
Aa

1990
1990
1980

5
h-3/U
6-1/2

li-93
h. 70

A
Aa




—

—

Ba
——

--

H.lU

v

G-2

-13-

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

Type y

Coupon 1
Amount
rate or fOffering Rating
(mill ions Maturity
net inter-1 yield
of
est cost j
dollars)

STATE AND LOCAL GOVERNMENT
Grand Bap ids Expressway,
Rev.—S.T.
Mich.
Dade Co. Port Auth., Fla. Rev.-Ut.
G.O.
State of Louisiana
Rev.-S.T.
Cook Co., Illinois
State of Delaware
G.O.
State of California
G.O.
Los Angeles Co. Flood
Cont. Dist., Calif.
G.O.
Chi.fid.of Educ., 111.
G.O.

18.0 1961-85
19.2 1999/63
15,0 1961-84/69
25.0 1961-70
12. 4 1961-80
100.0 1961-86/80,81
10.0
25.0

1961-89
1962-80

A

4.12
4.73
3.80
3.a
3.25
3.95

3.00-4.15
4.67
2.C0-3.80
2.80-3.45
2.60-3.30
2.90-3.95

A
A
Aa
Aa

3.63
- 3.53

2.40-3,85
2.80-3.60

Aa
A

——

OTHER
34.5 . 1965-90 5-5-1/8 5.00-5.15
Metropolitan Toronto, Can. S.F. deb.'
Instal. deb.
6.9 1961-80
4.75-5.15
5
Fed. Nat. Mtg. Assoc.
Deb.
150.0
1970
4-5/8
4.63

A
A
• —

1/ Includes corporate and other security offerings of $15 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.
2/ In the case of State and,local^government securities, G.O. denotes general
obligationsj 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; Kev.-Rent.,
revenue bonds secured solely by lease payments.




—ill"
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

1959 - Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31
1960 - Jan. 29
Feb. 29
Mar. 31

Subsequent to
date shown

During month following
date shown
Corporate State and
other 2/
local govt,
396
21*6

287
165
238
198
37 h

s

210
207
301
299

g

20
50

11*6

50

2*
l7

356
385
270
115
295
W*5
210
255
250

761

25
70
30
h$
35

20
50

500
1*06

50

1*02

1*76

25

s

3 h6
332
272
305
517
69I*
509
271
280
252
372
3hh

1*70
336

1*85
51*5

310
385

280

70
30

1*5
35

Forthcoming Large Offerings, as of April 1
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Carolina Power & Light Co.
Commonwealth Edison Co.
Alabama Power Co.
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.




1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
S.F. deb.
Pfd. stk.
Deb.
1st mtg. bds.
S.F. deb.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Com. stk.
S.F. deb.
1st mtg. bds.
Deb., bds. & com.

25.0
30.0
19.5
18.0
26.0
1*0.0
15.0
25.0
35.0
20.0
15.0
30.0
20.0
20.0
22.0
1*5.0

Apr. 6
Apr. 7
Apr. 8
Apr. 12
Apr. 12
(rights expire)
Apr. 13
Apr. l *
l
Apr. l *
l
Apr. 21 •
Apr. 21
Apr. 27
Apr. 29
May 5
May 11
May 18
Indefinite

Ht l i ti-2
i

-15Forthcoming large Offerings, as of April 1 (Cont'd)
Type

Amount Approximate date
(millions
of offering
I of dollars)

STATE AND LOCAL GOVERNMENT
State Public School Bldg. Auth., Pa,
New York City hsg. Auth., New York
^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 Mun. Ut. Dist,, Calif,
Ventura Port Dist., Calif;
#Puerto Rico Water Resources - - t ,
Huh
Jacksonville, Fla.

G.Oo
G.Oe
G.0C
G.O.
Rev.-Ut.
G.O,
G.O.
G.O.
G.O.
G.O.
Rev.
Rev,~Ut»
Rev.-Ut.
Rev,-Ut,

16.0
20.5
10.0
25.0
100.0
29.3
13.3
16.0
. 15.0
75.0
30.0
10.0
20.0
30.0

Apr. 6
. Apr. 7
Apr. Ik
Apr. 19
Apr. 19
Apr. 20
Apr. 26
Apr. 26
Apr. 27
Apr. 27
Apr. 28
Apr.
Apr,
May 10

OTHER
None
*—Included in table for .first time,
1/ Includes corporate and other issues of $15 million and overj 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.




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

Date

1952 - 1958
High
Low
1959 - January
February
March
April
May
June
July 9
10
15
30
Aug. 5
20
Sept. 18
Oct. 22
23
28
29
30
Nov. 25
Dec. 8
9
10
1960 - Jan. 7
Feb. 25
26
Mar. 15
16
18
29

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

5.00 (9/14/57)
2.93 (3/31/54)

87
-3

ti
4.97
*4.95

37
4
10
17
37
29

4.93

31

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

123
-15

*4.752/

23

*4.67

18
25
15
19

|:oi2/

5.10

24
22

&
5.15

46
16
40

5.15
5.08
5.30

42
42
63

5.08
5.10

44
46
32
17

5.00

19
13

5.65

60

5.25
5.40

35
50

5.45

4.85
4.80

5.10

51
50

5:3oS/

28

5o
.o
4.93

11
7

*—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 fur
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.
 one issue which provides for a 7-year period during which the
3/ Includes
issue may not be called for refunding at a lower coupon rate.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

April U, I960
Part II - Canada

-17-

The continuing decline in Canadian bill rates at last Thursday's
tender brought Canadian yields fractionaly below U.S. bill yields. At
Thursday's closing, there was a net incentive to hold U.S. bills against
Canadian bills for the first time since January, Purchases by the Bank
of Canada have contributed to the eight-week decline in bill rates, Bond
prices also strengthened during the week. It is expected that the Government will have a balanced budget in 1960-61 compared with cash borrowings
of about $333 million in 1959-60, The recovery in stock prices on the
Canadian exchanges continued,
Money market conditions« The short Treasury bill declined from
3=Ul pef cent the preceding weekto 3-01 per cent at last Thursday's
tender: the yield on the 6-month bill fell from 3-65 per cent a week
earlier to 3,23 per cent on Thursday. The short bill rate has dropped
1<>75 per cent since the decline began on February 3 and 1,33 per cent in
the past three weeks. The recent decline in rates has been accompanied by
substantial increases in the holdings of the Bank of Canada and by sales
by the general public as may be seen in the following weekly changes in
bill holdings (in millions of Canadian dollars):
91-day
bill rate

Bank of
Canada

Chartered
banks

Feb. 10
17
2U

k.75
U.62
a,61

+ 15
+ 37
+ 1

- 79
- U5
+ 16

+ 18
- 11
0

. + 52
+ 18
- 9

March 2
9
16
23
30

a,57
U--3U
a,02
3M
3=01

+
+
+
+
+

+
+
+

* h
+ lU
- 5
- 15
- 9

- 27
- 7
0
- 32
- 12

31
31
11
U3
25

12
33
1
9
2

Govt»
accounts

General
public

The rate on day-to-day loans eased from 3-80 per cent last week to 3=25
per cent for the week ending March 30^
The lower Canadian bill rate, combined with a rise
in the United States rate, brought the United States rate 0-01 per cent
above the Canadian rate as compared with the previous week when the spread
was 0:55 per cent in favor of the Canadian bill (see Table), With the
discount on the forward Canadian dollar unchanged at 0,2k per cent per
annum, the incentive moved in favor of holding United States bills for
the first time since early January.
Bond market developments, Canadian bond prices improved in all
sectors of the market. The spreads 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)




-18-

-0.01 per
-0.15 per
0.9U per
1.01 per
1.U8 per

cent
cent
cent
cent
cent

on a 91-day bill (+0=55)
on a 182-day bill (+0.53)
on an 8-year bond (1.11)
on a 20-year bond (lo20)
on a 35-year bond (1.61)

The press reported continuing strength in the bond market
evidenced by the heavy oversubscription of last week's British Columbia
Electric 6-1/2 per cent 30-year issue» Financial institutions alone
placed orders for more than the $30 million offered.
Budget. The budget for 1960-61, as presented to Parliament last
Thursday night, anticipates a cash surplus of about $12 million. This
includes a $173 million increase in expenditures for increases in salaries
for the civil service, and an increase of $591 million in revenue as a
result of higher levels of economic activity. Certain technical amendments to the tax structure have been proposed which were designed to
eliminate loopholes and to meet certain special problems but these tax
changes will have no net effect on the total revenue anticipated. The
Minister stated that he anticipates a year of solid expansion and balanced
growth.
Stock markets. Prices of Canadian industrial stocks on the
Toronto and.Montreal market continued to rise over the past week, as
noted in the following comparison between close of business March 29
and one week earlier%
March 22

March 29

Toronto industrials
Montreal industrials

U87o5U
280o9

U95o31
28U.1;

New York-Standard and
Poors industrials

59.05

59o5l

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




=19"
Selected Government of Canada Security Yields
3-month
Date
1957 - High
1958 - Low
1959 - High '
Low
I960 - High .
Low

a.08
0.87
6.16
3.25
5.1U
3.01

Mar, 10
17
2U
31

U.3U
U»02
3.ia
3.01

Intermediate
Govt,
bond*/
a *8i
3.31
5.30

Longterm
Govt.y
bond!/
a. 35
3.78
5.30

Spread between
Canadian & U.S. rates
long-term.
3-mo».
bondy
billsz/

5*17

5.U2
5-21

5.28
5,20
5.19
5,17

5.36
5.29
5.21
5,22

2:96
0.30
0.90
-0.01

1.19
0,17
1,22
0.91
1,21
1,22
1:20
1.09

U.U5
5.55

U.Ui

Discount
on 3-mo#
Canadian
dollar®/

0,72
0.2U

0.68

0.U8
0.U8

Oc58 i
0:55

0c2U

-0,01

0:2ii

f

Average yield at weekly tender on Thursday.
Government of Canada 2-3A per cent of June V?, 1967-68,
Government of Canada 3-1/U per cent of 1979.
C/ U.S. Government 3-1/U per cent of 1978-83. Government of Canada 3-1/U per
cent of 1979# Bond prices are Wednesday closing quotations5/ 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-month a forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Thursday*

(millions of dollars, par value)
End 1958
Bank of Canada
Treasury bills
Other securities
Total
Chartered banks
Treasury bills
Other securities
Total
Government accounts
Total
General public
Treasury bills
Savings bonds
Other
Total
Total outstanding

36
2,63k
r m

End 1959

Jan: 27
206

309

i960
Feb: 2k

Mar. 30
ao2

261
2,260

W h

m

983
1,827
"On

1,09k

1,367

1,258

910

883

^15
2,895

. 755
3,212

767
3,20a

820
3,176

l6,Ul6

1 0 #
17,135

956

Source t Bank of Canada Statistical Summary!""




.
968

979
%

i^Bir
17,225

11,009
17,30a

830

17,313

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