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Not f o r Publication BECOMHOIiED a f t e r

s a toHTHg

H.lli

August 29, I960.

'V:
AUG;'-'""
BDSUjr- }
C? RiCl!.
l

~"

1

:
j
I

G&EHALMARKET DEVELOPMENTS
IN THE UNITED STATES AND C N D .
AAA
P a r t I - United S t a t e s

""
Two l a r g e corporate s e c u r i t y i s s u e s with aggregate proceeds
of $75 m i l l i o n and t h r e e l a r g e S t a t e and l o c a l government bond i s s u e s
t o t a l i n g $78 m i l l i o n were s o l d during the week ending August 26. This
week only one corporate debenture i s s u e f o r $125 million—Republic S t e e l
Corporation—and one St a t e and l o c a l government, bond i s s u e f o r $13 million
a r e scheduled f o r s a l e .
long-term bond y i e l d s - Yields on long-term corporate and S t a t e
and l o c a l government bonds declined f u r t h e r l a s t week t o new lows f o r t h e
y e a r , while y i e l d s on U. S. Government long-teim bonds were s t a b l e .
S h o r t - and intermediate-term i n t e r e s t r a t e s - Yields on Treasury
b i l l s rose l a s t week while y i e l d s on I n t e r a e d i a t e - t e r m government bonds
d e c l i n e d . Both t h e prime r a t e and t h e r a t e on c a l l loans secured by stock
exchange c o l l a t e r a l were reduced from 5 per cent to i i - l / 2 p e r cent by
New York banks. The r a t e quoted f o r 3- t o 6-month d i r e c t l y - p l a c e d f i n a n c e
company paper was unchanged.

Mortgage recordings - Mortgage recordings rose about seasonally
i n June. As in May, they were about one-tenth lower than a y e a r e a r l i e r
but higher than i n the corresponding month of any e a r l i e r y e a r . In t h e
f i r s t half of t h i s year recordings t o t a l e d $Ll|.2 b i l l i o n , compared with
$15.7 b i l l i o n in t h e f i r s t half of 1958, and $13.9 b i l l i o n in t h e f i r s t
h a l f of 1955.
Stock p r i c e s - Common stock p r i c e s , a s measured by Standard
and P o o r ' s index of 500 stocks, increased l a s t wedc, closing a t 57.60
on Friday, an i n c r e a s e of .59 p o i n t s . Trading volume averaged 3 . 1 m i l l i o n
shares a day, t h e h e a v i e s t since June.
More d e t a i l e d i n f o imation concerning recent capital- market
developments i s presented i n t h e a t t a c h e d e x h i b i t s .
Developments i n t h e Canadian c a p i t a l markets a r e presented i n
Part I I a t the end of t h i s r e p o r t .

Capital Markets S e c t i o n ,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




L O N G - T E R M B O N D YIELDS

HIGH-GRADE

V\z

i

i

LOWER-GRADE

r




\

-3-

Exhibit B - Tables f o r Exhibit A
Long-term Bond Yields
Higi-grade

H.Ik

Date

Corporate
Aaa 1/

Spread between
U. S. Govt, and
Corporate IState and
l o c a l Aaa"

S t a t e and
l o c a l govt.
Aaa y

U. S. Govt,
long-term 2 /
(Per cent)

1951*
1957
1958
1959

-

Low
High
Low
High
Low
1960 - High
Low

l*.6l
1.09
1.61
1*.23

July
Aug.
Aug.
Aug.
Aug.

2.1*5 ( 8 / 6 )

U-38
h.3k
k.30
b.26
h.23

29
5
12
19
26 g /

2.85 (lt/23)
lull* (9/27)

3.76 (10/18)

3.07
1*.37
3.83
h.U2
3.75

3.55 (5/2)

(12/31)
(1/9)
(1/29)
(8/26)

(8/5)

-

3.53 (1/7)
2.99 (8/25)

3.28
3.22
3.11
z/3.03
2.99

3.81
3.75
3.78

3.81
3.81

.30
.1*7
.31*
.92
,53
.92
.53

.57
.59
.52
.16
.1*2

I (3/26)
*
3.06

(V25)v
(12/31)
(1/2)

(1/8)

.30
.60
.22
.50
.16
.59
.19

.53
.53
,6h
.79
.82

Lower-grade
Date

Corporate
Baa 1 /

S t a t e and
l o c a l govt.
Baa 2 /

Spread between
Aaa and Baa
S t a t e and
Corporate
l o c a l govt.

(Per cent)
1951*
1957
1958
1959

Low
High
Low
High
Low
1960 - High
Low
July
Aug.
Aug.
Aug.
Aug.

-

295
12
19
26 2 /

3.1*1* (12/31)
5.10 (13/29)
li.51 (7/11)

!-i I5S
i:S
5.11
5.06
5.03

"

.

2.93 (8/S)

ahi

3.92 (3/26)
1.1*6 (1/7)
L 0 5 (8/25)

,k.2$
k.2h
it. 21
i+.ll
1*.05

.52
1.27
.77
.*56
-.81*
.71

.81
.80
.80

.96
1.21

.

,

•98
.79
1.09
.92
.97
1.02
1.07
1.09
1.06

g/ Preliminary.
y Weekly aver#** ef dally figures. Average tare of bgnda Included 1» 25-26 y w r i .
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 I s 20 years.
Note.—Highs and lews are for Individual series and may be en different dates for different eeriee.




SHORT-

AND

INTERMEDIATE-

TERM

INTEREST

RATES

GOVERNMENT

T - MOUTH I I U S

PRIVATE




Mil

LOAHS

Exhibit D - Tables f o r Exhibit C

-5-

Short- and Intermediate-term I n t e r e s t Rates
Government
Discount
rate 1/

Date

3-month
b i l l s 2/

Yields
6-month
b i l l s 2/

3-5 y e a r
issues 2/

Spread between y i e l d s on
3-month b i l l s and y i e l d s on
6-mo. b i l l s 13-5 y r . i s s u e s "

(per cent)
195U
1957
1958
1959

-

Low
High
Low
High
Low
1960 - High
Low

1.50
3.50
1.75
I4.00
2.50
Loo
3.00

July
Aug.
Aug.
Aug.
Aug.

3.50
3.50
3.00
3.00
3.00

29
5
12
19
26 q /

• 6l
3.61
.58
1.57

(6/ll)
--(10A8) —
(5/29) 3.02 (12/26)
(12/26) lt.91 (12/31)

2.63 (2/20)
" "

2.92(1/2)

li.59 (1/8)
2.13 (8/5)

5.07 (1/8)
2.39 (8/5)

2.2k
2.13

2.56
2.39
2.1*8
2.66
2.70

2.18

2.31
2.13

1.66
l*.0l*
2.11*
5.00

(V30)
(10/18)
(6/7)
(12/21*)

3.70(1/2)

li.97 (1/8)
3.^7 (8/26)
3.51;
3.k9
3.52
1/3.52
3.1:7

.66
.26

.86
.01*

.79
.19
.58
.16

1.1*2
.liO
1.81 "
.38

.32

1.30
1.36
1.3k
1.22
1.0k

.26

.JO
.35
.27

Private

Date

Stock Exchange
c a l l loan 1 /

Spread between 3-month
Prime
Finance company Treasuzy b i l l y i e l d and
rate 1/
f i n a n c e company
paper ] /
paper r a t e s
( p e r cent)

1951*
1957
1958
1959

-

Low •
High
Low
High
Low
i960 - High

July
Aug.
Aug.
Aug.
Aug.

Low

3.00
lt.50
3.50
4.75
3.75
5.50
li.5o

3.00
i*.5o
3.50
5.00
1*.00
5.00
1|.50

1*.88
3.00
5.13
2.9k

29
5
12
19
26 g /

5.oo
5.oo
5.oo
5.oo
- L5o

5.oo
5.oo
5.00
5.oo
L5o

2.9k
2.9k
2.9k
2.9k
2.9k

0 (12/18)

1.25
3.88
1.13

w

.59 (7/19)
- . 3 5 (8/29)
.86 (10/9)
.13 (12/1*)
1.02(3/25)
.22 (1*/15)
.70
.81
.51

1/ Weekly rate shown Is that l a effect at end of period. Discount pate Is for Federal Reservs Bank of New York.
Stock exchange call loan rate I s going rate on call loans secured ty customers' stock exchange collateral at
New York City banks. Prime rate Is that charged by large banks on short-term loans to business borrowers of
the highest credit standing.
y Market yield; weekly averages computed from dally cleslng bid prices'. Series of 3-5 year Issues consists of
seleoted notes and bonds.
3/ Average of dally rates published ty finance companies for dlreotly placed paper for varying maturities In the
90-179 day range.
Note.—Highs and lows are
individual series and
 for and low to narrowest. may be on different dates for different series. Per spreads,
nigh refers to widest,



STOCK

MARKET

MORTGAGE

RECORDINGS




AND

LOANS

E x h i b i t F - Tables f o r E x h i b i t E

-7-

Stock Market
Stock p r i c e
index 1 /

Date

1957-59 - High
Low
i960 - High
Low

60.51
39.78
59.50
5k. 2k

June
July
Aug. 12
Aug. 19
Aug. 26 p /

Trading
Common
volume y
stock
yields 2/ (millions
( p e r c e n t ) of s h a r e s )

Stock market customer c r e d i t
Customers•
Bank
debit b a l - loans to
ances k / " o t h e r s " 5 /
C l i i : Lions of do]Liars)

Total

57.26
55.8k
56.66
57.01
57.60

3.07
It.66
3.18
3.51

k.3
l.k
3.9
2.h

l|,761t
3,551)
It, 365
. It, 132

3,k01
2,482
3,198
3,00k

1,373
1,060
1,167
1,111

3.35
3.U5
3.k2
3.a
3.38

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

3.5
2.7
2.9
2.7
3.1

1|,2H|
L,133
n.a.
n.a.
n.a.

3,082
3,00k
n.a.
n.a.
n.a.

1,132
1,129
1,125
1,127
n.a.

n . a . ~ N o t available.
g / Preliminary.
1/ Standard and Poor's composite Index of 500. oomnon atooka, weekly closing prices, 1941-43=10, Monthly data
are averages of daily figures rather than of FVldays' 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 dates on which price Index reached i t s high or low.
3/ Averages of daily trading volume on the New York Stock EScoliange.
4 / End of month figures f o r member f i r e ? of the New York Stock Exchange which carry margin accounts; excludes
balences 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.oent of loan# to others. For further detail see Bulletin.

Nonfarm Mortgage Recordings and Loans 1 /
Date

Total
Seasonally
Unadjusted
adjusted 2/

Unadjusted
FHA

Conv.

-VA.

(Millions of dollars)

1959 - June
July
August
September
October
November
December
1960 - January
February
i larch
April
hay
June

2,760
2,767
2,769
2,650
2,639
2,589
2,1(65 .
2,1(67

:;Z
2,k00
2,kk6
n.a.

2,97k

3,100

2,871
2,83k
2,799
2,kk2
2,k67
2,079
2,149
2,k06

2,366
2,500
2,690

521
52k
50k
510
523
kk8
k5l
kl7
368
361
#6
322
365

221
227
202
221
238
220
2kl
195
170
173
153
155
175

,

2,233
2,3k&2,165
2,103
2,039
1,775
1,79k
l,k67
1,612
1,872
1,878
2,023
2,150

n.a.—Not available.
/
1/ Total rocordlngs data are estimates based on reports from about 450 areas and include
mortgages of $20,000 or less secured by nonfarm real e s t a t e , primarily residential properties.
FHA-lnsured 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 t o t a l
recordings and V and P A loans are not s t r l o t l y comparable In concept or timing.
A
H
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Sources Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.
for FRASER

Digitized


Exhibit G
Long-term Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of d o l l a r s )
New c a p i t a l
I960
January
February
March

Corporate 1 /
1 1959
1

I960

728

736
623
575

63?
858
61*6

812
953
511

932

798
895
551

577
715
860

821
738
6b6

1,5532/

April
May

766
567
1,03k

891*
785
887

i,i4o
597
887

729
551
E/970

July
August
September

e/800
e/925

535
740
703

1,107
540
1,114

S/550
1/550

879
86^
900

862
518
920

2,204
2,567

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

October
November
December
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

1st half
Three q u a r t e r s
Year

2.151
2,367

s
4,519
s
9,392

e and l o c a l 2/
1
1958
1959

1956

5,762
8,522
10,823

V^IM

806
403
651

t !
It55
1,93)4
E/2,249

465

456
474
435

u :
1,571

2,276
2,21,1*
1,860
1,365

4,674
6,222
7,793

4,520
6,380
7,746

2,143

Excluding f i n a n c e companies 4 /
1st
2nd
3rd
hth

quarter
quarter
quarter
quarter

1,722
e/2,067

1/
2/
3/
h/

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

8,630

Year

1,999
2,412
1,716
2,503

10,1*29

g / Preliminary.
S e c u r i t i e s and Exchange Commission e s t i m a t e s of n e t proceeds.
Investment Bankers Association of America e s t i m a t e s of p r i n c i p a l amounts.
Includes $718.3 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
T o t a l new c a p i t a l ,is sues excluding o f f e r i n g s of s a l e s and consumer f i n a n c e
companies.




H.U

Exhibit H
Other S e c u r i t y O f f e r i n g s 1 /
( I n m i l l i o n s of d o l l a r s )
Long-tern
Foreign government 2 /
Federal apency 3 /
I960
1959
1 1958
I960
I
1
1
1959

JanuaryFebruary
March
April
May
June

17 $
70

81
60
2

196
53

33
72
1*0

• 58
50
1*2

139
198
120

85
1
35

9
5
17

33
30
70

58
123
74
992

707

July
August
September
October
November
December
Year

—

.182
150
150

April
May
July
August
September

199

1,163
251

175

11+8
351*

.

523
—

—

16U
98
150

—

220

Short-term
S t a t e and l o c a l government h/
January
February
March

1958

86

5U7

*

—

2,321

Federal agency 3J

268
3h£
365

190
128
295

233
1*60
273

1*79
I463
512

359
500
1*89

371
208
ll* 4

365
. 351
297

563
1*11
215

357
354
26h

509
632
435

486
675
289

209
161
329

207

21t6
1*67
399

289
123
369

312

727.
365
665

1*37
206
330

235
3h3
358

?31
hlS
2l*3

733
1*71
288

1*51*
111*
137

li,179

3,910

6,01*7

October
November
December
Year

3,090

E/ PrelUilrnry.
1/ Data presented i n t h i s exhibit d i f f e r from those i n Exhibit E i n t h a t refunding l s s u n s , an well a s new
c a p i t a l iS3UQ8j ere included. Long-term s e c u r i t i e s are dn fined as those matwi.ng in m^ra thar. one y e a r .
2 / Inoludos s e c u r i t i e s offered i n the United States by foreign governnents and t h e i r subdivisions end by
in'.ernntlonnl organisations. "-oureos S e c u r i t i e s ami Exuhr.nge Commi«*lor:.
y Isaues not gunreM*ad by the U. S. Govtrn-ier.:.. Sourcei long-tern, S e c u r i t i e s and Exchange Corailaslonj
short-term, Federal Reserve.
4 / P r i n c i p a l l y tax and bond a n t i c i p a t i o n not*s, warrants or c e r t i f i c a t e s ar.d Public Housing Authority
not»». I n some instances PHA r.»tee included may have a somewhat longer tftui than one year. Sourcei Bond Buyer.




Exhibit I
—10—

Large Long-term Public Security I s s u e s f o r New Capital
(Other than U, S. Treasury) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )
Month

Corporate

S t a t e and
l o c a l government

110
363
199
400
121
230
279
262
381*
309
139
442
303

1959 - July
August
September
October
November
December
I960 - January
February
March
April.
May
June
July

194
263
214
294
163
217
388
283
225
370
234
561
191

Other 2 /

*0
98
17$
20
70
100
320
191
71
28
30

Largo I n d i v i d u a l Issues Offered August 1 through 26

Issuer

Type y

Coupon
Amount
(millions
rate or
Offering
Maturity n e t i n t e r - y i e l d
Rating
of
dollars)
e s t cost

CORPORATE
Southwestern Bell T e l . Co.
Deb.
100.0
Texas ha s t e m Trans. Corp. "S.F. deb.
25.0
El Paso Natural Gas Co.
Com.' s t k .
33.0
Consumers Power Co.
Conv. deb.
38.1
Michigan B e l l Telephone Co.
Deb.
35.0
General Motors Accept.Corp.
Deb.
150.0
Southern C a l i f . Edison Co. 1st r e f . m t g . b d s . 6 0 . 0
McKesson & Robbins, Inc.
Deb.
15.0

1995
1980

4-5/8
5-3/8

4.55
5.38

Aaa
Ba

1975
1996
1982
1985
1980

1-3/8
4-5/8
4-5/8
4-3/8
4-5/8

4.38
4.53
4.68
4.38
4.61

Aa
Aaa
——

Aa
A

STATE AND LOCAL GOVERNMENT
Chesapeake Bay Bridge and
Tunnel Commission
"

Los Angeles Co., C a l i f .
State of C a l i f o r n i a

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




0.0.

70.0
30.0
81.3
11.0
15.0

2000
2000
2000
I96I-8O
1905-90/85

5.62
5.62
5.62
3.31
3.31

4.88
5.50
5.75
1.70-3.45
2.40-4.00

Aa
Aa

1-2

-11-

Large i n d i v i d u a l I s s u e s Offered August 1 through 26 (Cont'd)

Issuer

Type U

Coupon
Amount
Offering
r a t e or
(millions
Maturity n e t i n t e r - y i e l d
of
est cost
dollars)

Rating

STATE AND LOCAL GOVERNMENT
(Cont'd)
G.O.
State of Vermont
S t a t e of Washington
Rev.-S.T.
East Bay Mun. U t i l . D i s t . ,
Calif or nia
G.O.

13.7
3L0

1962-80
1961-80/70

2a.6£
3.59

1.30-2.80
1.70-3.70

Aaa
A

30.0

1961-95/75

3.30

1.50^3.95

Aa

75.0

1971

lt-1/8

OTHER
Fed. Nat. Mtg. Assoc.
1/
2/
J/

Deb.

it. 10-

—

Includes coiporate and o t h e r s e c u r i t y o f f e r i n g s of
million and over; S t a t e
and l o c a l government s e c u r i t y o f f e r i n g s of $10 m i l l i o n and over.
Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and
Development i s s u e s and non-guaranteed i s s u e s by Federal agencies,
In t h e case of S t a t e and l o c a l government s e c u r i t i e s , G.O. denotes general
obligations5 Rev.-Ut., .yevenue- o b l i g a t i o n s secured only by income from p u b l i c
u t i l i t i e s 3 Rev.-Q.Ut. / revenue bonds secured only by revenue from q u a s i u t i l i t i e s j Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c t a x e s
only; Rev.-Rent., revenue bonds secured s o l e l y by l e a s e payments.




Exhibit J

-12-

Forthcoming Large Long-term P u b l i c S e c u r i t y O f f e r i n g s f o r New C a p i t a l
(Other t h a n U. S. T r e a s u i y ) 1 /
Expected Proceeds from Forthcoming Large I s s u e s
Date of
computation

During month f o l l o w i n g
d a t e shown
S t a t e and
Corporate
Other 2 /
l o c a l govt.

1959 - J u l y 31
Aug. 31
Se p t. 30
Oct. 30
Nov. 30
Dec. 31
- Jan. 29
Feb. 29
Mar. 31
Apr. 29
May 31
June 30
J u l y 29

238
198
37k
385
226
210
207
301
299
202
1*83
237
596

356
385
270
115
295
kk$
210
255
250
243
277
180
275

Subsequent t o
date shown
S t a t e and
Coiporate
Other 2 /
local govt.

70
30
b$
35
30
30
—

J|06
102
k70
336
185

70

%

305
517
69k
569
271
280
252
372
3Wi

25

^5
35

SUB
280
258
502
380
32k

8

1,006

25

60
30

Forthcoming Large O f f e r i n g s , a s of August 26
Issuer

Type

Amount
Approximate d a t e
(millions
of o f f e r i n g
I of d o l l a r s )

CORPORATE
Republic S t e e l Corp.
V i r g i n i a E l e c t r i c & Power Co.
P u b l i c S e r v i c e Co. of Colorado
Utah Power & L i f h t Co.
xPublic Service E l e c t r i c and Gas Co.
P a c i f i c Power & L i g h t Co.
Union E l e c t r i c Co.
American Telephone & Telegraph Co.
•^Columbia Gas System
T r u s t o r s ' Corp.
Commerce C i l R e f i n i n g Corp.
L i b e r i a n Iron Ore, L t d .
N a t u r a l Gas P i p e l i n e of America
N a t u r a l Gas P i p e l i n e of America

Deb.
1 s t r e f . mtg. b d s .
Pfd. s t k .
1 s t mtg. b d s .
1 s t r e f . mtg. b d s .
1 s t mtp. b d s .
1 s t mtg. b d s .
Deb.
Deb.
Partic. certif.
Deb., bds. & com.
Bds. & s t k .
1 s t mtg. b d s .
. Pfd. stk.

125.0

25.0
15.0

Aug. 31
Sept. lb
S e p t . 15
Sept. 15
S e p t . 21
S e p t . 22
Oct. 19
Oct. 25
October
Indefinite
Indefinite
Indefinite
Indefinite
Indefinite

12.7

Aug. 30

16.5
i5.o

Sept. 7
Sept. 7

25.0

15.0

16.0
50.0
20.0
50.0
250.0
30.0
1*0.0
45.0

30.0

STATE AND LOCAL GOVERNMENT
A t l a n t a , Georgia
Alameda-Contra Costa T r a n s i t L i s t . ,
California
 A u t h o r i t y
-"-Alabama Highway



Rev.-Ut.
Rev.

$
,:$

J-2

-13-

Forthcoming Large O f f e r i n g s , a s of August 26 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of.offering
of d o l l a r s )

STATE AND LOCAL GOVERNMENT (Cont'd)
New York S t a t e Thraway Auth.
City & Co. of San Francisco, C a l i f .
Pa. S t a t e Highway & Bridge Auth.
State of Ohio
Public Housing A u t h o r i t i e s
Milwaukee, Wisconsin
^ B u f f a l o , New York

Eev.-Ut.
G.O.
Rev.-Ut.
G.O. ;
G.O.
G.O.
G.O.

50.0
21.5

10.0
31.0

1*8.9

10.8
U2.3

Sept.
Sept.
Sept.
Sept.
Sept.
Sept.
Sept.

8
12
13
13
lit
20
22

OTHER
None
*—Included i n t a b l e f o r f i r s t time.
1/ Includes corporate and o t h e r i s s u e s of $15 m i l l i o n and over; S t a t e and l o c a l
government i s s u e s of $10 m i l l i o n and over.
2 / Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and
Development i s s u e s and non-guaranteed i s s u e s by Federal agencies.
Note.—Deletions f o r reasons o t h e r than s a l e of i s s u e : None.




Exhibit K
-ill-

Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1/
Aa-rated o f f e r i n g y i e l d s
A-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
( p e r cent) seasoned y i e l d s (per cent) seasoned y i e l d s
( b a s i s points)
( b a s i s points)

Date

1952-1959 - High
Low
1959 - July
Aug.
Sept.
Oct.
Nov.
Dec.
1960 - Jan. 7
Feb. 25
26
Mar. 15
16
18
29
Apr. 6
8
lit
21
27
May 10
12
25
June 17
28
29
July 8
13

5.30 (12/8/59)
2.93 (3/31/510

87
-3

*4.93
4.83
5.13^/
*5.08
*5.30
.

31
23
36
42
63

5.08
5.10

5.65 (9/18/59)
3.00 (3/17/54)

123
-15

44
46

»

8

it. 85

33

lt.9lt

39

lt.95
lt.88'

39
32

U.82
. it. ait

25
27

5.07
*5.65
5.33

17
.

60
43

5.45m/
5.30=/

51
28

5.00
4.93

11
7

4.98

21

5.30

50

5.10
5.20
4.95

26
33
11

4.93
4.88

11
8 '

*—Single observation, not an average.
1/ Covers only 30-year f i r s t mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, t h e a c t u a l y i e l d f i g u r e and the amount above
seasoned y i e l d s a r e averages of o f f e r i n g s during the indicated period and of
the d i f f e r e n c e s between these new o f f e r i n g y i e l d s and y i e l d s on seasoned issues
of similar q u a l i t y f o r the same day. Average maturity f o r the seasoned issues
v a r i e s from 26 t o 28 years.
2/ Provides f o r a 5-year period during which issue may not be called f o r
refunding a t a lower coupon r a t e . Monthly averages so marked include one or more
i s s u e s with such a provision. Other issues have no such provision.




August 29, I960
P a r t II-Canada

-15-

A f u r t h e r s u b s t a n t i a l d e c l i n e l a s t week i n Canadian Treasury
b i l l y i e l d s brought Canadian y i e l d s t o t h e i r lowest l e v e l since mid-1958•
They were a l s o below comparable y i e l d s i n the United S t a t e s f o r the f i r s t
time since l a t e May, The y i e l d on 3-month b i l l s has declined by 66 b a s i s
p o i n t s i n the p a s t two weeks; i n t h i s p e r i o d t h e Bank of Canada.has been
a small s e l l e r of b i l l s , the chartered banks have been s u b s t a n t i a l buyers
and the general public s u b s t a n t i a l s e l l e r s .
During t h e p a s t week, bond y i e l d s f e l l g e n e r a l l y , with intermediate
m a t u r i t i e s showing drops of 20 t o 28 b a s i s p o i n t s . With i n c r e a s e s i n United0
S t a t e s i n t e r e s t r a t e s , the spread between Canadian bond y i e l d s and U.S.
y i e l d s narrowed s u b s t a n t i a l l y . The spot Canadian d o l l a r moved up f r a c t i o n a l l y
during the week.
Honey market c o n d i t i o n s . At l a s t Thursday's a u c t i o n , t h e average
y i e l d on the 3-month Treasury b i l l again dropped s h a r p l y by hi b a s i s p o i n t s
t o 2.25 per c e n t p e r annum from 2.66 p e r cent a week ago (see Table)o
This i s the lowest y i e l d s i n c e September 1958. The y i e l d i s now I4.O b a s i s
p o i n t s below i t s former low f o r the year i n l a t e May. The 6-month b i l l
y i e l d a l s o declined t o i t s low f o r i960 of 2.UU per cent per annum from
2.89 per cent the previous week. The chartered banks purchased |2U m i l l i o n
of Treasury b i l l s and t h e general p u b l i c sold $lU m i l l i o n and the Bank of
Canada sold $6 m i l l i o n . The average c l o s i n g r a t e on day-to-day loans
decreased t o 2.58 per cent p e r annum from 2.98 p e r cent l a s t week.
The n e t i n c e n t i v e t o hold t h e Canadian s h o r t Treasury b i l l on a
covered b a s i s disappeared during the week; i n s t e a d t h e r e i s now a n e t
i n c e n t i v e of 0.2U per cent per annum i n f a v o r of the U.S. b i l l . During the
week, t h e y i e l d on t h e Canadian b i l l f e l l by U5 b a s i s p o i n t s and the U.S.
b i l l y i e l d rose by 10 b a s i s p o i n t s . There was no premium or discount on
the 3-month forward Canadian d o l l a r .
Acceptance companies have again reduced t h e i r r a t e s on s h o r t term c o l l a t e r a l t r u s t notes by 0 . 2 5 per cent per annum. A s i m i l a r cut was
made during the f i r s t week of August. The new r a t e s being paid by leading
firms a r e :
Maturity
30-89 days
90-179
180-269
270-36U

Rate
(per cent)
3
3-lA
3-1/2
3-3A

Bond market. Bond y i e l d s declined g e n e r a l l y through t h e week
with t h e intermediate range m a t u r i t i e s r e g i s t e r i n g drbps of as much as
28 b a s i s p o i n t s . The general p u b l i c sold
m i l l i o n of bonds and $6
m i l l i o n of savings bonds. The spreads between s e l e c t e d comparable Canadian




—16—

and United S t a t e s s e c u r i t i e s (Thursday y i e l d f o r b i l l s and Wednesday y i e l d
f o r bonds) were a s f o l l o w s ( f i g u r e s i n p a r e n t h e s e s r e f e r t o t h e p r e v i o u s
week):
-0.2k
-0.3$:
0.69
loOO
1,15

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

a 91-day b i l l ( 0 . 2 8 )
a 182-day b i l l ( 0 . 1 7 )
an 8 - y e a r bond ( 0 . 8 5 )
a 20-year bond ( 1 . 0 9 )
a 35-year bond ( 1 , 2 0 )

O f f e r i n g - of t h e 1959 s e r i e s of Canada s a v i n g s bonds w i l l end
August 31, Finance M i n i s t e r Fleming has announced. Current p r i c e i s 10U.15,
m a i n t a i n i n g t h e U.98 p e r c e n t y i e l d t o m a t u r i t y . There i s a 3 p e r c e n t
t a x f r e e bonus on bonds h e l d t o m a t u r i t y .
The C i t y of Montreal i s o f f e r i n g $5,1 m i l l i o n of 2 0 - y e a r s e r i a l
d e b e n t u r e s . Minimum t e n d e r p r i c e on August 30 i s 95 on an i n t e r e s t r a t e
range between U and 5»5 p e r c e n t . Proceeds w i l l be used t o r e p a y bank
advances.
Over t h e p a s t twelve months, Canadian y i e l d s have d e c l i n e d g e n e r a l l y
( s e e T a b l e ) . Since August 1959, t h e y i e l d on T r e a s u r y b i l l s has f a l l e n by
over 3 p e r c e n t . From t h e i r h i g h s i n March I 9 6 0 , bond y i e l d s have d e c r e a s e d
by U5 t o 9U b a s i s p o i n t s . The United S t a t e s T r e a s u r y b i l l y i e l d over t h e
l a s t y e a r f e l l by 1 , 1 1 p e r c e n t . The y i e l d of l o n g - t e r m bonds h a s h e l d
s t e a d y b u t t h e i n t e r m e d i a t e and s h o r t m a t u r i t i e s have d e c l i n e d over t h e
p a s t f o u r months by 2h t o 52 b a s i s p o i n t s .
Canadian Government, p r o v i n c i a l , m u n i c i p a l and c o r p o r a t i o n p u b l i c
bond f i n a n c i n g i n Canada f o r J u l y amounted t o n e a r l y $90 m i l l i o n , o f f
over UO p e r c e n t from J u l y 1959, However bond f i n a n c i n g over t h e f i r s t
seven months of I960 was up 95 p e r c e n t over t h e same p e r i o d i n 1957, This
i n c r e a s e was p r i n c i p a l l y i n t h e Canada d i r e c t and g u a r a n t e e d b o n d s .
Exchange r a t e . During t h e week, t h e Canadian d o l l a r s t r e n g t h e n e d
t o 103.203 (U.S. c e n t s ) on Thursday f r o m 103,125 t h e week b e f o r e ( s e e
T a b l e ) . During t h e week t h e r e was a s l i g h t premium b u t by Thursday i t had
disappeared.
Stock exchange. P r i c e s of i n d u s t r i a l s t o c k s on t h e Toronto index
i n c r e a s e d by a b o u t 6 p e r c e n t from August 18 t o 23 w h i l e over t h e same
p e r i o d t h e Montreal index gained about it p e r c e n t .
New York
Toronto
Montreal
Standard & Poor
January U
March 1
May 2
July 5
August 2
18
19
22
23




532.58
U9U.71
U8U.6O
U85.50
475,06
U93o63
1*96.25
U96o88
U99o50

318.9
290.6
280 0 9
272,0
259.3
269,3
271,3
273,4
273,6

64.50
59,83
57,59
60.65
58.Ul
60.26
60.15
60.65
61.31

Selected Canadian Money Market and Related Data
(

3-mo • Treas. bills
Spread
Canada
over U.S.

' 1959 - High
Low
i960 - High
Low
Aug. 3
11
18
25

6.16 .
3.25
2.25

U.U9
2.80
U.63
2.15

2.96
0.30
0.90
-0,69

2.83
2.91
2.66
2.25

2.15
2.21;
2.38
2.U9

0.68
0.67
0.28
-0.2U

Spot

Canadian dollar
3-mo# discount ( - 1
forward premium(+)d/

105.51
1012,58
105.27
101.31

-

-

102.75
103.31
103.13
103.20

102.75
103.33
103.13
103.20

Net incentiVB to
hold Can.
bills/

0.31
-0.72

0.9U
-0.57

0.0
0.06

0.68
0.73
0.28
-0.2U

a/ Average yield at weekly tender on Thursday.
— —
—
%/ Composite market yield for the U.S. Treasury bill on Thursday close of business,
c/ In U.S. cents.
3/ Spread between spot rate and 3-month forward Canadian dollar on Thursday
closing, expressed as per cent per annum.
e/ Spread over U.S. Treasury bill (column 3), plus 3-month forward discount or
premium (column 6).
Selected Government of Canada Security Yields
6-mo. Treas. bills
Spread
Canada
1959 - High
Low
I960 - High
Low

6.2k
5.11
5.33
2.UU

Aug. 3
10
17
2h

3.05
3.13
2.89
2.16

M
W
0.85
-0.69

5.37
U.50
5.55
U.U5

loll
0.21

0.65
0.58
0.17
-0.35

U.53
U.5U
U.U5
U.25

0.9U
0.96
0.85
0.69

J

Long-term bonds
(20 year)
(35 year)
Spread
Spread
Canada over
Canada
m J L

Intermediate
bonds (8 yr.)
Spread
Canada
JJTI/

a

•

5.30
U.UU
5.U2
U.85

1.22
0.87

U.85
U.89
U.87
h.77

1.1k
l.lU
1.09
1.00

5.05
u.73
5.28
U.85

'

1.61
0.98

U.85
U.90
U.86
• U.83

1.25
1.29
1.20
1.15

Average yield at weekly tender on Thursday.
.
Spread between Canadian auction rate and composite market yield of U.S.
on close of business Thursday..
c/ Government of Canada 2-3A per cent of June 1967-68.
a/ Spread over U.S. Government 2-1/2 per cent of 1963-68.
e/ Government of Canada > l / U per cent of October 1979#
y Spread over U.S. Government 3 - l A per cent of 1978-83.
g/ Government of Canada 3 - 3 A per cent of September 1996 - March 1998.
H/ Spread over U.S. Government of 199$•




" l8 ~

Canada: Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
(millions or Canadian dollars, par value;
Bank of Canada
%eas.
bills
Bonds

June 23
30
July 7
Ht

Aug

21
28
k
11
18
25

+
+
+
-

k
5
18
2
15
18
3
12
3
6

+
+
+
+
+
+
+
+

Government
Total

13
5
U8
12
5
13
11
5
17
l

Chartered banks
Treas.
bills
Bonds
+
+
+
+
+

- 17
0
+ 13
- 2
+ 13
+ 25
+ 57
+ 15
+ 2
+ 1

+
+
+
+
+

5
U6
21
2h
k
u
12
8
21
2h

2
11
27
6
k
3
3k
1
10
2

General public
Savings Treas.
bonds billb Bonds
-

7
7
5
2
6
6
5
5
5
6

+
+
+
-

1
Uo
U9
2k
k
37
0
+ 11
- 19
- m

Source: Bank of Canada, Weekly Financial Statistics*

Canada and the United S t a t e s ;

Canada
Treasury b i l l (3-mo.)

1967-8
1979
1996-8

United S t a t e s
Treasury b i l l (3-mo.)
' U . S . 2-1/2 per cent 1963-68
U.S. 3 - l A per c e n t , 1978-83
U.S. 3 p e r cent 1995
Source:

Comparative Bond Yields

I960
Aug. 25

I960
July 21

2.25
U.25
U.77
U.83

3.19
U.55
4.88
lt.86

5.21
5.28

5.33
5.10
5.13
lt.90

2.1*9
3.56
3.77
3.68

2.3U
3.70
3.76
3.62

2.86
U„08
UoOl
3.67

3.60
U.60
U.12
3.86

Bank of Canada, Weekly F i n a n c i a l S t a t i s t i c s .




I960
March 23
3.U1
5.19

1959
Aug. 26

+ k
- 17
- 25
- 15
- k
- 10
- 35
- 9
-23
- k

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