Full text of H.16 Capital Market Developments : December 13, 1960
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L
Not for Publication DECONTROLLED AFTER SIX MONTHS
H.lU
\
^
December 13, 1960.
;
CAPITAL I^JKET DEVELOPMENTS
IN THE UNITED STATES AND CANADA.
(Including Quarterly Review of Corporate
Security Financing)
Part I - United States
Last week the volume of new security financing was substantia 1.
Three large corporate issues with gross proceeds of $150 million and two
large State and local government bond issues with par value of $23 million
were publicly sold. In addition the Federal Land Banks offered two
intermediate-term bond issues of which $31 million was for new capital..
This week three corporate security issues totaling $110 million are scheduled
and two State and local government bond issues with par value of $123 million
are on the calendar.
Bond yields - Changes in long-term bond yields were mixed but
minor last week. Yields on U. S. Government and State and local government bonds declined slightly while those on corporate bonds increased
somewhat.
Short- and intermediate-teim interest rates - Yields on Treasury
bills and intermediate-term U. S. Government obligations declined moderately
last week. Interest rates on directly placed finance company paper increased
somewhat, primarily as a result of an adjustment in the maturities offered
at previously established rates.
Mortgage recordings - Nonfarm mortgage recordings in September
were 8 per cent below the record monthly level of a year earlier. Compared
with September 1959, conventional loans were down by 5 per cent, FHA-ansured
loans by 17 per cent, and VA-guaranteed loans by-23 per cent.
Corporate Security Offerings
in the Third Quarter i960
Corporate security offerings during the third quarter of i960
totaled $2.5 billion, This was more than one-fifth greater than in the
unusually low third quarter of 1959• Refunding of outstanding securities,
as it had been a year earlier, was very small—$1*1 million.
Net proceeds for new capital -Corporations sold $2.k billion
of security issues to obtain new capital. Although substantially above
financing last year, corporate security offerings were smaller than in
other recent third quarters.
Table 1
Corporate Security Offerings for New Capital
by Type of Business of Issuer
Third Quarter 1956-60
(Net proceeds in millions of dollars)
I960
1959
1958
1957
1956
2,167
2,016
2,862
2,950
2,6kl
ill
2,1*27
37
1,979
101
2,760
51
2,899
86
2,556
120
151
_-71
63
1*9
1*3
3h
20
18
ll*
11
96
U68
~w
10
77
1*1*
27
31
15
20
6
61*
127
1,112
320
12
1*6
8
21
62
23
1*5
9
79
1*87
810
92
16
32
58
16
11*5
1*
.19
1
10
1*17
736
72
25
128
51
17
106
9
52
1*
1*
268
651
1:70
809
912
632
308
99
121*
21*3
399
63
32
1*3
62
87
Other transportation
130
235
75
91*
1*9
Commercial and other
101*
105
1*29
80
65
32
35
53
77
11*9
159
2%3
271
116
29
87
620
318
302
L21
3#
130
Total corporate offerings
Refunding
New capital
Manufacturing
Primary iron and steel
Fabricated metal products
Chemicals
Electrical machinery
Textiles and apparel
Nonelectrical machinery
Paper
Printing
Other transportation equipment
Other 1/
Electric3 gas and water utilities
Communication
Railroad
Mining
Financial and real estate
Sales and consumer finance
Other
1/ Includes small volume of issues of foreign manufacturers not further classified,
Note,—Details may not add to totals due to rounding.
Source.—Securities and Exchange Commission and Federal Reserve.
1
:
|
|
*
For the first nine months of i960 new capital offerings of
corporations totaled $6.9 billion, slightly larger than a year earlier.
(Through the first half, financing had been somewhat smaller this year
than in 195?.)
Electric, gas and water utilities were the most important group
of issuers during the third quarter, selling securities totaling $.7 billion, This volume was nearly two-fifths larger than last year but smaller
than in 1957 and 1958. Security offerings of manufacturing corporations
totaled $.6 billion. Though one-fifth larger than a year earlier, this
was smaller than in any other third quarter since 1955= The amount of
securities sold was moderate for most types of industrial producers0
Primary iron and steel, fabricated metal products, textile, printing and
food manufacturers, however, sold a larger volume of new securities in
the third quarter than in most other recent years.
New financing by financial and real estate companies in the
July-September period totaled $.6 billion, slightly larger than last year.
Security sales by sales and consumer finance companies, however, were up
sharply—50 per cent above a year earlier and the largest third quarter
volume since 1955= The decline this year in financing by other types
of financial corporations largely reflects a smaller volume of real estate
company financing during the recent quarter.
New issue volume by communication companies and by railroads
in the third quarter was also larger than a year earlier, while offerings,
by transportation companies other than railroads, and by mining and
commercial and other companies were in smaller volume this year.
Total gross proceeds - Gross proceeds from corporate offerings,
which include refunding issues and costs of flotation were $2.5 billion
in the third quarter. PutiLicly offered issues, totaling $1.7 billion,
were nearly half again as large as a; year ago,, while private placements
amounted to $,8 billion, nearly one-tenth snailer.
The volume of bond and note financing, $2.1 billion, was onefourth larger than in the corresponding period of 1959= Public tond sales
were two-thirds larger than in 1959 when volume had been unusually small,
while privately placed bonds were one-seventh smaller. (Private placements of bonds have been smaller in volume in each quarter this year than
in the corresponding period of 1959.) Bonds convertible into common stock
were also sold in smaller volume during the recent third quarter. New
preferred stock financing totaled $.1 billion, three-fourths larger than
a year earlier. Common stock financing, amounting to $.3 billions was
about the same as in the third quarter of 1959 =
Total Corporate Security Offerings by T: re 0f i-3rueThird Quarter 1956-60
(Gross proceeds in millions of dollars)
Type of issue
I960
1959
1958
1557
Total corporate offerings
2,518
2,062
2,910
2,997
Type of offering
Public
Private
1,717
801
1,162
680
2,201
710
2,0^4
954
1,IM
CO-'
Type of security
Bonds and notes
Public
Private •
(Memo: Convertible)
2,076
1,344
732
(115)
1,666
607
659
(196)
2,461
1,795
666
(79)
2,521
1,586
935
(231)
2,13k
1,352
762
(116)
Preferred stock
112
63
Common stock
330
333
loh
345
72
99
404
457
n.a.—Not avaliable.
:7ete.—j,ut,ails may not add to totals due to rounding,
source.
ccvritics and uxchange Commission.
Stock prices - Common stock prices, as measured by Standard
and Pool's index of 500 stocks, increased 2 per cent last week, closing
at 5<--. 65 on Friday. At this level prices were about Midway between the
It CO high and low. Trading volume averaged 3.7 million shares per day,
the heaviest trading since last spring.
Ho re 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,
"hoard of Governors of the Federal Reserve System.
IXHIIIT A
LONQ-T1KM BOND YlliPS
• HIOH-OKAP1
45
t W..fcV
I
T
nrOWKR-ORADI
/V'
11# ill
Exhibit B - Tables for Exhibit A
Long-term Bond Yields
High-grade
Date
Corporate
Aaa 1/
SE
U. S. Govt,
long-term 2/
lt.6i (12/31)
I1.09 ( 1 / 9 )
li.61 (1/29)
lt.23 (9/9)
3.07 ( V 2 5 ) .
It. 37 (12/31)
3.83 ( 1 / 2 )
Ui2 (1/8)
3.75 (8/5)
Nov.
Nov.
Nov.
Dec.
Dec.
it# 29
ll.30
ii.32
jt.33
4.35
3.91
3.92
3.9U
3.97
3.9k
11
18
25
2
9 jo/
Spread between
U. S. Govt, and
Corporate State and
local Aaa
State and
local govt.
Aaa y
(Per cent)
- Low
-High
- Low
- High
Low
i960 - High
Low
1951*
1957
1958
1959
-7-
2.16 (6/6)
3.76 (10/18)
111;
.30
.30
.1*7
.31*
.92
.53
.60
.22
.50
3.06 (3/26)
3.53 (1/7)
2.99 (9/1)
.16
.59
.19
.92
.53
3.16
.38
.38
.38
.36
.ill
.75
.80
.82
.83
.83
3.12
3.12
3.14
3.11
Lower-grade
Date
Corporate
Baa 1/
State and
local govt.
Baa y
Spread between
Aaa and Baa
State and
Corporate
local govt.
(Percent)
1951*
1957
1958
1959
-
Low
High
Low
High
Low
1960 - High
Low
3.11U (12/31)
2.93 (8/5)
w
5.36 (2/12)
L 9 8 (9/9)
H
;
3.92i (3/26)
h.k6 (1/7)
it. 05 (9/1)
Nov.
Nov.
Nov.
Dec.
Dec.
5.08
5.07
5.08
5.10
5.11
ii.ll
ii.07
4.07
it. 07
it.06
11
18
25
2
9 e/
.52 .
1.27
t
.71
.79
.77
.76
.96
1.21
'.98
.79
1.08
.92
.95
.95
.95
.93
..95
Prellslmry.
Ueekly average of dally figure*. Average tere of bpade lncludedts 28-26 years.
J/ 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 tern Is 20 years.
Mote,—High# and lews are for Individual series and eey be on different dates for different series.
1_
.
SHORT-
AND
INTERMEDIATE-
TERM
INTEREST
RATES
GOVERNMENT
' S - 5 YtAt ISSUES
6 - MOUTH BIUS I
mauh
PRIVATE
'flNANCi COMPANY PAPlF
•m
%
Exhibit D - Tables for Exhibit C
Short- and Intermediate-term Interest Rates
Government
Yields
6-month
bills 2/
Date
Discount
rate 1/
-
P
ll.OO
3.61* (10/18)
U.04 ( 1 0 A 8 )
.58 ( 5 / 2 9 ) 3.02 (12/26) 2.1U (6/6)
U.57 (12/24) U.91 (12/31) 5.00 (12/2U)
ll.OO
3.00
U.59 ( 1 / 8 )
2.11 (10/28)2.39 ( 8 / 5 )
5.07 (1/8)
3.00
2.1i0
3.00
3.00
2.38
2.35
2.28
2.59
2.75
2.71
2.70
195U
1957
1958
1959
Low
High
Low
High
Low
1960 - High
Low
Nov.
Nov.
Nov.
Dec.
Dec.
11
18
25
2
9 2/
2.50
3.00
3.00
3-month
bills 2/
3-5 year
issues 2/
Spread between yields on
3-month bills and yields on
6-mo. bills 13-5 yr. issues"
(per cent)
.61 (6/11) —
2.63 (2/20) 2.92 (1/2)
2.1+6
.66
1.66 {u/joy
2.62
3.70 (1/2)
.26
.79
.19
.58
U.97 ( 1 / 8 )
3.1*7 ( 9 / 2 3 )
.16
3.63
3.69
3.72
3.75
3.59
.19
.29
.33
.35
.31*
.86
.01*
1.1*2
.1*0
1.81
.38
1.23
1.23
1.01
1.1*0
1.31
Private
Date
Stock Exchange
call loan 1/
Spread between 3-month
Prime
Finance company Treasury bill yield and
rate 3/ paper y
finance company
paper rates
(per cent)
1951* 1957 1958 1959 -
Low
High
Low
High
Low
I960 - High
Low
3.00
1*.50
3.50
5.00
It. 00
5.50
U.50
Nov.
Nov.
Nov.
Dec.
Dec.
l*.5o
U.5o
U.50
l*.5o
l*.5o
11
18
25
2
9 J0/
-
3.00
li.50
3.50
5.00
I4.OO
5.oo
U.5o
1.25 (12/31)
3.88 (11/15)
1.13 (8/8)
U.88 (12/31)
3.00 (3/6)
5.13 (1/22)
2.88 ( l l / U )
U.5o
l*.5o
U.5o
li.50
U.50
2.88
2.93"
2.9U
2.9U
3.01
0 (12/18).59 (7/19)
-.35 (8/29)
.86 (10/9)
.13 (12/U)
1.02 (3/25)
.22 (U/15)
.1*8
. .56
.59
.73
Hsekly r>t« shown Is that In effect at end of period. Dlsoount rate Is for Federal Reserve Bank of Mew York.
Stock axohange call loan rate la going rate on call loans secured ty oustoners' stock sxohange oollateral at
New York City banks. Prime rate la that charged by large banks on ahort-tera loans to business borrowers of
the highest ersdlt standing.
i/ Market ylold| weekly averages computed fro* daily closing bll prloee. Series of 3-8 year Issues oonslstM of
selected notes and bondi.
3/ Average of daily rates published t-y. flwutow companies for directly placed paper for varying waturities In the
90-179 day ruivi*.
, ,
Note.—Illghe and lows are for Individual series. <tnd nay be on different dates for different series. For spreads,
high refers to widest, and lew to narrowest.'
STOCK
MARKET
MORTGAGE
RECORDINGS
AND
LOANS
v-\
V
Exhibit F - Tables for KxiribiL E
Stock Market
Date
Stock price
index 1/
Trading
Common
stock
volume J /
yields 2/ (millions
(per c
shares)
Stock market customer credit
Bank
Customers'
debit bal- loans to
ances 1*/ "others" 5/
CSttlKoiSa of dollars)
Total
1957-59 - High
Low
I960 - High
Low
60.51 (7/31/59)
39.78
59.50
53.32 (10/21)
3.07
1*.66
3.18
3.62
fc3u
3.9
2.2
a s It, 365
It,132
3,to
2,1*82
3,198
3,00k
October
November
Nov. 25
Dec. 2
Dec. 9 jo/
53.73
55.1*7
56.13
3.60
3.51
3.17
3.51
3.a
2.6
3.1
3.2
3.1*
3.7
It, 291
n.a.
n.a.
n.a.
n.a.
3,133
n.a.
n.a.
n.a.
n.a.
1 : 1
1,373
1,060
1,167
1,111
&
1,161
1,153
n.a.
n.a.—Hot available.
g/ Preliminary,
T
1/ Standard and Poor's fnmposlte Index of 600. eeegroB stocks, weekly closing prices, 1941-43*10. Monthly date
are averages of dally figures rather than of Mdays' Wily. Highs and Iowa are for Fridays' data only.
2/ Standard and Poor's opposite stook yield based on Wednesday data converted to weekly closing price» by
Federal Reserve. Yields shown are for dates em wMeh price Index reached Its high or low*
3/ Averages of daily trading weluaa ee tba D M York Stook Exchange.
4/ End of nonth figures for member fines of the New York Stook Exchange which carry margin accounts; excludes
balances secured by U. S. Government obligations.
5/ Wednesday figure* for weekly reporting mesiber banks. Excludes loans for purchasing or carrying U. S.
Government securitiese Prior to July 1, 1959, sxroh loans are excluded only at-banks In New York and Chicago,
Weekly reporting banks account for about 70 percent of loans-to others. For further detail see Bulletin.
Nonfarm Mortgage Recordings and Loans 1 /
Date
1959 - Sept.
Oct.
Nov.
Dec.
I960 • Jan,
Feb.
Mar.
Apr.
MayJune
July
Aug.
Sept.
Unadjusted
Total
Seasonally
Unadjusted
PHA
*1
adjusted 2/
(Millions of dollars)
2,650
2,639
2,589
2,1*85
2,187
2,W0
2 , W
2,1:27
2,1*93
2,1*88
n.a.
2,831*
2,799
2,1*1*2
2,1*87
2,079
2,11*9
2,1*06
2,366
2,500
2,690
2,528
2,781*
2,598
510
523
1*1*8
1*51
1*17
368
361
336
322
365
362
1*17
1*25
2a
238
220
21*1
195
170
173
153
155
175
160
181
169
Conv.
2,103
2,039
1,775
1,794
1,1*67
1,612
1,872
1,878
2,023
2,150
2,006
2,186
2,001*
n.a.--Not available.
1/ Total recordings data are estimates based em reports from about 450 areas and include
mortgages of $20,000 or less secured by noafarm real estate, primarily residential properties.
FHA-lneured loans represent gross amount of insurance written, and VA-guaranteed leans the gross amount •
of loans olosed,on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA and PHA loans are not strictly comparable In concept or timing.
2/ Three-month moving average, eaasoaally adjusted by Federal Reserve.
for FRASER
Source 1 Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.
Digitized
Exhibit 0
Long-term Coxporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital
1960
January
February
March
April
May
June
July
August
September
, State and local 2/
i 1958
I960
1 1959
821
738
616
1,55^
766
567
1,03k
894
785
887
1,140
597
887
1,030
727
962
738
535
7W
703
1,107
540
1,114
571
599
2/670
879
861*
900
862
518
920
e/325
e/500
e/45o
2,204
2,567
3,139
2,623
2,760
2,300
e/1,000
1st
2nd
3rd
4th
2,151
2,367
2,427
e/2,725
1st half
Three quarters
Year
1958
577
715
860
October
November
December
quarter
quarter
quarter
quarter
Corporate 1/
1
1 1959
2/625
e/900
4,519
6,945
e/9,670
iS
4,771
6,750
9,392
728
iS
10,823
738
623
575
S
639
858
646
812
953
511
932
798
895
551
,,s
8
I
806
403
651
456
474
435
^/l,275
1,571
2,276
2,244
1,860
1,365
4,247
JD/6,087
e/7,362
4,674
6,222
7,793
4,520
6,380
7,746
1,936
2,311
2/1,840
2,1U3
Excluding finance companies 4/
1st
2nd
3rd
4th
quarter
quarter
quarter
quarter
Year
1,722
2,150
2,017
e/2,325
.1,999
2,412
1,716
2,503
IS
e/8,2l4
8,630
10,429
2,731
2,213
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.
4/ Total new capital issues excluding offerings of sales and consumer finance
companies.
H.ilt
Exi libit
h
-13-
Other Security Offerings 1/
(In millions of dollars)
Long-be m
Foreign government 2/
Federal agency
I960
1959"
w a r
1960
1^9
January
February
March
81
60
2
2
175
70
April
May
June
lo
July
August
September
25
1
36
I
3U
85
1
35,
October
November
December
33
30
70
Year
5U7
s
196
53
182
148
351*
—
9
5
17
199
96
150
*3
58
April
May
June
July
Aupust
September
October
November
December
U28 FP
g
§
u
•S
297
280
.505
199
.
295
160
273
215
26j;
. 289
123
369
21l6
167
399
E/lk6
Year
$
358
1,179
to
2li3 3,910
1 S T
1*163
251
523
16U
220
2/160
5/100
66
992
190
268
E
175
139
198
120
707
Short-tdrm
State and local government k/
January
Februaxy
March
199
2,321
Federal agency 3/
359
500
II89
371
208
lli)4
%
U35
I186
075
289
209
161
329
312
I468
296
72 7
365
665
437
206
330
£
1*79
21*1
282
28
288
I.5U
Hit
137
6,Oh7
3,096
EZ Preliminary.
1/ Data presented in this exhibit differ from those In Exhibit B In that r#furvllr« isiuoe, a* well as new
on pi re 1 lesues, are lnelutied. Long-term eaeurltlee are duflned as those ms.twi.ng In more than one year.
2/ Includes securities offered In the United States by foreign govevrments and their rubdlvisions end by
International organluitlona. Tourcai Securities ami Kxulir.age Convni anion.
3/ Issues not gunreMied by the U. S. Oovernwn:. Sour091 long-tern, Securities anil Bcohangt Corailiisloni
short-term, federal Reserve.
4/ Principally tax and bond anticipation notts, warrants or oerttfloates ar.il Publlo Housing Authority
not*s. In *0*# instances l»HA eotee Included may have a somewhat longer tens thAn one year. Souroei Bond Buyer.
Exhibit I
-Ill-
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1f
Proceeds of Large Issues Offered
(in millions of dollars)
Corporate
Month
State and
local government
1|21
230
279
• 262
381*
309
139
1*1*2
303
581
266
566
165
1959 - November
December
I960 - January
February
March
April
May
June
July
August
September
October
November
Other 2/
163
217
388
283
225
370
23U
561
191
298
70
100
320
191
71
28
30
75
25
77
150
%
1*6
186
Large Individual Issues Offered December 1 through 9
Type y
Issuer
' Coupon
Amount
rate or Offering
(millions
Maturity
net inter- yield
of
est cost
dollars)
Rating
CORPORATE
Southern Bell Tel. & Tel.
Northern States Pwr. Co.
Potomac Electric Pwr. Co.
Deb.
1st mtg. bds.
1st mtg. bds.
75.0 1997
35.0 1990
1*0.0 1995
5
5
5
1*.85
5.00
1*.95
Aa
Aa
STATE AND LOCAL GOVERNMENT
San Diego Unif. Sch. Dist.
California
Maryland St. Rds. Comm.
G.O.
Rev.-S.T.
10.0
12.5
1963-81 -3.1*3
1962-76
3.29
31.0
1961*
1962
2.20-3.65V A
1.90-3.35
Aa
OTHER
Federal Land Banks
Federal Land Banks
Bds.
Bds.
1*
3-3/8
1*.08
3.78
-
1-2
-15-
•Footnotes
1/
Includes corporate and other security offerings of $15 million and over; State
and local government security offerings of $10 million and over.
Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies,
3/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations.secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasiutilities; Rev.-S.T., revenue bonds secured by revenue from specific taxes
only; Rev.-Rent., revenue bonds secured solely by lease payments.
k/ 1/U per cent obligations of 1982 were not reoffered.
2/
-16-
Exbibit J
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
During month following
date shown
Corporate
226
210
207
301
299
202
1*83
237
596
216
576
1A0
260
1959 - Nov. 30
Dec. 31
- Jan. 29
Feb. 29
Mar. 31
Apr. 29
May 31
June 30
July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Subsequent to
date shown
g ^ J o t t o r g/
295
bkS
210
255
250
22*3
277
180
27 5
283
212
258
2it2
Corporate
70
30
bS
35
30
30
77
50
—
—
Other2/
185
5ii5
310
385
280
258
502
380
32i|
283
336
391
560
271
280
252
372
3W
357
553
U55
1,006
731
836
585
335
.
70
30
h$
35
60
30
127
50
Forthcoming Large Offerings, as of December 9
Issuer
Type
Amount
Approximate date
(millions
of dollars) of offering
CORPORATE
Consumers Power Co.
Beneficial Finance Corp.
Public Service Electric & Gas Co.
*Texas Eastern Transmission Corp.
•if-Lone Star Gas Co.
1st mtg. bds.
Deb.
Pfd. stk.
Pfd. stk.
Com. stk.
35.0
5o.o
25.0
15.0
20.0
#Brunswick Corp.
Conv. sub. deb.
25.6
*Texas Eastern Transmission Corp.
Commerce Oil Refining Coip.
Liberian Iron Ore, Ltd.
1st mtg.pil.bds.
Deb., bds. & com.
Bds. & stk.
30.0
it5.0
30.0
Dec. 1U
Dec. 15
Dec. 15
Jan. 18
Jan. 23
(lights expire)
Jan. 25
(rights expire)
Jan.
Indefinite
Indefinite
STATE AND LOCAL GOVERNMENT
Public Housing Authorities
State of Michigan
State of New Mexico
State Colleges of California
Oklahoma City Metro. Improvement
Auth., Oklahoma
-*Los Angeles, California
State of California
Rev.-Ut.
G.O.
Rev.-Q.Ut.
97.6
25.0
16.1
lit. 2
Dec.
Dec.
Dec.
Dec.
llj.
lU
19
21
Rev.-Ut.
G.O.
G.O.
55.0
30.0
95.0
December
Jan. 10
Jan. 11
-17-
J-2
Forthcoming Large Offerings, as of December 9 (Cont'd)
Issuer
STATE AND LOCAL GOVERNMENT (Cont'd)
•Pennsylvania State Public Sch.
Bldg. Auth.
Los Angeles Dept. of Wtr. and Pwr.,
California
Orleans Parish School Dist., La.
Kentucky Turnpike Authority
Dade County, Florida
New York State Housing Fin. Agency
Amount
Approximate date
(millions
of offering
of dollars)
Type
-
Rev.-Rent.
Rev.-Ut.
G.O.
Rev,
G.O.
Rev.
23.0
12.0
10.0
55.0
46.0
100.0
Jan. 18
Indefinite
Indefinite
Indefinite
, Indefinite
Indefinite
OTHER
None
*—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 by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None.
Bxhlbit K
-18-
Yields on New and Outstanding
Electric Power Bonds, Bated Aa and A 1/
Date
1952-1959 - High
Low
1959 - July
Aug.
Sept.
Oct.
Nov.
Dec.
1960 - Jan.
Feb.
Mar.
Apr.
May 10
12
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)
5.30 (12/8/59) 87
2.93 (3/31/5U) -3
*4.93
14.83
31
23
5.13%/
«5.08
*5.30
36
5.09
it.82
It. 91
It. 88
It. 82
h. 6k
5.07
17
*5.65
5.33
60
63
it5
25
37
32
25
27
27
17
1*3
*5:30^
51
28
ii.97
5.1U
9
35
5.20
5.10
lt.95
26
33
11
it.93
L88
11
8
L80
2U
2i.8 8
26
5.05
1*3
2U
22
8
18
Dec. 7
123
-15
1|2
25
June 17
28
29
July 8
13
Sept. 15
23
28
Oct. 5
21
Nov. h
16
17
5.45 (9A8/59)
3.00 ( 3 A 7 / 5 4 )
5.00
h9
1
*—Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Mooter'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 yearsT
2/ Provides for a 5-year period during which Issue may not be called for refunding
at a lower coupon rate. Monthly averages so marked include one or more issues
for FRASER
with such a provision. Other issues have no such provision.
Digitized
-19'
December 13, I960
Part
II- Canada
For the first time in eleven weeks, Canadian Treasury bill yields declined
slightly last week. Bill yields for shorter maturities rose slightly while there
was some decline in yields on longer maturities. The Bank of Canada purchased $9
million of Treasury bills and $53 million of under-2-year bonds; these purchases
helped to ease the pressure on short-term rates growing out of the new $200 million
1962-63 maturity Government of Canada refunding issue, marketed last week. At
the same time, the Bank sold $56 million of over-2-year bonds. Stock prices rose
slightly.
The Canadian dollar showed little change closing at 102.3U (U.S. cents)
last Thursday.
Money market. The yield on Canadian Treasury bills declined for the first
time in 91 weeks.
The average yield on the 3-month Treasury bill at last Thursday's
auction was 3.70 per cent compared with 3<>95 per cent the week before. (See Table)
The yield on the 6-month bill also declined from U.07 per cent to 3.92 per cent.
(See Table) The Bank of Canada purchased $9 million of Treasury bills during the
week while the chartered banks sold $7 million and the general public sold $U million.
(See Table)
The average closing rate on day-to-day loans was 3»U0 per cent compared
with 3.50 per cent a week ago.
The spread in favor of the Canadian over the United States short Treasury
bill narrowed only slightly from 1.62 per cent the week before to l.Wi per cent last
Thursday. However, the discount on the forward Canadian dollar reached 0.73 per cent
per annum (the largest for i960), reducing the net incentive to hold„the Canadian
bill by ^8 basis points to 0.71 per cent per annum from 1.19 per cent the week before.
(See Table.)
Bond market. Bond yields rose slightly in shorter maturities and declined
in most longer maturities. The spread between selected comparable Canadian and
United States securities (Thursday yields for bills and Wednesday yields for bonds)
were as follows (figures in parenthesis refer to the previous week):
l.liU
I.3U
0.81
1.25
1.1*1
per
per
per
per
per
cent
cent
cent
cent
cent
on
on
on
on
on
a 91-day bill (1.62)
a 182-day bill (1.37)
an 8-year bond (0.72)
a 30-year bond (1.28)
a 35-year bond (1.3^)
During the week the Bank of Canada-sold $56 million of over-2-year Government bonds
and purchased $53 million under-2-year bonds, thus reducing the pressure on shortterm rates. The chartered banks sold $28 million and the general public purchased
$31 million of Government bonds. (See Table.)
The Minister of Finance announced that the new refunding issue of Government of Canada bonds (see Capital Market Developments, December 1, i960) was oversubscribed. Offers -for the two maturities totaling $200 million available to investors
have been accepted as follows? $120 million in the 1962 maturity and $80 million in
the 1963 maturity. In addition, the Bank of Canada took $180 million of the 1962
maturity and $220 million of the 1963 maturity
-20-
A *>35 million offer of 6 per cent, 25-year bonds last week by Bell Telephone
of Canada resulted in an immediate oversubscription. Bid went to 101 on a "when
issued" basis shortly after the announcement and then eased to 100-3A.
jj
The Mcleod, Young, Weir 4o bond yield average for December 1 showed an increa^
to 5.68 per cent compared with 5.44 per cent on November 1. The rise was apparent in
1
all types of bonds. (See Table.)
•
•
Stock market. Industrial stock prices on the Canadian exchanges rose slightly '
early in the week ending December 9, after falling in the previous week, as noted in
\
the following tablet
2
Toronto
^
Montreal
New York
Standard & Poor
I960 - High
Low
532.5:6
1:72.38
271.1
250.3
60.51
55.98
November 28
29
30
December 1
2
5
6
496.42*
497.06
495.94
499.00
^99.31
499.75
261.1
262.7
262.0
262.8
263.7
26ii.li
264.0
59 . 4 5
59.22
58.87
59.59
58.70
58.58
58.74
496.81
1
Foreign exchang;e. The spot rate cn the Canadian dollar rose slightly last
closed at 102.3^1 (U.S. cents) last Thursday. The discount on the forward
the highest for the year, under the influence of continued large spreads favoring the
Canadian over the U. S. Treasury bill.
British^Gommonwealth Section
Division of International Finance
Board of Governors of the Federal Reserve System
|
%
I
Selected Canadian Money Market and Related Data
3-mo, Treaa. bills
Spread
over U.S.
6.16
2.96
Spot
Net incentive to
hold Can #
billg/
Canadian dollar
3-mo. discount ^
forward prendum(
1959 High
Low
I960 - High
Low
5.1U
1.68
hoh9
2.80
U.63
2.10
0.30
1.62
-0.82
io$.5i
102.58
105.27
101.31
Nov, 3
10
17
2k
Dec0 1
8
3,22
3.21
3.k8
3.77
3.95
3.70
2.21
2,15
2.1*0
2.39
2.33
2.26 .
1,01
0.76
1.08
1.38
' 1.62
i.Uli
102.80 ' 102.70
102.53
102.52
102.02
101.9k
102.38
102.25
102.22
102.11
102.16
102.3k
3.25
-21-
MM
—
0.99
-0.73
-0.37
-0.06
-0.31
-0.U9
-0.U3
-0.73
1.19
-0.57
.
-
0.6k
0.70
0.77
0.89
1.19
0.71
a/ Average yield at weekly tender on Thursday.
5/ Composite market yield for the U.S. Treasury bill on Thursday close of business#
c/ In U.S. cents,
a/ 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 Iislds
1959 - High
Low
I960 - High
Low
6.2k
5.11
5.33
1.99
1.37
-0.86
Intermediate
bonds (6 yr.)
spread
Canute over.
1 2 1 M k
5.27
k.5o
1.11
5.55
0.21
k.09
Nov. 3 •
10
17
2k
Dec. 1
8
3.51
3.U7
3.78
3.93
1.07
3.92
1.03
0.83
1.02
1.23
1.37
1.3k
k.62
k.62
k.67
k.70
k.72
k.73
6-mo. Trias# bills
spread
0.81
0.76
0,72
0.68
0.72
0.81
Long-term bonds
qgfca
Canada over.
J L I m k
5.30
hohk
5.1i2
1.30
14.63
L.89
k.99
5.09
5.20
5.21
5.17
0.85
l.oU
l.iU
1.22
1.30
. 1.28
1.25
Canada over,
J Z Z MM
5.05
a.73
5.28
1.61
1.68
0.95
It. 92
5.01
5.05
5.09
5.16
5.18 .
Spread between Canadian auction rate and composite market yield of U.S.
on close of business Thursday.
Government of Canada 2-3A per cent of June 1967-68.
Spread over U.S. Government 2-1/2 per cent of 1963-68#
Government of Canada 3-lA per cent of 0ctober_1979
y Spread over U.S. Government 3-lA per cent of 1978-83.
-' Government of Canada 3 - 3 A per cent of September 1996 - March 1998.
' Spread over U.S. Government of 199$,
i
J i
1.17
1.2U
1.27
1.28
1.3k
i.ia
Canada: Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
(millions of Canadian dollars, par value)
Bank of Canada
Treas.
Bonds
bills
Oct. 6
13
20
27
Nov, 3
10
17
2k
Dec. 1
8
Source*
+ $
- 1
- it
+ 6
- $
- 1
+10
- 3
+ 3
- 3
- 1
+27
- It
-11
- 1
+ 3
+ 1
+10
+ 9
Government
Total
+ 3
+ 2
+23
+ 9
+ 6
+ 2
- 1
+ 8
+2U
- It
Chartered banks
Treas.
bills
Bonds
+ 2
—2C
-20
-16
+ 8
+ 6
. -28
-30
-21
- 7
+
+
+
+
+
+
+
+
-
68
23
23
12
19
7
6
3
8
28
General public
Savings Treas.
bonds M L
,Bonds
- $
- $
+ 2
+ 3
+ 9
+199
+131
+271
+ k
- k
+ 3
-19
- I*
+20
+ 6
- 6
+26
+29
+ 3
+ 1
Bank of Canada, Weekly Financial Statistics.
Average Bond Yields
(per cent per annum)
10
10
10
10
k0
Provincials
Municipals
Public Utilities
Industrials
Bond Yield Average
Sources
McLeod, Young, Weir.
SokO
$.60
$.38
$.39
$.Wi
$.60
$.9$
$.$U
$.62
5.68
+16$
- 27
- U2
- 2U
- 17
- 7
- 17
-
$
- 27
+ 31
UNITED
KINGDOM
MONTHLY AVERAGES
BANK
BOND
RATE
AND
AND
STOCK
TREASURY
BILL
RATE
YIELDS
2 / 2 % CONSOLS YIELD (liMWI.)
«.*
@FedFRASER