Full text of H.16 Capital Market Developments : December 13, 1965
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Not f o r l j u b l i c a t i o n DECONTROLLED AFTER SIX MONTHS December 13, 1965. H H ; | ^ CAPITAL MARKET DEVELOPMENTS ^ IN 'i'lllJ UW1TFD STATES C o r p o r a t e and m u n i c i p a l bond m a r k e t s . The t o t a l volume o f p u b l i c s e c u r i t y f i n a n c i n g by c o r p o r a t i o n s t h i s week w i l l be more t h a n t w i c e a s l a r g e a s l a s t week; w i t h a $100 m i l l i o n bond o f f e r i n g of C o n s o l i d a t e d E d i s o n Company a c c o u n t i n g f o r t w o - t h i r d s of t h e t o t a l . M u n i c i p a l bond f i n a n c i n g w i l l be a b o u t o n e - h a l f l a r g e r than l a s t w e e k ' s r e v i s e d t o t a 1 - - t h e l a r g e s t i s s u e on t h e c a l e n d a r i s $100 m i l l i o n i n C a l i f o r n i a T o l l Bridge A u t h o r i t y bonds. 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 1/ (In m i l l i o n s of d o l l a r s ) Corporate New C a p i t a 1 1 R e f u n d i n g S t a t e and l o c a l Government New C a p i t a l | R e f u n d i n g Sold • 52 week a v g . Dec. Dec. 3 10 138 48 r / 70 3 190 14 140 204 r / Scheduled: 302 Dec. 17 150 -1 V F e d e r a l R e s e r v e e s t i m a t e s b a s e d upon p u b l i s h e d r e p o r t s o f i s s u e s s o l d and s c h e d u l e d f o r o f f e r i n g ; c o r p o r a t e r i g h t s o f f e r i n g s a r e included as of the date s u b s c r i p t i o n r i g h t s e x p i r e . F o l l o w i n g t h e announcement of t h e i n c r e a s e i n t h e d i s c o u n t r a t e a t t h e s t a r t o f l a s t w e e k , c o r p o r a t e bond p r i c e s b r o k e s h a r p l y on Monday and a $75 m i l l i o n i s s u e s c h e d u l e d f o r o f f e r i n g d u r i n g t h e week was p o s t p o n e d i n d e f i n i t e l y . However, by t h e end o f t h e w e e k , bond p r i c e s had r e c o v e r e d most of t h e i r e a r l i e r l o s s e s and some r e c e n t l y d i s t r i b u t e d i s s u e s a c t u a l l y p o s t e d g a i n s f o r the week. (Moody's A a a rated s e r i e s rose 4 b a s i s p o i n t s , but t h i s s e r i e s u s u a l l y l a g s the market b e c a u s e o f t h e method o f q u o t e s on w h i c h i t i s b a s e d ) . Conseq u e n t l y , l a s t w e e k ' s one major bond o f f e r i n g — a n A - r a t e d u t i l i t y o f f e r e d t o y i e l d 8 b a s i s p o i n t s more t h a n t h e l a s t c o m p a r a b l e i s s u e w h i c h was o f f e r e d i n l a t e November--was q u i c k l y d i s t r i b u t e d and went t o a s m a l l premium i n s e c o n d a r y market t r a d i n g . In the municipal market, the d i s c o u n t r a t e a c t i o n a l s o r e s u l t e d i n t h e p o s t p o n e m e n t of a number o f s c h e d u l e d s a l e s . However, w i t h t h e a c c o m p a n y i n g drop i n m u n i c i p a l p r i c e s , t h e t o n e o f t h e market improved somewhat a s t h e $90 m i l l i o n p a c k a g e o f P u b l i c Housing A u t h o r i t y bonds w e r e q u i t e s u c c e s s f u l a t y i e l d s 10 b a s i s p o i n t s h i g h e r t h a n had b e e n e x p e c t e d p r i o r t o Monday. M o r e o v e r , d e a l e r s a d v e r t i s e d i n v e n t o r y H. 14 -2 - Y i e l d s i n S e c u r i t y Markets L e v e l l a t e s t week (per cent) High-Grade N o t e s and Bonds Corporate New Seasoned 4.80 4.64 +1 +4 U.S. Govt. Long-term 3-5 year 4.42 4.70 +6 +20 3.40 +3 3.60 4-7 3.65 -48 4.33 4.47 +21 +21 S t a t e and l o c a l G o v t . . Moody's Aaa S t a n d a r d and P o o r ' s high grade Money Market F e d e r a l funds Treasury b i l l s 3-month 6-month C o r p o r a t e Bonds S t i l l Date Offered Change from p r e c e d i n g week (basis points) Amount ( m i l l i o n s o f $) 11/26 40.0 Issue in Syndicate Reoffering yield Estimated Proportion sold Rating N o r t h e r n N a t u r a l Gas Co. 4 - 7 / 8 ' s - 1985 4.90 9/10 Blue L i s t of Municipal D e a l e r ' s A d v e r t i s e d I n v e n t o r i e s ( m i l l i o n s of d o l l a r s ) L a t e s t Date 561 ( 1 2 / 9 ) End o f P r e v i o u s Week 650 R e c e n t High 901 ( 6 / 4 ) H. 14 o f u n s o l d bonds dropped t o t h e i r l o w e s t l e v e l s i n c e m i d - O c t o b e r a s d e a l e r s r e l e a s e d a r a t h e r l a r g e q u a n t i t y o f u n s o l d bonds t o t h e f r e e m a r k e t ; y i e l d s on most o f t h e s e bonds f e l l 1 0 - 2 0 b a s i s p o i n t s i n s e c o n d a r y market t r a d i n g . Y i e l d s on s e a s o n e d A a a - r a t e d bonds e a s e d 3 b a s i s points further to 3.40 per c e n t - - t h e i r highest l e v e l s i n c e e a r l y 1 9 6 0 - - w h i l e o t h e r y i e l d s e r i e s r o s e a s much a s 7 b a s i s p o i n t s . M o r t g a g e y i e l d s and c o n v e n t i o n a l m o r t g a g e t e r m s . i e l d s on F H A - i n s u r e d 3 0 - y e a r m o r t g a g e s s o l d i n t h e s e c o n d a r y market r o s e 2 b a s i s p o i n t s f u r t h e r i n November. The a d v a n c e w h i c h f o l l o w e d an i n c r e a s e o f 3 b a s i s p o i n t s i n October brought the average t o 5 . 5 1 per c e n t , about 6 b a s i s p o i n t s a b o v e t h e l e v e l w h i c h had p r e v a i l e d o v e r most o f t h e p e r i o d s i n c e e a r l y 1963. R e f l e c t i n g t h e i n c r e a s e d f i r m n e s s i n t h e market w h i c h had developed i n r e c e n t months, c o n t r a c t i n t e r e s t r a t e s f o r c o n v e n t i o n a l f i r s t m o r t g a g e s on new homes a l s o r o s e f u r t h e r i n O c t o b e r , a c c o r d i n g t o the F e d e r a l Housing A d m i n i s t r a t i o n . At 5 . 9 0 p e r c e n t - - r o u n d e d t o t h e n e a r e s t f i v e b a s i s p o i n t s - - t h e r a t e was t h e h i g h e s t s i n c e t h e end of 1962. R a t e s on c o n v e n t i o n a l f i r s t m o r t g a g e s on e x i s t i n g ho m e s , r e sumed t h e i r a d v a n c e i n November, t o 5 . 9 5 p e r c e n t . T h e s e r a t e s had a l r e a d y t u r n e d up i n A u g u s t b u t , a s e s t i m a t e d by FHA, t h e y h a v e changed l i t t l e in the intervening period. I n t h e c a s e o f n o n - r a t e t e r m s , some downward p r e s s u r e on l o a n - t o - v a l u e r a t i o s and m a t u r i t i e s f o r c o n v e n t i o n a l f i r s t m o r t g a g e s on e x i s t i n g homes a p p e a r e d t o be d e v e l o p i n g i n O c t o b e r , t h e l a t e s t month f o r w h i c h d a t a a r e a v a i l a b l e from t h e F e d e r a l Home Loan Bank Board. U n l i k e s u c h terms f o r new home l o a n s , t h e s e had e x p e r i e n c e d some f u r t h e r l i b e r a l i z a t i o n e a r l y t h i s y e a r . Savings flows in October. D u r i n g t h e month o f O c t o b e r , n e t i n f l o w s of i n c o m e - y i e l d i n g claims in d e p o s i t a r y - t y p e savings i n s t i t u t i o n s amounted t o $ 2 . 8 b i l l i o n , a r e c o r d f o r t h e month and 11 p e r The e n t i r e amount o f t h i s r e c o r d c e n t g r e a t e r than i n October 1964. y e a r - t o - y e a r g r o w t h f o r O c t o b e r was a t t r i b u t a b l e t o a s h a r p l y i n c r e a s e d f l o w o f t i m e and s a v i n g s d e p o s i t s a t c o m m e r c i a l b a n k s . Exp a n s i o n i n b o t h s a v i n g s c a p i t a l and s a v i n g s and l o a n a s s o c i a t i o n s and r e g u l a r d e p o s i t s a t m u t u a l s a v i n g s banks was s m a l l e r t h a n a y e a r earlier. H. 14 -4N e t I n c r e a s e i n S a v i n g s C a p i t a l a t S a v i n g s and Loan Associations (millions of d o l l a r s ) Unadjusted data Change from Current year previous year 1965 - J u l y Aug. Sept. Oct. 10-month t o t a l -438 554 1,040 595 5,948 Percentage change -445 -168 -33 -156 -2,053 -14 -4 -21 -26 S e a s o n a l l y a d j u s t e d data Current year 1965 - J u l y Aug. Sept. Oct. 622 875 931 706 Previous year 977 1,069 979 854 N e t Change i n R e g u l a r D e p o s i t s a t Mutual S a v i n g s Banks ( m i l l i o n s of d o l l a r s ) Unadjusted data Change from Current year previous year 1965 - J u l y Aug. Sept. Oct. 10-month t o t a l 212 210 430 170 2,706 -72 -135 -41 -63 -561 S e a s o n a l l y a d j u s t e d data Current year 1965 - J u l y Aug. Sept. Oct. 363 312 278 324 Previous year 423 439 330 376 Percentage change -25 -39 -9 -27 -17 H. 14 Time and s a v i n g s d e p o s i t s a t c o m m e r c i a l banks r o s e $ 2 . 0 b i l l i o n d u r i n g O c t o b e r , a r e c o r d f o r t h e month and o n e - t h i r d more t h a n a year e a r l i e r . For t h e f i r s t t e n months a s a w h o l e , growth i n t h e s e d e p o s i t s amounted t o a r e c o r d $ 1 7 . 3 b i l l i o n - - u p more t h a n o n e - h a l f over the corresponding p e r i o d of 1964. Common s t o c k p r i c e s a l s o showed a s h a r p drop Stock p r i c e s . f o l l o w i n g the d i s c o u n t r a t e a c t i o n , but q u i c k l y erased t h e s e l o s s e s i n very heavy trading. S t a n d a r d and P o o r ' s i n d e x o f 5 0 0 s t o c k p r i c e s c l o s e d a t 9 1 . 8 0 on December 1 0 - - u p c n e - h a l f o f a p e r c e n t from t h e end o f t h e p r e v i o u s week and 1% p e r c e n t a b o v e Monday's c l o s e . Trading volume a v e r a g e d 9 . 6 m i l l i o n s h a r e s a d a y . More d e t a i l e d i n f o r m a t i o n c o n c e r n i n g r e c e n t c a p i t a l market developments i s presented i n the attached e x h i b i t s . C a p i t a l Markets S e c t i o n , D i v i s i o n o f R e s e a r c h and S t a t i s t i c s , Board o f G o v e r n o r s o f t h e F e d e r a l R e s e r v e S y s t e m . LONG-TKI HIGH -ORAOI xv "W-z-r E x h i b i t A — Part I I Corporate Aaa 1 / Da t e U. S. Govt. long-term 2/ S t a t e and local government Aaa 3 / Spread between 0 . S . Govt, and S t a t e and Corporate l o c a l Aaa Aaa (per cent) 1959-60 - High 1961-62 High 1962-63 - Low 1964 - High Low 1965 - High Low N#v. Nov. Nov. Dec. Dec. series. 12 19 26 3 lOg/ 4.64 a 2 / l 0 ) 4.41 (3/12) 4.42 (12/10) 4.13 (6/25) 3.37^/6/61) 2.88(11/8/62) 3 . 1 6 3/26) 2.99(14/31) 3.40 (12/9) 2.94 (2/11) .33 .19 .34 .24 .92 1.04 .80 1.14 1.01 1.22 .94 4.60 4.61 4.61 4.60 4.64/ 4.35 4.34 4.34 4.36 4.42' 3.32 3.36 3.37 3.37 3.40 ^ .25 .27 .28 .24 .22 1.03 .98 .97 .99 1.02 t i i i m h 4.19(3/29/63) t f X 3 . 8 5 (12/28/62) t s s o a Tor a pre ad a, high refers to widest, sad l w to narrowest. .59 .57 .21 IXMIBIT I . r«>« t IONO-TIRM BOND YIIIDS, IOWIR ORADI We.hi, y' X \ \ 1,A,,AN \ 1 A V v I 1 I 1 1 II i1 I l i i i I i i, t i-LJ ,1 1 1 1 1 1 1J-L1J 1 1 1.1 U 1 1 11 II 1 1 1 1 II 1 1 1**0 1*41 1**1 1*43 1*44 l 1 1 1 1 1 1 II 1*4* Exhibit B — Part I I Da t e 1959-60 - High Year end - 1961 1962 1963 1964 1965 - High Low Corporate Baa 1 / 5 . 3 6 (3/12/60) 5.10 4.93 4.85 4.80 4 . 5 9 (12 AO) 4.78 (3/19) Nov., 12 4.95 Nov. 19 4.96 Nov. 26 4.97 Dec, 3 4.98 v^Dec. 10 p / 4.99 " Notes Tor footnotes see Exhibit JL. S t a t e and local govt. Baa I f (per cent) 4 . 4 6 (3/7/60) 4.04 3.57 3.60 3.51 3.79 (12/9) 3.40 (2/11) 3.67 3.73 3.74 3.74 3.79 Spread between Aaa and Baa Corporate ' | ^ .84 .66 .70 .48 .37 .41 33 1.08 .73 .63 .49 .52 .52 .34 .35 .35 .35 .38 .35 .35 .37 .37 •37 .39 EXHIBIT C, P«fl 1 SHORT- AND INTIRMIDIATI-TIRM IN GOVERNMENT Weekly \ .MONTH S l l l l * MerWl TleM> 1 ISSUIS -1w J y r. 1 . DISCOUNT RATI ^ r | 1 J . MONTH l i t i s | 1 1 1 1 1 I 1I 1 1 1 1 1 1 1 1 1 1 i960 If*1 196: 1961 1*64 1*6S E x h i b i t C — Part XI Discount 3-month ra t e b i l l s 2/ —U 3.00 3.50 4.00 4.50 4.00 4.59 ( W e o ) 2.66 2.89 3.52 3.83 5 . 0 7 (3/8/60) 2.90 2.93 3.64 3.93 3.78 (6/25) 3.82 (6/25) 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 ! 3 - 5 v r . i s s u e s 8 4.00 3.00 3-5 year i s s u e s 2/ I 1959-60 - High Year end - 1961 1962 1963 1964 1965-High Low Yields 6-month b i l l s 2/ 3.81 3.41 4.07 4.07 4.70 (12/10) 4.04 (1/22) .79 .24 .04 .13 .10 .17 .03 1.81 1.15 .52 .55 .24 .43 .11 .43 .17 . 4.49 4.23 4.06 4.00 Nov. 12 .37 .16 4.46 4.25 4.09 4.00 Nov, 1.9 .34 . 1 4 4 . 4 5 4 . 2 5 4 . 1 1 Nov. 2$ . 4 . 0 0 .14 .24 4.50 4.26 4.12 4.00 Dec. 3 1 ,23 4.474,70 Dec. 10 p, 4 . 5 0 4.33/ Weekly rate shown Is that in tiffeot at end of period at the federal Reserve Bank of Mew Yortc, Market yield) weekly average# computed from daily elosing bid prioes, Series of 3-6 year Issues consists of selected notes and bonds. ^ ' . Note.—Eight and lows are f o r individual s e r i e s and may be on different dates for different s e r i e s , f o r spreads, high refers t o widest, and low to narrowest. ¥ EXHIBIT 0, f.r» 1 SHORTBANKS Weekly AND AND INTERMEDIATEOTHER TERM INTEREST R A T E S , PRIVATE BORROWERS f e r «eel AT. 1 1 , r « . / yVW/MfWlAlN j i If f.e. DISCOUNT (ATI f iflr m ' ' il T I r m 1 f j iHecilve let* t Exhibit D - - Part I I Prime rate Da te 1959-60 - High Year end - 1961 1962 1963 1964 1965 - High Low Nov. Nov. Nov. Dec. Dec. 12 19 26 3 10 E / 1/ Finance company Federal funds 3/ paper 2/ (per cent) Spread between 3-mo. b i l l s and finance co. paper 5.00 4.50 4.50 4.50 4.50 5.00 4.50 5.13 (1/22/60) 3.00 3.19 3.88 4.06 4.50 (12/10) 4.00 (2/12) 4 . 0 0 (5/13/60) 2.88 3.00 3.50 4.00 1.02 .34 .30 .36 .23 4.13 (12/3) 3.48 (10/1) .47 .10 4.50 4.50 4.50 4.50 5.00 4.38 4.38 4.38 4.38 4.50 3.97 4.13 4.09 4.13 3.65^ .32 .29 .27 .26 .17 } / Weekly rate shown is that in effect at end of period. Prime rate i s that charged by large bant# 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 i s the rate for the heaviest volume of purchase and sale transactions as reported to the Federal Reserve Bank of New York# Notes—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. FRASER Digitized for I X H 111T 1, Pari 1 STOCK MARKET Exhibit"E~ — Part I I Stock p r i c e index 1/ 1961-62 - High Low Year end 1963 1964 1965 - High Low Oct. NOT. Common stock y i e l d s 2/ (oer c e n t ) Trading volume J / (millions of shares) 72.04(12/8/61) 52.68(6/22/62) 2.80 3.96 10.1 2.4 74.44 84.75 92.55 (11/12) 83.06 (6/25) 91.39 92.15 3.13 3.02 2.95 3.15 2.91 2.97 4.7 4.7 9.8 3.8 7.8 7.4 Stock mar ket customer Bank Customers 1 loans to debit bal"others" 5 / ances 4 / ( I n m i l l i o n s of d o l l a r s ) Total 5,603(13/61) 4,424(3/61) 4,259 (12/61) 3,253(3/61) 1,418(5/9/62) 1,161(3/8/61) 7,242 7J)53 , 5,515 5.099 1,727 1.974 7,117 5,129 6,872 7,117 n.a. 4,863 5,073 n.a. 2,10ft (12/10) 1,843 (3/3) 2.044 2,095 Nov. 26 92.03 n.a. 3 . 0 0 n.a. 7.1 2,095 Dec. 3 n.a. 91.27 3.04 n.a. 9.0 2,108 91.80 Dec. 10 e / n.a. n.a. 9.8 3.05 a.m,.—Not &TKll&ble. p / Preliminary. 2/ Standard and Poor's composite index of 900 eemnon stocks, weekly closing prices, 1941^43*10# Monthly data are averagee of daily figures rather than of Friday*s only. Highs and l o w are far Friday's data only. Z/ Standard and Poor's oongjosite stock yield based on Wednesday data converted to weekly closing i prices by Federal Reserve. Helde shewn\ are for dates on which price index reached i t s high 3/ Averages of daily trading volts i on the New Yexfc Stock exchange# Yeai*-end figures are averages of daily figures for the year. A/ Ind of month figures far member f i x e s of the Hew Y e * Stock Exchange which carry margin accounts j excludes balances secured by U. S. Government obligations. 5/ Wednesday flgures for weekly reporting member banks. Excludes loans far purchasing or carrying U. S. Government securities. Weekly reporting banks account for about 70 per cent of loans to FRASER others, f o r further detail see Bulletin. Digitized for CXHIIT f. POM I MORTOAOI AND >OND YtllDS^] 111111111111111111111111:7 HOME MORTGAGES: Am# CORPORATE B O N D S : 1964 Exhibit F paK :*ea 2/ Conventional mort25-year 30-year g a g e . 1956 1957 1958 1959-60 1961-65 - Low - High -Low - High -High . Low 1965 " J u l y Aug. Sept. Oct. Nov. y 4.68 5.63 5.35 6.24 6.00 5.43 5.43 5.45 5.46 5.49 5.51 Part I I Spread beAaa Co:rporate tween y i e l d s Boiida on conv. & FHA mort. N e ^ Seasoned^/ saeea » Spread between y i e l d s on new c o r porate bonda and FHA mtge. Seaaoned 4/ 5.70 5.44 5.20 6.00 5.55 6.30 6.10 5.80 .47 .47 .15 .23 .39 .25 3.08 4.94 3.65 5.25 4.72 4.12 3.08 4.12 3.57 4.61 4.60 4.19 .76 1.58 .88 1.69 1.48 .79 1.03 .05 .73 .39 -.16 5.44 5.45 5.46 5.49 5.52Z 5.80 5.80 5.80 5.85 5.90/ .36 .35 .34 .36 .39 4.61 4.63 4.67 4.69 4.72 4.48 4.49 4.52 4.56 4.60 .83 .82 .79 .80 .79 .13 .14 .15 .13 . .12 w i t h e r mortgage nor bond yields take into accetmt servicing oeets ehloh are mob higher f or mortgages than bond®. Generally, bonds pay interest ••nd-*nnuallyj mortgagee, monthly. Mortgage yields. If oanpoted as equivalmt to a eeed-eanual interest lnveetmset, io»ld be slightly higher thse given i s Based on IHArfield-effice opinions about average M.d prices i n the private seeondary market to r me#hosss mortgagee for iossdlate delivery. Separate data available f o r 25-year sni—beginning July 1961— 30-year mortgages with tilnlmam dewnpayasnts, weighted by probable voltes ef transactions. Yields coseputed by TEA* assuming prepayment period of 12 years tar 23—year mortgagee and IS years for 30— year mortgagee. Over the peril . the movement of the two mortgage yield series has been similar. Dashed line s indicate periods of adjmstment to changes i n contraotmal interest rates. 2 / Based on ISA f i e l d office opinion on typical interest rates (rounded) on convent!ooal f i r s t mortgagee prevailing in the market areas of insuring office c i t i e s . Beginning with April I960, rate relates only to new-fcooe mortgages j prior to that date, rate related to both new as well as exlsting-hoa* mortgages. Dashed line Indicates this change in the series. 4 / FHA, mortgage yield data are for 23-year mortgages through June 1961; 30-year mortgages thereafter, FRASER 37 See note f o r exhibit G. %J Moody's Investor Service, Monthly averages of daily data* See Cahlbit JU Digitized for IXNIIIT f, tan m CON ioi MATURITY NEW EXISTING 10 80 LOANlPRICE/RATI O NEW EXISTING I F 1982 1964 Exhibit F New Homes Con- Fees & t r a c t Charges Maturity Rate (Per (Years) (Per cent) cent) 2/ 1964 Oct. Nov, Dec. 5.75 5.75 5.76 .58 .55 .59 24.5 24.7 25.2 196T Part IV E x i s t i n g Homes Loan/ Con- Fees & Loan/ Loan Price t r a c t Charges Maturity Price amt. r a t i o (Thous.) Rate (Per (Years) r a t i o (Thous.) (Per (Per cent) (Per cent) cent) 2/ 73.2 74.5 74.9 17.4 17.4 17.8 5.91 5.94 5.92 .52 .57 .56 20.0 20.3 20.1 71.4 71.4 71.7 1 1 1 13.3 13.8 13.7 1965 Jan. 5.79 .59 74.0 24.7 17.5 5.95 .54 19.9 71.6 13.6 Feb. 5.79 .61 7&.0 24.9 17.6 5.93 .54 20.3 72.6 13.8 Mar. 5.72 .49 24.9 73.7 18.5 5.91 .55 20.9 72.7 14.6 Apr. 5.74 .51 24.9 73.7 18.1 5.89 .49 20.4 71.8 14.0 May 5.77 .53 24.9 18.2 74.4 5.88 .48 20.3 71.9 14.1 June 5.76 .49 24.6 73.9 17.5 5.86 .49 20.6 72.1 14.3 July 5.77 .55 25.0 75.0 18.3 51.86 .49 20.6 72.5 14.5 Aug. 5.76 .50 24.5 73.8 18.3 5 .86 .46 20.4 72.1 14.1 2 0 . 1 7 1 . 6 1 3.7 Sept. 1 8 . 1 .56 5.75 24.9 73.7 .47 5-89 Oct. TA-t .48 19.9 71.3 5.75 .51 24.8 73.8 1 W — 2/ 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 f i r s t mortgages originated by major institutional lender groups, (including mortgage companies) for purchase of single family homes. Data exclude loans fcr refinancing, reconditioning, or modernization; construction loans to home-buildersi and—In this exhibit—permanent loans which are coupled with construction loams to owner-builders. Data are s t i l l in a developmental stage and may reflect seasonal influences which cannot yet be measured because the series go back only to end of 1962. 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 THLBB-TDIC survey, end are included—in -the case of new home mortgage rates—in Exhibit T, Parts I 2 j Pees 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 related solely to transfer of property ownership. borrower. They exclude any closing costs 1XHISIT O, Pari I YIELD* O N N Exhibit 0 - Part I I Yields on New Corporate Bond laauea Adjusted to an Asm baala Number Am't of laauea Average Included (mil. yield of (oer centl laauea of dollara) Number Am't of laauea Average Included (mil. yield of foer cent) Weekly averages: 1965 - Jan. Feb. Mar. Apr. Hay July Aug. Sept. Oct. Nov. Weekly average 1965 - High Low 3 3 7 4 8 4 8 7 7 ' 5 6 94.0 111.0 157.8 115.0 315.0 100.0 278.0 , 166.5 288.5 108.0 267.0 4.42 4.41 4.45 4.46 4.51 4.58 4.61 4.63 4.67 4.69 4.72 Oct. 1 8 15 22 29 Nov. 5 12 19 26 Dec. 3 Dec. 10 4.80 (12/10) 4.33 ( 1 / 2 9 ) —I.IAm m> .11 4 itnaf nf milillalv offere d 4 88.0 4.72* 1 20.0 4.63 2 2 2 75.0 125.0 67.0 4.73* 4.70 4.78 - 1 40.0 40.0 4.79 - 1 c o r e OPS i» i» end - Vg Exhibit H H.14 L o n g - t e r m C o r p o r a t e and 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 and P l a c e m e n t s (In m i l l i o n s of dollars) New Can i t a l 1965 January February March Corporate 1964 1963 1965 S t a t e and L o c a l 2 / 1963 1966 i 795 746 1,197 938 700 778 613 594 1,144 a/803 E / 872 JE./946 947 776 810 732 746 976 April May June 1,152 1,691 1,946 2,237 1,095' 1,405 930 904 1,013 &Z825 E./924 2/967 1,242 667 903 869 866 930 July August September 1,290 850 1,392 812 680 1,130 676 637 795 E/984 2/656 e/950 906 780 892 680 708 449 4/800 e/900 801 529 948 / October November December 3/1,700 e/1,000 e/1,450 953 669 1,642 1,013 819 1,415 e/800 1st 2nd 3rd 4th 2,738 4,789 3,533 e/4,150 2,41,6 4,738 2,62% 3,264 2,3bl 2,847 2,109 3,246 2/2,624 £/2,716 e/2.590 3/2,500 2,533 2,811 2,578 2,278 5,198 7,307 10,553 a/5,340 1/7,930 e/10,430 5,345 7,923 10,201 quarter quarter quarter quarter 1st half Three q u a r t e r s Year 7,527 11,060 eA5,210 7,153 9,775 13,038 1,051 729 416 2,454 2,665 1,837 2,197 t 5,118 6,955 9,151 Excluding f i n a n c e companies 3 / 1st 2nd 3rd 4th Year e/ 2/ 1/ 2/ 3/ quarter quarter quarter quarter 2,547 4,348 3,183 e/3,650 2,043 4,258 ... 2 , 4 7 7 2,997 e/13,728 U,775 . 2,284 2,529 1,768 2,854 9,434 E s t i m a t e d by F e d e r a l R e s e r v e . Preliminary. S e c u r i t i e s and E x c h a n g e Commission e s t i m a t e s o f n e t p r o c e e d s , I n v e s t m e n t B a n k e r s A s s o c i a t i o n o f America e s t i m a t e s o f p r i n c i p a l a m o u n t s . T o t a l new c a p i t a l i s s u e s e x c l u d i n g o f f e r i n g s o f s a l e s and c o n s u m e r f i n a n c e c o m p a n i e s . 1 1 1 17 H. 1 4 Exhibit I New C o r p o r a t e S e c u r i t y I s s u e s , Type o f I s s u e and I s s u e r (In millions of d o l l a r s ) Quarter or Total Month 1963 • I I I IV 2,436 3,466 G r o s s p r o c e e d s f o r new c a p i t a l and r e f u n d i n g !L / Common Memo: Bonds P u b l i c l y P r i v a t e l y and Foreign Offered issues Placed Pfd. stock included 1,251 287 898 109 1,780 367 47 1,319 Net proceeds f o r new c a p i t a l 1 / 2 / Mfg. P u b l i c CommuniU t i l i t y cations 806 968 285 530 150 Other Issuers 868 118 1,629 273 59 135 1,275 1,492 1,361 1,559 I II III IV 2,548 4,965 2,876 3,568 978 1,321 792 531 1,269 1,755 1,590 2,629 300 1,890 494 408 29 105 94 227 429 723 559 1,061 438 856 642 509 I II III IV 3,007 5,043 3,912 906 1,864 1,575 1,673 2,259 1,955 429 920 383 243 215 263 1,072 1,679 1,119 541 609 786 91 255 323 1,034 2,246 1,304 1964 - J u l y Aug. Sept. Oct. Nov. Dec. 902 748 1,226 1,036 727 1,805 234 183 376 181 30 320 443 453 693 642 645 1,342 225 112 156 213 52 143 24 27 44 82 29 116 150 176 234 250 203 607 207 138 296 297 40 172 23 16 19 82 21 32 432 349 580 323 405 831 1965 - J a n . Feb. Mar. Apr. May June July Aug. Sept. Oct.e/ Nov.e/ Dec. 858 791 1,358 1,233 1,773 2,038 1,443 930 1,538 1,090 1,580 161 187 557 422 694 748 542 369 664 280 630 565 450 658 648 630 980 780 468 706 700 700 131 155 143 162 449 309 122 93 168 110 250 49 51 143 33 49 134 27 87 150 385 192 494 540 698 441 399 ,307 414 350 450 97 215 229 176 248 184 202 297 287 160 220 21 44 26 15 143 98 102 25 196 60 10 292 295 448 422 602 1,223 587 222 495 430 770 1964 1965 1,666 1966 - I 1966 - J a n . Feb. Mar. j>/ P r e l i m i n a r y , e / E s t i m a t e d by Federal R e s e r v e . 1 / Gross p r o c e e d s exceed n e t p r o c e e d s by t h e c o s t o f f l o t a t i o n . 2 / For t o t a l s e e E x h i b i t H; o t h e r i s s u e r s a r e e x t r a c t i v e , r a i l r o a d & o t h e r t r a n s p o r t a t i o n , S o u r c e : S e c u r i t i e s & Exchange Commission r e a l e s t a t e & f i n a n c e , & commercial & o t h e r . Exhibit J Other S e c u r i t y O f f e r i n g s (In m i l l i o n s of d o l l a r s ) Gross Long-term 1 / Foreign Government t ] 1964 1965 1963 1965 January February March April May June July August September October November December J a n . -Oct-., 218 4 —- 82 38 73 69 30 75 26 — e/ 91 33 74 5 50 20 13 7 180 72 58 e / 582 Tear 232 129 185 325 133 76 57 114 11 63 83 775 —— #9 150 e / 375 ——• 2 506 769 636 771 e/2,178 January February March April May June July August September October November December Jan.-set.. 238 91 -458 647 204 -82 119 £ / 409 &/-133 n. a . ; n.a. Tear 75 272 -367 599 -30 -10 62 208 -173 259 146 -339 67 b 885 453 692 148 — — — — 186 — —— 275 260 160 459 — 510 — 174 200 — — 1,205 967 1,205 1,167 1 I New she S t a t e and Local Government 5/ 103 236 -407 442 81 -80 -9 127 176 7 -15 -208 Federal Agency 3 / 1963 l9ok Federal Agency 3 / -137 -174 117 -11 509 237 132 206. 105 £ / 98 e / 1 , ti&y -308 -336 23 97 183 239 -333 167 1 525 113 -3 -332 -255 -161 202 195 319 415 326 258 123 -102 551 -258 1,090 368 1,539 from t h o s e in E x h i b i t H i n t h a t r e f u n d i n g i s s u e s , as w e l l as new c a p i t a l i s s u e s , a r e i n c l u d e d . Long-term s e c u r i t i e s a r e d e f i n e d as those maturing i n more than one y e a r . 2 / I n c l u d e s s e c u r i t i e s o f f e r e d i n t h e U.S. by f o r e i g n governments and t h e i r p o l i t i c a l s u b d i v i s i o n s and i n t e r n a t i o n a l o r g a n i z a t i o n s . Source: S e c u r i t i e s and Exchange Commission, j j / I s s u e s not guaranteed by t h e U.S. Government. Source: Long-term, S e c u r i t i e s & Exchange Commission; s h o r t - t e r m , Treasury Dept. & Fed. Reserve, j^/lhese d a t a d i f f e r from t h o s e i n E x h i b i t H and above i n t h a t t h e y r e p r e s e n t new o f f e r i n g s l e s s r e t i r e m e n t s , whether from t h e proceeds or r e f u n d i n g i s s u e s or from o t h e r f u n d s . Data include only i s s u e s with o r i g i n a l m a t u r i t y of one y e a r or l e s s . ^ / P r i n c i p a l l y t a x and bond a n t i c i p a t i o n n o t e s , w a r r a n t s , or c e r t i f i c a t e s and P u b l i c Housing Auth. n o t e s . In some i n s t a n c e s PHA n o t e s included may have a somewhat longer m a t u r i t y than 1 y e a r . Source: Bond and Buyer & Fed.Ree H. 14 Exhibit K Large Long-term Public Security Issues f o r New Capital (Other than U. S. Treasury) 1 / Proceeds of Large Issues Offered (In millions of d o l l a r s ) Total 1 9 6 4 - Nov. Dec. 1965 - J a n . Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Cornoriate Bonds (other than Convertible convertibles) bonds Stocks State and local governments - - 15 86 280 97 53 320 22 62 315 138 26 -16 144 40 33 2/ 15 226 541 419 446 395 411 492 377 655 312 563 409 538 30 200 115 131 233 210 560 343 455 211 530 190 559 230 193 217 513 307 928 801 477 299 530 246 736 Other - - 235 130 19 260 40 340 20 50 170 43 95 L a r g e I n d i v i d u a l I s s u e s O f f e r e d December 1 t h r o u g h 10 Issuer Type 2/ Amount (millions of dollars) Maturity Coupon r a t e or net i n t e r e s t cost Offering vield Rating Corporate S t a t e and l o c a l Government I n d i a n a p o l i s F i d . Cont. D i s t . , Ind. Rhode I s l a n d T u r n p i k e & Bridge Auth. Chicago, I l l i n o i s P o r t o f New O r l e a n s , La. P u b l i c Housing Auth. S t a t e of South Carolina Aa 1 s t mtg. b d s . 1 s t mtg. b d s . 40.0 40.0 1995 1995 5 5 4.85 4.98 G. 0 . 12.6 1968-97 3.47 4/ 2.85-3.50- Aaa Rev.-Q.-Ut. Rev.-Ut. Rev.-Q.-Ut. Bonds G.O. 17.5 25.0 20.0 90.1 17.3 2006-15 1971-88 1971-2000 1967-2006 1966-80 3.88 3.75 3.93 3.52 3.27 3.80-3.85 3.25-3.75 3.35-4.30 2.80-3.58 2.80-3.30 A A Baa Aaa Aaa F l o r i d a Pwr. & L t . Co. G e n e r a l T e l . Co. o f C a l . Other None A ,j>. K-2 FOOTNOTES: *--Rights offering. n.a.--not available. 1/ Includes c o r p o r a t e and o t h e r s e c u r i t y o f f e r i n g s of $15 m i l l i o n 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. 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 R e c o n s t r u c t i o n and Development i s s u e s and non-guaranteed i s s u e s by Federal Agencies. 3/ In the 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 g e n e r a l o b l i g a t i o n s ; R e v . - U t . , revenue 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 ; R e v . - Q . - U t . , revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ; R e v . - S . T . , revenue bonds secured by revenue from s p e c i f i c taxes only; R e v . - R e n t . , revenue bonds secured s o l e l y by l e a s e payments. 4/ Bonds' maturing 1996-97 not p u b l i c l y r e o f f e r e d . H. 14 Exhibit L Forthcoming Large Long-term Public Security Offering for New Capital (Other than U.S. Treasury) JL/ Expected Proceeds from Forthcoming Large Issues (In millions of d o l l a r s ) During month following date shown State and Corpora te Other 2/ local govt. 1964 - Nov. 3Q D e c . 31 1965 - J a n . 29 Feb. 26 Mar. 31 Apr. 30 May 28 June 30 J u l y 30 Aug. 31 Sept.30 O c t . 29 Nov. 30 360 306 242 316 212 411 328 397 248 404 269 343 90 105 169 407 267 852 765 363 193 312 206 412 297 398 Corporate 25 215 Subsequent to date shown State and local govt. 130 105 253 504 792 60 25 70 20 563 435 25 215 382 599 373 635 474 524 353 450 331 578 458 852 923 410 340 636 303 489 344 15 25 20 Other 2/ 60 25 70 20 15 25 20 F o r t h c o m i n g L a r g e O f f e r i n g s a s o f December 10 (millions dollars) Approximate date of offering Corporate Kentucky Pwr. Co. C o n s o l . E d i s o n Co. I n t ' l . Minerals & Chemicals Corp. Macy C r e d i t Corp. G r e a t W e s t e r n F i n a n c i a l Corp. S o u t h e r n C a l . Ed. Co. S t a t e and l o c a l government D e t r o i t S c h . D i s t . , Mich. E v e r e t t , Wash. Cal. T o l l - B r i d g e Auth. U n i v e r s i t y o f Kentucky Los A n g e l e s D e p t . o f Wtr. & Pwr., C a l i f . 1 s t mtg. b d s . 1 s t mtg. b d s . Conv. s u b . d e b . Deb. Deb. 1 s t mtg. b d s . G.O. R e v . - Ut. Rev.-Q.-Ut. Rev.-Rent. Rev.-Ut. 32.0 100.0 50.0 25.0 22.0 75.0 Dec. Dec. 15 16 D e c . 21 Indefinite Indefinite Indefinite 15.0 12.0 100.0 30.0 Dec. Dec. Dec. Dec. 14 14 15 15 15.0 Dec. 15 Forthcoming Large O f f e r i n g s a s of December 10 ( C o n t ' d ) Type Issuer Amount (millions of dollars) Approximate d a t e o f offering S t a : e and l o c a l government (Cont 'd) Rev.-Q.-Ut. P e n i n s u l a P o r t A u t h . , Va. Rev.-Rent. U n i v e r s i t y of Kentucky Rev. - U t . Henderson, Texas Dade County, F l a . G.O. Rev.-Ut. A u s t i n , Texas Lake C h a r l e s Harbor and Term. Rev.-Q.-Ut. D i s t . , La. ^Alabama Pub. Sch. & C o l l . A u t h . R e v . - R e n t . *Houston, Texas G.O. ^ C h e s t e r f i e l d C o . . Va. G.O. 15.0 25.0 12.0 46.0 14.0 Dec. 15 Dec. 15 Dec. Indefinite Indefinite 21.4 20.0 25.7 10.0 Indefinite Jan. 5 Jan. 5 J a n . 19 R e p u b l i c of I r e l a n d 20.0 Indefinite Bonds ! * - - I n c l u d e d in table for f i r s t time. i|( 1/ I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of $15 m i l l i o n and o v e r ; S t a t e and l o c a l government/tj* i s s u e s of $10 m i l l i o n and o v e r . . j'f 2 / I n c l u d e s 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 R e c o n s t r u c t i o n and Development V i s s u e s and n o n - g u a r a n t e e d i s s u e s of F e d e r a l A g e n c i e s . ^ Note: D e l e t i o n s f o r r e a s o n s o t h e r than s a l e o f i s s u e : None. \ I H. 14 Exhibit M F o r e i g n Government and C o r p o r a t e S e c u r i t y O f f e r i n g s and P l a c e m e n t s i n t h e U n i t e d S t a t e s Part I: S a l e Date Public Offerings Amount (millions of dollars) I s s u e r and D e s c r i p t i o n o f I s s u e A. 15.0 R e p u b l i c o f Finland--6%% b o n d s , m a t u r i n g 1 9 8 9 , r e o f f e r e d t o y i e l d 6.61%. 10/27 27.5 United Mexican States--6%% bonds, maturing 1980, r e o f f e r e d t o y i e l d 6.63%. 11/9 25.0 Commonwealth o f A u s t r a l i a - - 5 - 3 / 4 % b o n d s , m a t u r i n g 1 9 8 5 , r e o f f e r e d t o y i e l d 5.77%. * * * 11/17 33.0 International Util. 11/18 50.0 Quebec H y d r o - E l e c . Comm.--5%% b o n d s , m a t u r i n g 1 9 8 7 , r e o f f e r e d t o y i e l d 5.25%. 11/23 20.0 J a p a n D e v e l o p m e n t Bank--6%% b o n d s , m a t u r i n g 1 9 8 0 , r e o f f e r e d t o y i e l d 6.74%. B. Indefinite * ** *** S o l d O c t o b e r 1 t h r o u g h December 10 10/19 20.0 Prospective Offerings Republic of Ireland-Bonds. - Included in table for f i r s t time. - I s s u e s o l d t o i n v e s t o r s o u t s i d e U. S . - - Issues subject to i n t e r e s t equalization tax. Corp.--conv. pfd. stk. ! H. 14 M-2 P a r t I i : P r i v a t e Placements-Reported October 1 through December 10 Date Reported Amount (millions of dollars) I s s u e r and D e s c r i p t i o n o f I s s u e None X I Note: For r e t r o s p e c t i v e data on aggregate f o r e i g n c o r p o r a t e and government s e c u r i t y o f f e r i n g s in the United S t a t e s see E x h i b i t s I and J . There i s no simple r e l a t i o n s h i p between the data shown i n the E x h i b i t and t h a t shown in E x h i b i t s I and J because the l a t t e r includes p r i v a t e l y placed s e c u r i t i e s in the period in which funds a r e a c t u a l l y takendown but only in the amount of takedown while the placements shown i n t h i s e x h i b i t a r e included when r e p o r t e d , f r e q u e n t l y w i t h l i t t l e or no information concerning timing of takedowns. F u l l or p a r t i a l t a k e downs may take p l a c e both p r i o r and subsequent to the d a t e a placement i s r e ported. ; >v, ( X %