Full text of H.16 Capital Market Developments : December 21, 1959

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Not f o r P u b l i c a t i o n ^CONTROLLED AFTER SIX MONTHS
H.ll*

December 21, 1959.
CAPITAL MARKET DEVELOPMENTS

No l a r g e p u b l i c s e c u r i t y f i n a n c i n g i s scheduled u n t i l a f t e r
the f i r s t of t h e y e a r . L a s t week c o r p o r a t i o n s s o l d s e c u r i t y i s s u e s
. t o t a l i n g $79 m i l l i o n , while S t a t e and l o c a l government f i n a n c i n g
amounted t o $106 m i l l i o n .
Bond y i e l d s - Y i e l d s on a l l t y p e s of bonds r o s e l a s t week.
The i n c r e a s e i n U. S. Government l o n g - t e r m bond y i e l d s brought them
t o a new peak l e v e l . Y i e l d s on c o r p o r a t e and S t a t e and l o c a l government b o n i s a r e s t i l l below t h e l e v e l s reached e a r l i e r i n t h e y e a r .
Housing s t a r t s - P r i v a t e nonfarm housing s t a r t s d e c l i n e d
about s e a s o n a l l y i n November, and t h e s e a s o n a l l y a d j u s t e d annual r a t e
of 1 , 2 1 0 , 0 0 0 u n i t s was only s l i g h t l y above t h e October l e v e l , a c c o r d ing t o p r e l i m i n a r y Census Bureau e s t i m a t e s . The November r a t e , which
was about o n e - s i x t h below t h e peak e a r l i e r t h i s y e a r , was n e v e r t h e l e s s
t h e f o u r t h h i g h e s t on r e c o r d f o r t h e month. I f t h e s e a s o n a l l y a d j u s t e d
r a t e of p r i v a t e s t a r t s changes l i t t l e i n December, t h e t o t a l f o r t h e
y e a r w i l l come t o a b o u t 1,335*000 u n i t s , assuming no n e t r e v i s i o n i s
made i n t h e p r e l i m i n a r y t o t a l f o r October and November. This would
be a l i t t l e below t h e 1,352,000 p r i v a t e s t a r t s i n t h e r e c o r d y e a r of
1950, b u t somewhat above t h e 1,310,000 s t a r t s i n 1955.
Stock market c r e d i t - Customer c r e d i t in t h e stock market
( e x c l u d i n g borrowing on U, S. Government s e c u r i t i e s ) i n c r e a s e d $59
m i l l i o n d u r i n g November t o t o t a l $l|.,li60 m i l l i o n a t t h e end of t h e month.
The i n c r e a s e was e n t i r e l y i n c u s t o m e r s ' d e b i t b a l a n c e s a s bank l o a n s
t o o t h e r t h a n b r o k e r s o r d e a l e r s f o r p u r c h a s i n g or c a r r y i n g s e c u r i t i e s
declined s l i g h t l y .
Borrowing by member f i r m s of the New York Stock Exchange
m a i n t a i n i n g margin a c c o u n t s ( e x c l u d i n g borrowing on U. S. Government
s e c u r i t i e s ) i n c r e a s e d t o a new peak of $2,256 m i l l i o n . Customers'
n e t f r e e . c r e d i t b a l a n c e s changed l i t t l e . These and o t h e r d a t a on
s t o c k market c r e d i t f o r October and November a r e shown i n the t a b l e
on t h e f o l l o w i n g p a g e .
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 common s t o c k s i n c r e a s e d l a s t week, c l o s i n g a t
59.1b on December 18. Trading a c t i v i t y averaged 3 . 2 m i l l i o n s h a r e s a
day.




Holij.

— 2 —
End of month
November | October

Customer c r e d i t
Excluding U. S. Government s e c u r i t i e s - t o t a l
Net d e b i t balances
Bank loans to "others"
Net d e b i t balances secured by U. S. Govt, s e c u r i t i e s
Bank loans t o o t h e r s f o r purchasing or carrying U. S.
Government s e c u r i t i e s
Broker and d e a l e r c r e d i t
Money borrowed except on U. S. Government s e c u r i t i e s
On customer c o l l a t e r a l
Money borrowed on U. S. Government s e c u r i t i e s
Customers' net f r e e c r e d i t balances

(Millions of d o l l a r s )
h,b60
3,273
1,187
165

k,k01
3,210
1,191
168

158

158

2,256
1,999
236
97k

2,178
1,923
227
967

More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented i n the a t t a c h e d e x h i b i t s .
Developments in the Canadian c a p i t a l market a r e presented jji
Appendix 1 a t the end of t h i s r e p o r t .

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




Change

+59
+63
-h
-3
—

+78
+76
+9
+7

i HIGH-GRADE

BOND

YIELDS

>X/

LOWER-GRADE

BOND

YIELDS




r

MU

S: GOVEINMIMT

H.l4

Exhibit b
Tables f o r E x h i b i t A
High-grade Bond Yields

Date

Spread between
U. S. Govt, and
Corporate S t a t e and
Aaa
l o c a l Aaa

S t a t e and
l o c a l govt.
Aaa J /

U. S. Govt,
long-term 2/

Corporate
Aaa 1 /

( P e r cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
4.14
4.13
3.55
It. 57
4.09

Nov.
Nov.
Dec.
Dec.
Dec.

4.57

20
27
It
11
18 2 /

(4/23)
(9/27)
(10/10)
(5/2)
(11/20)
(1/9)

2.45
3.76
3.84
3.07
4.30
3.83

(6/6)
(10/18)
(12/26)
(4/25)
(9/18)
(1/2)

-1.90
3.45
3.31
2.64
3.65
3.06

4.13
4.15
4.21
4.22
4.25

4.55
4.56
4.59

3.41
3.38
3.38
3.38
3.40

(9/2)
(8/29)
(9/11)
(5/1)
(9/24)
(3/26)
.
.

.30
.60
.51
.22 .
.50
.16

.30
.47
.72
.34
.92
.53

.44
.40
.34
.34
.34

.72
.77
.83
.84
.85

.

Lower-grade Bond Yields
Corporate
Baa 1 /

S t a t e and
.local govt.
Baa y

1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
5.29
4.83

2.93
4.51
4.34
3.64
4.46
3.92

Nov.
Nov.
Dec.
Dec.
Dec.

5.27
5.26
5.25
5.25
5.27

Date

Spread between
Aaa and Baa
S t a t e and
Corporate
local govt.

(Per c e n t )

20
27
4
11
18 2 /

(12/31)
(11/29)
(1/3)
(7/11)
(10/16)
(4/17)

4.28
4.29
4.33
4.33
4.35

(8/5)
(0/29)
(9/11)
(5/1)
(7/2)
(3/26)
.

.52
1.27
1.28
.77
.77
.56

.96
1.21
1.11
.93
.98
.79

.70
.71
.70
.69
.68

.87
.91
.95
.95
.95

" jg/ P r e l i m i n a r y . ~
1 / Weekly average of d a i l y f i g u r e s . Average term of bonds included i s 25-26 y e a r s .
2 / Weekly average of d a i l y f i g u r e s . The s e r i e s i n c l u d e s bonds due or c a l l a b l e i n
10 y e a r s o r more.
y Thursday f i g u r e s . __0nly g e n e r a l o b l i g a t i o n bonds a r e i n c l u d e d ; average term
i s 20 y e a r s .
")
Note.—-hiphs and lows a r e f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t d a t e s f o r
J l i f f e r e n t series,




STOCK

MARKET

PRIVATE

PERMANENT

NONFARM

DWELLING

UNITS

STARTED

Monthly




Thousands

/

L-\

V

V

A

X

W

CONVENTIONAL

A

V

ol

Units

E x h i b i t D - Tables l o r KxtiibiL C
Stock Market
Stock p r i c e
index 1 /

Date

1959 - High
Low

5U.ll
22.95
60.51
5k. 37

October
November
Dec. U
Dec. 11
Dec. 18 2 /

57.00
57.23
58.85
58.88
59.1U

1953-1958 - High
Low

(12/21/58)
(9/18/53)
(7/31)
(2/6)

Trading
Common
stock
volume J /
yields 2/ (millions
( p e r c e n t ) of shares)

Stock market customer c r e d i t
Customers *|
Bank
Total debit b a l - l loans t o '
ances V . [ I'othera? 5 /
(HillionsPof. d o l l a r s )

3.30
6.25
3.08
3.3k

k.9
0.9
k.3
2.1

k,k92
2)055
k,7 6k
kykoi

•1,317
3,285
1,31k'
469
3,1401 ' 1 , 3 3 2
3,210 . 1,210

1,373
1,180.

3.2k
3.2k
3.16
3.16
3.20

2.8
3.k
3.6
3.k
3.2

k,koi
U,ii6o

a,210 :
.3,273 :
ri.a.
"n.a.'
nva. •

% 7
1,1781,187
n.a.

n.a.

n . a , - -Not a v a i l a b l e .
g / Preliminary.
1 / Standard and Poor's rrmposlte Index of 600 ooinmon stocks, weekly closing prices, 1941-43*10". Monthly data,
ere averages of dally figures rather than of Fridays' only. Highs and lows are for Fridays' data only.
2/ Standard and Poor's composite stock y i e l d based on Wednesday data converted t o weekly closing prices by
Federal Reserve. Yields shown are f o r dales on which price Index reached i t s high or low,
31 Averages of daily trading volume on the Hew York Stock EXoluxiiye.
4 / tod of month f i g u r e s f o r member firms of the New York Stock Exchange whloh carry margin accountsi -excludes
balences secured by U. S. Government obligations.
5/ Wednesday f i g u r e s for weekly reporting member banks. Excludes loans for purchasing or carrying U, S.
Qovernment s e c u r i t i e s • Prior to July 1, 1959, such loans are excluded only a t banks in Hew York and Chicago,
Weekly- reporting banks account for about 70 par cent of loans to others. For f u r t h e r d e t a i l see Bulletin.

P r i v a t e Permanent Nonfanu Dwelling Units S t a r t e d

Date

1958 - Nov.
Dec.
1959 - Jan.
Feb.
Mar.
Apr.
MayJuly
Aug.
Sept.
Oct.
Nov. '

1/

Unadjusted .
Total •
Seasonally
Conv,
VA
FHA
Unadjusted
adjusted
annual r a t e
(Thousands of u n i t s )
1,1*27
1,1*32
1,361:
1,W3
1,1*03
l,k3k
1,370
1,368
1,375
1,31*0
•
1,323
2/1,180
2/1,210

107
90
8U
9l
118
137
13U
131
127
125
117
E/102

E/91

26
25

20
20
30
3k
3k
35
31
31
30
27
20

11
9
7
6
10
11
10
11
11
10
10
9
8

70
55

57
67
78
93
89
85
85
81*
77
2/66
e/62

t o t a l s t a r t s are Census estimates. Prior to Jun, 1959, "data are from Bureau of Labor S t a t i s t i c s .
A dwelling u n i t l e s t a r t e d when excavation begins; a l l u n i t e In an apartment structure are considered
s t a r t e d a t t h a t time, FHA and VA s t a r t s are u n i t s s t a r t e d under commitments by these agencies t o Insure
or guarantee the mortgages. As reported by FHA and VA, a unit I s s t a r t e d when a f i e l d o f f i c e receives
the f i r s t compliance Inspection r e p o r t , whloh I s made before footings are poured In some casee but normally
a f t e r the foundations have been completed. Capehart m i l i t a r y housing u n i t s are excluded. Conventional
s t a r t s are derived a s a r e s i d u a l , although t o t a l and FHA and VA s t a r t s are not s t r i c t l y comparable I n
concept or timing| they Include both u n i t s financed by conventional mortgages and u n i t e without mortgagee.




1

Exhibit E

H.lJj

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 )

1959
January
Februajy
March

8U0
745
631

1,55^

April
May
June

899
791
874

1,140
597
887

July
August *
September

531
718
709

1,107
5W
1,114

October
November
December

S/750
V850
e/850

862
518
920

1st
2nd
3rd
4th

2,216
e/2,450

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

а,780
б,738
e/9,188

5,762
8,522
10,823

quarter
quarter
quarter
quarter

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

"New capital"*

Corporate 1 /
1
195b
I
728

1959

1,060

1,320

636
856
6U5

s s -

742
572
506

765
l.to

931
. 592
981

798
895
551

765
546
393

1,003
924
973

566
516
167

806
403
651

529
584
431

1,090

E/573
e/450
e/450

456
i47U
135

698
633
698

2,138

2,276
2,21,4

1,820
1,704
1,544
2,029

1,065

•

.

State and l o c a l 27
I
195?"

1957

789

1,076

812

3,115
3,149
2,899
2,951.

2,50k
1,549
e/l,473

1,365

6,594"
9,493 .
12,447

4,642
6,191
e/7,66h

tit

1,860

It,520

3,524
5,069
7,099

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

quarter
quarter
quarter
quarter

2,011

2,li09
1,695
e/2,300

a/8,io5"

2,899
2,5#
2,731
2,213
10

>h29

3,237

i:S8
2,610
11 518

'

e / Estimated.
£ / Preliminary.
1 / S e c u r i t i e s and Lxohange Commission e s t i m a t e s of n e t p r o c e e d s .
2 / Investment Bankers A s s o c i a t i o n of America e s t i m a t e s of p r i n c i p a l amounts,
3 / I n c l u d e s $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 .
y / T o t a l new c a p i t a l i s s u e s 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.




Exhibit F

H.lli

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-term
Foreigr government 2 /
Federal agencjf 3/
1957
1956
It
1959
I
1959
1
1958
1957
January
February
March

77
59
2

196
53
—

84
k9
30

April
May

56
50
1*2

139
198
120

123
k8
k2

July
August
September

35
1
36

9
5
17

28
7
30

98
150

October
November
December

29

58 123
74

Year

992

199

190
128
295

April
May
June

72

—

—

__

523

125

- -

—

60

164
——

215

—

k
60
1

220

507

2,321

100
—

—

Short-term
S t a t e and l o c a l government 4 /
January
February
March

1,163
251

175

572

F e d e r a l agency 3/

k60
273

326
455
lk7

359
5oo
189

371
208
lkk

638
130
505

563
111
245

357
35k
26k

205
337
153

486
675
289

20 9
161
329

336
I69
501

July
August
September

r -2k6
'467
399

2#
k23
369

272
272
252

727
365
665

k37
206
330

22k
370
512

October
November
December

2/234

231
lil 5 243

303
9k
159

K

454
liii
137

1,238
255
116

3,098

5,543

Year

3,910

3,27k

1 / Data p r e s e n t e d i n t h i s e x h i b i t d i f f e r from t h o s e i n E x h i b i t E i n t h a t r e f u n d i n g i s s u e s , a s w e l l a s 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 a s t h o s e 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 United S t a t e s by f o r e i g n governments and
t h e i r s u b d i v i s i o n s and by 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.
2 / I s s u e s n o t guaranteed by t h e U. S. Government. Source: long-term, S e c u r i t i e s
and Exchange Commissionj s h o r t - t e r m , F e d e r a l Reserve.
4 / 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 o r c e r t i f i c a t e s and Publ:
DigitizedHousing
for FRASER
A u t h o r i t y n o t e s . I n some i n s t a n c e s PMA n o t e s included may have a somewhat
l o n g e r term t h a n one y e a r . Source: Bond. Buyer.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

Exhibit 0

H.lk

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 Issues Offered
(Millions of d o l l a r s )

Corporate

Month

1958 - November
December
1959 - January
FebruaryMarch
April
May
June
JulyAugust
September
October
November

227
305
369
3h0
215
359
3h2
281+
110
363
199
Uoo
121

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

-

Other 2 /

100
79
171*
35
176
20
50
60
50
'98
175
20

259
229
335
551
369
563
258
635
19k
263
2lU
29k
163

Large Individual i s s u e s Offered December 1 through 18
Issuer

Type y

Coupon
Amount
( m i l l i o n s Maturity
r a t e or O f f e r i n g Rating
net inter- yield
of
dollars)
e s t cost

CORPORATE
Consol. Edison Co. of N.Y. 1st ref.rafcg.bds.
Gen. Telephone Co. of Gal. 1 s t mtg. bds.
Arkansas Louisiana Gas Co. 1 s t mtg. bds.
James T a l c o t t , I n c .
Sr. notes
Arkansas Pwr. & L t . Co.
1 s t mtg. bds.
Dallas Pwr. & L t . Co.
1 s t mtg. bds.
Pub. Sv. Elec. & Gas Co.
Com. s t k .
B e l l Tel. Co. of Penna.
Deb.

75.0 1989
30.0 1989
16.0 1979
15.0 1979
15.0 1989
20.0 1989
29.1
30.0 199k

5
5
5
5
5
5

1/h

Aa
A
A

1/8
1/2
5/8
1A

5.15
5.00
5.15
5.55
5.45
5.10

A
Aaa

5 3/8

5.21

Aaa

STATE AND LOCAL GOVERNMENT
S a l t River P r o j e c t Agric.
Imp. & Pwr. D i s t . , A r i z .
Los Angeles Sch. D i s t s . ,
California
Columbus, Ohio
Los Angeles Co., C a l i f .
S t a t e of Massachusetts




Rev.-Ut.

15.0

1963-92/69

1*.05 3.10-U.15

A

G.O.
0.0.
Rev.-Ut.
G.O.

21.5
10.0
13.0
21.6

1961-85
1962-86
1999/65
1960-89

3.89 2.90-3.90
3.1*9 2.80-3.55
5.65
5.51
3.52 2.80-3.65

Aa
Aa
Aa

H.11+

G-2
Large Individual Issues Offered December 1 through 18 (Cont'd)
Issuer

Type J /

Amount
Coupon
(millions
r a t e or O f f e r i n g
Maturity n e t i n t e r - y i e l d
Rating
of
dollars)
e s t cost

STATE AND LOCAL GOVERNMENT
(Cont'd)
Commonwealth of Puerto Rico
Chicago Bd. of Educ., 111.
Houston Indep. S.D., Texas
S t a t e of New Jersey
DeKalb Co.'Sch. D i s t . , Ga.
Wisconsin S t a t e Agencies
Bldg. Corp.

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

20.0
10.0
16.9
66.8
11.5

19-61-80/75
1962-79
1961-89
1963-75
1962-90

il.05
3.68
3.92
3.10U.05

3.00-1*. 05
3.00-3.70, /
3.00-L00H/
2.90-3.1*0
3.10-U.10

A
A
A
Aaa
A

G.O.

10.7

1962-89

3.91

3.00-3.90

—

1979
198k

5 1/2
5

5.89
. 5.10

OTHER
Credit Foncier de France
Alberta Mun. Fin. Corp.

Ext.loan bds;50.0
S.F. deb.
20.0

Aa

St ate 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 Reconstruction and
Development i s s u e s and non-guaranteed i s s u e s by Federal a g e n c i e s .
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 general
o b l i g a t i o n s ; Rev.-Ut., revenue o b l i g a t i o n s secured only by income from public
u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c taxes only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.
h / 1/h % 1989 maturity not r e o f f e r e d .




Exhibit H

H.lk

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. Treasury) 3 /
Expected Proceeds from Forthcoming Large I s s u e s
Date of
computation

Subsequent t o
d a t e shown

During month f o l l o w i n g
d a t e shown
Corporate | g % »

Nov. 28
Dec. 31
J a n . 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
J u l y 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30

301
210
270
198
396
2l*6
287
165
238
198
371
385
226

'

| o t h e r 2j

229
26]^
551
292
550
25k
2l*7
lii6
356
385
270
115
295

Corporate | i ^ a l e ^ t . l 0 t h e r 2 /
l*oi
370
365
279
1*76
31*6
332
272
305
517
69J4
509
271

71
75
1*5
20
50
50
25
70

683
515
856
1*81
761
517
761
500
1*06
1*02
1*70
336
1*85

71
75
1*5
'20
50
5o
25
70

Forthcoming Large O f f e r i n g s , a s of December 18
Issuer

Type

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

CORPORATE '
Kansas C i t y Power & L i g h t Co.
C . I . T . F i n a n c i a l Corp.
Northern I l l i n o i s Gas Co.
Commercial C r e d i t Co.
Commerce O i l R e f i n i n g Corp.

1 s t mbg. b d s .
Deb.
Pfd. s t k .
Notes
Deb., b d s . & com.

20.0

75.0

15.0

5o.o
k5.o

Jan. 7
Jan. 8
J a n . 13
Jan.
Indefinite

STATE AND LOCAL GOVERNMENT
•Toledo, Ohio, School D i s t r i c t
S e a t t l e , Washington
City and Co. of San F r a n c i s c o , C a l i f ,
New York S t a t e Power A u t h o r i t y
S t a t e of C a l i f o r n i a
* S t a t e of Washington
OTHER
None




G.O.
Rev.-(ft.
G.O.
Rev.-Ut.
G.O.
Rev.-Ut.

10.0
11.8
13.6
200.0
100.0
28.1

Jan.
Jan.
Jan.
Jan.
Jan.
Jan.

7
11
11
12
13
20

H.llt

H-2
Footnotes

«—Included in t a b l e f o r f i r s t time.
1 / Includes corporate and other i s s u e s of $1$ 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.—Deletion's f o r reasons o t h e r than sale of i s s u e : None.




Exhibit I

H.14

Yielxty on New and Outstanding
E l e c t r i c Ppwer Bonds, Rated Aa and A 1 /
Date

1952 - 1958
High
Low
1959 - January
February
March
April
May 1
. 13
Hi
20
21
26
June it
17
26
July 9
10
15
30
Aug. 5
20
Sept. 18
Oct. 22
23
28
29
30
Nov. 25
Dec. 8
9
10

Aa-rated offering 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
seasoned
y
i
e
l
d
s
(per cent)
(per cent) seasoned y i e l d s
(basis points)
( b a s i s points)
5.00 (9/14/57)
2.93 (3/31/510
L63_,
*U.35§Z
4.4%K
4.58^/

87
-3
37
4
10
17

4.95
4.95

38
34

5.oo
4.95

.38
29

it. 93

31

4.85
4.80

2k
22

5.25,,
4.95^/
5.15
5.15
5.08
5.30

'

46
16
kO
k2
42
63

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

123
-15

*4.752/

23

*4.67

18

4.85
5.06

17
13

5.13

27

4.92y
5.10
5.10

6
24
19

5.10
5.00

19
13

5.65

60

5.25
5.4o

35
50

5.45
5.44

.

-

51
50

1 / Covers only 30-year f i r s t mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, the actual y i e l d f i g u r e and the amount above
seasoned y i e l d s are averages of offerings during the indicated period and of
the differences 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 i s s u e s
of similar quality f o r the same day. Average maturity f o r the seasoned issues
varies from 26 t o 28 years.
2 / Provides f o r a 5-year period during which issue may not be c a l l e d f o r
refunding a t a lower coupon rate. Monthly averages so marked include one or
more i s s u e s with such a provision. Other issues have no such provision.
during which issue may not be c a l l e d f o r
3 / Provides f o r a 7-year period
per
refunding
im.ni a t a lower coupon r a t e .




December 21, 1959
Appendix 1
MONET AND CAPITAL MARKET DEVELOPMENTS IN CANADA
The most s i g n i f i c a n t development i n Canadian c r e d i t markets
l a s t week was t h e Government 1 s announcement t h a t i t was r a i s i n g t h e
ma-Hmmn i n t e r e s t r a t e on i t s g u a r a n t e e d housing l o a n s f r o m t h e i r t h r e e
y e a r c e i l i n g of 6 p e r c e n t t o a new high of ,6-3/U p e r c e n t . The i n c r e a s e
i s aimed a t r e v i v i n g t h e f l o w of i n v e s t m e n t f u n d s i n t o mortgages, and
i s t h e l a r g e s t s i n c e t h e i n c e p t i o n i n 19£>U of government g u a r a n t e e d
mortgages i n Canada, The i n c r e a s e removes, a t l e a s t f o r the moment,
an i m p o r t a n t r i g i d i t y i n t h e Canadian i n t e r e s t r a t e s t r u c t u r e . I n r e c e n t
months, w i t h y i e l d s on c o m p e t i t i v e i n v e s t m e n t s above 7 p e r c e n t , new
commitments t o buy government g u a r a n t e e d mortgages have diminished
to almost nothing.
Money market c o n d i t i o n s - L a s t Thursday's a u c t i o n r a t e f o r
3-month b i l l s f e l l s l i g h t l y from t h e week b e f o r e , from 2 . 0 2 p e r c e n t t o
U.98 p e r c e n t . The a u c t i o n r a t e f o r 6-month b i l l s a l s o f e l l s l i g h t l y ,
from 5 . 3 2 p e r c e n t t o 5 . 2 9 p e r c e n t . Although t h e a u c t i o n r a t e on
U n i t e d S t a t e s Treasury b i l l s ( l a s t Monday) f e l l somewhat more s h a r p l y ,
a widened d i s c o u n t on t h e 3-months f o r w a r d Canadian d o l l a r f u r t h e r
i n c r e a s e d t h e i n c e n t i v e t o s w i t c h s h o r t f u n d s f r o m Canadian t o United
S t a t e s 'Treasury b i l l s .
Bond market developments - Only a f e w s e c u r i t y i s s u e s were r e p o r t e d t o have been made i n Canada l a s t week, and no new borrowing i n
New York was r e p o r t e d . A Canadian s t e e l company made a. p r i v a t e placement
of $20 m i l l i o n i n 15-year s i n k i n g f u n d d e b e n t u r e s w i t h a coupon of 6 . 3 7 5
p e r c e n t . Trans-Canada Pipe Lines L t d . , o f f e r e d $13 m i l l i o n i n a d d i t i o n a l
f i r s t mortgage bonds t o the 30 odd f i n a n c i a l i n s t i t u t i o n s which o r i g i n a l l y
h e l p e d f i n a n c e t h e company. The new bonds, which mature i n 19 y e a r s
and a r e n o n c a l l a b l e f o r 1 2 - 1 / 2 y e a r s , were o f f e r e d a t p a r w i t h a coupon
of 6.63 p e r c e n t .
^
Y i e l d s on 8 - y e a r and over Canadian government bonds, showed
r i s e s v a r y i n g between one t o t h r e e b a s i s p o i n t s through Wednesday from
t h e week b e f o r e . F i g i r e s a r e n o t y e t a v a i l a b l e t o i n d i c a t e whether
t h e a c c e l e r a t e d d e c l i n e i n t h e p r i c e s of U n i t e d S t a t e s governments on
Thursday and F r i d a y was matched by a c o r r e s p o n d i n g movement i n Government of Canada i s s u e s . At midweek, s p r e a d s between comparable Canadian
and U n i t e d S t a t e s Government s e c u r i t i e s were ( f i g u r e s i n p a r e n t h e s i s
r e f e r to t h e p r e v i o u s week):

^
"""




O.Wi
0.U6
0.5U
1.01
1.02

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

91-day b i l l s ( 0 . 3 8 )
182-day b i l l s ( 0 . 3 5 )
a 9 - y e a r bond ( 0 . 6 1 )
a 20-year bond ( 1 . 0 2 )
a 3 6 - y e a r bond ( 1 . 0 3 )

Appendix 1-2
Stock markets - Share-prices of Canadian subsidiaries of the
big international o i l companies have r i s e n rather strongly i n recent
weeks. Badly h i t i n the summer's market slump, these stocks have
advanced under the influence of a 20 per cent p r o f i t gain over 1958
and prospects of an increased demand f o r Canadian o i l and natural
gas i n both Canada and the United States i n I960. Trading a c t i v i t y
picked up somewhat l a s t week and stocks were generally firmer. At
Thursday1a close the Montreal industrial average was one per cent higher
than the week before and U.U per cent below the high f o r the year.




Appendix 1 - 3
Selected Government of Canada Security Yields

Date

3-month
Treasury
billsi/

b % s ?

Longterm
Govt,
bond!/

1957 - High
1958 - High
Low
1959 - High
Low

4.08
3.65
0.87
6.16
3.25

4.81
4.52
3.31
5.30
4.45

4.35
4.42
3.78
5.30
4.41

1.19
0.47

2.96
0.30

Nov. 25
Dec. 2
9
16

4.86
U.93
5.02
4.98

5.12
5.12
5.19
5.23

5.14
5.12
5.20
5.23

1.04
0.94
1.02
1.01

0.58
0.43
0.38

.

Spread between
Canadian & U.S. r a t e s
if

Intermediate

bills?/

0.44

Discount
on 3-mo.
Canadian
dollarSZ

1.01
0.89
1.01
1.25

Average y i e l d a t weekly tender on Thursday following Wednesday date shown.
Government of Canada 2-3/U per cent of June 15, 1967-78 •
Government of Canada 3-1/4 per cent of 1979.
£ / U.S. Government 3 - 1 / 4 per cent of 1978-83. Government of Canada 3 - l A per
cent of 1979.
5 / Spread between average auction r a t e s : on Monday preceding Wednesday date
shown f o r the United States; on Thursday following Wednesday date shown f o r Canada.
6 / Spread between 3-months forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Friday following Wednesday date shown.

f

Distribution of Government of Canada Marketable Debt
(millions of Canadian d o l l a r s , par value)
Govt,
accounts

Tbtal

-Bank of
Canada

Sept. 30
Dec. 31

12,51*9
12,516

2,412
2,463

1,381
1,367

2,623
2,641

6,133
6,045

1958 - Mar. 31
June 30
S e p t . 30
Dec. 31

12,711l
13,032
13,423
13,521

2,438
2,571
2,747
2,670

1,287
1,129
1>221
1,258

2,855
3,333
3,892
3,520

i;iH

1959 - Mar. 31
June 30
S e p t . 30
Dec. 16

13,706
lit,024
14,015
13,936

2,601
2,677
2,726
2,761

944
1,007
989
921

3,519
3,174
2,834
2,766

Date
1957

Source* Bank of Canada S t a t i s t i c a l Summary. "
n . a . - Not a v a i l a b l e .




Chartered
banks

General
public

Average term
of general
public
hn1d4n%«
Years
Moa&
6
7

10
—

6,073

lit
13

10

6,642
7,166
7,466
7,589

12
11
11
(n.a.)

6,134

11
4