Full text of H.16 Capital Market Developments : December 22, 1958

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Not for Publication

DECONTROLLED AFTER SIX MONTHS

1

h,lli

December 22, 1958

OaPITaij i UiKi ji.1' iztiViiiLCH-IKijTS

The "usual seasonal lull in new public security financing is
taking place. No large issues—either corporate or State and local
government—were sold last week and none are scheduled for sale during
this holiday-shortened week.
Bond yields - Changes in yields on outstanding bonds were
mixea last week. Yields on corporate and U. S. Government obligations
increased. The increase in yields was substantial for Government
bonds 3 but slight for corporate bonds. Yields on lower grade State
and local government bonds were unchanged, while tnose on high-grade
State and local government bonds declined slightly.
A new Aa-rated, first mortgage electric utility bond issue was
offered to investors last week to yield U.lUt per cent, about the same
as yields on comparable offerings.made in late October. The.spread between the yields on this offering and yields on similar outstanding bonds
was larger than in October, however, since yields on outstanding bonds
have declined since then.
Stock market credit - Customer credit in the stock market
(excluding that for U. S. Government securities) increased
million
further in November. At a record level of »li,lt23 million, customer
credit was almost 3 per cent higher than at the end of September, shortly
before the mid-October increase in margin requirements to 90 per cent.
The November increase resulted from a ^57 million rise in net debit
balances and a ^3 million decline in bank loans to "others."
Borrowing by member firms of the Hew i-ork Stock Exchange maintaining margin accounts (excluding borrowing on U. S. Government securities) increased last month, principally in borrowing on customer collateral. Customers' net free credit balances increased somewnat further
and totaled yi,li|8 million at the end of the month. These and other
data on stock market credit for November arid October are shown in the
table on the following page.
Stock prices - Stock prices increased considerably last week.
Standard and Poor's index of 500 common stocks at the close Friday was
5k.07, slightly below the record of Sk.lS reached on Thursday, but still
1.6 per cent higher tnan a week earlier. Trading volume continued to be
heavy.




h.lk •

- 2 -

.

.

-

.

End of Month
Nov.
| Oct. -

Change

(Millions of dollars)
Customer credit
••
Excluding U. S. Government securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Government securities
Broker and dealer credit
Money borrowed except on U. S. Government securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances

U,U23
3,2U5
1,178
12 J|

U, 369
2,188
1,181
123

So

59

1,923
1,677
210
1,11$

1,832
1,612
193
i,mo

More detailed information concerning recent capital market
developments is presented in the attached exhibits.

Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




+5k
+57

-3
+1
"

9

+91
+65
+17

+8

EXHIBIT

HIGH-GRADE BOND YIELDS

LOWER - GRADE BOND

YIELDS




A

H.lU

Exhibit B
Tables for Exhibit A
High-grade Bond Yields

Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

3.h2
2.85
I1.II4
li.13
3.55

3.19
2.1,5
3.76
3.83
3.07

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

State and
local govt.
Aaa J/

(Per cent)
1953
195k
1957
1958

-

High
Low
High
High
Low

Nov.
Nov.
Dec.
Dec.
Dec.

21
28
5
12
19

(6/19)
a/23)
(9/27)
(10/10)
(5/2)

U.08

3.69
3.67
3.73
3.77
3.83

4.07
it,06

2/

(6/5)
(8/6)
(10/18)
(12/19)
(1/25)

L06

ii.07

2.73 (6/25)
1.90 (9/2)
3.U5 (8/29)
3.31 (9/11)
2.61* (5/1)

.38
.30
.60
.51
.22

.83
.30
.17
.72
.3k

3.17
3.1U
3.11*
3.13
3.11

.39
.140
.33
.29
-"21*

.52
.53
.59
.61
.72

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local tfovt.

(Per cent)
1953
1951*
1957
1958

-

Nov.
Nov.
Dec.
Dec.
Dec.

21
28
5
12
19

High
Low
High
High
Low

3.89
3.1*1
5.10
14.96
k.51

2/

lt.86
4.85
14.85
1*.81|
1*.65

(9/18)
(12/31)
(11/29)
(1/3)
(7/11)

3.79 (6/25)
2.93 (8/5)
14.51 (8/29)
14.314 (9/11)
3.61* (5/1)
I4.ll
14.10
14.1P
14.10
14.10

.69
.52
1.27
1.28
.77
.78
.78
.79
.78
.78

1.21
.96
1.21
1.11
•93
.9U
.96
.96.
.97
.99

1/ Weekly average of daily figures. Average term of bonds included la 25-26 years.
2/ Weekly averapo of daily figures. The series includes bonds due or callable in
10 years or more.
2/ Thursday figures. Only general obligations bonds are Included; average term
is 20 years.
Note.--Highs and lows are for individual series and may be on different dates for
different series.




EXHIBIT

STOCK MARKET




C

Exhibit D
Table for Exhibit C
Stock Ma iket

Date

Stock price
index 3/

Trading
Common
stock
volume 2/
yields V
(millions
of shares) (per cent)

Stock market customer credit
Customers'
Bank
Total debit bal- loans to
ances 1*/ "others" 5/
(Millions of dollars)

26.51, (1/2)

1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

2.5
22.95 (9/18)
0.9
35.98 (12/31) 3.7
1.1*
2U.93 (1/8)
1*.6
1*5.89 (12/9)
35.28 (1/11*)
1.5
1*9.61* (8/3)
3.1
1*3.22 (1/20) 1.5
1*9.08 (7/12) 1**2
39.1*8 (12/20) 1.1* 51*.07 (12/19) 1*.9
1*0.37 (1/10)
1.7

October
November
Dec. 5
Dec. 12
Dec. 19 £/

52.1*6

50.95
52.50

53.22
51*. 07

lt.1
l*.l
3.5
3.8
3.7

5.38
6.25
1*.32
5.82
1*.08
1*.1*1
3.82
l*.3l*
3.91
1*.72
. 3.30
1*.*58
3.52
3.1*2
3.1*2
3.38
3.30

2,1*55
i p
2,U0S
1,030

3,537

k.Olil

3,Jilt

S

1*,1*23
3,551*

1*,369
1*,1*23
n.a.

1,665
1,311*
2,388
1,653

2,805

2,517
2,823

2,71*0

780

661*
i;oue
71*6
l;2l*l
i;oia
1^267
1,155

2,'W
3,21*5
2,1*87

3,188

3,21*5
n.a.
n.a.
n.a.

1,317
1,051

1,181
X/1,178

1,186

1,189

jg/ Preliminary.
r/ Revised.
n.a.—Not available.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19l*l-l*3*iO. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Friday's data only.
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. Yields shown are for dates
on which price index reached its high or low.
*
h j End of month figures for member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government obligations.
Wednesday figures for weekly reporting member banks. Excludes loans for
purchasing or carrying U. S. Government securities at banks in New York and
Chicago. Weekly reporting banks account for about 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highe and lows are for individual series and may be on different dates
for different series.




Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
New capital
Corporate 1/
State and local 2/
1
1956
1958
1
1956
1
1957
1
1957

195a

l f 56l2/

1,060
1,065
1,320

573
712
817

812
953
511

7h2
572
506

hOh
696
390

l,Hil
600
881

1,1I53

%

818
1,11*6
8iil

798
895
551

765
5U6
393

378
1*90
735

July
August
September

1,102
538
l,lWi

1,003
92U
973

1,063
65U
8#

806
it03
650

529
58U
U3l

k08
206
357

October
November
December

2/815
e/600
e/950

1,090
789
1,076

1,089^
1,088

1455
E/lt6l
e/150

698

633

3h7
h09

3,135
2,622
2,781*
2/2,365

3,Wi5
3,1U9
2,899
2,95k

2,102
2,805
2,556
2,922

2,276
2,2Wi
1,859
1,366

1,820
l,70li
l,5Wi
2,029

l,h90
1,603
971
1,395

5,757
8,511
3/10,906

6,59b
9,h93
12,W7

It,907
7,163
10,381

k,$ 20
6,379
e/7,lh$

3,52k
5,069
7,099

3,093
U,06U
5,L59

January
February
March
April
May

1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

723

698

639

Excluding finance companies %/
1st
2nd
3rd
hth
Year

quarter
quarter
quarter
quarter

2,89L
2,583
2,753
e/2,290
#,520

.

3,237
2.809
2,582
2.810

1,61*7
2,5hl
2,2k6
2,826

11,519

9,260

e/ Estimated.
E/ Preliminary.
1 / Securities and Exchange Commission estimates of net proceeds.
2/ Data through June 1?56 are Bond Buyer data classified as now capital by
Federal Reserve; later data are from the Investment Bankers Association of America
and are somewhat more complete as to coverage than the earlier data, particularly
for Federal Government loans.
3/ Includes #718.3 million AT&T convertible debenture issue.
I
5/ Includes $571.5 million AT&T common stock issue.
Total new capital issues excluding off--rings o.C sales :.\H consumer finance
companies.




H.ll*

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-term
Foreign government 2/
Federal agency
19SU
1957
1956
"19^F
1957

Januaiy
FebruaryMarch
April
May
- June
JulyAugust
September
October
November
December

196
53
139
198

120
9

5

17

58

Year

81*
1*9
30
123
W
12

37
8
50

1,163
251

72

523

125

2
39

109
215

li

1*1*

5
21

100

507

300

572

Short-1
State and local government !>/
January
February
March
April
May
June
July
August
September
October
November
December

233

1*6o
273

g
261*.
' 289
123
369
z/Zil

Year

326

60

161*

1

60

1956

60

95

28
7
30

£

196
357
21*9

,1C9

Federal agency 3/~

114*

638
1*30
5#

380
220
283

176

209
161
329

501

336
1*69

323
311*
260

252

195
207
179

330

22ii
370
512

222
1*25
273

x
,i
1*59

11*8

1*55
H*7

205
337
153

272
272

3,271*

125
252

291*

328

2,706.

371

208

1*37

206

1*51*

111*

1,238
255

116

1*07
222
128

5,51*3

3,1*57

e/ Estimated.
£/ Preliminary.
IZ Data presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more th»n one year.
2/ Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission,
2 / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-tern,Federal Reserve.
k/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing Authority notes. In some instances PHA notes included may have a somewhat
longer
term than one year. Source: Bond Buyer.




11.Ill

lv hibll. (i
Largo Lung-U;nu l'wbii c .''.enril.y Txcik x J\,r livw Capital
(Ut.lur Llian U. 5. Truaauiy) 1/
l'roceudu of Large Is:;uuu Offered
(Millions of dollars)

Corporate

Month

State and
local government

h20
399
318
605
1,093
725
356
281
771
209
825
# 9
227

1957 - November
.^December
1958 .- January
/ *. FebruaryMarch
April
May
;
June
July
August
September
October
November

Other 2/

151

3Wi
ItOU
kio
553
182
300
505
195
275
109
268
172
259

1,357
266
653
161;
86
lil
.18
209
100

Large Individual Issues Offered December 1 through 19

Issuer

Type 3/

Amount
Coupon
(millions
Maturity
net inter
of
dollars)
est cost

Offering
yield

Rating

C0HP0KATB
Pacific Gas & Electric Co. 1st ref.mtg.bds. 65.0
Com. stk.
26. u
Public Service Elec. & Gas
Potomac M e c . Pwr. Co.
1st mtg. bds.
25.0
P. Lorillard Co.
Com. stk.
21).fi
Southern Bell Tel. & Tel.
Deb.
70.0
Philadelphia Elec. Co.
1st ref. mtg* b d s 5 0 . 0
Arvida Corp.
Com. stk.
27.5

1990

li 1/2

U.SO

Aa

1993

1 5/8

h.55

An

1993
1986

a 5/8
a 3/8

It. 55
it.38

Aaa
Aaa

STATE A N D LOCAL GOVERNMENT
State of Ohio
State of California
East Baton Rouge Par., La. |
1
State of New York
Chicago Bd. of Educ., 111.|




-

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

0.0.
O.O.

30.0
100.0
22.5
5i.o
25.0

1959-73
1959-85
1960-79
1960-79
17-1-78

2.72
3.60
3.60
2.56

1.60-2.80
1.80-3.65
2.00-3.CO
1.70-3.00
?.5o-3.50

Aaa
Aa

A

K.m

G-2
Large Individual Issues Offered December 1 through 19 (Cont'd)

Issuer

Type 3/

Amount
Coupon
[millions
rate or Offering
Maturity
of
net inter- yield
dollars)
est cost

Rating

OTHER
Republic of Austria
Union of South Africa
Metro. Toronto, Canada

Bonds
Bonds
S.P. deb.

25.0
25.0
28.6

1973
1961-68
1959-88

5 1/2
5, 5 1/2
h-3/U

5.91
5.00-5.70
3.50-U.80

A
A

n.a.—Not available.
1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal ageiicies.
^
y 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 quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.;
revenue bonds secured solely by lease payments.




Exhibit h

ti.u

Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S." Treasury) 1/
E x a c t e d Proceeds fro in Forthcoming Large Issues
Subsequent to
date shewn

During month following
date shown

Date of
computation

^rporate

1957 - Oct. 31
Nov. 29
Dec. 31
1958 - Jan. 31
Feb. 28
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28

158
383
378
U98
1,123
555
356

266
768
161
785
113
20b
301

2/

363
345
370
13U
298
1*93
177
225
55
2bl
295
258
229

3

150

815
1,193
1,378

110
150
36

1,208

3a

1,018

&93
208

110
150
36

h35
52k
675
6(3

71

235
125

216

Type

165

330

670
561
46k

381
9±h

71

%

558
56k
187

1,161

326
h01

Forthcoming Large Offerings, as of

Issuer

Other 2/

Corporate

December 19

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Pacific Telephone and Telegraph Co.
Washington Water Power Co.
San Diego Gas & Electric Co.
*C. I. T. Financial Corp.
-^-Commonwealth Edison Co.
-^-Southern Natural Gas Co.
•^Champion Paper & Fiber Co.
Consumers Power Co.
^
1'iontana. Power Co.
Commerce Oil Refining Corp.
Indiana & Michigan Electric Co.

Common stk.

16.0

1st mtg. bds.
S.F. deb.
Deb.
Deb.
1st mtg. p. 1. bds.
Conv. deb.

15.0
15.0
75.0
20.0
35.0
20.0

Pfd. stk.
1st mtg. bds.
Deb.jbds.&comnon
1st mtg. bds.

15.0
20.0
15.0
20.0

~ec. 30
(rifhts expire)
Jan. 8
Jan. 9
Jan. 9.
Jan. lit
Jan. 21
Jan. 29
(rights expire)
'..inter
v.'inter
'..inter
..inter

STATE AND LOCAL GOVERN?Ei,'T
New York State Power Authority
-"'Los Angeles Dept. of Vtr. & Pwr.,
California




Rev.-Lit.

200.0

Rev.-Ut.

18.0

Jan.

6

Jan. 7

n. 11+

n—2

rorti.coming Large Offerings, as of December 19 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of oil ering
of dollars)

STATE AND LOCAL GCVERKKctiT (Cont'd)
Sacramento kun. Ut. Dist., Calif.
Chespeake Bay Ferry Commission
Letroit-Ketro. Expressway
>iassachusetts Port Authority

Rev.-Ut.
Rev.-Ut.
Rev.-Ut.
Rev.-Ut.

25.0
ia.o
35.0
75.0

Jan. 15
Winter
winter
V; inter

NONE.
Other
-*—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.




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

Date

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)

1952 - 1957

1958 - January
February
March
April
May 7

i

20
21
22
28
June 10
17
25
July 2
?8
23
Oct. 7
15
28
29
Dec. 17

5.00(8/14/57)
2.93(3/31/54)

87
-3

*3.60 z
3.89s/
it. 08
3.91

-8
22
35
18

3.90

21

3.85
3.85

16
16

3.85
3.82
3.95

17
12
24

4.00
4.10
4.10
4.57
4.50
4.4oPy
4.42^
4.44

25
28
29
25
22
12
14
23

5.50(11/7/57)
3.00(3A7/51«)
3.962/
i».07
4.16
4.01
4.00

'

—

123
-15
3
9
-1
•

8

3

4.07
4.35

4
32

4.00
3.95

-1
-6

3.982/

i

k.352/

31

•--Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond
Survey. Except where Indicated, the actual yield figure and the amount above
seasoned yields are averages of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned issues of
similar quality for the same day. Average maturity for the seasoned issues
varies from 26 to 28 years.
2/ Provides for a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.