Full text of H.16 Capital Market Developments : December 23, 1955

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Not f o r P l i c a t i o n

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HolU

December 23, 1955
CAPITAL MARKET DEVELOPMENTS

Large o f f e r i n g s f l o a t e d f o r new c a p i t a l during the week
• ending December 16 t o t a l e d $88 m i l l i o n f o r S t a t e and l o c a l governments , $25 m i l l i o n f o r one corporate debenture i s s u e , and $50 m i l l i o n f o r one f o r e i g n f l o t a t i o n . The only l a r g e o f f e r i n g expected
t h i s week i s a $13 m i l l i o n S t a t e and l o c a l government i s s u e . Last
week two small municipal o f f e r i n g s were postponed, two not o f f e r e d
because t h e s o l e bid was r e j e c t e d by the i s s u e r , and one i s s u e r e ceived no b i d s .
Bond y i e l d s - Yields on outstanding corporate Aaa bonds
jumped f o u r b a s i s p o i n t s during t h e week ending December 16. S t a t e
and l o c a l government revenue and Aaa bond y i e l d s rose moderately and
y i e l d s on corporate Baa bonds increased s l i g h t l y . Treasury o b l i g a t i o n and S t a t e and l o c a l government Baa bond y i e l d s did not change.
Daily f i g u r e s showed l i t t l e change during t h e f i r s t p a r t
of t h i s week.
Stock p r i c e s - The SEC index of 265 common stocks decreased
moderately to 266.9 during the week ending December 16. Daily i n dexes i n d i c a t e d a moderate r i s e i n p r i c e s on balance through Thursday
of t h i s week.
S t a t e and Local Government S e c u r i t y Offerings
•
F i r s t Nine Months, 1955
S t a t e arid l o c a l government o f f e r i n g s of long-term s e c u r i t i e s f o r new c a p i t a l were #3*9 b i l l i o n i n the f i r s t t h r e e q u a r t e r s
of 1955* as shown i n the attached t a b l e . This volume was 20 per cent
below t h a t of t h e corresponding period l a s t y e a r , b u t s l i g h t l y above
the volume i n 1953*
Large i n d i v i d u a l i s s u e s t h i s year have come only from publ i c housing a u t h o r i t i e s . In c o n t r a s t , t h e r e were f i v e very l a r g e
highway i s s u e s with proceeds of more than $100 m i l l i o n s o f f e r e d l a s t
year., i n addition t o the usual housing f i n a n c i n g .
The changed s t r u c t u r e of 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 t h i s y e a r noted below i s l a r g e l y a r e s u l t of t h e decline
i n turnpike financing which i s r e f l e c t e d i n the l e s s e r importance of
s p e c i a l a u t h o r i t i e s as i s s u e r s of s e c u r i t i e s and the smaller volume
of revenue b o n d ' f l o t a t i o n s .




II. Ill

-2-

Long-Term Security Issues of State and l o c a l Governments
F i r s t Nine Months, 1953-1955
(In millions' of d o l l a r s )
F i r s t nine months
1955
Issuing authority:
State
County and toniship
Municipality
School d i s t r i c t
Special authority
Unidentified l /
Total
Purpose of I s s u e :
New c a p i t a l t o t a l
Schools
Highways, bridges, tunnels
Residential buildings
Hospitals and i n s t i t u t i o n s
Sewer and water
Misc. public service enterprises
Recreation
Port- and a i r p o r t
Veterans aid
I n d u s t r i a l buildings
Other
' Unidentified l /
Refunding
Total
Type of i s s u e :
General obligation
Revenue
" General revenue 2 /
Total

1

19524

1953

675
368
991
7U5
709
>86

1,012
3U0
1,16U
656
1,358
U30

603
202 .
857
6Wi
1,189
392

3,975

1*,989

3,887

3,927

1,895

3,810

1,088
602
hhh
65
533
131
33
. 70
109
3
367
.1*83

1,180
l,hQh
U55
70
501
190
25
66
102
2
398
122

1,012
865
385
83
507
130
32
23
136
7
252
390

47

9h

1+6

3,975

L,989.

3,887

2,862
1,078
35

2,987
1,983
19

2,629
8#
U33

3,975

1,98?

3,887

1 / Issue of l e s s than $500,000 not f u r t h e r c l a s s i f i e d .
7 / Total of i s s u e s with proceeds of $5 million or over.
Note.—Details may not add to t o t a l s because of rounding.
Source—Bond Buyer and Federal Reserve.




1

H.lli

-3-

Issuing authority - Of the various types of issuing autho r i t i e s , municipal governments were the l a r g e s t i s s u e r s in the f i r s t
t h r e e quarters of 1955* with $991 million of o f f e r i n g s . However,
t h i s i s considerably below the volume o f f e r e d in the corresponding
period l a s t year. In 19 5U and 1953, s p e c i a l authorities—mainly the
highway financing groups—accounted f o r the l a r g e s t proportion of
t o t a l i s s u e s , $1.L b i l l i o n in 195U and $1.2 b i l l i o n in 1953" This
year t h i s group has issued only $700 million of i s s u e s .
School d i s t r i c t s ; with o f f e r i n g s t o t a l i n g almost $750 mill i o n , were' the second l a r g e s t issuing authority in 1955, and the only
group to o f f e r a s u b s t a n t i a l l y greater volume in the f i r s t nine months
of t h i s year, as compared to the volume l a s t y e a r .
Purpose of i s s u e - More issues were sold f o r school cons t r u c t i o n than any other purpose in t h e f i r s t nine months of 1955—
$ 1 , 1 b i l l i o n compared to $1.2 b i l l i o n and $1;0 b i l l i o n in 19$k and
1953 r e s p e c t i v e l y .
In general about the same volume of issues was offered
f o r the various purposes in each of the l a s t two years. The except i o n was the volume of financing done f o r highway, bridge and tunnel
construction. Such issues declined to $600 million, from $1.5 b i l l i o n in 195b and $900 million in 1953* As in p a s t year, refunding
issues, continued to be r e l a t i v e l y unimportant.
Type of issue - General obligation issues were $2.9 b i l lion of a t o t a l of $U.0.billion in the f i r s t three quarters t h i s
year. This i s 72 per cent of t o t a l o f f e r i n g s . Last year the volume of such issues was s l i g h t l y higher but accounted f o r only 60
per cent of the t o t a l . Revenue o f f e r i n g s dropped sharply to $1.1
b i l l i o n from $2.0 b i l l i o n a year ago. General revenue i s s u e s , which
accounted f o r 11 per cent of t o t a l o f f e r i n g s in 1953, were n e g l i g i ble i n the l a s t two y e a r s .
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented in the attached e x h i b i t s .

Business Finance and 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.




HIGH-GRADE BOND YIELDS
Weekly

CORPORATE A a a

U. S. GOVERNMENT

STATE AND LOCAL
GOVERNMENT Aoo

S

1954

Corporate
Aaa 1 /

Date

U. S. Govt.
long-term 2 /

State and l o c a l
govt. , Aaa 3 /

D

Spread between
U« S. Govt, and
Corporate State and
l o c a l Aaa
Aaa

(Per cent)
1952 " High
Low
1953 - High
Low
195U - High
1955 - High
. Low
" November
November
December
December
December

18
25
2
9
16

3.03
2.91
3-U2
2.99
3.09
2.85

(1/W
(2/15)
(6/19)
(1/9)
(1/8)
(U/23)

2.79 (12/27)
2.56 (5/17)

3.15 (6/6)

2.91 (1/7)

2.78
2.7U
2.a
2.9U
2.62

3.08
3.11
3.12
3.13
3.17

2.86
2.88
2.88
2.88
2.88

3.17 (12/16)

(12/26)
(1/9)
(8/7)
(8/5)
(1/7)

2.00
1.65
2.73
1.98
2.21
1.9.0
2.3k
2.05
2.19
2.21
2.27
2.28
2.30

(10/23)
(5/1)
(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)

.37

1.02
.71

.8U

:S

:S

• 32
• 3U
.13

.29
.70
• 5U

.22
• 23
.2h
• 25
• 29

.67
.67
.61
.60

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
yearsT
2 / Weekly average of d a i l y f i g u r e s ; old s e r i e s . . Average term to f i r s t c a l l
of bonds included i s 11-lit years.
3/ Thursday f i g u r e s . Only general obligation bonds are included; average
term Ts 20 years.
Note.—Highs and lows are f o r individual s e r i e s and may be on d i f f e r e n t dates
for different series.




EXHIBIT B

LOWER-GRADE BOND YIELDS
Weekly^

Per cent p e r
CORPORATE B a a

\

STATE AND LOCAL GOVT. B o a

STATE AND LOCAL GOVT. REVENUE

1952

1953

1954

1955

(Per cent)
1952 - High
Low
1953 - High
195k - High
Low
1955 - High
Low

3.63
3.U8
3.89
3.50
3.7k
3-UU
3.62
3.U5

November
November
December
December
December

3-58
3.59
3.59
3.61
3.62

18
25
2
9
16

(1/W
(5/16)
(9/18)
(0/2)
(1/8)
(12/31)
(12/16)
(1/14)

2.98
2.1*8
3.79
2.96
3.32
2.93
3.25
3.02
3.19.
3-20
3-2U
3.25
3.25

(10/23)
(it/17)
(6/25)
(1/8)
(1/7)
(8/5)
(12/15)
(1/6)

2.69 (12/19)
2.27 (U/25)
3.27 (6/26)

2.71 (1/2)

3.00
2.72
2.99
2.76

(1/1)
(8/13)
(12/16)
(1/7)

2,86
2.88
. 2.92
2.97
2.99

1/ Weekly average of daily figures. Average term of bonds
included i s 25-26 years.
2/ Thursday figures. Only general
obligation bonds are
inducted; average term i s 20 years. c
3/ Friday figures. Average rating of bonds included i s
between Baa and A; average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock price

Common
Trading
volume £ /
(millions yields J /
of shares) (per cent)

Stock market customer c r e d i t
Customers'
debit bal- loans to
a n c e s ^ / "others" 5/ «
(Millions of dollars)

1952 - High
Low
1953 - High
195U - High
Low

1955 - Higi
Low

October
November
December. 2
December 9
December 16

165-3
151.7
167.1
UiU.O
221.U
156.5
270.5
217-U

(12/26)
(10/2U)
(1/2)
(9/18)
(12/31)
(1/6)
(12/9)
(1/lk)

250. U
265.0
268.3
270.5
266.9

2.0
0.9
2-5
0.9
3.7
i.a
u.6
1.5
2.3
2.5
2.6
2.U

•

5-77
5-13
5.75
5.15
5.33
U.20
1.22
3-78

1,986
1,80U
2,UU5
2,055
3,1*36
2,1*05
3,980
3,537

U.12
U.09

3,91*1*
3,980

SI
1,311*

656
552

780

66U

2,388
1,653
2,805
2,517

1,0U8

2,7U9
2,759

1,195
1,221

71*6
1,221

1,018

1,221
1,221

n.a.--Not available.
1 / SEC index of 265 conmon stocks, weekly closing p r i c e s , 1939-100; converted
to 19li7-li9-100 by Federal Reserve. The conversion factor i s 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Moody's 200 common stocks; end of month f i g u r e s .
U/ End of month figures for-m ember firms of the New York Stock Exchange which
carry - margin accounts; excludes balances .secured by U. S. Government obligations.
"5/ Wednesday figures f o r weekly reporting member banks. Excludes a l l loans
f o r purchasing or carrying U. S. Governments f o r 1952; since 1953 only these loans
at banks in New York and Chicago are excluded. Weekly reporting banks account f o r
about 72 per cent of loans to others.
,
, - ,
Note. Highs and lows are for individual series and may be on d i f f e r e n t dates
for d i f f e r e n t s e r i e s .




Exhibit D

H.Ik.

Corporate and S t a t e and Local Government
S a 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 )

1955
January
February
March

Corporate
195k
I

New c a p i t a l
1953

1955

S t a t e and l o c a l
1
195k
I

1953

5U6
U36
1,261

5k7
U26
635

623
623
666

535
312
538

396
Ull
5%

390
360
U26

April
May
June

k9k.
903
697

197
656
8k2

779
675
1,123

U27
350
611

73k
7U8
853

329
6k9
k3k

July
August
September

$83
65k
680

909
33$
7k7

483
325
753

U70
2k9
k06

279
261
619

519
259
U75

e/900
3/625
e/kOO

59U
U23
877

153
k08
77k

1,912
1,385
2,578
. 1,118
1,561 ,
1,12k
2 , u a y e/1,925
e/5,8$0
. 8,k95

1,372
2,33k
1,188
1,89k
6,789

1,176
l,kl2
1,253
1,636
5,k77

October
November
December
^
P

1

1st quarter
2nd q u a r t e r
3rd q u a r t e r
kth quarter
Year

c

1,138 y
e/680
e/925
2,2k3
2,09k
1,917
e/2,7k5
e/9,000

1,003
290
60)4.

1,608
1,995
1,991
1,896
7,k90

577
L29,/
1,138 i t

Excluding f i n a n c e companies 3 /
1st quarter
2nd q u a r t e r
3rd q u a r t e r
Uth q u a r t e r
Year

1,791
1,912
},hhl
e/2,5k5
1/7,690

1,527
1,927
1,911
1,792
7,158

1,669
1,991
1,223
2,3kk
7,227

1 / I n c l u d e s $637*2 m i l l i o n AT&T c o n v e r t i b l e d e b e n t u r e i s s u e .
. 2 / I n c l u d e s §602.£ 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 .
3/ 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 p e r s o n a l f i n a n c e
companies.
N o t e . — D e t a i l s may n o t add t o t o t a l s due t o rounding.




H.lU.

Exhibit E
Large Public S e c u r i t y Issues f o r Mew Capital
(Other than U. ,S. Treasury) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )

-Month

Corporate

195U - October
November
December
1955 ~ January.
'February
March
April
May
June
' July
. August
September
October
November

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

Other 2 /

388
268
6#
3h 1
107
337
238
152
U03
. 278
65
' 23h
716
396

U33
0
121
1U1
63
750
173
he 3
175
101
U05
#8
805
269

30
35
15

25

Large I n d i v i d u a l I s s u e s Offered December 1 through 16

issuer

Type 3/

Coupon
Amount
r a t e or Offering Rating
(millions Maturity
yield
net interof
e s t cost
dollars)

CORPORATE
100.0
Radio Corp. of America Conv. deb.
Consolidated - Edison Co.
1st & ref.bds. 70.0
of New York
1 s t &ref. bds . 20.0
Conn. Light & Power
Deb.
Mew J e r s e y B e l l Tel.
25.0

1980

3 1/2

3.35

Baa

1985
1985
. 1995.

3 3/8
3 l/U
3 3/8

3.32
3.27
3.33

Aa •
Aaa
Aaa

STATE & LOCAL GOVERNMENT
Pend O r e i l l e Co., Uash.
. Onondaga Co. Water
Authority, New York
Los Angeles, .Calif.
Cook County, I l l i n o i s
New York Thruway




Rev.

Ih.k

1956-05

n.a.

1.85-3.25

Rev.
G.O.
G.O.
G.R.

12.6
20.0
6.8
50.0

1957-95
1957-81
1957-75
1985-95

3.30
2.72
2.81
2.7k

2.00-3.35
Baa
1.80-2.75
Aa
2.00-2.80 ' A
2.60-2.75
Aaa

H.Ik

E-2

Large Individual Issues Offered December 1 through 16 (Cont'd)
Issuer

Type 3/

. Coupon
Amount
r a t e or Offering Rating
(millions Maturity
yield
net i n t e r of
e s t cost
dollars)

STATE & LOCAL GOVERNMENT
(Cont'd)
C a l i f . Toll Bridge Auth.
Milwaukee, Wisconsin
Newark, New Jersey
Long Beach Unified
School D i s t . , • C a l i f .
State of South Carolina

Rev.
G.O.
G.O.

16.0
6.9
5.0

1995
1956-70
1956-75

3.68
2.21
3,02

3*61
1.70-2.20
2.00-3.05

Aaa
Baa

G.O.
G.O.

10.0
20.0

1956-76
1956-75

2.93
2.3*4

2.00-2.95
1.70-2,35

A
Aa

50.0

1981

3 1/2

3.53

A.

——

OTHER
Quebec Hydro-Electric
Commission

SF deb.

n.a.—Not a v a i l a b l e .
^ / i n c l u d e s corporate and other security o f f e r i n g s of 15 million d o l l a r s and
.over; S t a t e and l o c a l government security o f f e r i n g s of 5 million and over.
2 j Includes foreign 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 .
<
3/ In the case of State and l o c a l government s e c u r i t i e s , G.O. denotes general
obligation; Rev., revenue bonds; G.R., general obligations additionally secured
by f a c i l i t i e s revenues.

#



H.lU

Exhibit F

Forthcoming Large Public 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 than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large I s s u e s
Date of
.computation
195U - Nov. 30
,
Dec. 31
1955 - J a n . 31
Feb. 28
Mar. 31
. Apr. 29
May 31
June 30
July 29
Aug. 31
• Sept. 30
Oct. 31
Nov. 30

During month following
date showi
Corporate I S t a t e and. o t h e r 2 /
I l o c a l govt.
9h
18U
16
710
211
h25
160
67
h07
222
805
202
215

66l
567
682
521
208
116
3#
3UU
100
18U
8b3
330
305

30
•

Subsequent to
date shown
S t a t e and Igthe, 2 /
Corporate
local govt.1
—

—

2U6
216

—

h22

50

1,395
922
i,iia
850
830
1,135
920
909
112
230

2,682
2,lWi
1,961
1,978
2,009
1,917
1,861
1,815
2,018
1,971
2,205
1,650
756

30
35

50

Forthcoming Large O f f e r i n g s , as of December 16
Type

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

CORPORATE
Sheraton Corp or a t i on__of America

Deb.

15-0

1956

STATE AND LOCAL GOVERNMENT
San Francisco, C a l i f o r n i a
Wayne County, Michigan
Allegheny County, Pennsylvania
Tacoma, Washington
Los Angeles, C a l i f o r n i a
S t a t e of Colorado
^ D e t r o i t , Michigan
San Diego, C a l i f o r n i a
S p r i n g f i e l d , Ohio
•^Louisiana S t a t e Building Authority
*RcChester, New York
Inter-American Center Auth., F l a .
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e Toll Bridge Auth.
- S a l t River P r o j e c t , Arizona
Connecticut Expressway




G.O.
n.a.
n. a.
Rev.
Rev.

Rev.
Rev.
Rev.
Rev.
n.a.
Rev.

December 19
13.3
6.7
January 5
6.0
January 10
5.0
January 10
38.0
January 10
8,0
January 10
8.0
January 10
January 17
9-5 .
5-2
January 17
7-6
January 19
. February 21
7'h
25.0
1956
65.0
.
1956
62.0
1956
227-0
1956
11.0
1956
100.0
1956

F-2
Forthcoming Large O f f e r i n g s , as of December 16 (Cont'd)
Issuer

Type

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

OTHER
None
*—Included in t a b l e f o r f i r s t
1 / Includes corporate and other i s s u e s of 1$ m i l l i o n d o l l a r s and over. S t a t e
and l o c a l government i s s u e s of £ million and over.
y 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 .