Full text of H.16 Capital Market Developments : December 4, 1957
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I Not for Publication p E C 0 H T B 0 L L E D H.lli ' . m six 1 mOKTHS ~ I } 'r ' December U, 1957 CAPITAL MARKET DEVELOPMENTS Large public security offerings for new capital during the week ending November 29 consisted of three State and local government - issues with total proceeds of $31 million. No large corporate issues were sold last week. This week, corporations are expected to sell issues amounting to $U5 million, and State and local government issues totaling $5>0 million are scheduled for sale. Bond yields - Yields continued to decline last week for all categories of outstanding bonds, with the drop being quite sharp for all types except Baa-rated corporate bonds. Daily figures for Monday and Tuesday of this week indicate some further decline for corporate bond yields. Offering yields on new corporate issues also have declined recently. An Aa-rated, 30-year first and refunding mortgage public utility issue was offered and promptly sold to investors this week at a yield of luli7 per cent — 18 basis points below the yield for a similarly rated first mortgage bond issue offered on November 22, and about £0 basis points below the early November level. Stock prices - Stock, prices, as measured ty the Standard & Poor's index of 500common stocks, increased last week, closing at III.72 on November/29. Prices declined on; balance in thfe. early part: -of this week. More detailed information concerning recent capital market developments is presented in the attached exhibits. Business Finance and Capital Markets Section, -Division of Research and Statistics, . Board of Governors of the Federal Reserve System. HIGH-GRADE BOND YIELDS 0. S. Govt., long-term 2/ Corporate Aaa 1/ New series Old series Spread between U. S. Govt. State and local govt. (old series) and CorporatelState and Aaa 3/ Aaa I local Aaa (Per cent) 3.1*2 (6/19) 2.99 (1/9) 3.09 (1/8) 2.85 (k/23) 3.17 (12/23) 2.91 (1/7) 3.79 (12/28) 3.07 (3/2) li.lt • (9/27) 3.66 (L/12) h.12 k.12 2*-12 L.06 a.02 n .15 .78 .71 .UU .91 .62 .1,9 .80 .87 (6/6) n.a. (12/26) n.a. (1/9) n.a. (8/7) n.a. (8/5) 3.03 ( 8/5) (1/7) 2.89 (6/10) (12/21)3.39 (12/28) (2/17) 2.92 (2/3) (10/18)3.66 (10/18) .15 (2/8) 3.22 (2/8) 3.85 3.77^ 3.70 3.50 3.W, 3-61* 3.60 3.5L 3.W* 3.1*0 " a • ~ w e e k l y * a v e r a g e of daily figures. 2.73 (6/25) 1.98 (1/8) 2.21 (6/10) 1.90 (9/2) 2.05 3.05 (12/27) 2.17 (2/23) 3.L5 (8/29) 2.76 (2/21) 3.30 3.30 3.28 3.23 3.16 .38 .19 ,13 .32 .31 .13 .liU .13 .58 .2M .35 .1*2 .56 .58 .81 .30 .61 .29 .70 .51 .68 .32 .58 .lit .55 .hi .1*2 .27 .28 Average term of bonds included is 25-26 2/ Weekly averages of daily figures. The old series includes fully taxable, marketable 2 1/2 per cent bonds due or first callable after 12 years through September 1995, and those due or callable in 10-12 years thereafter, including, beginning October 1957, the 2i per cent bond of 1969. The new series is comprised of the 3 per cent bond of 1955 and the 3 1/U per cent bond of 1978-83. 3/ Thursday figures. Only general obligation bonds are included; average! term I s 20 years. Note.--Highs and lows are for individual series and may be on different dates for different series. LOWER-GRADE BOND YIELDS CORPORATE STATE AND LOCAL GOVT. Be 'STATE AND LOCAL GOVT. REVENUE Corporate Baa 1/ State and local govt. Baa 2/ State and local govt, rev. y (Per cent) 1953 - High 195U - High 1955 - High 3.89 3.50 3.7k 3.hh 3.63 (9/18) (1/2) (1/8) (12/31) (12/30) 1956 - High 3.15 (1/1U) h.Ul (12/28) 3.58 (3/9) 1957 - High 5.10 (11/29) November November November November November 1 815 22 29 U.U2 (U/12) 5. Olt 5.09 5.10 5.09 5.10 3.79 2.96 3.32 2.93 3.26 (6/25) (1/8) (1/7) - (8/5) (12/29) 3.02 (1/6) In 22 (12/27) 3.20 (3/8) L.51 (8/29) 3.90 (2/21) L 37 U.37 L. 39 3.27 (6/26) 2.71 (1/2) 3.00 (1/1) 2.72 2.99 2.76 3.98 (8/13) (12/30) (1/7) (12/28) 2.89 (2/2h) 3.98 ( 1 / W 3.70 (2/22) V fcg 1/ Weekly average of daily figures. Average term of bonds included is 25-26 years. 2/ Thursday figures. Only general obligation bonds are included; average tezm is 20 years. 3/.Friday figures. Average rating of bonds included is between Baa and Aj average term is 20 years. h/ Series discontinued, as of March 15. N o t e . — H i g h s and lows are for individual series and may be on different dates for different series. STOCK MARKET Date Stock price index 1/ Common Stock market cust<jmer credit volume 2/ Customers' debit bal(millions yields y of shares) (per cent) ances h/ "others" 5/ (Millions of dollars) 1953 - High Low. 1951 - High Low 1955 - High Low 1956 - High Low 1957 - High Low 26.5k 22.95 35.98 21.93 1*5.89 35.28 19.61* 1*3.22 1*9.08 L0.19 September October November 15 November 22 November 29 1*3.98 1*0.1*3 1*0.37 2*0.87 1*1.72 (1/2) (9/18) (12/31) (1/8) (12/9) (1/11,) (8/3) (1/20) (7/12) (11/8) 2.5 0.9 3.7 1.1* 1*.6 1.5 3.1 1.5 It.2 1.1* 6.25 5.38 5.82 1*.32 1*.1*2 3.61, 1*.35 3.82 L.70 3.91 2,1*55 2,055 3.1*36 2,1*05 1*,030 3,537 l*,0l*7 3,911* 1*,031 3,61*3 1,665 1,311, • 2,388 1,653 2,805 2,517 2,823 2,71*0 2,887 2,568 780 661* 1,01*8 71*6 1,21*1 1,018 1,267 1,155 1,163 1,060 1.8 2.8 2.3 2.5 3.1 l*.3l* 1*.60 U.65 It. 59 1*.50 3,882 3,61*3 2,789 2,568 1,093 1,075 1,063 1,060 n.a. , available. 1/ Standard and Poor'a composite Index of 500 common stocks, weekly closing prices, 191*1-1,3-10. 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 iachange. 2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. h/ End of month figures for member firms of the New York Stock Exchange which carry margin accountsj excludes balances secured by U.S. Government obligations. 5/ 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.—Highs and lows are for individual series and may be on different dates for different series. Exhibit D H.lh Corporate and State and local Government Security Offerings and Placements (In millions of dollars) New capita] January February arch M 1 April May ' July August September 1,063 1,071 l,3bb 573 732 017 921 771 1,189 818 1,11.6 61,1 991 91b 973 1,063 65b 838 1955 5# Lu7 1,223 ' I1O8 206 357 1,70 21,9 bu6 672 e/600 e/600 6# 31,7 bop 939 658 1,08 1,820 1,706 1,5L3 e/1,872 3,1,90 3,6u3 973 3,395 3,365 1,1,16 1,121, 1,98b 3,093 b,o6b 5,b59 2,802 3,927 5,913 1st 2nd 3rd Lth 3,179 3,18U 2,878 e/2,800 2,302 2,805 2,556 2,92? 2,165 2,052 3,931 2,695. h,9u? 7,1,63 10,38b 53> 332 >35 529 58b li30 3,162- / 632 90u 6,663 9,5bl e/12,3bl l,vL 6< 6 39u 597 61,14 670 "^3/ 3,089^' 3,088 1st half ; Three Quarters Year 7b2 - 572 506 State' ;iViu loc 1 li66 765 516 395 e/9# e/850 e/1,000 . 19 5 T 1I78. 886 687 October November December ouarter ouarter Quarter Quarter - 1,216 6,127 8,821 111 1957 Corporate 1 1956 | 378 • 1,90 . 735 1,27 3b0 61,2 Excluding finance companies b/ 1st quarter 2nd ouarter 3rd ouarter Lth. Quarter Year 3,268 2,921 2,560 e/2,650 1,61,7 2,5141 2,2),6 2,826 1,727 1,870 1/bbb 2,51,1 e/ll,b02 9,259 7,595 e/ Estimated. 2/ Data through June 3 956 are Bond Buyer data classified as new capital by Federal peserve; 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. 2/ Includes #637.2 million AT&T convertible debenture issue. ?/ Includes S571.5 million AT&T common stock issue . 17/ Total new capital issues excluding offerings of sales and consumer finance companies. Note.—Details may not add to totals due to rounding.. H.lii Exhibit E Large Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Corporate Month 1956 - October November December 1957 - January February March April May June July August September October State and local government 386 701 . 1*30 567 671 788 U77 329 877 525 526 537 57k 383 135 201 386 • 306 191* 199 2U8 176 265 357 185 U35 Other 2/ 35 100 50 125 25 39 25 30 75 Large Individual Issues Offered during November Issuer Type 3/ Amount Coupon (milliona Maturity rate or Offering of net inter- yield . dollara) est coat Rating CORPORATE Consumers Power Co. Dayton Power & Light Co. So. New England Tel. Co. Beneficial Finance Co. Caterpillar Tractor Co. Transcontinental Gas Pipe Line Corp. Trans. Gas Pipe Line Corp. Michigan Bell Tel. Co. Ohio Power Co. Olin Mathieson Chem. Corp. Houston Ltg. & Pwr. Co. Idaho Power Co. Cony. deb. let mtg. bds. Common etk. Deb. S.F. deb. 35*2 25.0 27.U 50.0 65.0 S.F. deb. 20.0 Common stk. 17.8 Deb. UO.O 1st mtg.bds. 25.0 Coriv.sub.deb. 60.0 1st mtg.bds. UO.O 1st mtg.bds. 15.0 . 1972 1987 h 5/8 5 h.63 >.97 Aa Aa 1977 1977 ft 1/2 5.2U U.5U Aa 1978 6 1/8 6.17 Ba 1992 1987 1982 1987 1987 U 3/U 1* 7/8 5 1/2 U.65 U.82 5.50 U.65 U.65 U 3/U U 3/U Aaa Aa Ba • Aa Aa E-2 H.lU Large Individual Issues Offered during November'(Cont'd) Issuer Type 3/ Amount Coupon Offering (millions Maturity Rating net inter- yield of dollars) est cost STATE AND LOCAL GOVERNMENT Fairfax Co., Virginia G.O. 5.5 Hamilton City S. D., Ohio G.O. 5.5 Jacksonville, Fla. Utilities rev.30.0 Port of New York Auth. Rev. 30.0 Cook Co., Illinois G.O. 20.7 State of Kentucky G.O. 35.0 Los Angeles Co. Flood Control Dist., Calif. Rev. 20.0 State of Maryland G.O. lit.2 New York, New York G.O. 36.5 Springfield, Missouri Water rev . 22.0 Chicago,Illinois Water rev . 20.0 Lincoln Park S. D., Mich. G.O. 6.8 State of Ohio Qxroughfare iev.30.0 Terr, of Hawaii G.O. 7.0 Oklahoma Co., Okla. G.O. 6.0 State of Connecticut Exp. rev. 35.0 Wash. Toll bridge Auth. Rev. 30.5 Johnson Co. Wtr. Dist. No. 1, Kansas Rev. 20.0 State of South Carolina G.O. 5.0 Bethel Mun. Auth., Penna. Swr. rev. 6.h 1959-83 1959-60 1959-95/68 1987/67 1958-77 1959-72/68 U.21 3.78 h.6h 3.83 3.58 2.97 3.00-5.00 2.80-3.80 3.20-1.60 3.78 2.60-3.60 2.30-3.00 Baa A A A A Aa 1958-83 1960-72 1958-72 1961-97/67 1963-82 1960-86/68 1958-72 1960-77 1961-77 1963-87 1997 3.72 2.99 3.51 h.h7 3.97 1.77 3.35 3.69 3.Wi 3.9? 2.50-3.00 2.50-3.00 2.00-3.55 3.30-1.50 3.U0-U.00 3.25-U.75 2.10-3.30 3.00-3.70 2.85-3.15 3.I4O-U.OO Aa Aaa A A A Baa ' Aa A A • U.81 1962-97 2.68 1959-68 1959-97/68 5.U7 3.25-1.75 Baa 2.25-2.70 Aa 3.25-5.50 — OTHER None n.a.—Not available. . 1/ Includes corporate and other security offerings of $15 million and over; State and local government security offerings of #5 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues. .. 3/ In the case of State and local government securities, G.O. denotes general obligation; Rev., revenue bonds; G.R., general obligations additionally secured by facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues. 1 0 H.lh Exhibit F Forthcoming Large Public Security Offerings for New Capital (Other than U.S. Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following date shown Corporate State and Other 2/ local govt. Date of computation 1956 - Nov. 30 Dec. 31 1957 - Jan. 31 Feb. 28 Mar. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 li36 176 591 7U0 L6l 187 525 370 526 578 576 158 383 I48 280 153 - 153 290 179 97 172 252 2h3 370 369 387 23 100 " 35 25 25 25 • 30 . 30 18 Subsequent to dale shown Corporate)State and Other 2/ 1 local govt. 181 796 #6 795 1*86 258 525 115 811 8ii5 617 815 1,193 23 100 35 979 763 61,8 631 862 #6 388 1,98 51k 139 587 573 589 25 25 25 30 15 us 63 Forthcoming Large Offerings, as -of November 29 Issuer Type Amount Approximate"date (millions of dollars) of offering CORPORATE Virginia Electric 8 Power Co. lst&ref.mtg.bds. Northern Natural Gas Co. S.F. deb. Chesapeake & Potomac Tel. Co. of Md. Deb. Commonwealth Oil Refining Co. Conv. sub. deb. Standard Oil Co. of New Jersey Common stk. 20.0 25.0 30.0 20.0 288.2 American Telephone; & Telegraph Co. Conv. deb. 720.0 Commercial Credit Co. Natural Gas Pipeline Co. of America Notes 1st mtg. bds. 50.0 1)0.0 STATE AND LOCAL GOVFIWIENT Akron, Ohio Los Angeles Sch. Dists., Calif. Indianapolis, Ind. State of Ohio Chelan Co. Pub. Ut. Dist.,No.l,Wash. Greater Baton Rouge Port Comm., La. Dec . h Dec. 6 Dec. 10 Dec. 11 Dec. 18 (rights expire) March 12 (rights expire; Winter Winter .X Water works rev. G.O. 0.0. G.O. Rev. Rev. 5.0 15.U 5.1 25.0 250.0 19,h Dec. Dec. Dec. Dec. Dec. Dec. 2 3 3 L 10 11 H.Ui F-2 Forthcoming Large Offerings, as of November 29 (Cont'd) Type Amount (millions Approximate date of dollars) of offering STATE AND LOCAL GOVERNMENT (Cont'd) Bergen Co., N. J Phoenix, Arizona ^Minneapolis 6 St. Paul Met. Airport Comm., Minn. •^Richmond, Virginia Chicago Bd. of Education, H i . Caddo Parish Sch. Dist., La. New York State Thruway Auth. Penna. State Highway & Bridge Auth. *East Baton Rouge Par. S.D. No.l, La, State of Missouri State of Texas Pennsylvania Turnpike Commission Inter-American Center Auth., Fla. G.O. Water rev. G.O. G.O. G.O. G.O. Rev. Rev. G.O. G.O. G.O. Rev. Rev. 7.2 Dec. 11 Dec. 12 13.0 6.5 25.0 7.5 Uo.o Dec. 17 Dec. 18 Dec.. 18 Jan. 7 Jan. 1U Jan. 17 Feb. h Winter Winter Winter Winter 16.0 20.0 10.0 30.0 12.5 62.0 20.0 OTHER Montreal, Quebec Pacific Great Eastern %r. Co. Union of South Africa S.F. deb. S.F. deb. Ext. loan bds. 18.0 30.0 15.0 Dec. 12 Winter Winter *—Included in table for first time. 1/ Includes corporate and other issues of $15 million and over; State and local""government issues of $5 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues. Note .—Deletions for reasons other than sale of issue: National Cylinder Gas Company's $17.5 million convertible subordinated debenture issue — withdrawn from registration