View original document

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

Not for Publication

rm„
DECONTROLLED AFTER SIX.MONTHS

H.II4.

December 8, 1958
CAPITAL MARKET DEVELOPMENTS

The volume of publicly-offered securities for new capital was
substantial last week, and is expected to be only slightly smaller this
week> After that, however, the usual seasonal lull in public security
financing is expected until the first of the year. During the week
ending December 5, corporations sold large issues totaling $113 million
and State and local governments sold issues amounting to ^130 million.
Two large foreign government issues with aggregate proceeds of $50 million were also sold. This week, large corporate issues, including the
expiration of subscription rights are -expected to total «?1kS million
and State and local government issues for $99 million are scheduled for
sale. A foreign government issue for ^29 million is also on the calendar.
' Bond yields - Changes in yields on outstanding bonds were mixed
last week, lields on U. S. Government obligations increased b basis points
while those for State and local government and lower grade corporate bonds
remained stable. Yields on high-grade corporate bonds continued to decline slightly.
Stock prices - Stock prices showed little net change last ueel.
in reduced activity. Standard and Poor's index of 500 common stocks
closed at 52. U6 on December 5. Trading volume averaged 3.5 million shares
a day, the lowest weekly average since mid-September, but still sharply
above the 1957 daily average of 2.2 million shares.
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.




'

tMB A
XIU
H I G H - G R A D E B O N D YIELDS

L O W E R - G R A D E B O N D YIELDS

1953
1954



V\

1955

1956

1957

195B

H.lU

Exhibit B
Tables for Exhibit A
High-grade Bond Yields

Date

Corporate
Aaa 1/

u. S. Govt,
long-term 2/

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

State and
local govt.
Aaa y

(Per cent)
1953
1954
1957
1958

- High
- Low
- High
- High
Low

3.42 (6/19)
2.85 (4/23)
h.lk (9/27)
4.13 (10/10)
3.55 (5/2)

3.19 (6/5)
2.45 (8/6)
3.76 (10/18)
3.83 (10/3)
3.07 (1/25)

2.73 (6/25)
1.90 (9/2)
3.2*5 (8/29)
3.31 (9/11)
2.64 (5/1)

.38
.30
.60
.51
.22

.83
.30
.)
17
.62
.34

Nov.
Nov.
Nov.
Nov.
Dec.

7
14
21
28
5 2/

4.11
4.10
4.08
4.07
2.0
4-6

3.75
3.71
3.69
3.67
3.73

3.19
3.17
3.17
3-lii
3.H

.36.
.39
.39 .40
.33

.56
.54
.52
.53
.59

Lower-grade Bond Yields

Date

Corporate
Baa 1/

High
Low
High
Riga
Low

3.89
3.44
5.10
L96
1.51

State and
local govt.
Baa y

j

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953
1S54
1957
1958

-

Nov.
Nov.
Nov.
Nov.
Dec.

7
lt
i
21
28
5 d/

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

4.89
4.88
4.86
4.85
4.85

"

3.79 (6/25)
2.93 (8/5)
4.5-1 (8/29)
4.34(9/11)
3,6^(5/1)
1.12
1.12
4.11
4.10
4.10

.69
.52
1.27
1.23
.77

1.21
.96
1.21
1.11
.93

.78
.78
.78
.78
.79

• 93
.95
.94
.96
.96

'

2/ Preliminary.
2/ Weekly average of daily figures. Average term of bonds included, in J . - 2 years.
??;6
2/ Weekly average 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 :,era
is 20 years.
Note.—highs and lows are for individual-series and may be on different dates for
different series.




STOCK MARKET




Exhibit D
Table for Exhibit C
Stock Market

Date

Stock price
index 1/

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

Stock market customer credit
Customers'
Bank
debit bal- loans to .
ances h/
"others" 5/

Total

(Millions of dollars)

(1/2)

1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

1*9.08 7/12)
1*.2
39.1*8 (12/20) 1.1*
53.09 (11/lU 1*.9
hO. 37 (1/10)
1.7

October
November
Nov. 21
Nov. 28
Dec. 5 e /

50.95
52.50
52.70
52. W
52. U6

26.5k
22.95
35.98
2U.93
1*5.89
35.28
19.61*

2.5
0.9
.

liS!

1*3.22 |l/20)

&

1*.6
1.5
3.1
1.5

h.'l
l*.l

JU.l
1*.2
3.5

l*.3k
3.91
1*.72
3.39
L58

3,537
l*,0l*7
3,911*
1*,031
3,576
1*,369
3,551*

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82 .
3,188
2,1*87

3.52

1*,369

3,188

5.38
6.25
U.32

5.82

U.08

1.*
*11

3.82

3.1*2

•3-ia
3.1*2
3.1*2

2,1*55

1:21

2,1*05

1*,030

780

61
6i

1,0U8
71*6
1,2 ia

1,018
1,26?

1,155
1,163
1)051*
1,317
1,051.

1,101
1,179
1,176
1,179

n.a.—Not available.
jo/ Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, I9la-l*3e10. 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.
2/ 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/ 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.
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 E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions^ of dollars)

1958
January
February
March

723

1

New capital
Corporate 1/
State and local 2/
1
1956
1957
1958
1
1956
1
1957
1,060
1,065
1,320

573
712
817

812
953
511

742
572
506

404
696
390

765
1,453

818
1,146 ,
841

798
895
551

765
546
393

378
490
735

1,063
654
838

804
403
667

529
584
431

408
206
357

698
633
698

639
347
409

April
May
June

i,iia
600
881

July
August
September

1,144

1,102
538

1,003
921*
973

October
November
December

3/700
e/600
e/950

1,090
789
1,076

1,088

2/447
e/500
3/450

3,135
2,622
2,784
e/2,250

3,445
3,149
2,899
2,951

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

2,276
. 2,244
1,874
e/1,397

1,620
1,704

154
,14
2,029

1,490
1,603
971
1,395

5,757

'6,591
9,4?3
12,117

4,907
7,463
10.384

. 4,520
6,394
e/7,791

3,524
5,069
7,099

3,093
4,064
5,459

1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

1st half
Three quarters
Tear

8,51a

3/10,791

Excluding finance companies %/
1st
2nd
.3rd
4th

quarter
quarter
quarter
quarter

Year

2,89li
2,583
e/2,734
e/2,175

3,237
2,889
2,582
2,810

1,647
2,541
. 2,246
2,826

5/10,386

11,519

9,260

1/ Securities and Exchange Commission estimates of net proceeds.
2/ Data through June 1956 are Bond Buyer data.classified as new 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.
U/ Includes #571.5 million AT&T common stock issue.
% ] Total new capital issues ev blading offerings of sales arid consumer finance
companies.




H.lU

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-•term
Foreign government 2/
Federal agency 3/
1956
1956
1958
1
1957
1
1957
1 .1956
1

January
February
March

196
53

April
May
June

139
198
120

123
I8
i
U2

9
5
17

28
7
30

July ^
August
September

—

October
November
. December

8U
19
*
30

h
60
1

Year

507

37
•8

1,163
251
:

—

50

523

125

60

95

—

60

—

2
39

16U

;—

—

109

215

hh
5
21

300

—

100
572

'

—

Short-term
State and local government h/
January
February
March

72

—

•

169

Federal agency 3/

233
. 460
273

326
U55
lit?

196
.357
21-9

371
208
1'i;

6]8
h30
505

380
220
283

April
May

357
35k
261*

205
337
153

125.
252
176

209
161
329

336
469
501

323
311
260

July
August
September

289
L23
369

272
272
252

. 195
207
179

U37
206
330

221*
370
512

222
k25
273

2/231

303
9h
159

29h
328
118

h$k

1,236
255
116

1*07
222
128

3,271

2,706

5,51*3

3, 1 5
,,7

October
November
December
Year

,

1/ 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 than 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.
J/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commissionj short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing Authority notes. In some instances P l notes included may have a somewhat
iA
longer term than
 one year. Source: bond Buyer.



Exhibit G

H.lU

Larpe Lunp>term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Corporate

1957 - November
December
1958 - January
February
March
April
May
July
August
September
October
November

State and
local government

L20
399
318
605
1,093
725
356
281
771
209
825
259
227

Month

3hh
I4OU .
' ItlO
553
182
300
505
195
275
109
288 r
172
259

Other 2/

15h
• 1,357
266
653
16U
86
laid
209
100

Large Individual Issues Offered December 1 through 5

•

Issuer

Type 3/

Amount
Coupon
(millions
Offering
Maturity
net interyield
of
dollars)
est cost

Rating

CORPORATE
Pacific Gas & Electric Co. 1st ref.mtg.bds.' 65.0
Public Service Elec. & Gas
Com. stk.
26. q
Potomac Elec. Pwr. Co.
1st mtg. bds.
25.0

1990
1993

h.50

Aa

4 5/8

k.55

Aa

2.72
3. CO

1.60-2."0
1.80-3.65

Aaa
Aa

h 1/2

STATE"AND LOCAL GOVERNMENT
State,of Ohio
State of California

G.O.
G.C.

'

30.0 1959-73
1 0 0 . c 1959-85

OTHER
Republic of Austria
Union of South Africa




bonds
bonds

.

25.0
1973
25.0 1 9 6 1 - 0 8

5 1/2
5.91
5, 5 1/2 jp.00r5.70

H.lli

G-2

n.a.—Not available.
1/ Includes corporate and other security offerings of $15 million and oyer;
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 agencies.
3/ 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. lit., 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.




ti.u
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. 5. Treasury) 1/
'.
Expected Proceeds from Forthcoming Large Issues
Subsequent to
date shown

During month following
date shown

Date of
computation.

Corporate

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. 38

^

1,58
383
378
1*98
1,123
555
356
266
768
161
785
113
204
301

[<>U»r 2/

363
345
370
134
298
193
177
225
55
2ill
295
258
229

Corporate l ^ / o v l . K

•18
150
110
150
36

815
1,193

1,161 •

1,378
1,208~
670
561
464
1,048
381
914
.

71

216

326
401

1%

564
487
341
330
493
208
235
125
435
524
675
6U3

h e r

2/

45

63
165
110
150
36

71

Forthcoming Large Offerings, as of December 5
Type

Issuer

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Common stk.

2U.8

Southern Bell Telephone & Telegraph
Philadelphia Electric Co.
Pacific Telephone and Telegraph Co.

Deb. •
1st & ref. mtg. bds.
Common stk.

70.0
50.0
16.6

Arvida Corp.
Consumers Power Co.
Montana Power Co.
Commerce Oil Refining Corp.
Indiana & Michiran Electric Co.

Common stk.
Pfd. stk.
1st. mtg. bds.
Deb., bds. 6 common
1st mtg. bds.

27.5
15.0
20.0
45.0
20.0

P. Loriliard Co.

Dec. 9
(rights expired
Dec. 10
Dec. 11
Dec. 30
(rights expire)
Dec.
Winter
.
V inter
j
Winter
Winter

STATE AND LOCAL GOVERNMENT

hast Baton Rouge Parish, Louisiana
State of New York
Chicago Board of Education, Illinois
New York State Power Authority
Chesapeake Bay Ferry Commission
Detroit-Metro. Expressway
Massachusetts Port Authority
J




G;O.
G.O.
G.O.

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

22.5
51.0
25.0
200.0
144.0
75.0

Dec. 10
Dec. 10
Dec. 10
Winter
Winter
Winter
Winter

ti.llt

ti-2

Forthcoming Large Offerings, as of December 5 (Cont'd)
Issuer

type

Amount
Approximate date
(millions
of offering
of dollars)

OThER
Municipality of Metropolitan Toronto

S.F. deb.

26.6

Dec, 9

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

H.lli

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

Date
1952 - 1957
High
Low
1958 -January
February
March
April
May 7
13
%
20
21
22
28
June 10
17
25
July 2
9
18
23
Oct. 7
15
28
29

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)
5.00(8/m/57)
2.93(3/31/Sh)

87
-3

*3.60 /
3-89^
14.08
3.91

-8
22
35
18

3.90

16
16

3.85
3.82
3.95

17
12
2U

U.OO
-I4.IO
LlO
14,57
14.50
li.li02/
li.l42^

25
28
29
25
22
12
U4

123
-15

3.96^/
U.07
14.16
14.01
U.OO

21

3.85
3.85

5.50(11/7/57)
3.00(3/17/5U)

|
'

3
9
-1
8
3

14.07
1*.35

1
4
32

I4.OO
3.95

.

-1
-6

3.982/

1

Ji.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.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102