Full text of H.16 Capital Market Developments : February 1, 1956

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

BECOHTROLLED AFTER SIX MONTHS

Helli

February 1 , 1956
CAPITAL MARKET DEVELOPMENTS

One l a r g e c o r p o r a t e d e b e n t u r e i s s u e of $20 m i l l i o n and
two l a r g e 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 w i t h t o t a l
proceeds of $1$ m i l l i o n were f l o a t e d p u b l i c l y f o r new c a p i t a l d u r i n g the week ending J a n u a r y 27. The.volume of l a r g e i s s u e s s c h e d u l e d t o be o f f e r e d t h i s week i s g r e a t e r , t o t a l i n g $6$ m i l l i o n f o r
c o r p o r a t i o n s and $13 m i l l i o n f o r S t a t e and l o c a l governments.
Februaiy e s t i m a t e s - The volume of c o r p o r a t e f i n a n c i n g
f o r new c a p i t a l i n February i s e s t i m a t e d a t $600 m i l l i o n , more than
o n e - t h i r d g r e a t e r than t h e t o t a l a y e a r ago. Large p u b l i c i s s u e s
a l r e a d y scheduled account f o r about o n e - t h i r d of t h e expected v o l ume t h i s month while l a s t y e a r such o f f e r i n g s r e p r e s e n t e d only ones e v e n t h of t h e t o t a l .
The February e s t i m a t e of S t a t e and l o c a l government
s e c u r i t y i s s u e s i s $$2$ m i l l i o n , compared t o a t o t a l of $312 m i l l i o n o f f e r e d i n February 1955 • Included i n t h i s e s t i m a t e , and
accounting f o r most of t h e gain over l a s t y e a r ' s February volume,
a r e the P u b l i c Housing A u t h o r i t i e s i s s u e of #106.8 m i l l i o n and t h e
C o n n e c t i c u t Expressway o f f e r i n g of #100 m i l l i o n . The l a t t e r o f f e r i n g was p r e v i o u s l y scheduled i n December 1955 b u t was postponed due
t o u n f a v o r a b l e market c o n d i t i o n s .
Bond y i e l d s - Corporate Aaa and Baa bond y i e l d s d e c r e a s e d
two and one b a s i s p o i n t s r e s p e c t i v e l y d u r i n g t h e week ending J a n u ary 27. Other y i e l d s shown i n t h e a t t a c h e d e x h i b i t s remained s t a b l e .
During t h e f i r s t two days of t h i s week, no change was r e c o r d e d i n
c o r p o r a t e and U. S. Government bond y i e l d s .
Stock p r i c e s i n c r e a s e - The SEC i n d e x of 265 common s t o c k s
r o s e moderately t o 259.O l a s t week i n an average d a i l y t r a d i n g v o l ume of 2 . 1 m i l l i o n s h a r e s a day. P r i c e s made f u r t h e r moderate i n c r e a s e s on Monday, Tuesday and Wednesday of t h i s week.
More d e t a i l e d i n f o r m a t i o n concerning r e c e n t c a p i t a l market
developments i s p r e s e n t e d i n t h e a t t a c h e d e x h i b i t s .

Business Finance and C a p i t a l Markets S e c t i o n ,
D i v i s i o n of R e s e a r c h and S t a t i s t i c s ,
Board of Governors of t h e F e d e r a l Reserve System.




EXHIBIT A

H I G H - G R A D E B O H D YIELDS
Weekly

CORPORATE A a o

- U . S. GOVERNMENT

_4—i—rv^t'
i

STATE AND LOCAL \
GOVERNMENT A a a

T

^

---.-r

-|-

r

\

\
j

U. S. Govt,
long-term 2/

Corporate
Aaa y

State and local
govt., Aaa

Spread between
p. S» Govt, and
Corporate State an$
Aaa
local Aaa

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low

3.12
2.99
3.09
2.85
3.17
2.91
3.1k
3.09

December 30
January 6
January 13
January 20
January 27

3.16
3.1h
3.13
3-11
3.09

3.1$
2.78
2.7U
2.a
2.9h
2.62
2.90
2.83

V

(6/6)
(12/26)
(1/9)
(8/7)
(8/3)
(1/7)
(1/6)
(1/27)

2.89
2.90
2.88
2.83
2.83

1/ Weekly average of dally figures!
yearS

2/

2.73
1.98
2.21
1.90
2.3U
2.05
2.29
2.27
2.30
2.29
2.27
2.27
2.27

.8U
• 30
.61
.29
•70
•5U
.61
.56

.38
.19
• U3
32
• 3U
.13
.28
.2b
.27
• 2U
.25
.28
.26

-

.59
.61
.61
.56
.56

Average term of bonds included i s 25-20

Weekly average of daily figures; old series.

°f
term Ts 20 years.

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

Average term to f i r s t call

Only 8 general o r a t i o n bonds are included, average

Note.—Hishs and lows are for individual series and may be on different dates
for different series.




L O W E R - GRADE B O N D YIELDS

l O R P O R a i c Baa

STATE AND LOCAL GOVT. Baa
/\
Moody's j
./V

1

!

I

r - J

STATE AND LOCAL GOVT. REVENUE

Corporate
Baa 1/

Date

State and
local govt.
Baa 2/

State and
local govt,
"rev. 3/

(Per cent)

1955 - High
Low
1956 - High
Low

3.89
3-50
3.7k
3. a
3.63
3.1I5
3.62
3.59

December 30
January 6
January 13
January 20
January 27

3.63
3.62
3.61
3.60
3-59

1953 - High
, Low
195U - High

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/1U)
(1/6)
(1/27)

3.79
2.96
3-32
2.93
3.26
3.02
3.26
3.22
3.26
3.26
3-25
3.22
3.22

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(1/5)
(1/26)

3.27
2.71
3.00
2.72
2.99
, 2.76
2.9U
2.90

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(1/6)
(1/27)

2.99
2.9U
2.91
2.90
2.90

1/ Weekly average of daily figures. Average terra of bonds
included i s 25-26 years.
2j Thursday figures. Only general obligation bonds are
included; average term is 20 years.
J / Friday figures. Average rating of bonds included i s
between Baa and Aj 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

Trading
Common
Stodc market customer credit
volume 2/
stock
Customers'
(millions yields 3/
debit bal- loans to
of shares) (per cent)
ances V "others" 5/

Date "

Stock price
index 1/

1953 - High
Low
195U - High
1955 - Higi
Low
1956 - High
Low

167.1 (1/2)
m . 0 (9/18)
221.1* (12/31)
156.5 (1/6)
270.7 (12/30)
217.U ( 1 M )
268.8 (1/6)
257-U (1/20)

2.5
0.9
3-7
l.li
L.6
1-5
2.U
2.1

November
December
January 13
January 20
January 2?

265-0
269.2
266.2
257.U
259.0

2.3
2.U
2.U
2-3
2.1

(Millions of dollars)
5.75
5.15
5.33
U.20
U.22
3.78

2,UU5
2,055
3,U36
2,105
1,025
3,537

1,665
1,31k
2,388
1,653
2,805
2,517

n.a.

n.a.

n.a.

U.09
U.06

3,980
It,025

2,759
2,786

n.a-

n.a.

n.a.

780
66U
1,0U8
7U6
1,21a
1,018
1,253
1,21*1
1,221
1,239
1,253
1,21a

n.a.—Not, available.
V SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19U7-U9-100 ty Federal Reserve. The conversion factor i s 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
~y Moody's 200 comnon stocks; end of month figures.
Ty End of month figures for member firms of the New York Stock Exchange which
cany margin accounts; excludes balances secured by U. S. Government obligations.
$J 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 72 per cent of loans to others.
,
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D .

H.lU

%

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 millions of d o l l a r s )

1956
January
February
March

e/600
e/600
~

April
. May
June

195U

1956

5h6
U36
1,261

5U7
U26
635

e/36g
1/52.5

L9L
903
697

July
August
September

#3
65U
680

October"
November
December

1,138 y
601
e/8>0

[ 1st quarter
2nd q u a r t e r
3rd -quarter
Uth q u a r t e r
Year

New c a p i t a l

Corporate
1 1955
1

2,2U3
2,09k
1,917
e/2,590
e/8,8ii5

'

S t a t e and l o c a l
1
1955
1
535
312
538

396
101
565

U97
656
8U2

U27
350
6U1

731
7U8
653

909
335
7U7

h702h9
U06

279
261
6U9

1,003.
290
60U

919
658
e/UOO-

59U
1*23
877

1,385
1,118
1,12k
e/l,977
e/5,901*

1,372
2,331
1,188
1,89k
6,789

1,608
1,99$
1,991
1,896
7,190

Excluding f i n a n c e companies 7j
1st quarter
2nd;quarter
3rd quarter
Uth q u a r t e r
Year

-

1,791
1,912
i,m
e/2,390
e/7,535

1,527
1,927
1,911
1,792
7,155

e / Estimated.
1 / Includes $637.2 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 Total 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 personal finance
companies.
Note.—Details may not add t o t o t a l s due t o rounding.




Helii

Exhibit E

W

Large Public S e c u r i t y I s s u e s f o r New C a p i t a l
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues O f f e r e d (Millions of d o l l a r s )
Month

1

Corporate '

121
1U1
63
750
173
U83
175
101
ho$
328
80S
269
215

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

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

-

.

Other 2 /

689
3U1
107
337
238
152
1*03
278
65
23U
716
396
20$

30
35
15

25
5°

Large I n d i v i d u a l I s s u e s Offered January 2 through 27
Issuer

Type 3/

Coupon
Amount '
(millions Maturity r a t e or
O f f e r i n g Rating
yield
net i n t e r of
dollars)
est cost

CORPORATE
Commercial Credit Co.
Textron-American

S r . notes
| Cony. deb.

75-0
20.0

1976
1971

3 5/8
5.oo

3.63
5.00

__

Ba

STATE & LOCAL GOVERNMENT
Wayne County Sevier
System, Michigan
P l a t t e County, Missouri
Allegheny Co., Pa.
Los Angeles, C a l i f .
S t a t e of Colorado
D e t r o i t , Michigan
Gwinnett County, Ga.
San Diego, C a l i f .
S p r i n g f i e l d , Ohio




G.O.
Rev.
G» 0.
' G.O.
L.L.
Rev.
L.L.
G.O.
G.O.

6.7
1956-93
1986
5.1*
6.0
1957-86
10.0 r- 1957-76
8.0
1957-71
8 . 0 I 1961-76
5.9 ' 1959-81*
1957-81
9.5
1957-80
5-2

3.21
2.53
2.58
2.29
2.U1
2.56
2.U8

1.90-3.20
3.75
1.75-2.60
1.80-2.65
1.70-2.25
2.10-2.15
3.00-3.50
1.75-2.60
1.75-2.55

A
A
Aa
Aa
Aa
A
A

1
H.lU

E-2

;

Large I n d i v i d u a l I s s u e s Offered January 2 through 27 (Cont'd)
Issuer

Type 3 /

Amount
Coupon
(millions
| Maturity r a t e or O f f e r i n g Rating
of
net interyield
dollars)
e s t cost

STATE & LOCAL GOVERNMENT
(Cont'd)
S t a t e of Michigan
S t a t e of Michigan
D e t r o i t , Michigan
Caddo P a r i s h , La.
La. S t a t e Building Auth.
Milwaukee Co., Wis.
P h i l a d e l p h i a , Pa.

L.L.
L.L.
G.O.
G.O.
L.L.
G.O.
G.O.

10.0
10.0
5.2
5.0
7-6
8.9
6.0

1957-78
1957-72
1957-81
1957-76
1961-85
1957-64
1957-06

2.37 .
2.30
Var.
2.57
3.06
1.96
2.75

1.70-2.1*0
1.70-2.30
1.80-2.60
1.80-2.60
2.50-3.05
1.55-1.90
1.75-3,00

Aa
la
A
A
Baa
Aaa
A

OTHER
None
1
Yar.—Various.
' _n.a.—Not a v a i l a b l e .
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of &15 m i l l i o n and over;
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 of #5 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 .
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 ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured
by f a c i l i t i e s revenues; L . L . , l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
designated revenues.




H.lU

Exhibit F

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury), 1 /
During, month following
date shown
State and other 2 /
Corporate
l o c a l govt.
—

Date of
computation
.19$$ - Jan. 31
Feb. 28
. Mar. 31
Apr. 29
May 31
June 30
July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31

16
710
211
k2$
160
67
h07
222
80$
202
215
70
176

682
$2h
208
116
339
3hU
100
18U
82+3
330
205
121
327

50

Subsequent to
date shown
State and other 2 /
Corporate
l o c a l govt.
—
U22
1,395
922
1,11*1
. 850
. 830
1,135
920
909
U12
230
85
376

1,961

1,978
2,009
1,917

1,861

1,8U5

2,018

1,971
2,205
1,650
756

618

50

917

Forthcoming Large Offerings, as of January 27
Issuer

Northwestern Bell Telephone
Reynolds Metals
Chemical Corn Exchange Bank
Southern California Edison
M. Lowenstein and Sons
#West Coast Transmission
Bell Telephone of Pennsylvania
New York Telephone
Southern California Gas
Sheraton Corporation of America
^Tennessee Gas Transmission
#Koppers Co., Inc.

Type

Deb.
Pfd stock
Com. stock
Pfd . stock
Conv. sub. deb.
Sub. deb.
Deb.
Ref. mtg. bds.
Mtg.. bds.
Deb.
Pfd.. stock
Com.. stock

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

25.0
Uo.o
26.0
30.0
3h*3
20.5
35.0
55.0
Uo.o
15.0
Uo.o
15.6

February
February
February
February
February
February
March 6
March 27
May
1956
1956
1956

1
1
8
lit
15
21

STATE AND LOCAL GOVERNMENT
State of Maryland
Tacoma, Washington
Oklahoma City, Oklahoma
Public Housing Authorities
New Orleans, Louisiana




G.O.
Rev.
n•
n. a.

7.8
5.0
13.2
106.8
11.5

January 31
January 31
February 7
February 7
February 8

H.lU

F-2
Forthcoming Large O f f e r i n g s , as of January 27 (Cont'd)
Issuer

Type

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

.STATE AND LOCAL GOVERNMENT (Cont'd)
H a r r i s County, Texas
Metropolitan Water D i s t . of So. Cal.
*Lubbock, Texas
*New York S t a t e Thruway
Rochester, New York
Weber Basin Water Conservancy
D i s t r i c t , Utah
*Fort Worth, Texas
Connecticut Expressway
Georgia Rural Roads Authority
F l o r i d a S t a t e Turnpike Authority
Inter-American Center Auth., F l a .
Oklahoma Turnpike AuthorityPennsylvania Turnpike Commission
Washington S t a t e Toll Bridge Auth.
S a l t River P r o j e c t , Arizona

n.a.
n.a»
n.a.
n.a.
Rev.
Rev.
n.a.
Rev.
Rev.
Rev.
Rev. "

5.5
7-3
9.8
5o.o
7.U
5.U .
10.0
100.0
15.5
185.0
25.0
65.0
62.0
227.0
11.0

1

February
February
February
February
February

1U
Hi
lit
15
21

February 23
February 27
February 28
May
Late spring
1956
1956
1956
1956
1956

None
a—Included i n 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
' local™"government i s s u e s of $5 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 .