Full text of H.16 Capital Market Developments : February 12, 1958
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Not f o r Publication ^CONTROLLED SIX MOUTHS. H.lU February 12, 1958 capital market d^vi^lop&nts 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 during the week ending February 7 t o t a l e d &U7 m i l l i o n f o r corporations and 4233 m i l l i o n f o r S t a t e and l o c a l governments. This.week, corporate i s s u e s , including t h e e x p i r a t i o n of s u b s c r i p t i o n r i g h t s , a r e expected t o t o t a l ^172 m i l l i o n , . and S t a t e and l o c a l government i s s u e s t o t a l i n g $1*8 m i l l i o n a r e scheduled f o r s a l e . Included i n t h e corporate f i n a n c i n g t o t a l i s an estimate f o r the Royal -Dutch Petroleum Company's i s s u e f o r which s u b s c r i p t i o n r i g h t s expired e a r l y t h i s week. Final information i s not y e t a v a i l a b l e on t h e proportion which was sold to American i n v e s t o r s . Bond y i e l d s - Changes i n y i e l d s on outstanding bonds were mixed l a s t week. Yields on S t a t e and l o c a l government and high-grade corporate bonds i n c r e a s e s , while those f o r corporate Baa's and U. S. Government obl i g a t i o n s declined. Stock p r i c e s - The Standard and P o o r ' s index of 500 common stock p r i c e s increased in t h e early p a r t of l a s t week, then declined. P r i c e s have continued t o decline t h i s week, closing a t 1*0.93 on Wednesday. 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 t h e attached e x h i b i t s . C a p i t a l Markets Section, Division of Research and S t a t i s t i c s , Board of Governors of t h e Federal Reserve System. EXHIBIT A HIGH-GRADE BOND Date YIELDS Corporate Aaa 1/ U. S. Govt, long-term 2/ State and l o c a l govt. Aaa ] / Spread between U. S. Govt, and Corporate 1 State and Aaa | l o c a l Aaa (Per cent) 1958 - High Low 3.12 2.99 3.09 2.85 3.17 2.91 3.79 3.07 k.lk 3.66 3.68 3.56 January 10 January 1? January 2k January 31 February 7 3.65 3.61 3.57 3.56 3.59 1953 - High Low 195k - High Low 1955 - High Low 1956 - High Low 1957 - High (6/19) (1/9) (1/8) (U/23) (12/23) (1/7) (12/28) (3/2) (9/27) (U/12) (1/3) (1/31) 3.19 2.7k 2.7k 2.15 2.97 2.6k 3.1,5 2.8k 3.76 3.18 3.28 3.20 3.20 3.21 3.27 .3.28 3.27 (6/5) (12/31) (1/8) (8/6) (8/5) (1/7) (12/28) (2/17) (10/18) (2/8) (1/31) (1/10) 2.73 (6/25) 1.98 (1/8) 2.21 (6/10) 1.90 (9/2) 2.3k (9/8) 2.05 (5/26) 3.05 (12/27) 2.17 (2/23) .3.k5 (8/29) 2.76(2/21) 2/86(1/9) 2.65 (1/23) .38 .20 .k3 .30 .27 .11 .kl .12 .60 .27 • k6 .28 2.86 2.68 2.# 2.68 2.70 • k5 .kO .30 .28 .32 .83 • 'P .62 .30 .76 .57 .71 .32 .k7 .15 .62 .3k .3k .53 .62 .60 .57 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 y e a r s . . 2/ Weekly average of daily f i g u r e s . The s e r i e s includes bonds due or c a l l a b l e in 10 years or more. y Thursday f i g u r e s . Only general obligation .bonds a r e included; average term i s 20 years. Not.—highs and lows a r e f o r individual s e r i e s and may be o n . d i f f e r e n t dates for, different series. LOWER-GRADE BOND YIELDS STATE AND LOCAL GO Corporate Baa 1 / S t a t e and l o c a l govt. Baa 2/ Spread between Aaa and P (Per cent) 1 9 5 3 ' - HighLow 1954 - High 1955 - High Low 1956 - High Low 1957 - High 1958 - H i g h January 10 January 17 January 24 January 31 February 7 3.89 3.50 3.7k 3.a 3.63 3.45 4.41 3.58 5.10 4.42 4.96 4.68 4.92 4.84 4.77 4.72 4.68 (9/18) (1/2) (1/8) (12/31) (12/30) (1M) (12/28) (3/9) (11/29) (4/12) (1/3) (2/7) 3.79 - 2.96 3.32 2.93 3.26 3.02 4.22 3.20 4.51 . 3.90 3.92 3.73 3.t8 3.77 3.73 3.76 3.77 1/ Weekly average of d a i l y f i g u r e s . 2 ten ^Thursday figures. (6/25) (1/8 (8/5) ^ (12/29) (1/6) (12/27) (3/8) (8/29) (2/21) d/2) P-/23) .69 .42 .68 .52 .54 .45 .63 .42 1.27 .64 1.28 1.09 1.21 .98 1.16 .93 1.03 .87 1.17 .89 1.21 1.04 1.09 1.02 1.27 1.23 1.20 1.16 1.09 1.02 1.09 . 1.08 1.08 1.07 Average term of bonds i n c l u d e s i s Only general o b l i g a t i o n bonds are included; average " Note?--Highs and lows a r e f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t dates f o r d i f f e r e n t series. EXHIBIT C STOCK MARKET -h- Stock p r i c e Trading Common volume 2 / (millions yields 3/ of s h a r e s ) ( p e r cent) Stock market customer c r e d i t Customers' Bank debit bal- loans to ances 1*/ " o t h e r s " 5 / Total ( M i l l i o n s of d o l l a r s ) 1953 - High 195U - High Low 1955 - High . 1956 - High 1957 - High 1958 - High November December January 21* January 31 February 7 26.5k 22.95 35.98 2U.93 145.69 35.28 1*9.61* 1*3.22 19.08 39.1*8 1*1.73 1*0.37 (1/2) (9/18) (12/31) (1/8) (12/9) (1M) (8/3) (1/20) (7/12) (12/20) (2/7) (1/10) 1*0.35 to. 33 1*1.71 l a . 70 1*1.73 2.5 3.7 l.li 1*.6 1.5 i.i U.2 1.1* 2.5 2.2 2.5 2,5 IE 1 8 I U.32 It. 1*2 3.61* It,030 3,537 1,665 1,311* 2,388 1,653 2,805 2,517 2,823 2,71*0 2,887 2,1*82 I'M 2,517 2,1*82 780 661, 1,01*8 •71*6 1,21*1 1,018 1,267 1,155 1,163 1,051* 1,051 1*. 62 1*. 63 U-1*3 1*. 1* 2 1*.1*2 1,060 1,091* 1,058 1,067 n.a.—Not available. ' ' ' ' 1 / Standard and"Poor's composite index of 500 common s t o c k s , weekly c l o s i n g p r i c e s , 191*1-1*3-10. Monthly d a t a a r e averages of d a i l y f i g u r e s r a t h e r than of F r i d a y s ' only. Highs and lows a r e f o r F r i d a j ' s data o n l y . 2 / Averages of d a i l y t r a d i n g volume on t h e New York Stock Exchange. 2 / Standard and P o o r ' s composite stock y i e l d based on Wednesday d a t a conv e r t e d t o weekly c l o s i n g p r i c e s by Federal Reserve. h / Knd of month f i g u r e s f o r member f i r m s of the New York Stock Exchange which c a r r y margin a c c o u n t s ; excludes b a l a n c e s secured by U. S. Government o b l i g a t i o n s . y Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes loans f o r purchasing or c a r r y i n g U. S. Government s e c u r i t i e s a t banks in New York and Chicago. Weekly r e p o r t i n g banks account f o r about 70 p e r cent of l o a n s t o o t h e r s . For f u r t h e r d e t a i l see B u l l e t i n . Exhibit D Corporate and Statu and Local Government Security Offerings and Placements (In millions of d o l l a r s ) 1958 January February March e / 800 e / 825 April May June v jly August September Corporate 1 1957 1 New c a p i t a l 1956 1958 573 712 817 796 e / 750 S t a t e and l o c a l 1/ 1956 T 1957 ' 1 IS 1*01* 696 390 92li 771 1,189 818 1,11*6 61*1 765 51*6 393 378 1*90 735 991 91*4 973 1,063 654 838 529 581* 1*31 1*08 206 357 • 698 633 698 639 31*7 1*09 1,820 1,063 1,071 1,31*4 . October November December 1,0114. 831 e/1,000 1st 2nd 3rd l*th quarter quarter quarter quarter 3,1,79 3,iai t 2,078 e/2,845 . 2,102 2,805 2,556 2,922 ^5% 2,029 1,1*90 1,603 971 1,395 lsfhalf Three q u a r t e r s Year 6,662 9,540 e/12,385 4,907 7,463 10,361 3,5% 5,069 7,099 3,0?3 4,064 .5,1*59 1,0892/ 1,088 ' Excluding finance companies 3/ 1st 2nd 3rd l*th quarter quarter quarter quarter Year ~ 3,268 2,921 2,560 e/2,695 1,617 2,541 2,246 2,826 e/ll,446 9,260 e / Estimated. 1 / Data through June 1956 are Bond Buyer data c l a s s i f i e d as new c a p i t a l by Federal Reserve; l a t e r data a r e from the Investment Bankers Association of America and a r e somewhat more complete as to coverage than the e a r l i e r d a t a , p a r t i c u l a r l y f o r Federal Government loans. • 2/ includes $571.5 million AT&T common stock issue. y Total new c a p i t a l issues excluding o f f e r i n g s of sales and consumer finance companies. Note.—Details may not add t o t o t a l s due to rounding. Exhibit ii H.llt Large Public Security I s s u e s f o r New 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 ) Corporate Month • January February March April May June July August September October November December Januaiy S t a t e and l o c a l government Other 2 / 386 306 19k 1*99 2ii8 176 262 357 185 1*35 386 1*39 506 567 6?1 788 1*77 329 877 525 526 537 571 1*20 399 318 100 50 ^ 125 25 39 25 30 75 215. Large Individual I s s u e s Offered February 1 through 7 Issuer Type 2 / Amount Coupon (millions r a t e or O f f e r i n g Maturity Rating of net i n t e r - yield dollars) e s t cost CORPORATE Tenn. Gas Trans. Co. Texas U t i l i t i e s Co. Com.stk. Com.stk. 30.8 16.6 Swr.rev. G.O. Wtr.rev. Swr.rev. 5 . 6 1962-97/72 5.0 1959-82 5.0 1962-78/68 25.0 1961-96/63 3.53 2.73 3.02 3.55 2.30-3.60 1.50-2.90 2.15-3.05 2.20-3.60 A Aa Aa 10.0 3.19 1.80-3.25 A STATE AND LOCAL GOVERNMENT Springfield, H I . Columbus C.S.D., Ohio D e t r o i t , Michigan Allegheny Co.San.Auth.,Pa. East Baton Rouge Par. Sch. Dist. Nb. 1, La. G.O. 1959-78 — 1 H.lii E-2 Large I n d i v i d u a l I s s u e s Offered February 1 through 7 (Cont'd) Type 3/ Amount Coupon [millions r a t e or Offering Maturity net i n t e r - y i e l d of dollars) e s t cost 1 Rating STATE AND LOCAL GOVERNMENT (Continued) >.emphis, Tennessee G.O. Denver, Colorado Wtr.rev. Public Housing Auth. — N.Y. S t a t e Thruway Auth. G.R. No. Hempstead S.D.No.9»N.Y. G.O. D e t r o i t , Michigan G.O. Nevj Orleans, La. G.O. Wichita S. D. No. 1 , Kan. G.O. 12.5 20.0 67.1 50.0 7.4 13.7 .6.3 5.0 . 2.82 1959-88 1969-97/68 3.25 1959-98/67 2.89 1985-95/65 3.12 1958-86 3.72 2.98 1959-83 1959-87/731 3.25 1959-78 3.1h 1.50-3.70 Aa 2.65-3.2k Aa 1.45-3.10 Aaa 2.85-3.10 Aaa 1.60-3.75 Baa 1.65-3.15 A 1.80-3.35 A 1.80-3.30 A • OTHER None 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 $5 m i l l i o n and over. 2 / Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and Development i s s u e s . 3 / In the case of State and l o c a l government s e c u r i t i e s , G.O. denotes general o b l i g a t i o n s ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured by f a c i l i t i e s revenues; L . L . , l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge or d e s i g nated revenues. H.lli Exhibit F Forthcoming Large Public Security Offerings f o r New Capital (Other than U. S. Treasury) 1 / Expected Proceeds from Forthcoming Large Issues During month following date shown Corporate S t a t e and. Other 2 / l o c a l govt. Date of computation Dec. 31 Jan. 31 Feb. 28 Mar. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 Dec. 31 476 591 740 461 . 187 52$ 370 526 578 576 458 383 378 . 280 153 153 290 179 97 172 252 243 370 369 387 383 . 100 35 25 25 25 30 30 18 150 Subsequent t o date shown Corporate^ 796 966 795 486 258 5# 415 811 845 647 815 1,193 1,161 , a 763 648 631 862 396 388 498 514 439 587 573 589 614 g ^ |Other 2 / 100 35 25 25 25 30 15 45 63 165 Forthcoming Large O f f e r i n g s , as of February 7 Issuer Type Amount (millions Approximate date of o f f e r i n g . of d o l l a r s ) CORPORATE Royal Dutch Petroleum Cb. Common s t k . 100.0 Northern Natural Gas Co. Common s t k . 21.8 Pfd. s t k . Southern C a lifo rn ia Edison Co. 25.0 1 s t mtg. bds. Indiana & Michigan E l e c t r i c Co. 25.0 Pfd. s t k . ^Niagara Mohawk Power Co. 25.0 Deb. General Motors Acceptance Corp. 150.0 1 s t mtg. bds. New York S t a t e E l e c t r i c & Gas Co. 25.0 1 s t mtg. bds. 29.0 Pennsylvania E l e c t r i c Co. 1st mtg. bds. Cleveland E l e c t r i c Illuminating Co.30.0 Central I l l i n o i s Public Service Co. 1 s t mfcg. bds. 15.0 United Gas Corp. 1st mtg.&coll.tr.bdsJO.O Deb. ^Southern New England Telephone Co. 30.0 Pfd. s t k . ^Potomac E l e c t r i c Co. 15.0 Feb. 10 ( r i g h t s expire) Feb. 11 ( r i g h t s expire) Feb. 11 Feb. 14 Feb. 18 Feb. 19 Feb. 21 Feb. 25 Feb. 26 Feb. 26 Feb. 27 Feb. 27 Feb. 28 H.lU F-2 Forthcoming Large O f f e r i n g s , as of February 7 (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 ) CORPORATE (Continued) /"•Baltimore Gas & E l e c t r i c Co. O h i o Edison Co. Public Service E l e c t r i c & Gas Co. Union E l e c t r i c Co. -"-Columbia Gas System, I n c . American Telephone & Telegraph Co. Chicago, Rock I s l a n d & P a c i f i c R.R. Commerce Oil Refining Corp. Natural Gas P i p e l i n e Co. of. America lst&ref.mtg.bds. 1 s t mtg. bds. . Pfd. s t k . 1 s t mtg. bds. Deb. Conv. deb. 30.0 . ko.o 25.0 35.0 30.0 718.3 1 s t mtg. bds. Deb. -,-bds. &commont 1 s t mtg. bds. 16.0 16.0 ko.o Mar,. h Mar,, 5 Mar.. 5 Mar., 6 Mar., 7 Mar., 12 ( r i g h t s expire) Mar. 13 Winter Winter . STATE AND LOCAL GOVERNMENT S t a t e of Minnesota - G.O. H a r t f o r d , Connecticut G.O. Met.-Water D i s t . of Southern C a l i f . Rev. Guilford Co., North Carolina G.O. Hempstead U. F. S. D., N. Y. G.O. Kansas City Sch. D i s t . , Mo. _____ G.O. • Long Beach, C a l i f o r n i a G.O. S t a t e of Connecticut G.O. S t a t e of Alabama G.O. -x-State of . Rhode Island ' G.O. --St. Louis, Missouri G.O. *Ltis Angeles Met. T r a n s i t A u t h . , C a l i f Rev. -::-State of Delaware G.O. >-New York, New York G.O. Cleveland, Ohio G.O. S t a t e of Kentucky G.O. Houston Ihd. Sch. D i s t . , Texas G.O. ' -^Washington Tp. Local Sch. Dist.,Ohio C-.O. -^-Louisiana S t a t e Univ. Bldg. r e v . • e s t a t e of M i s s i s s i p p i G.O. Milwaukee, Wisconsin vvtr. rev. -x-State of Louisiana C-.O. Pennsylvania Turnpike Commission Rev. Inter-American* Center A u t h o r i t y , F l a . Rev. Met. F a i r & Exposition Auth., 111. ' Bldg. r e v . 12.0 6.9 18.0 6.0 5.1* • - 7.0 10.1 35.0 21,0 18.8 12.3 liO.O 21.0 ' . a.5 15.3 35.0 . 15.0 5.0 7.5 20.0 ' 10.0 • 8.1 62.0 20.0 25.0 Feb. 11 Feb. 11 . Feb. 11 Feb. 11 Feb. 13 Feb. 17 Feb. 18 Feb. 18 Feb. 19 Feb. 19 Feb. 19 Feb. 19 Feb. 20 Feb. 25 Feb. 25 Feb. 25 Feb. 26 Feb. 27 Mar. 1 Mar. 6 Mar. 18 Mar. 26 winter Winter winter OTHER -^Amsterdam, The Netherlands S.F. bds. 15.0 Feb. 26 H.lii F-3 -*—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 #15 m i l l i o n and over j S t a t e and l o c a l government i s s u e s of 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 . Note.—Deletions f o r reasons o t h e r than s a l e of i s s u e : None.