Full text of H.16 Capital Market Developments : February 14, 1957

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Not for Publication DECONTROLLED AFTER SIX MOUTHS
H.li*

February lU, 1957
CAPITAL MARKET DEVELOPMENTS

The volume of large publicly offered securities was moderate
during the week ending February 8, Corporate offerings totaling §62
million, State and local government issues amounting to #76 million
and a $50 million Canadian issue were floated last week. The calendar for this week includes issues totaling $76 million for corporations and &75 million for State and local governments.
Bond yields - Bond yields declined last week for all categories of outstanding bonds, except those for corporate Baa-rated
bonds which remained stable. The decline was slight for corporate
Aaa's and State and local government revenue bonds, but it was substantial for State and local government Aaa's and Baa's and U. S.
Government obligations.
Stock prices -Stock prices, as measured by the SEC index
of 265 common stocks, declined sharply last week, closing at 260.3
on February 8, bringing prices down to the level of January 1956.
Daily figures through Wednesday of this week indicate a very sharp
drop in prices on Monday, with partial recovery on Wednesday,
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.




H I G H - G R A D E BOND YIELDS
Per cent per

CORPORATE

STATE AND LOCAL
GOVERNMENT A a a

U. S. Govt., long-term 2/
• B.U

Corporate
Aaal/

Old series

New series

Spread between
State and
U. S. Govt,
local govt. (old series) and
Aaa y
Corporate 1 State and
Aaa
1local Aaa

(Per cent)
3.U2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
3.82
3.69

(6/19) 3.15
(1/9)
2.78
(1/8)
2.?a
(V23) 2.hh
(12/23) 2.9U
2.62
(1/7)
(12/28) 3.U9
2.80
(3/2)
(1/W
3.53
(2/8)
3.15

is
•is
3.73

3.U5
3.30
3.22

£5

(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)
(1/W
3.U5 OA)
(2/8) 3.22 (2/8)

2.73
1.98
2.21
1.90
2.3U
2.05
3.05
2.17
3.05
2.81

3.a

3.05
3.02
2.96
2.87
2.81

£2

3.29
3.22

(6/25)
(V8) ,
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)
(i/io)
(2/7)

.13
.51t
.29

.8U
.30
.61
.29
.70
•5U
.68
.32
•U8
.26

.36
.U8
.51
.52
.51

.ltO
.28
.26
.33
.3k

.38
.19
•U3
.32
• 3U
.13

2/ Weekly average of daily figures. Average term of bonds included io 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 1955, and those due or callable in 10-12 years thereafter; the. average
term to first call of the bonds included declined from lit years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 l/lt per cent bond of 1978-83-.
j/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




L O W E R - G R A D E BOND YIELDS
Per cent per annum

CORPORATE Baa

STATE AND LOCAL GOVT. Baa

I

I

STATE AND LOCAL GOVT. REVENUE

Corporate
Baa 1/

State and
local govt.
Baa 2/

State and
local govt,
rev, y

(Per cent)
1953 - High
Low
195U - High
1955 - High
1956 - High
Low
1957 - High
Low
January 11
January 18
January 25
February 1
February 8

3.89
3.50
3.7k
3.W
3.63
3.U5
It.ltl
3.58
.k.50
lt.U6
It. 1*9
It. 50
lt.ltS

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/llt)
(12/28)

h.ke
I4.I18

(3/9)

(1/18)
(1/W

3.79

2.96
3.32
2.93
3.26 (12/29
3.02 (1/6)
It. 22 (12/27
3.20 (3%)
It.22
lt.00

3.27
2.71
3.00
2.72
2.99
2.76
3.98
2.89
3.98
3.80

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/28)
(2/2U)
( W
(2/8)

It. 22
lt.17
L13
lt.08
lt.00

3.814
3.81
3.80 '

3.95
3.90

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




Stock price

Common
Stock market customer credit
volume 2/
Customers'
(millions yields ^
Tot.l
debit bal- loans to
of shares) (per cent)
ances 4 / "others" 5/
(Millions of dollars)

1953 - High
1954 - High
Low

1955. - High
Low

1956 - High
1957 - Hi^h
Low
December
January
January 25
February 1
February 3

167.1
144.0
221.h
156.5
270.7
217.4
295.5
257.4

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/14)
(8/3)
(1/20)

279.2 (1/4)

260.3 (2/8)
277.7
273.0
268.2
1 266.3
260.3

2.5 .
0.9'
3.7
1.4
4.6
1.5
3-1
1.5
2.7
1.8
2.4

2.2

2.1
1.8
2.1

5-75
5.15
5-33
4-20
4.22
3.78
4.25
3-86

2,445

2,055

1,665

3,537
4,047
3,914

1,314
2,388
1,653
2,805
2,517
2,823
2,740

4.13
4.31
n.a.

3,984
n.a.

2,923
n.a.

n.a.

n.a.

n.a.

3,436

2,405
4,030

n.a.

n.a.

780
664
1,048
746
1,241
1,018
1,267
1,155
1,163
1,141

.

1,161
1,141
1,141
1,141

n.a.—Not available.
_l/ SEC index of 265 common stocks, weekly closing prices, 1939=100; converted
to 19u7_49=100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Moody's 200 common stocks; end of month figures.
2 / 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 / Yfednesday 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 ?2 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.IU

Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1957
January
February
i-iarch

5/1,100
e/1,000

III
July
August
September
October
November
^December
1st
2nd
3rd
kth

Corporate
1 1956
I

1st half
Three quarters
rear

»

312
538

k78
886
687

377
k90
735

k27
350
• 6kl

597
6kk
670

376
199
333 .

816
l,lkk
830
1,066
66?
8#

1,09k

1,162
632
900

2,073
2,790
2,571
2,929

2,165
2,052
1,911
2,695
"

e/660
jg/525

1955

kok
696
390

535
k07
1,223

1,863
•7,k3k
10,363

State and local
1957
1 1956
I

1955

579
70k
790

1,088 y

quarter
quarter
quarter
quarter

New capital

3/

k,217
6,126
8,821

,

k70
2k9
k06

6k5
311
s/kiS

919
658
k08

1,190
1,603
908
e/1,3'1

1,385

as

3,093
k,001
3/5,3o2

2,803
3,927
5,911

1,984

deluding finance companies 3/
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

Year

1,617
2,520
2,263
e/2,80k
e/9,'20k

'

1,727
1,870
l,k3k
2,55k
7,569

1/ Includes $637.2 million AT&T convertible debenture issue,
2/ Includes #571,5 million AT&T common stock issue.
3/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note,—Details may not add to totals due to rounding.




H.Ik

Exhibit E
Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Month

Corporate

State and
local government

Other 2/

.

1956 - January
February
March
April
May
June
July
August
September
October
November
• December
<-957 - January

95
212
278
395
623
185 .
• 592
217
558
386
701
WO
567

-

__

192
hhh
163
157
233
1*63
16U
35 •
18U
383
135
201
386

50
20
37
35
100

Large Individual Issues Offered February 1 through 8

Issuer

Type 3/

Amount
Coupon
(millions
rate or
Offering
Maturity net inter- yield Rating
of
dollars)
est cost

CORPORATE
Carrier Corp.
Conv. sub. deb. 18.0
Douglas Aircraft Co.
Conv. sub. deb. 27.9
Stanrock Uranium Mines,Ltd. 1st mtg.bds. 16.0

1982
1977
1963

h 1/8
h
5 3/h

1.03
3.8 9

V

Baa
Baa
—

STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wisconsin
San Diego Unified Sch,
Dist., California
New York, New York
Fresno Unified Sch,Hist.,
California
Public Housing Authorities




G.O.

11.2 1958-67

2.18

2.00-2.15 Aaa

G.O.
G.O.

5.0 1959-78
25.2 1958-66

3.07
2.89

2.35-3.10
2.25-3.00

G.O.

5.5 1958-77
28.6 1958-97

2.79
2.82

2.10-2.85 Aa
1.95-2.85 Aaa

A
A

%

H.Ht

E-2
Large Individual Issues Offered February 1 through 8(Cont'd)

Issuer

Type "2/

Amount
Coupon
(millions
rate or Offering Rating
Maturity
of
net inter- yield
dollars)
est cost

OTHiijR
Quebec Hydro-Electric
Commission

Deb.

50.0

1977

h 3/8

k.hl

A

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.
h/ Offered in units with common stock..




H.lk
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
' Subsequent to
During month following
date shown
date shown
Corporate State and Other 2/ Corporate State and Other 2
local govt.
local govt.

Date of
computation
1956 - Jan. 31
Feb. 29 .
Lar. 30
Apr. 30
May 31
June 29
July 31
Aug. 31
Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31

176
123
380
568
198
U37
2h7
369
315
683
136
h76
591

327
220
132
173
332
61
131
359
162
U8
280
153

376
233
1,013
818
kk8
567
1,096
1,202
1,009
990
181
796

37

23
100
35

966

917
785
811
832
9lil
690
726
958
1,197
955
979
763
6U8

37

23
100
35

Forthcoming Large Offerings, as of February I
Issuer

Type

Amount
Approximate date
(millions
of dollars) of offerings

. CORPORATE

18.0

Potomac Electric Power Co.
Trans-Canada Pipe Lines, Ltd.
Ohio Edison Co.

Deb.
Deb.& common stk.
Common stk.

Southern California Edison Co.
Socony Mobil Oil Co.

Ist&ref. mtg. bds. 37.5
Common stk.
199.3

Colorado Fuel & Iron Corp.

Conv. S.F. deb,

Phillips Petroleum Co.
^Illinois Bell Telephone Co.




Cohv. deb.
1st mtg. bds.

31.3
27.0

19.9
171.8
iiO.O

. February ll*
February 15
February 15
(rights expire)
February 19
February 19
(rights expire)
February 23
(rights expire)
February 25
(rights expire)
February 27

H.lU

F-2
Forthcoming Large Offerings, as of February 8 (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

CORPORATE (Cont'd)
United Gas Corp.
Potomac Electric Power Co.
Anaconda Co.
•aColumbus & Southern Ohio Electric Co.
^Southern Counties Gas Co.
American Natural Gas Co.
Consolidated Edison Co.
American Tel. & Tel. Co.
-^-Central & South West Co.
Michigan Wisconsin Pipe Line Co.

1st & coll. tr.
Preferred stk.
Common stk.

35.0
15.0
86.7

1st mtg. bds.
1st mtg. bds.
Common stk.

16.0
15.0
28.0

Conv. deb.

55.1

Deb.
Common stk.
1st Mtg". bds.

250.0
20.0
25.0

February 28
February 28
March 5
(rights expire)
March 6
March 7
March ll|
(rights expire)
March 15
(rights expire)
March 26
Winter

STATE AND LOCAL GOVERNMENT
State of Missouri
G.O.
Allegheny Co, Sanitary Auth., Pa,
Swr. rev.
State of New York
G.O.
San Francisco (City & Co.), Calif.
G.O.
St. Louis, Missouri
G.O.
•Montgomery Co., Md.
G.O.
•Elizabeth, New Jersey
G.O.
El Paso Co. Sch. Dist. No. 11, Colo.
. G.O.
Los Angeles, California
Wtr. rev.
•Puerto Rico Aqueduct & Sewer Authority
Rev.
Commonwealth of Massachusetts
G.O.
Jacksonville, Florida
Elec. rev.
•Dallas Ind. Sch. Dist., Texas
G.O.
•Georgia Farmers Market Authority
Rev.
Houston Ind. Sch. Dist., Texas
G.O.
Seattle, Washington
G.O.
•Broward Co. Spec, Tax Sch. Dist.,.Fla.
G.O.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth., Florida
Rev.
New York State Thruway Authority
G.O.
Jacksonville Expressway Authority
Rev.
Florida State Turnpike Authority
Rev.
Oklahoma.Turnpike Authority
Rev.
State of Connecticut
Expressway rev.
OTHER
None




20.0
15.0
kO,h
23.6
12.1
6.0
5.0
6.9
9.0
12.0
80.2
8.0
7.5
10.0
16.8
6.5
6.0
• 62.0
20.0
50.0
142.0 185.0
65.0
5I4..O

February 13
February lh
February 1I4
February 18
February 19
February 19
February 19
February 20
February 20
February 20
February 26
February 26
February 2J
February 27
March 1
March 1
March lit
Winter
Winter
Winter
Winter
Winter,
Winter
Winter

H.lU

'

;

F-3

•—Included in table for first time.
l/ Includes corporate and other Issues of $15 million and over; State and
local government issues of
million and over.
2/ Includes foreign government and.International Bank for Reconstruction
and Development issues.
Note.--Deletions for reasons other than sale of issue: None.




H.lli

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

Date
1952 average
1953 average
1954 average
1955•average
1956 average
1956 - January
February
March
April
May
June
July 3

13
16
2
9
35

*3.15
3.28
*3.77
*3.53
*3.52

3
11
4o
19
18

None

18
25

August 1

30

September 11

13
25
October 10
31

November 21
December 6

• 12

1957 - January 8

16
18
22
24

3.16
3.16
3.02
3.23
3.81

.

February 5

3.62 '
3.70

26
33

1.07
It. 20
4.17
4.01

52
62
58
37

4.20
4.30

48
52

4.30

' 47

4.50

62

4.43 •

56

4.40
4.29

53
45

3.35
3.78
3.12
3.33
3.73

11
26
-3
12
27

3.23
3.45
3.61
3.77
*3.75
3.82

15
26
28
27
28

/ 4.oo

43

None

4.4o
4.58

-6

.

63
70

4.6?

70

4.56

57

*—Single observation, not an average..
1/ Covers only 30-year first mortgage bonds, as reported in Moody's Bond .
Survey, tixcept 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.




'