Full text of H.16 Capital Market Developments : February 19, 1958

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Not for Publication

^CONTROLLED

V

AFTER SIX MONTHS

H.l4

February 19, 1958
CAPITAL MARKET DEVELOPMENTS

Large public security offerings for new capital during the week
ending February 14 totaled $209 million for corporations (including- expiration of subscription rights) and $48 million for State and local governments. This week, the volume of new security offerings is expected to be
very large with corporate issues totaling $200 million and State and local
government offerings aggregating $207 million.
Bond yields - Changes in yields on outstanding bonds were minor
last week. Yields on State and local government and high-grade corporate
bonds remained stable, while yields on corporate Baa's and U. S. Government obligations declined slightly.•
A $150 million debenture issue of General Motors Acceptance
Corporation was offered to investors this week to yield it. 10 per cent —
110 basis points below that for a similar offering made by this company
last August. The recent issue is non-callable for five years, while the
earlier issue had a call restriction for, ten years.
Stock market credit - Customer credit in the stock market (excluding that extended on U. S. Government securities) declined during
January, reaching a level of $3,554 million at the end of .the month.
Net debit balances increased slightly, while bank loans to "others" declined $27 million. Net debit balances secured by U. S. Government
securities increased sharply in January,reflecting the U. S. Treasury
End of month
Jan.
1 Dec.
*.

Customer credit
Excluding U. 5. Govt, securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Government securities
Broker and dealer credit
Money borrowed except or^U. S. Govt, securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances




Change

(millions of dollars)
3,576
2,482
1,094
68

-22
+5
-27
+58

58

60

-2

1,552
. 1,344
188
936

1,706
1,494
125

-154
-150
+63
+40

3,554 ,
2,W7
1,067
126

896

H.lU

-2-

refunding operations, to a total of $126 million at the end of the month.
Borrowings by member firms of the NYSE maintaining margin accounts (except
borrowings on U. S. Government securities) also declined substantiallylast month, principally in borrowing on customer collateral. Customer's
net free credit balances increased further, totaling $936 million at the
end of January. These and other data on stock market credit for January
and December are shown in the following table.
Stock prices - Stock prices, as measured by the Standard and
Poor's index of 500 common stocks declined last week, closing at 1*1.33
on February ll;. Prices declined somewhat further on the first three days
of this week.
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.




HIGH-GRADE

BOND

"S3 '

Date

YIELDS

1954

J
S
1956

5

Corporate
Aaa 1/

1958 - High
Low

3-1*2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
U.1U
3.66
3.68
3.56

January .17
January 2b
January 31
February 7
February lit

3.61
3.57
3.56
3.59
3.59

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

(6/19)
(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(12/28)
(3/2)
(9/27)
(V12)
(V3)
(1/31)

M

J s
1957

State and
local govt.
Aaa y

U. S. Govt,
long-term 2/

(Per cent) .
1 9 # - High

0

o

M

1958

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

*

3-19 (6/5)
2.7U (12/31)
2.7U (1/8)
2.1*5 (8/6)
2.97 (8/5)
2.61* (1/7) '
3.16 (12/28)
2.81* (2/17)
3.76 (10/18)
3-18.(2/8)
3.28 (1/31)
3.20 (1/10)

2.73
1.98
2.21
1.90
2.3U
2.05
3.05
2.17
3.U5
2.76
2.86
2.65

3.21
3.27
3.28
3.27
3.21*.

2.68
2.65
2.68
2.70
2.70

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)
(8/29)
(2/21)
(1/9) .
(1/23)

.38
.20
.1*3
.30
.27
.11
.1*1
.12
.60
.27
.1*6
.28

.83
.33
.62
.30
.76
.57
.71
.32
.1*7
.15
.62
.31*

.1*0
.30
.28
.32
.35

•53
.62
.60
•57
.51*

.

1/ Weekly average of daily figures. Average term of bonds included is 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
2/ Thursday figures. Only general obligation bonds are included; average term is
20 years.
Not.—Highs and lows are for individual series and may be on different dates for
different series.




4
EXHIBIT B

LOWER - GRADE

BOND

YIELDS

Corporate
Baa 1/

Date

.

State and
local govt.
Baa 2/

Spread between
Aaa and Baa
1 State and
1local govt.

Corporate

(Per cent)

1958 - High
Low

3.89
3.50
3.74
3.44
3.63
3.45
4.41
3.58
5.10
4.42
4.96
4.66

January 1?
January 24
January 31
February 7
February lit

4.84
4.77
4.72
4.68
4.66

1953'- High
Low
1?54 - High
Low
1 9 # - High
1956 - High
1957 - High

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(lAW
(12/28)
(3/9)
(11/29)
(4/12)
(1/3)
(2/14)

3.79 (6/25)
2.96 (1/8)
3.32 (1/7)
2.93(8/5)
3.26 (12/29)
3.02 (1/6)
4.22 (12/27)
3.20 (3/8)
4.51 (8/29)
3.90 (2/21)
3.92 (1/2) 3.73 (1/23)
' 3.77
3.73
3.76
3.77 '
3.77

.69
.42
.68
.52
.54
.45
.63
.42
1.27
.64
1.28
1.07
1.23
1.20
1.16
1.09
1.07

.

1.21
.98
1.16
.93
1.03
.87
1.17
.89
1.21
1.04
1.09
1.02
1.09
1.08
1.08
1.07
1.07

1/ Weekly average of daily figures. Average term of bonds includes is
25-26 years.
2/ 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.
.
.




STOCK MARKET

Bate

Stock price
index 1/

Common
Stock market cust imer credit
Trading
volume 2/
Customers'
yields y
debit bal- loans to
(millions
ances 1*/ "others" 5/
of shares) (per cent)
- (Millions of dollars)

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

26.5U (1/2)
22.95 (9/18)
35.98 (12/31)>
2U.93 (1/8)
U5.69 (12/9)
35.28 (1/Ht)
1*9.61* (8/3)
1*3.22 (1/20)
1*9.08 (7/12)
39.1*8 (12/20)
73 (2/7)
1*0.37 (1/10)

2.5
0.9
3.7
1.1*
1*. 6
1.5
3.1
1.5
U.2
l.l*
2.5
2.2

January 31
February 7
February 1h

1*0.33
1*1.12
1*1.70
1*1.73
1*1.33

2.6
2.3
2.2
2.5

la.

.

.

6.25
5.38
5.82
1*.32
1*.1*2
3.61*
lt.35
3.82
i*.72
3.91
lt.58
1*.1*2
14.63
1*.1*8
1*.1*2
•l*.l*2
!*.!*?

2,1*55
2,055
3,1*36
2,1*05
It,030
3,537
It,01*7
3,911*
U,031 •
3,576
n.a.

1,665
l,3Ht
2,388 •
1,653
2,805
2,517
2,623
2,71*0
2,887
2,1*82

3,576
3,551*

2,1*82
2,1*87

n.a.

«...

661*
1,01*8
•71*6
1,21*1
1,018
1,267
1,155
1,163
1,051*
1,067
1,051
1,091*
1,067
1,067 •
1,065
n.a.

n.a.—Not available.
1/ Standard and Poor's composite Index of 500 common'stocks, weekly closing .
prices, 19l*l-!*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 Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
U/ End of month figures for member firms of the New York Stock Exchange which
cany margin accounts; excludes balances secured by 0. 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.lli

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

1958
January
February
March

1

e/ 800
e/ 825

Corporate
1957- 1
1,063
1,071
1,3hh -

April
May
June
July
August
September

New capital
1956
573
712
817

State and local 1/
1958 . 1 . 1957 1 1956

796
e/ 750

742 '
572
506

404

378
490
735

92k
771
1,1*89

818
1,146
841

765
516
393

991
91U
973

1,063
654
.838

529
584
431

698

696

390

'

408
206
357

October •
November December

1,055
792
1,086

• 745
1,089 2/
1,088

1st
2nd
3rd
4th

3,179
3,184
2,878
2,933

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

1,820
1,704
1,514*
2,029

1,1*90
1,603
971
1,395

6,662
. 9,540
12,473

1,907
10,384

3,524
5,069
7,099

3,093
4,o64
5,459

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

?,to

698

633

639

31*7 •
409

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

quarter
quarter
quarter
quarter

Year

- 3,268
2,924
2,560
e/2,783
e/ll,53U

1,647
2,541 '
2,246
2,826
9,260

1/ Data through June 1956 are Bond Buyer data classified as new capital byFederal 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.
2/ Includes $571.5 million AT&T common stock issue.
J/ Total new capital issues excluding offerings of sales and consumer, finance
companies.
Note.—Details may not add to totals due to rounding.




H.lU

Exhibit i£
Large Public Security Issues for Mew Capital
(Other than U. S, Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

Month

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

State and
local government

Other 2/

386
306
19U
1*99
218 .
176
265
357
185
1*35
386
1*39
506

567
671
788
1*77
329
877
525
526
537
571
t|20
399
318

100
50
125
25
39
25
30
75
215

-

Large Individual Issues Offered February 1 through li*
Type y

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

CORPORATE
Tennessee Gas Trans. Co.
Com. stk.
30.8
Texas Utilities Co.
Com. stk.
16.6
Royal Dutch Petroleum Co.
Com. stk. 136.8
Northern Natural Gas Co.
Com. stk.
21.8
Southern Calif. Edison Co. Pfd. stk.
25.0
Ind. & Mich. Electric Co. lstmtg. bds, 25.0

1988

3 7/8

3-80

Aa

STATE AND LOCAL GOVERNMENT
Springfield, 111.
Columbus C.S.D., Ohio




1

Swr. rev.
G.O.

5-6 1962-97/72
;
5.0
1959-82

3-53
2-73

2.30-3-60
1.50-2.90

A
Aa

%
H.lU

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

Amount
Coupon
Maturity rate or Offering Rating
Type 3/ (millions
of
net inter- yield
dollars)
est cost

STATE AND LOCAL GOVERNMENT
(Continued)
Detroit, Michigan
Wtr. rev.
5.0
Allegheny Co, San, Auth., Pa, Swr. rev.
25.0
East Baton Rouge Par. Sch.
Dist. No. 1, La.
G.O.
10.0
Memphis, Tennessee
G.O.
12.5
Denver, Colorado
Wtr. rev.
20.0
Public Housing Auth.
67.1
N.Y. State Thruway Auth.
G.R.
50.0
No. Hempstead S.D. No. % N.Y. G.O.
7.U
G.O.
Detroit, Michigan
13.7
New Orleans, La.
G.O.
. 6.3
Wichita S. D. No. 1, Kan.
G.O.
5.0
State of Minnesota
G.O.
12.0
Hartford, Connecticut
G.O.
6.9
Met. Wtr. Dist. of So. Calif.
Rev.
18.0
6.0
Guilford Co., N. C.
G.O.
Hempstead U.F.S.D. No. 35/NX G.O.
5.4

1962-78/68

3.02
3.55

2.15-3.05
2.20-3.60

Aa

1961-96/63

1959-78
1959-88
1969-97/68
1959-98/67
1985-95/65
1958-86
1959-83
1959-87/73
1959-78
1961-77
1959-78
1959-70
1961-80
1959-87

3.19
2.82
3.25
2.89
3.12
3.72
2.98
3.25
3.1U
2.1*5
2.1a
2.39
2.70
3.27

1.80-3.25
1.50-3.70
2.65-3.24
1.45-3.10
2.85-3.10
1.60-3.75
1.65-3.15
1.80-3.35
1.80-3.30
1.70-2.60
1.50-2.60
1.50-2.50
1.80-2.85
1.75-3.50

A
Aa
Aa
Aaa
Aaa
Baa
A
A
A
Aa
Aaa
Aa

Aa
A

OTHER
Hone

1/ Includes corporate and other security offerings of $1$ 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
obligations; Rev., revenue bonds; G.R., general obligations additionally secured by
facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues.




H.ll*

Exhibit F
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues

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

During month following
date shown
Corporate State and Other 2/
local govt.
1*76
591
7 hO

1*61
187
525
370
526
578
576
158
383
378

280
153
153
290
179
97
172
2#
2ii3
370
369
387
383

100'
35

Subsequent to
date shown
Corporate State and Other 2/
local govt.
796
966

30

- 795
i486
258
5#
1*15
• 811
815

30
18
150

815
1,193
1,161

25
25
25

6h7

763
61*8
631
862
396
388
1*98
511*
1*39
587 .
573
589
6ll*

100
35
25
25
25
30
15
1*5
63
165

Forthcoming Large Offerings, as of February lU
Type

Amount
Approximate date
(millions
of dollars) of offering

CORPORATE
Pfd. stk.
25.0
Niagara Mohawk Power Co._
Deb. .
150.0
General Motors Acceptance Corp.
1st mtg. bds.
25.0
New York State Electric & Gas Co.
1st mtg. bds.
29.0
Pennsylvania Electric Co.
1st
mtg.
bds.
30.0
Cleveland Electric Illuminating Co.
15.0
Central Illinois Public Service Co. 1st mtg. bds.
1st mtg.&coll.tr.tids. 30.0
United Gas Corp.
Deb.
30.0
Southern New England Telephone Co.
Pfd. stk.
15.0
Potomac Electric Co.
1st&ref.mtg.bds.
30.0
Baltimore Gas & Electric Co.
1*0.0
1st mtg. bds.
- Ohio Edison Co.
Pfd. stk.
25.0
Public Service Electric & Gas Co.
1st mtg. bds.
Union Electric Co.
^
35.0
Deb.
30.0
Columbia -Gas System, Inc.
Conv. deb.
718.3
American Telephone & Telegraph Co.




Feb. 18
Feb. 19
Feb. 21
Feb. 25
Feb. 26
Feb. 26
Feb. 27
Feb. 27
Feb. 28
Mar. k
Mar. 5
Mar. 5
Mar. 6
Mar. 7
Mar. 12
(rights expire)

F-2

H.Ht

Forthcoming Large Offerings, as of February lit (Cont'd)
Type

Amount
(millions Approximate date
of dollars) of offering

CORPORATE (Continued)
Chicago, Rock Island & Pacific R.R.
1st mtg. bds.
1st mtg. bds.
^General Telephone Co. of Calif.
S.F. deb.
-^Mississippi River Fuel Corp.
1st mtg. bds.
^Carolina Power and Light Co.
Commerce Oil Refining Corp.
Deb.,bds.& common
Natural Gas Pipeline Co. of America
1st mtg. bds.

16.0
20.0
30.0
20.0
U5.0
ko.o

Mar.. 13
Mar.. 13
Mar,• 13
Mar., 18
Winter
Winter

STATE AND LOCAL GOVERNMENT
Kansas City Sch. Dist., Mo.
G.O.
G.O.
Long Beach, California
State of Connecticut
G.O.
State of Alabama
G.O.
State of Rhode Island
G.O.
St. Louis, Missouri
G.O.
Los Angeles Met. Transit Auth., Calif.
Rev.
State of Delaware
G.O.
New York, New York
. G.O.
Cleveland, Ohio
G.O.
State of Kentucky
G.O.
Houston Ind. Sch. Dist., Texas
G.O.
•K-State of Tennessee
G.O.
*San Antonio, Texas
G.O.
Washington Tp. Local Sch. Dist.,Ohio
G.O.
Louisiana State University
Bldg". rev.
^Seattle, Washington
Rev.
•sMiami, Florida
G.O.
State of Mississippi
G.O.
*Newark, New Jersey
G.O.
Milwaukee, Wisconsin
Wtr. rev.
^Lafayette, Louisiana
Util. rev.
State of Louisiana
G.O.
^Providence, Rhode Island
G.O.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Authority,Fla.
Rev.
Met. Fair & Exposition Auth., HI.
Bldg. rev.

Amsterdam, The Netherlands




S.F. bds.

5.0
7.5
20.0
12.7
20.0
15.0
10.0
8.0
8.1
6.7
62.0
20.0
25.0

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. 26
Feb. 27
Feb. 27
Mar. 1
Mar. k
Mar. 5
Mar. 6
Mar. 11
Mar. 18
Mar. 18
Mar. 26
Mar. 26
Winter
Winter
Winter

15.0

Feb. 26

7.0
10.1
77.0
21.0
18.8
12.3
liO.O
21.0

a.5

15.3
35.0
15.0
i5.o

5.0

H.Ik

F-3

*—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: None.




Exhibit G

ti.'lit

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 seasoned yields Actual
seasoned yields
(per cent) (basis points) (per cent) (basis points)

Date

1952 - 19#
High
Low
1957 - January
February
March
April
May
June
July
August
September 5
6
25
October 1
15
17
2h

November 7
15
20

21
/

22

December 6

12

1.30(12/12/56)
2.93(3/31/51)

62
-3

it.it it
li.25
None
*1.29
L.itit
it.71
it .66

2
50
58
81

Wo
it .85

57
75
51
56

It.78

it5

*5.00

lt.97
It . 86 2/

63
52

It.82
It .65
it.65
it.30

53
37
39
lit

1958 - January 8
9
17
21

23
February 5
lit

3.60
3.80

13

It .58(12/6/56)
3.00(3/17/51)
it .62
None
it.50
it.55
it.80
*5.10
it.86 2/
None ~\-

i

70
-15
6U
15
5U
79
106
70

5.10

51

5.00

39
3it
67

5.05 2/

U3

it.itO
it .07
it .10 2/
3.85 ~
3.80

it
9
13
-3

3.90

-3

it.95
5.30
5.50

—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/ Both issues oh which July average is based and other issues so marked
provide for a 5-year period during which issue may not be called for refunding at
a lower coupon rate. Other issues have no such provision.