Full text of H.16 Capital Market Developments : February 2, 1959

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DECONTROLLED AFTER SIX MONTHS

h.lk

February 2, 1959
CAPITAL MARKET DEVELOPMENTS

New s e c u r i t y f i n a n c i n g was i n s u b s t a n t i a l volume l a s t week
and w i l l a l s o be l a r g e t h i s week. During t h e week ending January 30
corporations sold p u b l i c l y l a r g e s e c u r i t y i s s u e s aggregating #10$ m i l l i o n and S t a t e and l o c a l governments sold bond i s s u e s t o t a l i n g $61
m i l l i o n . This week Stat e and l o c a l government i s s u e s scheduled amount
t o #98 m i l l i o n , while $155 m i l l i o n i n c o r p o r a t e s e c u r i t i e s a r e expected
t o be p u b l i c l y sold.
Bond y i e l d s - Yields on a l l types of outstanding long-term
bonds, except those on U. S. Government bonds, increased l a s t week.
Yields on Aaa-rated corporate bonds increased f o u r b a s i s p o i n t s to a
postwar peak of U.16 p e r c e n t , two b a s i s p o i n t s above t h e previous
peak reached i n the f a l l of 1957. Yields on long-term U. S. Government bonds declined two basis points from the record l e v e l of a week
earlier.
Yields on new o f f e r i n g s of corporate bonds a l s o increased.
A new Aa-rated t h i r t y - y e a r f i r s t mortgage e l e c t r i c u t i l i t y bond i s s u e
was o f f e r e d t o i n v e s t o r s at. It. 65 p e r cent l a s t week, f i v e b a s i s p o i n t s
above the y i e l d on comparable o f f e r i n g s made a week e a r l i e r , but 35
b a s i s p o i n t s below the postwar high f o r new o f f e r i n g s of t h i s q u a l i t y .
February s e c u r i t y volume - New corporate s e c u r i t y o f f e r i n g s
a r e expected t o t o t a l %6$0 m i l l i o n in February, somewhat l e s s than the
estimated January volume and one-fourth smaller than in the corresponding month of 1958. Nearly a l l of the l a r g e i s s u e s scheduled f o r publ i c o f f e r i n g a r e e i t h e r stock or bonds c o n v e r t i b l e i n t o stock.
State and l o c a l government s e c u r i t y f i n a n c i n g i s expected
t o aggregate $800 million in February, one-fourth more than i n
January but o n e -s ix th l e s s than the record volume of bonds sold during
February l a s t y e a r .
Stock p r i c e s - Common stock p r i c e s declined one per cent
l a s t week. Standard and Poor's index of 500 common stocks closed a t
55.U2 Friday. Trading volume a l s o declined t o an average of 3.7 m i l l i o n shares a day.
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented i n t h e a t t a c h e d e x h i b i t s .
Capital 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.




1/
JXHI6IT /
HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




H.lU

Exllibit B
'

Tables f o r Exhibit A
High-grade Bond Yields

Date

Spread between
U. S. Govt, and
Corporate I S t a t e and
Aaa
I l o c a l Aaa

S t a t e and
l o c a l govt.
Aaa 3 /

U. S. Govt,
long-term 2/

Corporate
Aaa 1 /

(Per cent)
19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
4.14
4.13
3.55
4.16
4.09

Jan.
Jan.
Jan.
Jan.
Jan.

4.10
k.09
It. 11
4.12
4.16

2
9
16
23
30 2 /

(4/23).
(9/27)
(10/10)
(5/2)
(1/30)
(1/9)

2.45
3.76
3.84
3.07
3.96
3.83

(6/6)
(10/18)
(12/26)
(4/25)
(1/16)
(1/2)

1.90
3.45
3.31
2.64
3.20
3.19

(9/2)
(8/29)
(9/11)
(5/1)
(I/29)
(1/22)

3.12
3.19
3.19
3.19
3.20

3.83
3.84
3.89
3.96
3.94

.30
.60
.51
.22
.27
.16

.30
.47
.72
.34
.77
.65

.27
.25
.22
.16
.22

.71
.65.
.70
.77
.74

Loyier-grade Bond Yields
Corporate
Baa 1 /

S t a t e and
l o c a l govt.
Baa 2 /

1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
4.90
4.85

2.93
4.51
4.34
3.64
4.13
4.08

Jan.
Jan.
Jan.
Jan.
Jan.

4.87
4.85
4.86
4.88
4.90

Date

Spread between
Aaa and Baa
S t a t e and
Corporate
l o c a l govt.

(Per cent)

2
9
16
23
30 2 /

(12/31)
(11/29)
(1/3)
(7/11)
(1/30)
(1/9)

4.10
4.12
4.08
4.10
4.13

(8/5)
(8/29)
(9/11)
(5/D
(1/29)
(1/15)

.52
1.27
1.28
.77
.77
.74

.96
1.21
1.11
.93
.98
.89

.77
.76
.75
.76
.74

.98
.93
.89
.91
.93

g / Preliminary.
l/^Vreekly average of d a i l y f i g u r e s . Average terai 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 y e a r s or more.
J / Thursday f i g u r e s . Only general o b l i g a t i o n bonds a r e included; average term
i s 20 y e a r s .
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 ffor
f e rFRASER
ent series.
Digitized



I

4

STOCK

MARKET
—

v / V

k

l - f 1

V / \

\ ,

y

1

STOCK
'~\y r —




MARKET

CREDIT

Millions of

;

i

2
Shore

Exhibit D
Table f o r Exl l i b i t C
Stock Market
Stock p r i c e
index 1 /

Trading
Common
volume 2/
stock
(millions
y i e l d s 3/
of shares) (per cent)

Stock market customer c r e d i t
Customers 1
Bank
Total debit b a l - l o a n s t o
ances 4 / "others" 5 /
(Millions of d o l l a r s )

1951 - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low
1959 - High
Low

26.51
22.95
35.98
2k.93
45.89
35.28
49.64
1*3.22
49.08
39.48
54.11
40.37
56.00
55.42

November
December
Jan. 16
Jan. 23
Jan. 30 £ /

52.50
53.49
55.81
56.00
55.42

1953 - H i g h

(1/2)
(9/18)
(12/31)
(1/8)
(12/9)
(1/14)
(8/3)
(1/20)
(7/12)
(12/20)
(12/26)
(1/10)
(1/23)
(1/30)

2.5
0.9
3.7
1.4
4.6
1.5
3.1
1.5
4.2
1.4
4.9
1.7
4.2
3.7

5.38
6.25
4.32
5.82
4.08
•4.41
3.82
4.34
3.91
4.72
3.30
4.58
3.19
3.27

2,455
2,055
3,436
2,4o5
4,030
3,537
4,047
3,914
4,031
3,576
4,488
3,554

1,665
1,314
2,388
1,653
2,805
2,517
2,823
2,740
2,887
2,452
3,281
2,487

780
664
1,048
746
1,241
1,018
1,267
1,155
1,163
1,054
1,317
1,051
1,246
1,210

4.1
3.6
4.2
3.9
3.7

3.42
3.35
3.20
3.19
3.27

4,423
4,488

3,245
3,281

n.a.

n.a.

1,178
1,207
1,230
1,246
n.a.

n.a.—Mot a v a i l a b l e .
g / Preliminary.
1 / Standard and Poor's composite index of 500 common stocks, weekly closing
p r i c e s , 1941-43=10. Monthly data 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 y ' s data only.
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 Poor's composite stock y i e l d based on Wednesday data converted t o weekly closing p r i c e s by Federal Reserve. Yields shown a r e f o r dates
on which p r i c e index reached i t s high or low.
4/ End of month f i g u r e s f o r member firms of the New York Stock Exchange which
carry margin accounts; excludes balances secured by U. S. Government o b l i g a t i o n s .
£ / Wednesday f i g u r e s f o r weekly reporting member banks. Excludes loans f o r
purchasing or carrying 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 per cent of loans to o t her s. For
f u r t h e r d e t a i l see B u l l e t i n .
Note.—Highs and lows a r e f o r individual s e r i e s and may be on d i f f e r e n t d a t e s
for different series.




Exhibit E
Long-term Corporate and S t a t e and Local Government
Security Offerings and Placements
( I n millions of d o l l a r s )

1959
January
February
March

e/700
e/6#

1

New Capital
Corporate 1/
S t a t e and Local 2/
195H
1 1958
1 1957
1 1957
1959
723
651 3 /
1,561-2/

1,060
1,065
1,320

m

e/650
e/800

812
953
511

7U2
572
506 ,
765
5U6.
393

April
May

1,1U1
600
881

1,453

798
895
551

July
August
September

1,102
238
1 , 1w

1,003
92U973

806
U03
650

529
58U
U31

October
November
December

* jb/815

1,090
789
1,076

>53
>72
2/U30

698
633
698

1st
2nd
3rd
Uth

3,135
2,622
2,78U
e/2,2U0

3,UU5
3,1U9
2,899
2,95U

2,276
2,2UU
1,859
C/1,355

1,820
1,70U
i,5UU
2,029

6,59U
9,U93
12,UU7

U,520
6,379
2/7,735

3,52U
5,069
7,099

quarter
quarter
quarter
quarter

i:'S

1st half
Three q u a r t e r s
Year

e/10,781

Excluding finance companies h/
1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

Year

2,09U
2,583
2,753
e/2,165

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

e/10,395

11,518

e/ Estimated.
£ / Preliminary.
1/ S e c u r i t i e s and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of p r i n c i p a l amounts.
3/ Includes $718.3 million AT&T convertible 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 consumer f i n a n c e
companies.




Exhibit F

H.1U

Other S e c u r i t y O f f e r i n g s 1 /
( I n m i l l i o n s of d o l l a r s )
Long-term
a

1

Foreign
1958
1
Januajy
February
March

196
53

April
May
June
July
August
September
October
November
December

1957

1

1956

81,
U9
30

37

139
198
120

123
I18
U2

50

9
5
17

28
7
30

2
39

58
123

h
60
1

hh
5
21

507

300

—

Year

8

Federal agency 3/
1
1958
1
1957

1,163
251

1956

72
——

—

—

523

125

—

60
——

. 95

—

60

—

16U
—

220

109

215

—
wmm+

100

—-™•

—

169

572

Short-1
Sta te and l o c a l government h/

Federal agency 3/

January
February
March

233
I46O
273

326
U55
lit?

196
357
2k9

371
208
ia

638
li30
#5

380
220
283

April
May
June

357
35V
261;

205
337
153

125
252
176

209
161
329

336
¥>9
501

323
3llt
260

July
August
September

289
1*23
369

272
.272
252

195
20?
179

1*37
206
330

22h
370
512

222
125
273

October
November
December

231

303
9k
159

29h
328
1U8

h$h
Ilk

1,238
255
116

hQ?
222
128

3,272*

2,706.

5,A3

3,i»57

Year

'

e / Estimated.
^ Preliminary.
jd/
1/ Lata presented i n t h i s e x h i b i t d i f f e r from those .in Kxhibit E i n t h a t r e f u n d ing i s s u e s , as well as new c a p i t a l i s s u e s , a r e included. Long-term s e c u r i t i e s a r e def i n e d as those maturing i n more t b - n one y e a r .
2 / Includes s e c u r i t i e s o f f e r e d i n the United S t a t e s by f o r e i g n govenunents and
t h e i r subdivisions and by i n t e r n a t i o n a l organizations. Sources S e c u r i t i e s and Exchange Commission,
-2 / I s s u e s not guaranteed by t h e U. S. Government. Source: long-term, S e c u r i t i e s
and Exchange Commission; short-term, Federal Reserve.
h / P r i n c i p a l l y t a x and bond a n t i c i p a t i o n n o t e s , warrants or c e r t i f i c a t e s and Public
Housing
Authority n o t e s . In some instances PHA notes included may have a somewhat

longer term than one y e a r . Source: Bond Buyer.



1
H.lU

Kxhibit G '
Large Long.-.tern Public .'u.cin il/y I;i:iua.s l o r Uew C a p i t a l
(OUie.r
U. S. 'i'lxajury) 1 /
Proceeds 01 i.uri'v i u j u v a uiTorud
( M i l l i o n s oi' d o l l a r s )

Corporate

Month

1957 - December
1958 - JanuaryFebruary
March
April
May

State and
l o c a l government

ItOli
tilO
553
152
300
505
195
275
109
288
172
259
229

399
313
605
1,093
' 725
356
281
771
209
825
259
227
305

July
August
September
October
November
December

Other 2 /

1,357
266

653

'

I6I4
86

la

18
209
100
79

Large Individual Issues Offered during January

Type y

Issuer

.

Coupon
Amount
r a t e or O f f e r i n g
(millions
Maturity
net i n t e r - yield
of
est cost
dollars)

Rating

CORPORATE

Washington Wtr. Pwr. Co.
Household Finance Corp.
C. I . T. F i n a n c i a l Corp.
San Diego Gas & E l e c . Co.
Sheraton Corp. of America
Commonwealth Edison Co.
Southern C a l i f . Edison Co.
Southern N a t u r a l Gas Co.
Indiana & Mich. E l e c . Co.
T r a n s c o n t i n e n t a l Gas Pipe
Line Company
Inland S t e e l Co.
Champion Paper & Fiber Co.

A

1 s t mtg. bde. 15.0
S.F. deb.
30.0
Deb.
75-0
S . F . deb.
15.0
S.F. deb.
2J4.0
Deb.
20.0
Com. s t k .
30.0
1st mtg.p.l.bds.35.0
1 s t mtg. bds. 20.0

1989
1961i
1979
1981,
1909
200?

t 3A
k 5/0
k5/8
h 5/0
7 1/2
k 5/8

1979
.1988

h 3/k
4 3A

It. 75
I1.60

A
Aa.

1st m t g . p . l . b d s . 3 5 . 0
1 s t mtg. bds. 50.0
Conv. sub. d e b . 2 0 . 0

1979
1989
198k

5
h 1/2
h 1/2

5.10
it. 50
h.S0

Baa
A
Baa




U ..75
It. 69
WO
1.63
7.50-7.70
U.5U

A
Aa

H.lU

,

G-2

Large I n d i v i d u a l I s s u e s Offered during January (Cont'd)

Type 3 /

Coupon
Amount
Offering
r a t e or
(millions
Rating
Maturity n e t i n t e r - y i e l d
of
e s t cost
dollars)

STATE AND LOCAL GOVERNMENT
New York S t a t e Power Auth.
Los Angeles Dept of Wtr.
and Pwr., C a l i f o r n i a
Sacramento Mun. Ut. D i s t . ,
California
Dallas, Texas
State of Oregon
New York City Housing Auth.
Houston, Texas
Commonwealth of Puerto Rico

Rev.-Ut.

200.0

1965-2006

Rev.-Ut.

18.0

Rev.-Ut.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.

25.0
ll.U
20.0
20.3
20.2
20.0

Ext. deb.

75.0

4.22

3.20-1.20

1960-89/67

3.61

2.00-3.75

Aa

1966-99/69
1959-79
196U-65
1960-2006
1960-84
1960-79

3.58
3.29
2.78
4.07
3.1*8
3.94

2.90-3.70
1.75-3.40
2.60-2.70
2.20-4.10
2.00-3.65
2.20-4.15

Aa
Aa
Aa
A
A
A

1981

a 3/4

4.85

A

OTHER
Province of Ontario

n . a . — Not a v a i l a b l e .
1 / Includes corporate and o t h e r s e c u r i t y o f f e r i n g s of $15 m i l l i o n and over;
S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of !$L0 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 and non-guaranteed i s s u e s by Federal agencies.
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 s ; Rev. - U t . , revenue o b l i g a t i o n s secured only by income from p u b l i c u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c t a x e s only; Rev.-Bent.,
revenue bonds secured s o l e l y by l e a s e payments.




Exhibit ti

H.lli

Forthcoming Large Long-term Public Security O f f e r i n g s f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues
Date of
computation

1957 - Nov. 29
Dec. 31
1958 - Jan. 31
Feb. 26
Mar. 31
Apr. 30
May 29
June 30
J u l y 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30

During month following
date shown
S t a t e and
Corporate l o c a l govt. Other 2/
383
378
1*98
1,123
555
356
266
768
161
785
113
20U
301
210
270

363
315
370
13k
298
1*93
177
225
55
2a
295
258
229
261
551

Subsequent t o
date shown
S t a t e and
Corporate l o c a l govt. Other 2 /

18
150
110
150
36

71
75
1*5

1,193
1,161
1,378
1,208
670
561
1*6L
1,048
. 381 •
9lli
216
326
ltOl
370
365

558
561*
187
3hX
330
193
208
235
125
1*35
52k
675
683
515
856

63
165
110
150
36

71
75
1*5

Forthcoming Large O f f e r i n g s , as of January 30
Type

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

CORPORATE
Universal Oil Processes, I n c .
Southern Company
Avco Manufacturing Co.
Reynolds Metals Co.
Consolidated Edison Co.
Public Service Co. of Indiana, I n c .
Connecticut Light and Power Co.
^American Natural Gas Co.
Montana Power Co.
Commerce Oil Refining Corp.




Cap. s t k .
Common s t k .
Conv. deb.

60.0
hO.O
lli.9

Conv. p f d . s t k .
Conv. deb.

55.0

1 s t mtg. bds.
Comnon s t k .

25.0
15.0

Common s t k .

30.0

1 s t mtg. bds.
Deb. ,bds.&comiaon

20.0
U5.0

Feb. h
Feb. 5
Feb. 10
( r i g h t s expire)
Feb. 11
Feb. 13
( r i g h t s expire)
Feb. 18
Feb. 2k
( r i g h t s expire)
March
( r i g h t s expire)
Winter
Winter

h.llt

H-2

-

Forthcoming Large O f f e r i n g s , a s of January 30 (Cont'd)
Type

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

STATE AND LOCAL GOVERNMENT
Milwaukee Co., Wise.
Los Angeles, C a l i f o r n i a
Massachusetts Port Authority
Louisiana Dept. of Highways
S t a t e of Minnesota
S tate of Washington
-"-St. Louis, Missouri
*State of Connecticut
S t a t e of New Jersey
sMonroe County Water Auth., N. Y.
*E"ast Bay Mun. Ut. D i s t . , C a l i f .
Los Angeles Co. Flood Control D i s t . ,
California
San Antonio, Texas
xState of Michigan
Public Housing A u t h o r i t i e s
Chicago, I l l i n o i s
Metro. Water D i s t . of So. C a l i f o r n i a
/---State of C a l i f o r n i a
Chesapeake Bay Ferry Commission
Detroit-Metro. Expressway

G.O.
Rev.-Ut.
Rev.-Ut.
Rev.-S.T.
G.O.
G.O.
G.O.
G.O.
Rev. -Ut.
Rev.-Ut.
Rev.-Ut.

50.5
25.0
13.2
_2S.O

Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.

Rev.-Ut.
G.O.
Rev.-S.T.
' G.O.
Rev.-Ut.
Rev.-Ut.
G.O.
Rev.-Ut.
Rev.-Ut.

10.0
10.8
25.0
103.0
120.0 26.1
100.0
liili.O
35.0

Feb. 19
Feb. 2k
Feb. 2k
Feb. 26
Feb.
Mar. 10
March
Winter
Winter

lh.0
lU.O
149.7
20.0
22.9
3U.9

12.6

2
3
3
k
10
10
10
10
16
17
18

OTHER
Kingdom of Denmark
^Empire of Japan

Ext. loan bds.
Ext. loan bds.

15.0
30.0

Feb.
Feb.

*—Included in t a b l e f o r f i r s t time.
1 / Includes corporate and o t h e r i s s u e s of §lf> m i l l i o n and over; S t a t e and
l o c a l government i s s u e s of &L0 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 and non-guaranteed issues, by Federal a g e n c i 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.




Exhibit X

H.llt

Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 3 /
Date
1952 - 1957
High
Low
1958 - Januaiy
February
March ;
April
May 7
13
15
16
20
21
22
28
June 10
17
25
July 2
9
18
23
Oct. 7
if
29
Dec. 17
1959 - Jan. 7
20
28

A-rated offering y i e l d s
Aa-rated offering f i e l d s
Amount above
Amount above
Actual
Actual
(per cent) seasoned y i e l d s (per cent) seasoned y i e l d s
(basis points)
(basis points)
5.00(8/Ut/57)
2.93(3/31/51*)

87
-3

5.50(11/7/57)
3.00(3A7/5k)

123
-15

*3.60.,
3.892/
U.08
3.91

-8
22
35
18

3.96^
lt.07
It.16
lt.01
It. 00

3
9
-1
8
' 3

3.90

-

21

3.85
3.85

16
16

3-85
3.82
3.95

17
12
2k

lt.00
It. 10
it.io
It,57
It. 50
U.ltOp/
It.It 2 - /
It.ltlt

25
28
29
25
22
12
lit
23

It. 60
It. 65

3h
hO

1
'

lt.07
It. 35

k
32

it. 00
3.95

ul
-6

3.98^
k.30

it. 7 5 ^

1
31

' 23

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, the actual y i e l d figure and the amount above
seasoned y i e l d s 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 f o r the same day. Average maturity f o r the seasoned issues
varies, from 26 to 28 years.
2/ Provides f o r a 5-yoar period during which issue may not be called f o r
refunding at a lower coupon rate. Monthly averages so marked include one or more
i s s u e s with such a provision. Other issues have no such provision.