Full text of H.16 Capital Market Developments : February 9, 1956

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Mot for Publication m u n m n . u r ^

SIX M o m g s

H.lU

February 9, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of large public security issues for new capi t a l for the week ending February 3 totaled $6$ million for corporations and Sh5 million for State and local governments. The t o t a l
of large issues publicly sold this year through February 3 i s about
30 per cent less than in the corresponding weeks of 1955* Large
issues expected this week are three State and local government
issues with t o t a l proceeds of $132 million—including the &106.8
million Public Housing Authorities financing—and a bank common •
stock offering for $26 million.
Bond yields - Yields on corporate, long-term U. S. Government and State and local government bonds decreased further during the week ending February 3, in continuation of the general trend
since the f i r s t of the year. The greatest drop in yields has occurred
in the State and local revenue bonds which are presently 2,89 per cent
in contrast to 2.99 per cent for the week ending December 30.
U. S. Governmoit long-term bond yields (old series) have
fallen eight basis points to 2,61 per cent since the f i r s t of January. A decline of seven basis points in the same period for corporate Aaa bonds has brought current corporate yields to 3*09 per
cent. Yields for State and local Aaa bonds are 2,2k per cent, six
basis points below the level of the beginning of the year.
Yields for corporate and State and local government Baa
bonds and for Treasury bonds (new series) have a l l decreased four
basis points to 3.63, 3.26 and 2.96 per cent respectively.
One factor contributing to this decline in yields has been
the relatively small volume of new corporate and State and local securi t i e s offered f o r public sale in recent weeks, as noted above. A
markedly larger volume of such issues is expected l a t e r this month.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, rose sharply during the week ending February 3
to 266.7 in moderate trading volume. Daily prices rose slightly on
Monday but decreased somewhat more on Tuesday and Wednesday of this
week.
More detailed information concerning recent capital market
developments i s presented in the attached exhibits.

Business Finance and Capital Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




H I G H - G R A D E BOND YIELDS
We»<ly

CORPORATE A a a

,
\

\

:

U. S. GOVERNMENT: A ^ ^ r

|

long.l.rm'

\/'

j

y

%

n

1 0

j

STATE AND LOCAL
GOVERNMENT A a a

long-term i j
Corporate

nlH

oq i New series

Spread between
State and
l o c a l govt. (old s e r i e s ) and
Corporate(State and
Aaa 3 /
[local Aaa

(Per cent)
1953 - High
1954 - High
Low
1955 - High
1956 - High
Low
January 6
January 13
January 20
January 27
February 3
y

3.U2
2.99
3-09
2.85
3-17
2.91
3-1U
3.09

(6/19)
(V9)
(1/8)
(V23)
(12/23)
(V7)
(V6)
(2/3)

3-1U
3-13
3-11
3*09
3.09

3-15
2.78
2.7U
2.Ut
2.9k
2.62
2.90
2.81

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(V7)
(1/6)
(2/3)

2.90
2.88
2.83
2.83
2.81

Weekl y average of daily f i g u r e s .

n.a.

3-03
2.89
2.96
2.92
2.96
2.95
2.93
2.91
2.92

ffi/5)
(6/10)
(1/6)
(2/3)

2.73
1.98
2.21
1.90
2.3k
2.05
2.29
2.2U

(6/25)
.38
(1/8)
.19
(6/10)
.U3
(9/2) . 32
(9/8)
• 3li
(5/26)
.13
.28
(1/5)
(2/2)
• 2li

.8U
• 30
.61
.29
.70
•5U
.61
•56

2.29
2.27
2.27
2.27
2.21*

• 2U
•25
.28
.26
.28

.61
.61
.56
• 56
•57

Average term of bonds included i s 25-26

2 / Weekly averages of daily f i g u r e s . The old s e r i e s includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t callable a f t e r 12 years through
September 1955* and those due or callable in 10-12 years thereafter; the average
term to f i r s t c a l l of the bonds included declined from lit years in early 1953 to
11 1/2 years i n early 1955- The new series i s comprised of the 3 per cent bond
of 1995 and the 3 1/ii per cent bond of 1978-833/ Thursday f i g u r e s . Only general obligation bonds are included; average
term i s 20 years.
Note.—Highs and lows are f o r individual s e r i e s and may be on d i f f e r e n t dates
for d i f f e r e n t s e r i e s .




L O W E R - G R A D E B O N D YIELDS

1

' I
/l'

! . • I
I Moody'. |

'1 ' JJ

STATE AND LOCAL GOVT. Boo

j ^/Vi r-.X.

STATE AND LOCAL GOVT. REVENUE

1953

,954 '

Date

Corporate
Baa y

State and
local govt.
Baa 2 /

State and
local govt,
rev. i /

(Per cent)
1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low

3.89
3-50
3.71*
3. a
3.63
3.1*5
3.62
3-59

J anuary 6
Januaiy 13
J anuaiy 20
Januaiy 27
February 3

3.62
3.61
3.60
3-59
3-59

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

3.79 (6/25)
2.96(1/8)
3.32 (1/7)
2.93 (8/5)
3.26 (12/29)
3.02 (1/6)
3.26 (1/5)
3.22 (2/2)

3.27
2.71
3.00
2.72
2.99
2.76
2.91*
2.89

3.26
3-25
3.22
3.22
.3.22

2.91*
2.91
2.90
2.90
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(1/6)
(2/3)

Average term of bonds
included i s 25-26 years.
2/ Thursday figures. Only general obligation bonds are
included; average term i s 20 years.
Friday figures. Average rating of bonds included i s
between Baa and A; average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




Date

Stock p r i c e

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

Stock market customer c r e d i t
Customers'
Bank
Total d e b i t b a l - loans t o
ances u / "others" 5 /
( M i l l i o n s of d o l l a r s )

1953 - High
Low
195U - High
1955 - High
Low
1956 - High
. Low
December
January
January 20
January 27
February 3

167.1
| 1UU.0
221.U
156.5
270.7
217.U
268.8
257-U

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/lii)
(1/6)
(1/20)

269-2
262.8
257-U
259.0
266.7

lie a*"NOV dVcLLXa-UXt*

2.5
0.9
3.7
l.U
U.6
1.5
2.U
2.0
2.h
2.2
2.3
2.1
2.0

2,UU5
2,055
3,136
2,U05
U,025
3,537

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

780
66U
1,0U8
7U6
1,214
1,018
1,25k
1,2U1

U.06
U.08

U,025

2,786

n.a.

n.a.

n.a.

1,239
1,25U
l,2hl
1,25k
n.a.

5-75
5-15
5-33
k'ZO
li.22
3-78
n.a.

'

1 / SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19H7-b9-100 by Federal Reserve. The conversion factor is 123.91*
2 / Averages of d a i l y trading volume on the New York Stock Exchange.
3 / Moody's 200 common s t o c k s ; end of month f i g u r e s .
5 / 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 .
5/ 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 i n New York and Chicago.
Weekly r e p o r t i n g banks account f o r about 72 per cent of loans to o t h e r s . .
Note.—Highs and lows are 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 dated
for different series.




H.lU

Exhibit D
Corporate and S t a t e and Local Government
Security Offerings arid Placements
(In millions of d o l l a r s )

1956
January
February
March

e/700
J/600

April
May
June
July
August
September

1

Corporate
1955
I
U36
1,261

••ftt
U26
632

1i9U
903
#7

U97
656
8i|2

# 3

909
335 7U7

•6$h

MO

October
November
„ December

1,138 1 /
601
e/8^0

1 s t quarter
. 2nd quarter
3rd quarter
Uth quarter
Year

New c a p i t a l
19 5U

2,2k3
2,09k
1,917
e/2,590
1/8.,8^5

1

1956
eA00
1/575

1,003
290
60J4
1,608
1,995
1,991
1,896
7A90

State and l o c a l
^
i ^ r 1

195U

535
312
5 #

s

396
Ull
# 5

6I4I

73U
7k8
853

U70
219
U06

2?9
261
6 #

919 .
658
e/UOO
1,385
1,1*18
1,121
e/l,977
e/5,90U

;

591
L23
877
1,372
2,33k
1,188
1,89k
6,789

Excluding finance companies 2 /
1 s t quarter
2nd quarter
3rd quarter
Uth quarter
Year

1,791
1,912
• l,khl

e/2,390
%/7,535

1,527
1,927
1,911
1,792
7,158

1 / Includes $637.2 million AT&T convertible debenture issue.
2/ Total new c a p i t a l issues 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 to t o t a l s due to rounding.




H.lli

Exhibit E

L

Large Public Security Issues f o r New Capital
(Other than U. S. Treasury) l /
Proceeds of Large Issues Offered
(Millions of d o l l a r s )
• Month

Corporate

1955 - January
February
March
April
May
June
July
August
September
October
. November December
1956 - January

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

. 1U1
63
750
173
#3
175
101
Uo5
328
805
269
215
95

:

Other 2j

3U1
107
337
238
152
h03
278
65
23k
716
396
205
192

35
15

.25
50
—

1

Large Individual Issues Offered January 2 through February 3
Issuer

Type 3/

Amount
Coupon
(millions Maturity r a t e or
Offering Rating
of
net i n t e r yield
dollars)
e s t cost

CORPORATE
Commercial Credit Co.
Text-r on-Amer i can
Northwestern Bell
Telephone
Reynolds Metals

| S r . notes
Conv. deb.

75.0
20.0

1976
1971

3 5/8
5.oo

3.63
5-oo

Ba

Deb.
Pfd. s t k .

25,0
UOcO

1996

3 1/h

3.15

Aaa

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

6.7
5.U
6.0
kO.O
8.0
8.0

1956-93 .
1986
1957-86
1957-76
1957-71
1961-76

//STATE & LOCAL GOVERNMENT
Wayne County Sewer
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




3.21
2.53
2.58
2.29
2.LI

1.90-3.20
3.75
1.75-2.60
1.80-2.65
1.70-2.25
2.10-2.1*5

A
A
Aa
Aa
Aa

#

H.lh

E-2

Large Individual Issues Offered January 2 through February 3 (Cont'd)
Issuer

Type _3/

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

STATE & LOCAL GOVERNMENT
(Cont'd)
Gwinnett County, Ga.
Sail Diego, Calif.
Springfield, Ohio
State of Michigan
State of Michigan
Detroit, Michigan
Caddo Parish, La.
La. State Building Auth.
Milwaukee Co., Wis.
Philadelphia, Pa.
State of Maryland
Tacoma, Washington'
Chelan Co., Wash. Public
f U t i l i t y Dist. Ho. 1.

IieL*
G. 0.
G.O.
L.Lo
L.L.
G. 0»
G. 0.
L«L.
G.O.
G.O.
G.O.
Rev.

5-9 1959-8U
1957-81
9.5
1957-80
5.2
10.0
1957-78
10 wO 1957-72
1957-81
5.2
5.0
1957-76
7.6 1961-85
8.9
1957-6U
6.0 1957r20C6
7.8
1959-71
5.0
1959-79

n.a.
2.56
2.L8
2.37
2.30
Var.
2.57
3.06
1.96
2.75
1.99
2.91

Rev.

31-8

n.a.

1959-2003

—
3.00-3.50
1.75-2.60 A
1.75-2,55 A
1.70-2.10
4a
1.70-2.30
Aa
1.80-2.60 A
1.80-2.60
A ,
2.50-3.05 Baa
Aaa
1.55-1.90
I.75-3.OO A
1.70-2 ,.00 Aaa
2.20-2.90 • Baa .
—

OTHER
None
Var.—Various.
n.a.—Not available.
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 f o r Reconstruction and
Development issues.
3/ In the case of State and local government s e c u r i t i e s , G.O. denotes general
obligation; Rev,, revenue bonds; G.R., general obligations additionally secured
by f a c i l i t i e s revenues; L.L., limited l i a b i l i t y obligations secured by pledge of
designated revenues.




Exhibit !

•H-1U

" Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues
Subsequent t o
During month following
date shown
date shown
S t a t e and
Corporate j S t a t e and other 2/ jCorporate
l o c a l govt
Ilocal govt.
I

Date of
comoutation

16
710
211
U25
160
67
U07
222
805
202
215
70
176

1 9 # - 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 - J a n . 31

#2
52U
208
116
3#
3UU
100
18U
8U3
330
205 '
121 '
327

__
— '

•'

50
—

•

U22
1,395
.922
i,iui
850
830
1,135
920
9#
U12
230
85
376

other 2/
—

1,961
1,978
2,009
1,917
1,861
1,815
2,018
1,971
2,205
1,650
618
917

——

50
—

Forthcoming Large Offerings, as of February 3
Issuer

•

Type

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

CORPORATE
Chemical Com Exchange Bank
Southern C a l i f o r n i a Edison
M. Lowenstein and Sons
Koppers Co., Inc.
Xvestcoast Transmission, Ltd.
Tennessee Gas-Transmission
Bell Telephone of Pennsylvania
New York Telephone
- Southern C a l i f o r n i a Gas
Sheraton Corporation of America

Com. stock
Pfd. stock
Cohv. sub. deb.
Com. stock
Sub. deb.
P f d . stock
Deb.
Ref. mtg. bds.
Mtg. bds.
Deb.

26.0
30.0
3k. 3
15.6
20.5
Uo.o
35-0
55.0
•Uo.o
15.0

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

8
1U
15
20
21

G.O.

13.2
106.8
11.5
5-5
7-3

February
February
February
February
February

7
7
8
1U
1U

STATE AMD LOCAL GOVERNMENT
Oklahoma C i t y / Oklahoma
Public Housing Authorities
New Orleans, Louisiana
Harris County, Texas
Metropolitan Water D i s t . of So. Cal..




G.O.
G.O.
Rev.

F-2

H.lU

Forthcoming Large Offerings, as of February 3 (Cont'd)
Issuer

Type

Amount
date
(millions Approximate
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
Lubbock, Texas
New York State Thruway
^Chicago, I l l i n o i s
^Indianapolisj Indiana
Rochester, New York
Weber Basin Water Conservancy
D i s t r i c t , Utah
Fort Worth, Texas
Connecticut Expressway
*Los Angeles Co., Calif.
•K-State of California
Georgia Rural Roads Authority
Florida State Turnpike Authority
Inter-American Center Auth., Fla.
Oklahoma Turnpike Authority
— Pennsylvania Turnpike Commission
* WasMngton State Toll Bridge Auth.
Salt River Project, Arizona

Q.O.-Rev.
G.R.
Rev.
n.a.

9.8
50.0
15 o0
18.0
7.U

n. a.
G.O.-Rev.
Rev.

5.U
10.0
100,0
7.9
30.0
15-5
185.0
25.0
65.0
62.0
227.0
11.0

n.a.
Rev.
n.a.
Rev.
Rev.
Rev.
Rev.
n.a.

February
February
February
February
February

Ik
15
15
21
21

February 23
February 27
February 28
February 28
February 29
' May
Late spring
1956
1956
1956
1956
1956

OTHER
None
*—Included in table f o r f i r s t time.
3/ 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 f o r Reconstruction
and Development issues.
n.a.—Not available.

§