Full text of H.16 Capital Market Developments : January 15, 1958

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/
Not for Publication

DECONTROLLED AFTER SIX MONTHS

H.llt

January 15, 1958

CAPITAL MARKET DEVELOPMENTS
Large public security offerings for new capital during the
week ending January 10 totaled $105 million for corporations and $53
million for State and local governments. A $150 million bond issue
of the International Bank for Reconstruction and Development was also
sold. The calendar for this week includes large corporate issues-amounting to $105 million and State and local government offerings totaling
$173 million.
Bond yields - Yields on outstanding corporate and lower grade
State and local government bonds declined last week, while yields on
State and local government Aaa's remained stable.
Stock
Poor's index of
on January 10.
ing at 1*0.99 on

prices - Stock prices, as measured by the Standard and
500 common stocks, declined last week, closing at i|0.37 .
Prices increased in the early part of this week, closWednesday.

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.




V
; EXHIBIT A

HIGH-GRADE BOND YIELDS

\ U. S. GOVERNMENT:/A-/ . =
<
long.I*,m
'/

X

/

X

/

S,A

U. S. Govt., long-term 2/
Corporate
Aaa 1/

Old series

New series

Spread between
State and
U. S. Govt.
local govt. (old series) and
Corporate1 State and
Aaa 3/
Aaa
|local Aaa

. (Per cent)
1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High

3.1*2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
1*-11*
3.66

December 13
December 20
December 27
January 3
January 10

3.81*
3.77
3.73
3.68
3.65

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

3.15
2.78
2.71
2.1*1*
2.91*
2.62
3.1*9
2.80
3-87
3.15

(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)
(10/18)3.66 (10/18)
(2/8) 3.22 (2/8)

2,73
1.98
2.21
1.90
2.3k
2.05
3.05
2.17
3.1»5
2.76

3.35
3.29
3.28

2.9U
2.66
2.81*
2.86
2.86

3.25
3.18
3.15

y

n.a. — N o t "available.
"
1/ Weekly average of daily figures.

y

•

.

(6/25)
(1/8)
(6/10)
(9/2)

(9/8)

(5/26)
(12/27)
(2/23)
(8/29)
(2/21)

.38
.19
.1*3
.32
.31*
.13
.1*1*
.13
.65
.20
.59
.59
.58

.81*
.30
.61
.29
.70
.51*
.68
• .32
.58
.11*
• 31
• 32
• 31

— — — — — — — —
Average term of bonds included is 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, including,
beginning October 1957, the 1* per cent bond of 1969. The new series is comprised
of the 3 per cent bond of 1995 and the y 1/1* per cent bond of 1978-83.
3/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
^/Discontinued as of December 31, 1957. New series to be available Shortly.
Note.—Highs and lows a * for individual series and may be on different dates
for different series.




LOWER - GRADE BOND YIELDS

Date

Corporate
Baa 1/

State and
local govt.
Baa 2/

Spread between
Aaa and Baa
State and
local govt.

Corporate

(Per cent)

1957 - High
Low

3.89(9/18)
3.50 (1/2)
3.7k (1/8)
3.hh (12/31)
3.63 (12/30)
3.15 (1/1U)
it.Ul (12/28)
3.58 (3/9)
5.10 (11/29)
h.k2 (U/12)

3.79
2.96
3.32
2.93
3.26
3.02
1.22
3.20
U.51
3.90

December 13
December 20
December 2?
January 3
January 10

5.06
5.00
5.00
h.96
h.92

It.03
3.92
3.92
3.92
3.88

1953 - High
195k - high
1955 - High
1956 - High

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/27)
(3/8)
(8/29)
(2/21)

.69
.k2
.68
.52
.51i
.U5
.63
.U2
1.27
.6k

1.21
.98
1.16
. -93
1.03
.87
1.17
.89
1.21
1.0U

1.22
1.23
1.27
1.28
1.27

1.09
1.06
1.08
1.06
1.02.

1/ Weekly average of daily figures. Average.term of bonds included
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.




EXHIBIT C

Stock price

Trading
Common
Stock market customer credit
volume 2/
Customers
(millions yields y
Total debit bal- loans to
of shares) (per cent)
"others'1 j/
(Millions of dollars)

1953 - High
19$h - High
1955 - High
Low
1956 - High

26.5k
22.95 (9/18)
35.98

15:89

(12/9)

Itlh

s

1.5

43.22

1:
1
l.li

W.35
iiO.33
39.78

2.5
2.6
2.5
3.3
2.2

149.08 (7/S)
39.W (12/20)

November
December
December 27
January 3
January 10

1:1

hO. 87

10.31

lt-32

h.U2
3.64
U.35
3.82

L.72
3.91

L.62

I4.63 .

14.69
14.56
li.59

2,155

* 8

1,665
1,3114
2,388

2,U05
U,030
3,537
U,0U7
3,91k
(4,031
3,577

2,517
2,823
2,7140
2,687
2,517

3,577
n-a.

2,517
n.a.

JS§

780

66U
1,018

7146
l,2Ul
1,018

1,267
1,155
1,163
1,0514
1,060
c/ 1,091

a.—Not available I
c/ Corrected..
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19l4l-U3"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.
-%/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
h/ End of month figures for member firms of the New York Stock Exchange which
carry margin accountsj-excludes balances secured by U.S. Government obligations.
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.




<
H.11+

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

1958
January
February
March

Corporate
|
1957
1

e/ 800
.

April
May
June
July
August
September

1,063
1,071
1,3a

-

New capital
I
State and local 1/
1956
1958
1
1956
1
1957
573
712
817

e/ 700

742
572
506

4o4
696
390

92k
771
.1,1489

818
1,146
641

765
546
393

378
490
735

991
914
973

1,063
654
838

529
584
430

408
206
357

6%
632
688

639
347
409

October
November
December

1,014
831
e/1,000

745„,
1,0892/
1,088

1st
2nd
3rd
lith

3,179
3,181 '
2,878
e/2,845

2,102
2,605
2,556

2,922

1,820
1,704
1,544
2,016

1,490
1,603
971
1,395

4,907
7,463
10,384

3,524
5,068
7,084

3,093
4,0014,
5,459

Quarter
quarter
quarter
quarter

1st half
Three quarters
Year

'

6,662
9,5W
e/12,385

Excluding finance companies j/
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

Year

3,268
2,921
/2,560
e/2,695

1,647
2,541
- 2,246
2,826

e/11, hk6

9,260

e/ Estimated.
1/ Data through June 1956 are Bond Buyer data classified as new capital by
. Federal 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.
2 / Total new capital issues excluding offerings of sales and1 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

1956 - December
1957 - January
February
March
April
V
May
June
July
August
September
October
November
December

State and
local government

h30
567
671
788
U77
329
877
525
526
537
57k
k20
#9

201
386
306
19U
U99
2li8
176
265
357
185
1*35
386
U39

Other 2/

100
5°
125
25
39
25
30
75

Large Individual Issues Offered January 1 through 10

Issuer

Type 3/

Coupon
Amount
(millions
rate or
Offering
Maturity
of
net interyield
dollars)
est cost

Rating

CORPORATE
Commercial Credit Co.
Conn. Light & Power Co.
Washington Water Pwr. Co..

Notes
50.0
1978
lst&r ef. lit g. bds. 30.0 1988
1st mtg.bds.
20.0
1988

h 1/8
3 7/8
h 1/8

1.20
3.89
U.10

AaaA

STATE AND LOCAL GOVERNMENT
Los Angeles, California
Dade Co., Florida
Caddo Parish S.D., La.
Des Moines Sch. Dist.,1a.




G.O.
G.O.
G.O.
G.O.

25.0
lU.5
7.5
5.7

1959-88/68
1958-72/63
1959-78
1958-77

3.18
3.61
3.17
2.62

2.10-3.30
2.75-3.50
2.15-3.20
1.80-2.60

Aa
A
A
Aa

H.lU
Large Individual Issues Offered January 1 through 10 (Cont'd)

Issuer

Type 2/

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

Rating

OTHER
Int'l tik. for Reconstruction and Development

Bds.

150.0

1979

h 1/U

k.29

Aa

State and local government security offerings of
million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
2/ In the case of State and local government securities, G.O. denotes general
obligations5 Rev., revenue bonds; G.R., general obligations additionally secured by
facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues.




H.lU"

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

Subsequent to
date shown

C o r p o r a t e l i ^ a n d J o t h e r 2/

Corporate]^ ^ > t h e r

476
591
740
461
187
525
370
526
578
576
458
383
378

280
153
153
290
179
97
172
#2
2L3
370
369
387
383

1 100
35
'

'25
25
25
30
30
18
150

796
966
795
U86
258
525
115
811
845
647
815
1,193
1,161

.

763
648
631
862
396
388
498
514
U39
587
573
589
6lii

2/

100
35
25
25
25
30
15
45
63
165

Forthcoming Large Offerings, as of January 10
Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Commonwealth Edison Co.
West Virginia Pulp & Paper Co.
Pacific Power & Light Co.
Alabama Power Co.
Pacific Gas & Electric Co.
• Kimberly Clark Corp.
Commerce Oil Refining Corp.
Royal Dutch Petroleum Co.
Indiana & Michigan Electric Co.
^Pennsylvania Electric Co.
^Cleveland Electric Illuminating Co.
American Telephone & Telegraph Co.




S.F. deb.
Deb.
1st mtg. bds..
1st mtg. bds.
1st & ref. mtg. bds.
S.F. deb.
Deb. bds. & common
Common stk.

50.0
40.0
15.0
23.0
75.0
30.0
45.0
3/

1st mtg. bds.
1st mtg. bds-.
1st mtg. bds.
Conv. deb.

25.0
29.0
30.0
718.3

1st mtg. bds.

40.0

Jan. 15
Jan. 15
Jan. 16
Jan. 17
Jan. 22
Jan.- 22
Jan.
Feb. 10
(rights expire)
Feb. 14
Feb. 25
Feb. 26 '
March 12
(rights expire)
Winter

1--2

Forthcoming Large Offerings, as of January 10 (Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Des Moines Ind. Sch. Dist., Iowa
San Diego Co. Wtr. Auth., Calif.
State of New York
Georgia Rural Roads Auth.
State of Missouri
New York, New York
State of North Carolina
Penna. State Highway & Bridge Auth.
State of California
^Milwaukee Co., Wise.
Dallas, Texas
Florida State Board of Education
#State of South Carolina
Los Angeles, California
State of New Hampshire
^Puerto Rico Water Resources Auth.
No. Hempstead Sch. Dist. No. 9> N.Y.
East Baton Rouge Par. S.D. No.l, La.
^Memphis, Term.
Denver,. Colorado
Public Housing Authorities
Wichita Sch. Dist. No. 1, Kansas
New %ork State Thruway Auth.
Pennsylvania Turnpike Commission
Inter-American Center Authority,Kla.

G.O.
Rev.
G.O.
Rev.
G.O.
G.O.
, G.O.,
Rev.
G.O.
Sower rev.
G.O.
G.O.
G.O.
Water rev.
G.O.
Rev.
G.O.
G.O.
G.O.
Water rev.
G.O.
Rev.
Rev.
Rev.

5.7
7.5
37.5
17.5
55.0
25.5
10.0
20.0
100.0
5.7
11.8
7.9
8.0
9.0
28.lt
25.0
7.U
10.0
12.5
20.0
67.1
5.0
UO.O
62.0
20.0

Jan. 9
Jan. 13
Jan. 1U
Jan. 11*
Jan. 15
Jan. 15
Jan. 16
Jan. 17
Jan. 22
Jan. 2it
Jan. 27
Jan. 28
Jan. 28
Jan. 29
Jan. 30
Jan.
Feb. li
Feb. h
Feb. h
Feb. 5
Feb. 5
Feb. 6
Winter
Winter
Winter

Ext. loan bds.
Deb.

15.0
50.0

Jan. 21
Feb.

OTHER
Union of South Africa
^Quebec Hydro-Electric Commission

*—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.
2/ The net proceeds are expected to total $200-$250 million; however, the
amount to be offered in the United States is as yet indeterminate.
Note.—Deletions for reasons other than sale of. issue: None.




Exhibit G

H.lU

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

Date

1952 - 1956
High
Low

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)

h.30(12/12/56)
2.93(3/31/510

62
-3

1.58(12/6/56)
3.00(3/17/514)

70
-15

1957' - January
6U
k.kk
14.62
57
February
14.25
a
None
March
None
h$
-14.50
April
50
*k.29
5k
May
K:&)
58
k.kk
79
June 5
it. 63
75
106
7
5.10
11
87
U.7-8
• July 3
6U
14.80 2/
10
U8
it.57
7U
U.88 y
11
68
li.77
16
U.65
56
17
71
U.90
August 111
5.00
75
—
September 5
U.eo
51
6
56
U. 85
25
.
51
5.10
October 1
14.78
U5
15
'
5.00
39
17
3k
I4.95
2k
67
5.30
November 7
88
63
14.97
5.50
8
I4.86 2/
52
15
143
5.05 2 /
20
14.82
53
21
h.65
37
22
U. 65
39
*
. 11*
December 6
14.30
U.iio
12
-17
445
1958 - January 8
U.07
li.10 2 /
-39
9
*—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 %he 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/ Provides 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.