Full text of H.16 Capital Market Developments : January 17, 1957

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JBmYffWFEDERAL
Not for Publication DECONTROLLED

SIX MONTHS

H.lU

a m # MNK OF CLEVELAND

January 17# 1957
CAPITAL IIMIXET DEVELOPIEINTS

The volume of public security financing continues to be
very substantial. Large public security offerings issued for new
capital during the week ending January 11 totaled &280 million for
corporations and *>3U million for State end local governments. The
International Bank for Reconstruction and Development sold a bond
issue for »100 million. This week, the volume will again be large.
Corporate debt issues totaling 385 million and State and local
government issues amounting to y223 million are scheduled for sale.
Bond yields - Changes in yields on outstanding bonds were
mixed last'waelcl Yields on corporate Baa bonds increased slightly
last week while those for Aaa and Baa State and local government
bonds remained stable and yields on corporate Aaa, State and local
government revenue and U.S. Government bonds declined. The decline
was quite sharp for the U. S. Government (old series) bond yields.
Reoffering yields on new corporate issues continue to be
relatively high. A new A-rated, 30-year first mortgage electric
utility issue was reoffered this week at a yield of i+.67 per cent—
9 basis points above a similar offering made on December 6.
Stock market credit — Customer credit in the stock market
(excluding U.S. Government securities) increased #38 million during
December, to total ;?3»98U million at the end of the month. Net
debit balances continued to increase while bank loans to "others"
declined slightly. Borrowing by member firms of the NYSE maintaining
margin accounts, except borrowings on U. S. Government securities,
increased v6l million during December. Customers1 net free credit
balances increased substantially, totaling £880 million at the end
of the month. Thses and other data on stock market credit for
December and November are shown in the following table.




End of month
December

November

Change

(Millions of dollars)
Customer credit
Excluding U. S. 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. Govt, securities
Broker and dealer credit
Money borrowed except on U. S. Govt. securities
On customer collateral
Money borrowed on U. S. Govt, securities
Customers' net free credit balances

2,823

3,946
2,784

38
39

1,161

3,981+

1,162

-1

33

r/32

1

4l

43

- 2

2,132
1,852

46
880

2,071

r/ l , 8 2 2
43
822

r/ Revised
Stock prices - Stock prices, as measured by the SEC index
of.26-5 common stocks, declined last week, closing at 277*1 on
January 11. Daily figures through Wednesday of this week indicate a
further decline in prices.
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.




61

30
3
58

EXHIBIT A

H I G H - G R A D E BOND YIELDS
Weekly

CORPORATE Ada

1953

1954

1955

1956

U. S. Govt., long-term 2/
Date

Corporate

Old series

New series

Spread between
State and
local govt, (old series) and
Corporate 1 State and
Aaa J /
1 local Aaa

(Per cent)

195U - High
Low
1955 - high
Low
1956 - High
Low

3-1*2
2.99
3.09
2.85
3.17
2.91
3.79
3.07

December lU
December 21
December 28
January h
January 11

3.72
3.76
3.79
3.82
3.81

1953 - High

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

3.15
2.78
2.71+
2.a
2.91*
5.62
3.1*9
2.80

(6/6)
(12/26)
(1/9)
(8/7
(8/5)
(1/7)
(12/21)
(2/17)

3.38
3.19
3.1*8
3.53
3.1*5

1/ Weekly average of daily figures.

n.a.

2.73
1.98
2.21
1.90
3.03 (8/5)
2.3U
2.89 (6/10) 2.05
3.39 (12/28) 3.05
2.92 (2/3)
2.17
3.31*'
3.38
3.39
3.U5
3.1*1*

3.0b
3.0b
3.05
3.05
?.05

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

.38
.19
.1*3
.32
.31*
.13
.1*1*
.13

.81*
.30
.61
.29
.70
.51
.68
.32

.31*
.27
• 31
.29
.36

.31*
.1*1*
.1*3
.1*8
.1*0

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; 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 1/1* per cent bond of 1978-83.
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 B

LOWER - GRADE BOND YIELDS

CORPORATE

STATE AND LOCAL GQVT. Baa
1

/J

Moody's

r~i-

IW

i

i

STATE AND LOCAL GOVT. REVENUE

i i l i i I i ,i ii ii ,' ,
i 1 , i ! i i ii
Y " ,
1956

Corporate

Date

Baa 1 /

State and
local govt.
Baa i/

.

"

State and
local govt,
rev. 2/

(Per cent)
1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low
December Hi
D e c e m b e r 21
December 28
J a n u a r y it
January 11

(6/25)
(1/8)

3.27

(6/26)

(1/2)

3.79
2.96

2.71

(1/2)

3.7li ( 1 / 8 )

3.32

(1/7)

3.00

(1/1)

3.Ui

(12/31)

3.63

(12/30)

2.93
3.26

(8/5)
(12/29)

2.99

(12/30)

3.U5 ( 1 M )
li.lil ( 1 2 / 2 8 )

3.02
L.22

(1/6)
(12/27)

2.76
3.98

(1/7)
(12/28)

3.20

(3/8)

2.89

(2/2li)

3.89

(9/18)

3.50

3.58

(3/9)

U.35
li.38
li.lil

. U.17
a . 20
li.22

li.li6

li.22

li.U9

li.22

2.72 (8/13)

3.91
3.97
3.98
1

. 3.98
3.95

LucTed is 25-26 years.
'
inclua
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.
FRASER

Digitized for


STOCK M A R K E T

Date

Trading
Common
Stock price
volume 2/
index y
. (millions yields j/
of shares) (per cent)

Stock market customer credit
Customers'
Bank
debit bal- loans to
ances V
"others" 5/
(Millions of do]liars)

1955 - High
Low
1956 - High
Low

167.1
II4I4.O
221.h
156.5
270.7
217.ii
295.5
257.U

November
December
December 28
January It
January 11

273.1
277.7
277.8
279.2
277.1

1953 - High
195k - High

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

2.5
0.9.
3.7
l.lt
U.6
1.5
3.1
1.5

5.75 .
5.15
5.33
U. 20
U.22
3.78
14.25
3.86

2,1*5
2,055
3,1436
2,U05
14,030
3,537
U,0U7
3,9114

1,665
1,31k
2,388
1,653
2,805
2,517
2,810
2,7140

780
661*
1,0148
7146
1,21a
1,018
1,267
1,155

2.2
2.U
2.6
2.7

14.25
14.13

3,916

2,7814

n.a. .

n.a.

n.a.

1,162
1,161
1,161
1,163
n.a.

2.h

n.a.—No ; available.
V SEC index of-265 comnon stocks, weekly closing prices, 1939=100; converted
to 1957-149*100 by Federal Reserve. The conversion factor is 1 2 3 . 9 1 .
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Moody's 200 common stocks; end of month figures.
. % / 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/ 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 72 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
Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1957
January
February
March

e/1,050

April
my_

Corporate
1956
579
70k
790

535
I407

1st
2nd
3rd
4th

.

/ 770 2/
e/l,057-Z
3 / 9 5 0

quarter
quarter
quarter
quarter

2,073
2,790
2,571

e/2,785

1st half
Three quarters
Year

4, 863

„ 7,434
e/10,219

,

19,7?

696.
390

535
312
538

687

377
490
735

427
350
641

644
670

376
199
333

470

404

886

1,066

October
November
December

e/m-

478

830

669
#6

State and local.
1957
1956

1,223

816
l,!44

July.
August
September

New capital
1955

1,162 1/
632
900
2,165
2,052
1,911
2,695
4,217
6,128
8,821

249
406
919

;

e/400

1,490
1,603
908
£/l,370
3,093
4,001

e/5,37i

658
408
1,385
1,418
1,124

1,984
2,803
3,927
5,9H

Excluding finance companies 3/
- 1st quarter
2nd* quarter
3rd quarter
4th quarter
Year

1,617
2,520
2,263
e/2,660

2,554

e/9,060

7 , 5 6 9 .

1,727
1,870

1,434

e/ Estimated.
.T/ 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 rotmding.




H.lU

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

Corporate

Month

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

State and
local government

263
95
212
2?8
3#
623
185
592
217
558
3%
701
130

Other 2/

50.

227
192
1#
163
157
233
163
16U
35
18U
383
135
201

50
20
37
35
—

Large Individual Issues Offered January 1 through 11

Issuer

Type y

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

CORPORATE
Idaho Power Co,
1st Rite. bds. 20.0
S.F. Deb.
Standard Oil Co, of Ohio
25.0
Deb.
Aluminum Co. of America
125.0
Deb.
New England Tel. & Tel. Co
35.0
Interstate Oil Pipe Line
Co.
S.F. Deb.
25.0 .
Deb.
Sears Roebuck Accept. Corp
, 50.0




1987
1982
1982
1986

k 1/2
k 1/k
kl/k
k3/k

1987
1972

k 1/k
k 5/8

.

L50
U.25
a. 2 5
a. 6o

Aa
Aa
Aa
Aa

U.25
>.57

Aa

E-2

H. Ik

Large Individual Issues Offered January 1 through 11 (Cont'd)

Issuer

Type j/

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

STATE & LOCAL GOVtiRNMmT
San Antonio Ind. Sch. \
'Dist., Texas
Fort Worth Ind. Sch.
Dist., Texas
Los Angeles, California
.Fort Lauderdale, Florida
Caddo Parish Sch. Dist.,
Louisiana

G.O.

5.0

3.76

2.80-3.75

A

3.58
3.38
U.51

2.70-3.80
2.50-3.50
3.00-U.50

A
Aa
Baa

1958-77

3.U9

2.50-3.25

A

1977

k 1/2

U-39

Aa

1958-75.

G.O.
5.0
1958-82
G.O.
18.0 . 1958-87
Wtr.& swr. rev. 11.0 1957-86
G.O.

5.0

Bds .

100.0

OTHER
International Bank for Reconstruction & Development

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.Ik

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

Subsequent to
During month following
date shown
date shown
State and
State and
Corporate
local govt. Other 2/ Corporate local govt. Other 2/

Date of
computation
1955 - Dec. 30
1956 - Jan. 31
Feb. 29Mar. 30
Apr. 30
May 31
June 29
July 31 "
Aug. 31
Sept. 28
Oct. 31
Nov. 30
Dec. 31

70
176
123
380
568
198
.1*37
21*7
369

315
683
U36

2*76

121
327
220
132
173
33.2
81
131
359
162
U8
280

85
376
233
1,013
818
1*1*8
567
1,096
1,202
1,009
990
181
796

•
37

23
" 100

618
917
785
811
832
9kl
690
726
958
1,197
955
979
763

__

37

23
100

Forthcoming Large Offerings, as of January 11

Issuer

Type

.

Amount
Approximate date
(millions, i of offering
of dollars)

CORPORATE
Household Finance Corp.
Louisiana Power & Light Co.
Pacific Petroleums, Ltd.
Oklahoma Gas & Electric Co.
Pacific Gas & Electric Co,
Armco Steel Corp.
Niagara-Mohawk Power Co.

Deb.
30.0
1st mtg. bds.
20.0
Conv. sub. deb.
15.0
1st mtg. bds.
20.0
1st &ref. mtg. bds. 35.0
Common stk.
60.9
Cony. deb.

1*6.2

Mountain States Tel. & Tel. Co.
•RSocony Mobil-.Oil Co.

Deb.
Common stk.

35,4
231.0

•^American Natural Gas Co.

Common stk.

25.0

American Tel. & Tel. Co.
Michigan Wisconsin Pipe Line Co.
Southern New England Telephone Co.
• May Stores Realty Corp.




- Deb .
1st mtg. bds.
. Common st;:.
jGen, mtg. bds.

250.0
2 5 . 0

20 .k
25.0

January 15
January 16
January 17
January 18
January 23
January 21*
(rights expire)
January 28
(rights expire)
January 29
February 19
(rights empire)
February 25
(rights expire)
, March
Winter
Winter
Winter.

H. 14

F-2
Forthcoming Large Offerings, as of January 11 (Cont'd)

Type

STATE AND LOCAL GOVERN: JENT

Amount
(milliesa Approximate date
of dollars) of offering
-

Dallas, Texas
G.O.
10.0
Dallas, Texas
Rev.
5 . 0
Orange County Flood District, Calif.
G.O.
1 0 oO
State of Michigan 3 /
L»L.
27,0
Georgia Rural Roads Authority
L.L.
17:5
Spokane Co. Sch. Dist. No. 81, Wash.
G.O.
6,0
King Co. Sch. Dist. No. 1, Wash.
G.O.
. 10 cO
State of California
G.O.
85c0
Alabama Highway Authority
L »L .
6.0
San Antonio, Texas
Eleo. & gas rev. 2 0 . 0
Wichita Sch. Dist. No. 1, Kansas
G.O. .
6.0
Denver# Colorado
G.O.
20.0
Columbus, Ohio
G.O.
5.0
•Tulsa, Oklahoma
G.O.
6.5
Birmingham, Alabama
G.O.
6.7
DeKalb County Sch. Dist.„ Georgia
G.O.
5.1
•Boston Metropolitan District, Mass.
G.O.
8.2
Port of New York Authority
Rev.
50.0
•State of Connecticut
G.O.
29.2
San Diego Unified Sch. Dist., Calif.
G.O.
5*0
•New York,, ifo-vr York .
G.O.
25.2
•Fresno Unified Soh. dat.* Calif*
G.O.
5-5
•Public Housing Authorities
28.6
TPennsylvania Turnpike Commission
Rev*
62.0
Inter-American Center Auth., Fla.
. Rev.
20.0
New York State Thruway Authority
50.0
- V) G ' O "
Jacksonville Expressway Authority
#2.0
X_Rev.
Florida State Turnpike Authority
Rev.
185.0
Oklahoma Turnpike Authority
Rev.
65.O
State of Connecticut
Expressway rev.
5U.o

-January II4.
. January ll+
January 15
January 15
January 15
January 15
January 16
January 16
January 16
January 17
January 17
January 18
January 22
January 22
January 23
January 2ij.
January 2i#
January 29
January 30
February 5
February 5
February 5
February 6
Winter"
' Winter
Winter
"'/inter
Winter
Winter
Winter

OTHER
None
•—Included in table for first time.
l/ Includes corporate and other issues of £15 million and over; State and
local government issues of 05 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
3/ Reduced from $52 million and rescheduled with higher maximum permissible
interest cost after failing to receive bids on December ij..
Note.—Deletions for reasons other than sale of issues State of Colorado,
$8 million highway revenue bond issue—no bids received.




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

Date

1952 average
1953 average
1951i average
1955 average
I956 average
1956 - January
February
March
April
May
June
July 3

3.16

13
16
2

., 3.16
3.02
,

None
*3.1$

18

3.62

25

3.70

August 1
30

September 11

U.07
It. 2 0

13
25

k.01

1.17

October 10
31

November 21
December 6
12

1957 - January 8

-

4.20

11
26
-3

12

ho

3.U5
3.61

15
26

19
18

35
3
11

3.28

*3.77
*3.53
*3.52

3.78
3.12
3.33

9

3.23
3.81

3.35

3.73
None

27

-6

3.77

28

*3,75
3.82

27
28

U.00

h3

U-Uo

63

U. 5 8

70

26
•

33
52
62

-

58
37

.

ks

I4.30

52

li.30

U7

U.50

62

*—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.