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Not f o r P u b l i c a t i o n
L

y H.lli
-

DECONTROLLED AFTER SIX MONTHS
J"

^

^ 6 9

- '•'-"January IS, i960.

CAPITAL I-iARKET BKmOM-iENTS
IN T.-Jl UNITED STATES AND CANADA.

The volume of new c a p i t a l p u b l i c s e c u r i t y o f f e r i n g s i n t h e
United S t a t e s i s expected t o be much smaller t h i s week than l a s t ,
p a r t i c u l a r l y f o r S t a t e and l o c a l government i s s u e s . During t h e week
ending January 15, c o r p o r a t i o n s s o l a - l a r g e i s s u e s f o r s4i0 m i l l i o n and
S t a t e and l o c a l governments sold i s s u e s amounting to #301 m i l l i o n . The
S t a t e and l o c a l government f i n a n c i n g t o t a l included the s a l e of two very
l a r g e bond issues—a $120 m i l l i o n i s s u e by New York S t a t e Power Authority
and a fclOO m i l l i o n C a l i f o r n i a o f f e r i n g . Both were w e l l received by i n vestors.
This week, s u b s c r i p t i o n r i g h t s e x p i r e f o r a c o r p o r a t e stock
i s s u e f o r ^25 m i l l i o n . S t a t e and l o c a l government i s s u e s t o t a l i n g *>77
Million a r e a l s o scheduled f o r s a l e .
Bond y i e l d s - Changes i n y i e l d s on outstanding bonds were
mixed l a s t week. Yields on lower grade c o r p o r a t e bonds increased s l i g h t l y
while t h o s e f o r high-grade bonds remained s t a b l e . Yields on S t a t e and
l o c a l and U. S. Government o b l i g a t i o n s d e c l i n e d .
Housing s t a r t s - P r i v a t e nonfarm housing s t a r t s in December
d e c l i n e d l e s s than seasonally f o r t h e second s t r a i g h t month. At a
s e a s o n a l l y a d j u s t e d annual r a t e of 1,310,000 u n i t s , they were 8 per
cent above November, but n e a r l y 9 per cent below t h e advanced l e v e l of
a y e a r e a r l i e r , according t o preliminary e s t i m a t e s . This was t h e
t h i r d h i g h e s t December r a t e ever r e g i s t e r e d .
1959 was t h e second b i g g e s t y e a r in housing p r o d u c t i o n , as
p r i v a t e nonfarm s t a r t s t o t a l e d 1,31+2,000 u n i t s , s l i g h t l y below, the 1950
r e c o r d . Conventionally-financed s t a r t s accounted f o r about t w o - t h i r d s
of t h e t o t a l , a s in the previous two y e a r s . In c o n t r a s t , conventional
s t a r t s i n t h e o t h e r two boon years of 1950 and 1955 r e p r e s e n t e d only
one-half of the t o t a l .
Compared with 1958, t o t a l nonfarm s t a r t s were by up n e a r l y lU
per cent i n both metropolitan and nonmetropolitan a r e a s . Although p u b l i c
s t a r t s were down by 1*8 p e r c e n t , p r i v a t e s t a r t s were up by 18 p e r c e n t .
P r i v a t e c o n v e n t i o n a l l y - f i n a n c e d s t a r t s increased by 21 p e r c e n t ; blikinsured s t a r t s by 12 p e r c e n t ; and VA-guaranteed s t a r t s by 7 p e r c e n t .
Stock p r i c e s - Standard and P o o r ' s index of 500 common s t o c k s
continued t o d e c l i n e l a s t week, c l o s i n g a t 58.38 on January 15—nearly
3 per cent lower than a t t h e c l o s e of 1959. Trading a c t i v i t y changed
l i t t l e w i t h d a i l y volume averaging 3 - 5 m i l l i o n shares a day.




t

H. lit

— 2 —

More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented in the attached e x h i b i t s .
Developments in the Canadian c a p i t a l market a r e presented i
appendix 1 a t t h e end of t h i s r e p o r t .

Capital Markets S e c t i o n ,
Division of Research and S t a t i s t i c s ,
Board of Governors of t h e Federal Reserve System.




HIGH-GRADE

BOND

YIELDS

f

LOWER-GRADE

BOND

YIELDS




/ V 1

U.S. GOVdNMINT

H.l4

Exhibit b
Tables f o r Exhibit A
High-grade bond Yields
Date

Corporate
Aaa 1 /

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

State and
local govt.
Aaa y

U. S. Govt,
long-term 2 /
(Per cent)

19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low
Dec.
Dec.
Dec.
Jan.
Jan.

18
24
31
8
15 2 /

2.85
4.14
4.13
3.55
U.61
4.09

(4/23)
(9/27)
(10/10)
(5/2)
(12/31)
(1/9)

4.59
4.59
4.61
• 4.61
4.61

2.45
3.76
3.84
3.07
4.37
3.83

(0/6)
(10/18)
(12/26)
(4/25)
(12/31)
(1/2)

1.90
3.45
3.31
2.64
3.65
3.06

4.25
4.32
4.37
4.42
4.37

(9/2)
( 8/29)
(9/11)
(5/1)
(9/24)
(3/26)

.30
.47
.72
.34
.92
.23

.34
.27
.24
.19
.24

3.40
3.49
3.49
3.53
3.49

.30
.60
.51
.22
.50
.16

.85
.83
.88
.89
.88

Lower-grade Bond Yields
Corporate
Baa 1 /

State and
l o c a l govt.
Baa y

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

3.44
5.10
4.96
4.51
5.32
4.83

2.93
4.51
4.34
3.64
4.46
3.92

Dec.
Dec.
Dec.
Jan.
Jan.

5.27

Date

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)

18
24
31
8
15 2 /

5.30

5.32
5.32
5.34

(12/31)
(11/29)
(1/3)
(7/11)
(12/31)
(4/17)

4.35
4.42
4.43
4.46
4.43

(8/5)
(8/29)
(9/11)
(5/D
(7/2)
(3/26)

.52
1..27
1.20
.77
.77
.56

.96
1.21
1.11
.93
.98
.79

.68
.71
.71
.71
.73

.95
.93
.94
.93
.94

g/ Preliminary.
1/ Weekly average of daily f i g u r e s . Average term of bonds included i s 25-26 years.
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 years or morn.
2 / Thursday f i g u r e s . Only general obligation bondc are included; average term
i s 20 years.
Note.—highs and lows are f o r individual series and may be on d i f f e r e n t dates f o r
different series.




STOCK

MARKET

STOCK

1957
PRIVATE

PERMANENT

Monthly




MARKET

CREDIT

1951
NONFARM

19S9
DWELLING

UNITS

I960
STARTED
Ihouiondi

ol

U nils

Exhibit D - Tables l o r ExliibiL C
Stock Market
Stock price
index 1/

1953-1958 - High
Low
1959 - High
Low

5U.11
22.95
60.51
51.37

November
December
Dec. 31
Jan. 8
Jan. 15 b/

Trading
volume y
yields 2 / (millions
(per cent) of shares)

(12/24/58)
(9/18/53)
(7/31)
(2/6)

57.23
59.06
59.89
59.50
58.38

Common

Stock market customer c r e d i t
Customers1
Bank
debit b a l - loans t o
ances k / "others" 5 /
(Millions of dollars)

3.30
6.25
3.08
3.3k

k.9
0.9
k.3
2.1

k,k9 2
2,055
k,76k
k,k01

3,285
1,31k
3,k0l
3,210

3.2 k
3.18
3.15
3.18
3.21

3.k
3.3
3.3
3.6
3.5

k,k6o

1,317
669
1,332

3,273

1,373

1,210 1,180
1,187
1,17k
r/l,17k
1,327

n.a.
n.a.

n.a.—Not available.
g/ Preliminary.
1 / S t a n d a r d and P o o r ' s r«mposltc i n d e x of 500 common s t o c k s , weekly c l o s i n g p r i c e s , 1941-43=10. Monthly data,
a r e a v e r a g e a of d a i l y f i g u r e s r a t h e r t h a n of F r i d a y s ' o n l y . Highs and lows a r e f o r F r i d a y s ' d a t a o n l y .
2 / Standard and P o o r ' s composite s t o c k y i e l d based on Wednesday d a t a c o n v e r t e d t o weekly c l o s i n g p r i c e s by
F e d e r a l R e s e r v e . Y i e l d s shown a r e f o r d a t e s on which p r i c e index r e a c h e d i t s h i g h or low.
3 / Averages of d a i l y t r a d i n g volume on t h e New York Stock Exoliange.
4 / Bid of month f i g u r e s f o r member f i r m s of t h e New York Stock Exchange which c a r r y margin a c c o u n t s ; e x c l u d e s
b a l a n c e s 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 r e p o r t i n g member b a n k s . Excludes l o a n s f o r p u r c h a s i n g or c a r r y i n g U. S. —
Government s e c u r i t i e s • P r i o r t o J u l y 1 , 1959, such l o a n s a r e excluded only 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 p e r c e n t of l o a n s t o o t h e r s . For f u r t h e r d e t a i l sen B u l l e t i n .

Private Permanent Nonfanu Dwelling Units Started 1/
Unadjusted
Seasonally
adjusted
annual rate
Dec.
Jan.
Feb.
Mar.
Apr.
May
July
Aug. •
Sept.
Oct.
Nov.
Dec.

I,k32
1,36k
l,k03
l,k03
l,k3k
1,370
1,368
1,375
l,3k0
1,323
2/1,180
g/1,210
2/1,310

Unadjusted

FA
H

(Thousands of units)
90
8li
9k
118

&

131
127
125
• 117

1

25
20
20
30
3k
3k
35
31
31
30
27
20
20

9
7
6
10
11
10
11
11
10
10
9
8
6

55
57
67
78
93
89
85
85
8k
77
g/66
E/ 6 3
2/56

y t o t a l s t a r t s a r e Census e s t i m a t e s . P r i o r t o J • 1939^"data a r e from Bureau of Labor S t a t i s t i c s .
A d w e l l i n g u n i t i s s t a r t e d when e x c a v a t i o n b e g i n s } a l l u n i t s i n a n a p a r t m e n t s t r u c t u r e a r e c o n s i d e r e d
s t a r t e d a t t h a t t i m e . FHA and VA s t a r t s a r e u n i t s s t a r t e d u n d e r commitments by t h e s e a g e n c i e s t o i n s u r e
o r g u a r a n t e e t h e m o r t g a g e s . As r e p o r t e d by FHA a n d VA, a u n i t i s s t a r t e d when a f i e l d o f f i c e r e c e i v e s
t h e f i r s t compliance I n s p e c t i o n r e p o r t , which I s made b e f o r e f o o t i n g s a r e poured i n some c a s e s but n o r m a l l y
a f t e r t h e f o u n d a t i o n s have been c o m p l e t e d . Capehart m i l i t a r y h o u s i n g u n i t s a r e e x c l u d e d . Conventional
s t a r t s a r e d e r i v e d a s a r e s i d u a l , a l t h o u g h t o t a l a n d FHA and VA s t a r t s a r e n o t s t r i c t l y comparable i n
c o n c e p t o r t i m i n g ; t h e y I n c l u d e b o t h u n i t s f i n a n c e d by c o n v e n t i o n a l mortgages and u n i t s w i t h o u t m o r t g a g e s .




Exhibit E

H.Ik

Long-term Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of d o l l a r s )

I960

' New c a p i t a l
Corporate 1 /
S t a t e and l o c a l 2/
|
1959
I960
1
1958
1
1958
1
1959

1,553^

812
953
511

1,140
597
887

931
592
982

798
895
551

1,107
540
1,114

567
514
468

806
403
651

p/826
2/778
e/850

862
518
920

&/590
1/497
g/450

456
474
435

2,139
2,5p5
1,549
e/1,537

2,276
2,244
1,860
1,365

4j6^i.
6,193'
e/7,730^

4,520
6,380
7,746

8h0
745
631

April
May

899
791
87b

July
August
September
October
November
December
1st
2nd
3rd
4th

e/75o

637
857
645

531
718
709

January
February
March

;

quarter
quarter
quarter
quarter

2,216
2,561
9.,958
e/2,454

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

4,780
6,738
e/9,192

728 "

3,139
2,623
2,760
2,300"
5,762
8,522
10,823

e/700

Excluding f i n a n c e companies 4 /
1st quarter
2nd q u a r t e r
lith q u a r t e r

2,011
2,409
1,695
e/2,30k

2,899
2,586
2,731
2,213

Year

e/8,4l9

10,429

3 r d Quarter

1 / S e c u r i t i e s and Exchange Commission e s t i m a t e s of net proceeds.
2 / Investment Bankers A s s o c i a t i o n of America e s t i m a t e s of p r i n c i p a l amounts.
3 / Includes &718.3 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
h / Total nev 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.




II: U

Exhibit V
Other Security Offerings 1 /
(In millions of dollars)
LongForeig n government 2/
1959
1 1950
1 1957

1959

Federal agency' 3/
1 1958
1 1957

January
February
March

77
59
2

196
53

April
May
June

56
50
42

139
198
120

123
48
42

July
August
September

#

9
5
17

28
7
30

58
123
74

4
60
1

220

992

507

2,321

October
November
December

1
36
29
38

Year

—

84
49
30

199
175
__

1,163
251

72

—

—

125

#3

60

—

—

164
98
150

—
—

215

—

100
—

—

Short-term
State and l o c a l government 4/

572

Federal agency 3/

January
February
March

190
428
295

233
460
273

326
455
147

359
500
489

371
208
144

638
430
505

April
May

563
lai
216

357
354
264

205
337
153

486
675
.289

209
161
329

336
469
501

July
August
September

246
167
399

289
423
369

272
272
252

727
365
665

437
206
330

224
370
512

235
343
306

231
415
243

303
94
459

733
471
258

454
114
137

1,238
255
116

4,127

3,910

3,274

•6 5 0'«7

3,098

5,543

^jDctober
November
December
Year

g/ P r e l i m i n a r y . '
1 / Data presented in t h i s exhibit d i f f e r from those in Exhibit E in t h a t refunding i s s u e s , as well as new c a p i t a l i s s u e s , are included. Long-term s e c u r i t i e s are defined as those maturing i n more than one year.
2/ Includes s e c u r i t i e s offered in the United States by foreign governments and
t h e i r subdivisions and by i n t e r n a t i o n a l organizations. Source: Securities and Exchange Commission.
3/ Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
h / Principally t a x and bond anticipation notes, warrants or c e r t i f i c a t e s and Public
Housing Authority
 notes. In some instances RWi notes included may have a somewhat
longer term than one year. Source: Bond Buyer.



H.ll;

Exhibit G
Large Long-term Public Security Issues f o r New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1958 - December
1959 - January
February
March
April
May
, June
July
August
September
October
November
December

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

Other 2 /

229
335

305
369
3U0
215
#9
3U2
28U
110
363
199
bOO
h21
230

79
17U
35
176
20
50
60
50
98
175
20

551

369
.563
258
635
19it
263
21k
29k
163
217

70

Large Individual Issues Offered January 1 through 15
Issuer

Type y

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

CORPORATE
C.I.T. Financial Corp.
Deb.
Commercial Credit Co.
Notes
Kansas City Pwr. & L t . Co. 1 s t mtg. bds.
Northern I l l i n o i s Gas Co.
Pfd. s t k .
Chesapeake & Potomac Tel.
Co. of Maryland
Deb.

75.0
50.0
20.0
15.0

1980
1980
1990

5V8
5 Vh
5

5.25
5.#
1.95

25.0

1996

5 lA

5.19

. ——

Aaa
Aaa

STATE AND LOCAL GOVERNMENT
Toledo Sch. D i s t . , Ohio
G.O.
S e a t i l e , Washington
Rev.-Ut.
City « Co. oi oixii Erancisco
California
G.O.
New York S t a te Pwr. Auth.
Term
Rev.-lit.
Serial
S t a t e of Maryland
G.O.




1 0 . 0 - 1961-83
- 11.8 1969-85/70

3.65
3.72

2.90-3.70 • Aa
3.50-LljO • Aa

13.6

1961-60

j.hk • 2.85-3.602/

96.0
2h.O
23.1

2006
1965-79
1963-75

^
3.30

a. 38 -

3,50-1.00
2.95-3.30

Ad
—

Aaa

H.lU

G-2
Large Individual Issues Offered January 1 through 1$ (Cont'd)
Issuer

Type 3 /

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

STATE AND LOCAL GOVERNMENT
( Cont' d)
Tacoma, Washington
S t a t e of C a l i f o r n i a

Rev.-Ut.
G.O.

32.0
100.0

196^-2010/70
1961-85

li.Sl
It.02

3-50-U.75
3.00-1*.00

Baa
Aa

None
1 / Includes corporate and other s e c u r i t y o f f e r i n g s of $15 million and over;
State 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 $10 million 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 State and l o c a l government s e c u r i t i e s , G.O. denotes general
obligations3 Rev.-Ut., revenue obligations secured only by income from public
u t i l i t i e s 3 Rev.-Q.Ut., revenue bonds secured only by revenue from n 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 taxes only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.
b / 1 per cent of 1980 maturity not r e o f f e r e d .




H.Ik

Exhibit ti
Forthcoming Large Long-term Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues

- Dec. 31
- Jan. 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31

Subsequent t o
date shown

During month following
date shown

Date of
computation

lloS; Z t . I
210
270 .
198
396
2U6
287
165
238
198
37U
385
226
210

261
551
292
550
25U
2hl
I2i6
356
385
270
115
295
hbS

2/
75
bS
20
50
50
25 .
70
30

Corporate
370
365
'279
1+76
3U6
332
272
305
517
69U
509
271
280

Z t . l ^ h e r 2/

i

515
856
li8i
761.
517
761
500
ho6

20
50
50
25

2+02

U70
336
1*85.
5U5

70
30

Forthcoming Large O f f e r i n g s , as of January 15
Type

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

CORPORATE
General Public U t i l i t i e s Corp.
General Acceptance Corp.
Southern C a l i f o r n i a Edison Co.
Connecticut Light & Power Co.
Duke Power Co.
-^Consolidated Natural Gas Co.
Commerce Oil Refining Corp.
•STATE AND LOCAL GOVERNMENT
D e t r o i t , Michigan
Sacramento Unif. Sch. D i s t . , C a l i f .
State of Washington
S t a t e of North Carolina
S t a t e of Louisiana
New York, New York
Washington Sub. San i t . D i s t . , Md.
Public Housing A u t h o r i t i e s
OTHER Montreal Metropolitan Corp., Canada
Province of New Brunswick, Canada




Com. s t k .

2U.5

Deb.
'
25.0
1 s t & r e f . mtg.bds.30.0
1 s t mtg. bds.
25.0
1 s t & r e f . m t g . b d s . 50.0
Deb.
25.0
Deb., bds. & com. 2*5.0
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.

13.2
10.0
28.1
11.1
15.0
22.0
10.0
102.8

S.F. deb.
S.F. deb.

30.0
15.0

Jan. 19
( r i g h t s expire)
Jan. 26
Jan. 27
Jan. 28
Feb. 17
February
Indefinite
Jan.
Jan.
Jan.
Jan.
Jan.
Feb.
Feb.
Feb.

19
20
20
20
20
k
9
9

Jan. 28
28

H-2
Footnotes
*—Included in table for f i r s t time.
1 / Includes corporate and other issues of $15 million and over; State
and l o c a l government issues of $10 m i l l i o n and over.
2 / Includes foreign government and International 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.
Note.—Deletions for reasons other than sale of issue: None.




H.lli

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A. 1 /
Date

1952 - 1958
High
Low
1959 - January
February
March
April
May
June
July 9
10
15
30
Aug. 5
20
Sept. 18
Oct. 22
23
28
29
30
Nov. 25
Dec. 8
9
10
1960 - J a n . 7

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)
5.00 ( 9 A V 5 7 )
2.93 (3/31/5U)

87
-3

1

#
ii.97
*4.95

37
29

li.93

31

it. 85
it. 80

2h
22

5.25,/
it.95^
5.15

it6
16
hO

5.15
5.08
5.30

lt2
h2
63

5.50 (11/7/57)
3.00 (3/17/510

123
-15

*lt.75%/

23

*L6?

18

&
5.10

•

15
19

5.10
5.00

19
13

5.65

60

5.25
5.1t0

35
50

5.1t5
5.14t
5.3O2/

51
50
28

-*—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 a c t u a l yield f i g u r e and t h e amount above
seasoned y i e l d s are averages of o f f e r i n g s during the indicated period and of
the d i f f e r e n c e s between these new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of similar quality f o r the same day. Average maturity f o r the seasoned issues
v a r i e s from 26 to 28 y e a r s .
2 / Provides f o r a 5-year period during which issue may not be called f o r
refunding a t a lower coupon r a t e , honthly averages so marked include one or
more issues with such a provision. Other issues have no such provision.
3/ Includes one issue which provides f o r a 7-year period during which the
issue may not be called f o r refunding a t a lower coupon r a t e .




January 18, i960
Appendix 1
MONEY AND CAPITAL MARKET DEVELOPMENTS IN CANADA
Sharply lower Treasury b i l l y i e l d s i n Canada l a s t week brought
the 3-months b i l l c l o s e r to the .corresponding United States rate than
i t has been f o r twelve months. Easier credit conditions i n Canada were
accompanied by a general decline in the short-term sector, ranging from
day-to-day loans to the shorter bonds „ However, y i e l d s on intermediate
and long Government bonds continued to climb. The market f o r corporate
and municipal bonds improved during the week.
Money- market conditions „ Hie y i e l d on the short Treasury
b i l l declined 32 b a s i s points a t l a s t week's auction from 5olJ4. per cent
to U o 8 2 per cent and the 6-month b i l l y i e l d dropped by U5 points from
5.£3 to 5.08 per cento On January 13, the incentive to s h i f t funds
from Canadian to United States short b i l l s was e n t i r e l y eliminated as
the discount on the 3-month Canadian dollar was l e s s than the spread
between short b i l l r a t e s i n the two markets 0 Day-to-day money closed
at 3.60 per cent compared to iu06 per cent a week e a r l i e r 0
Bond market developments» There was a general upward movement
i n y i e l d s on intermediate- and long-term Government bonds, ranging
from 9 b a s i s points f o r an 8-year issue to 2 b a s i s points on a UO-year
s e c u r i t y . At midweek, spreads between comparable Canadian and United
States Treasury bonds were (figures i n parenthesis r e f e r to the previous
week):
0.23
0o09
0066
1,02
I0O8

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

91-day b i l l (0.50)
182-day b i l l (0.52)
an 8-year bond (0oh9)
a 20=»year bond (0.88)
a 35-year bond (0„97)

Other sectors of the bond market reported a b e t t e r tone. A
20-yeaf City of Montreal o f f e r i n g during the week rose a f u l l point above
the i s s u e . p r i c e . The recently issued 5~3A per cent Canadian National
Railways bonds of 198U moved from l a s t week's low of 9U-1/2 to 96. A
new $10 m i l l i o n 6 - 3 A per cent private o f f e r i n g i s expected to be priced
to show a 6.8U per cent y i e l d to maturity with a 12-year noncall f e a t u r e .
During 1959, there was a sharp cutback i n new o f f e r i n g s of
cdrporate bonds; s a l e s totaled $Ul5 m i l l i o n compared to $725 m i l l i o n
f o r 1958 and $1,0U5 m i l l i o n f o r 1957. Municipal and provincial o f f e r i n g s
were about at the 1958 l e v e l s .




Appendix 1-2
Estimates put new Canadian bond f l o t a t i o n s i n New York a t
about $U68 m i l l i o n i n 1959 or about t^ae same as i n the previous year.
However, o f f e r i n g s of corporations and municipalities were s u b s t a n t i a l l y
lower i n 1959 but borrowings by provinces correspondingly higher.
Several new Canadian o f f e r i n g s are on the books f o r the New York market
f o r January.
Stock markets. At midweek, the Toronto industrial index was
12 points below a week e a r l i e r and s l i g h t l y below the year-ago l e v e l .
By comparison, the New York Dow-Jones i n d u s t r i a l index also dropped
during the week but remained 12 per cent above the year-ago l e v e l .
The Montreal i n d u s t r i a l average was about 8 points below a week e a r l i e r
but by Thursday had recovered 2 p o i n t s .

B r i t i s h Conroomrealth Section
Division of International Finance
Board of Governors of the Federal Reserve System




Appendix 1-3
Selected Government of Canada Security Yields
InterLongmediate . term
Gdvt.
Govt. •
bond^Z
bondi/

Spread between
Canadian & U.S. rates
long-term
3-mo.
bondfe/
bills?/

Date

3-month
Treasury
bills]/

1957 - High
1958 - High
Low
1959 - High
Low

U.08
3.65
0.87
6.16
3.25

U.81
U.52
3.31
5.30
U.U5

U.35
U.U2
3.78
5.30
h.hl

1.19
0.U7

2.96
0.30

Dec. 23
30
Jan. 6
13

5.03
5.12
5.1ii
U.82

5.28
5.37
5.U6
5.55

5.26
5.30
5.37
5.U2

0.93
0.96
0.88
1.02

Discount
on 3-mo.
Canadian
dollar^/

0.36
0.60
0.50
0.23

1.13
0.91
0.66
0.18

1/ Average y i e l d at weekly tender on Thursday following Wednesday date shown, ~
~y Government of Canada 2-3/U per cent of June 15, 1967-68 .
3/ Government of Canada 3 - l A per cent of 1979.
5/ U.S. Government 3 - l A per cent of 1978-83. Government of Canada 3 - l A per
cent of 1979.
£ / Spread between average auction rates: on Monday preceding Wednesday date
shown f o r the United States; on Thursday following Wednesday date shown for Canada.
6/ Spread between ^months forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Friday following Wednesday date shown.
Sales of new Canadian Government Municipal and Corporate Bonds
( i n millions of Canadian dollars)
1959
Government
Provincial
Municipal
Corporation
Less short-term financing
( l e s s than one year)

1958

1957

9,620
781
Ul9
Ul5
10,865

15,130
791
U59
725
16,831

9,10k
6U6
357
1.0U5
10,568

6,570
h,29h

6,531
10,300

6,280
k, 288

Of the above, the following have been sold in New York
Provincial
310
195
Municipal
113
173
Corporation
U5
112
168
U80
Source:

A. E. Ames & Co., Limited.




122
95
390
607


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102