Full text of H.16 Capital Market Developments : January 2, 1958
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Not for Publication DECONTROLLED AFTER SIX MONTHS Holli January 2, 1958 CAPITAL MARKET DEVELOPMENTS The volume of large publicly offered securities continues to be small during these holiday-shortened weeks. During the week ending December 27, the only State and local Government issue sold-was the £250 million issue of the Chelan County Public Utility District No. 1, Washington„ This week the only large offerings scheduled for flotation are two State and local government issues totaling $18 million. No large corporate issues were sold last week and none are expected this week. Bond yields - Yields on outstanding bonds declined further last week, except for lower-grade corporate and State and local government bond yields, which remained stable. Daily figures for the first two days of the week show a decline in both Aaa and Baa corporate bond yields. Estimated January volume - Corporate security offerings for new capital are- expected to total $800 million in January, one-fifth less than the estimated^December volume and one-fourth less than the volume in January of last year. Included in the estimate are large public issues totaling over $3b0 million. State and local governments are expected to offer $700 million of bonds during January. This volume vould be about one-sixth greater than the volume in December but siiirhtly below that for Jan.uaiy 1957. Stock prices - Stock prices, as measured by the Standard and Poor's index of 500 common stocks.increased slightly last week, Closing at 39.78 on Decenber ?7. Prices declined on Monday, but increased on Tuesday, closing at 39.?? on December 31. Trading volume was unusually large on the last two days of the year, reaching a total of over'5 million shares in 1 he final session. 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. HIGH-GRADE B O N D YIELDS 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 Aaa 3 / CorporatelState and Aaa 1 local Aaa (Per cent) 3.1*2 2.99 3.09 2.85 3.17 2.91 3.79 3.07 lwll» 3.66 (6/19) (1/9) (1/8) (k/23) (12/23) (1/7) (12/28) (3/2) (9/27) (h/12) 3.15 2.78 2.7b 2.W. 2.9h 2.62 3.19 2.80 3.87 3.15 1.02 3.Ut 3.97 3.8U 3.77 3.73 3.32 i (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) f12/27)3.22 (2/8) n . a . — N o t available™ 1 / Weekly average of dally figures. 3.1*0 3.U1 3.35 3.29 3.28 2.73 (6/25) 1.98 (1/8) 2.21 (6/10) 1.90 (9/2) 2.'05 3.05 2.17 3.L5 (Ify) (12/27) (2/23) (8/29) 2.76 (2/21) 3.16 3.03 2.9U 2.86 2.8k .38 3 1 :£ :S .59 .59 .58 .30 .61 .29 i s .lit .29 .31 .32 .31 : ~ ' Average term of bonds Included Is 25-26 2/ Weekly averages of dally 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 h per cent bond of 1969. The new series is comprised of the 3 per cent bond of 1995 and the 3 1/L per cent bond of 1978-83. 3/ Thursday figures. Only general obligation bonds are included; average term Te 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 Bate Corporate Baa 1/ State and local govt. Baa 1 / State and local govt, rev. y (Per cent) 1953 - High 195k - High 1955 - High 1956 - High 3.89 (9/18) 3.50 (1/2) 3.7k (1/8) 3.kh (12/31) 3.63 (12/30) 3.15 (l/lb) li.lil (12/28) 3.$8 (3/9) 5.10 (11/29) : 1957 - High Low U.U2 (h/12) November December December December December 5.10 5.09 5.06 5.00 5.00 29 6 13 20 2? 3.79 2.96 3.32 2.93 3.26 3.02 lu22 3.20 14.51 3.90 a. 25 U.Ht rli.03 3.92 3.92 (6/25) (1/8) (1/7) (8/5) (12/29) (1/6) (12/27) (3/8) (8/29) (2/21) 3.27 (6/26) 2.71 (1/2) 3.00 (1/1) 2.72'(8/13) 2.99 (12/30) 2.76 (1/7) 3.98 (12/28) 2.89 (2/21) 3.98 (1/U) 3.70 (2/22) V 1/ Weekly average of daily figures. Average term of bonds included is 2F>-26 years. 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 Aj average term is 20 years. h/ Series discontinued, as of March 15. N o t e . — H i g h s and lows are for individual series and may be on different dates for different' series. STOCK M A R K E T 1 Date Stock price index 1/ Trading Common volume 2/ (millions yields y of shares) (per cent) Stock market customer credit Customers1 debit bal- loans to ances 4/ "others" £/ (Millions of dollars) 1953 - High 195b - High Low 1955 - High 1956 - High Low 1957 - High October November December 13 December 20 December 27 26.54 22.95 35.98 21.93 1*5.89 35.28 49.64 43.22 U9.08 39.48 (1/2) (9/18) (12/31) (1/8) (12/9) (1/14) (8/3) (1/20) (7/12) (12/20) 40.35 U0.73 39.48 39-78 2.5 0.9 3.7 1.4 4.6 1.5 3.1 1.5 4.2 1.4 6.25 5.38 5.82 4.32 4.42 3.64 4.35 3.82 4.72 3.91 2,455 2,055 3.436 2,405 4,030 3,537 4,047 3,914 4,031 3,577 1,665 1,314 2,388 1,653 2,805 2,517 2,823 2,740 2,887 2,517 780 664 1,048 746 1,241 1,018 1,267 1,155 1,163 1,054 2.8 2.5, 2.3 2.6 2.5 4.60 4.62 4.59 4.72 4.68 3,643 3,577 n.a. 2,568 2,517 n.a. n.a. 1,075 ,1,060 1,064 1,063 n.a. , available. 1/ Standard and Poor's composite index of 500 common stocks, weekly closing prices, 1941-43"10. Monthly data are averages of daily figures rather than of Fridays1 only, highs and lows are for Friday's data only. 2/ Averages of daily trading volume on the New York Stock Exchange. J/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve. 4/ End of month figures for member firms of.the New Xork Stock Exchange which -carry margin accounts; 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. Exhibit D Corporate and Statu and Local Government Security Offerings and Placements (In millions of dollars) •New capital 1950 January February March 800 April May June July August September | Corporate 1957 1 1956 1958 1,063 1,071 1,3UJU 573 712 817 700 921* 771 1,1*89 991 911* 973 71*2 572 506 l*ol* 696 390 818 1,11*6 61*1 765 51*6 395 378 1*90 735 1,063 651* 8# 529 581* 1*30 1*08 206 357 695 621 -5/600 639 31*7 1*09 1,820 1,706 1,51*1* e/1,916 1,1*9.0 1,603 971 1,395 3,526 5,070 e/6,987 3,093 U,06U 5,1*59 .October November December 1,01b e/900 3/1,000 1st 2nd 3rd itth 3,1*79 3,18k 2,878 e/2,9Ui 2,102 ' 2,805 2,556 2,922 6,662 9,51*0 e/12,li5U . 1*,907 7,1*63 10,381* quarter quarter quarter quarter 1st half Three quarters Year State and local 1/ | 1957 1 1956 71*5 , 1,0692/ 1,088 -7 06 ' Excluding finance companies 3/ 1st 2nd 3rd Lth quarter quarter quarter quarter Year 3,268 2,92k 2,560 e/2,76l4 e/H,5l 5 V 1,61*7 2,51*1 2,216 . 2,826 9,260 • e/ Estimated. 3/ 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. 3/ Total new capital issues excluding offerings of sales and consumer finance companies. Note.—Details may not add to totals due to rounding. Exhibit E H-lit Large Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Month Corporate 1956 - November December 1957 - January February March April May June July August September October November State and local government 701 k30 567 671 788 k77 329 877 525 526 537 57k 1*20 Other 2/ 135 201 386 306 19h h99 2U8 176 265 357 185 U35 386 100 50 125 25 39 25 30 75 — Large Individual Issues Offered December 1 through 27 Issuer Type J/ Amount Coupon rate or Offering (millions Maturity net inter- j yield of dollars) est cost Rating CORPORATE Virginia Elec. & Pwr. Co. Northern Natural Gas Co. Chesapeake &• Potomac Tel. Co. of Maryland Commonwealth Oil Refining Nat'1. Cylinder Gas Co. Standard Oil Co. of N. J. lst&ref.mtg.bda.20.0 S.F. deb. 25.0 1987 1977 h 1/2 U 5/8 h.h7 U.63 Deb. 30.0" Conv. sub.deb. 18.5 Conv. sub.deb. 17.5 Common stk. 288.2 1993 1972 1977 Yl/8 6 5 1/8 3.98 6.00 5-13 Aa A Aaa Ba STA.TF. AND LOCAL GOVERNMENT Akron, Ohio Los AngeDes Sch. Dists., Calif. Indianapolis, Ind. State of Ohio Water rev. G.O. G.O. G.O. 5.0 1959-78 15.0 1959-83 5.1 1960-89 25.0 1956-77/67 3.36 2.5.0-3.UO A 3.19 2.91 2.65 2.35-3.25 Aa 2.25-3.00 Aaa 2.0U-2.70 Aaa. H .11: E-2 . Large Individual Issues Offered December 1 through 27 (Cont'd) Issuer Type 3/ Coupon Amount rate or Offering (millions Maturity net inter- yield of est cost dollars) Rating STATE AMD LOCAL GOVERNMENT (Continued) . Greater Baton Rouge Port Comm., Louisiana Bergen Co., New Jersey Phoenix, Arizona State of Texas Minneapolis and St. Paul Met. Airport Comm., Minn. Atlanta, Georgia Mobile, Alabama Richmond, Virginia Chicago Bd. of Educ., 111. Chelan Co. Pub. Ut. Dist. No. 1, Washington Rev. 19.lt G.O. 7.2 VJtr. rev,. 16.0 12.5 G.O. 2.60-3.1*0 Baa -1960-77/67 3.36 " 2.70 -2.10-2.80 Aa 1959-82 1959-87-/68 3-51 2.50-3.50 A 2.1,0-2.70 Aa 1966-86/67 2.70 13.0 G.O. 15.0 G.O. Wtr. rev., 6.0 6.8 G.O. 25.0 G.O. 1961-88/73 1958-86 1961-91/68 1959-78 1960-77 Rev. 250.0 2013 2.79 2.96 3.93 2.I18 3.07 5.20 2.25-2.90 2.00-2.90 2.90-1.00 2.00-2.50 2.50-3.10 5.00 Aa Aa Baa Aaa A — OTHER None 1/ Includes corporate and other security offerings of $15 million and Over; State.and local government security offerings of $5 million and over. £/ 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 obligations; Rev., revenue bonds; G.R., general obligations additionally secured by facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues. ' H.lh .. - ^ ' Exhibit F Forthcoming Large Public Security Offerings for New Capital (Other than U.S. Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following Subsequent to date shown da1e shown Corporate State and Other 2/ Corporate State and Other 2j local govt. local govt. Date of computation 1956 - Nov. 30 Dec. 31 1957 - Jan. 31 Feb. 28 Mar. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 Sept. 30 Oct. 31 Nov. 29 . 136 176 591 710 L61 187 525 370 5# 578 576 li58 383 b8 280 153 153 290 179 . 97 172 252 2L3 370 369 387 23 100 35 25 25 25 30 30 18 L8l 796 966 795 L86 258 525 hi5 811 8Li5 6L7 815 1,193 979 763 61,8 631 862 396 388 h98 5lix 139 587 573 589 23 100 35 25 25 25 ^ 30 15 L5 63 Forthcoming Large Offerings, as of December 27 Issuer Type Amount Approximate date (millions of dollars) of offering CORPORATE Washington Water Power Company Connecticut Lt. & Pwr. Co. Commercial Credit Co. ^Commonwealth Edison Co. ^Pacific Power & Light Co. West Virginia Pulp & Paper Co. ^Alabama Power Co. ^Pacific Gas & Electric Co. Commerce Oil Refining Corp. -aRoyal Dutch Petroleum Co. 1st nvtg. bds. 20.0 1st nitg. bds. 30.0 Notes 50.0 S.F. deb. 5o.o 1st mtg. bds. 15.0 Deb. tiO.O 1st mtg. bds. 23.0 1st & ref. nit p. bds.75.0 Deb. bds. & common hS.Q Common stk. 3/ Indiana & Michigan Electric Co. American Telephone & Telegraph Co. 1st mtg. bds. Conv. deb. 25.0 71P.0 Natural Gas Pipeline Co. of America 1st mtg. bds. hO.O Jan. 9 Jan. 9 Jan. 9 Jan. 15 Jan. 16 Jan. 16 Jan. 17 Jan. 22 Jan. Feb. 10 (rights expire) Feb. lU March 12 (rights expire) winter Z H.lit F-2 Forthcoming Large Offerings, as of December 27 (Cont'd) Issuer . Type Amount Approximate date (millions of offering of dollars) STATE AND LOCAL GOVERNMENT University of Minnesota Minneapolis-St. Paul Met. Airport Comm., Minn. Caddo Parish Sch. Dist., La. Los Angeles, California Dade Co., Florida Des Moines Ind. Sch. Dist., Iowa State of New York ^Georgia Rural Roads Auth. *State of Missouri - New York, New York State of North Carolina Penna. State hi.-hway & Bridge Auth. State of California Florida State Board of Education Los Angeles, California "State of New Hampshire . -x-No. Hempstead Sch. Dist. No. 9, N.Y. East Baton Rouge Par. S.D. No.l, La. Denver,„Colorado Wichita, Kansas School Dist., No. 1 New York State Thruway Auth. Pennsylvania Turnpike Commission Inter-American Center Auth., Fla. Rev. G.O. G.O. " G.O* G.O, G.O. G.O. Rev. G.O. G.O. G.O. Rev. G.O. G.O. Water rev. G.O. G.O. G.O. Water rev. G.O. Rev. Rev. Rev. 5.0 13.0 7.5 25.0 lii.5 5.7 37.5 17.5 55-0. 25.5 10.0 20.0 150.0 7.9 9.0 28J: 7.L10.0 20.0 5.0 Lo.o 62.0 20.0 Dec. 30 Dec. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. 30 7 7 6 9 lk lk 15 15 16 17 22 28 29 30 Feb. U Feb. k Feb. 5 Feb. 6 V/inter Winter Winter OTHER Int'l. Bank for Reconstruction and Development Union of South Africa Bds. Ext. loan bds. 150.0 15.0 15 winter *—Included in table for first time. 1/ Includes corporate and other issues of &15 million and ever; State and local government issues of $5 million and over. 2/ Includes foreign government and International bank for Reconstruction and Development issues. 3/ 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.