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Not for Publication
DECONTROLLED AFTER SIX MONTHS
H.lU

LIBRARY

FEB 1 1961
FEDERAL RESERVE B A N K
I
OF RICHMOND

January 30, 19 6l.
v CAPITAL MARKET DEVELOPMENTS
B T T H E UNITED STATES AND CANADA
(Including Quarterly Review of State and Local
Government'Financing in the United States)
Part I - United States

Large public security financing was substantial last week, but
is expected to be much smaller this week. During the week ending January
27, corporations sold large issues totaling @102 million, including the
expiration of subscription rights. Large State and local government bond
issues amounting to $97 million were also sold.
This week, the calendar includes only three State and local
government bond issues with total proceeds of $53 million. No large
corporate issues are scheduled for sale.
Long-term bond yields - Changes in yields on outstanding bonds
were mixed, but minor, last week. Yields on high-grade corporate and
U. S. Government bonds declined, while those on State and local obligations
were stable. Yields on Baa-rated corporate bonds increased slightly.
Offering yields on new corporate issues continued to decline last
week. A new Aa-rated, first mortgage electric utility issue was offered
per cent, 11 basis points lower than
to the public last week to yield
the yield for a comparable offering made a week earlier. The yield of li.lUt
per cent for the recent offering was also two basis points below the yield
on similar seasoned bonds. The negative spread, occurring for the first
time since January 1958, may be partially accounted for by the fact that
the issue had an Aaa rating from another investment service. The spread
between new offering and outstanding bond yields has been narrowing in
recent weeks, however.
The offering of New York City bonds last week presents an opportunity to compare current State and local government bond yields with those of
1958 and 1 9 # . New York City also sold similar A-rated issues near the time
when yields on outstanding bonds were at their lows in 1958 and at their
peaks in 1959. The increase in yields for all maturities was greater from
May 1958 to October 1959 than the decline since then. Both the increase
in yields and the subsequent decline was sharper for shorter term bonds than
long-tera bonds. Moreover, the decline in yields on shorter term bonds
since October 1959 has offset a larger proportion of the earlier increase
than has been the case for longer term bonds. (Table on next page.)
Short- and inteimediate-term interest rates - Yields on Treasury
bills and intermediate-term issues declined last week. Rates on directly
placed finance company paper were lowered last week bringing the weekly
average to 2.71 per cent—10 basis points less than the week before.
Other major short-term money rates were unchanged. .




New York City Bond Sales
Date

May 15, 1958
Oct. 16, 1959
Jan. 2k, 1961
17

Net
Amount
interest
(millions
cost
of dollars)
,per cent,
47.3
18.0
76.5

2.52
3.64
3.42

1
.85
3.00
1.70

Yield by years to maturity
Outstanding 1/
New issue
20
| 5
1 10
I 15
1 20
(per cent)
2.00
3.30
2.80

2.60
3.55
3.30

2.90
3.70
3.55

—
—

3.65

3.13
3.97
3.65

Moody's A-rated State and local government bond yield averages.
Mortgage recordings - Nonfarm mortgage recordings continued to
decline in November and were about 3 per cent lower than a year earlier.
Federally-underwritten loans were 1? per cent lower while conventional
were 2 per cent higher,
February security volume - Sales of corporate securities to
raise new capital in February are expected to total $500 million, the
same as this month, but nearly one-third smaller than in February i960.
State and local government bond sales are also estimated at
$500 million for February. This total would be one-fifth smaller than a
year earlier and one-third smaller than in January.
Stock prices - Stock prices increased sharply last week, reaching a new peak. Standard and Poor's index of $00 common stocks closed
at 6l.2k on January 27, .53 points higher than the previous peak of 6o.?l
reached on Monday, August 35 1959. Trading activity was very heavy, averaging. i . i million shares a day.
il
State and Local Government Security Offerings in 1960
State and local governments sold new bond issues in the fourth
quarter totaling $1.3 billion, nearly one-sixth smaller than in the
comparable quarter of 1959. (This is the smallest quarterly volume since
the fourth quarter of 1958.) The decline in offerings during the recent
October-December period from that of a year earlier occurred principally
in financing for schools, water and sewer and public housing.
For the year i960 as a whole, State and local government bond
sales aggregated #7.5 billion, $2i00 million less than in 1958 and 1959 but
more than in any other year.
Purpose of issue - Bonds sold to provide funds for educational
building totaled $2.4 billion in i960 and were, as in other recent years,
the most important purpose of issue. School bond sales last year were
slightly, larger than in 1959, but one-tenth smaller than the record 1958
volume. New highway financing also increased last year, totaling $1.0
billion, one-fifth larger than in 1959. New bond issues to obtain funds




Long-term Security Issues of State and Local Governments
1955-60
(In millions of dollars)
I960
Issuing authority:
State
County atid township
Municipality
School district
Special authority
Unidentified 1/

1,094
533
2,1*14
1,471
1,977

1 1959
1,609
499
2,365
1,328
2,098

I 1950

I 1957

2,016
1,508
5iil
434
2,436
2,327
1,471. 1,602
1,368
1,279

--

—-

I 1956

1 1955

.818
328
1,814
1,111
1,103
351

1,408
1)72
1,313
1,005
1,097
683

Total

7,W9

7,900

7,832

7,150

5,525

5,976

Purpose of issue:
New capital total

L444

L793

7,746

7,099

5*459.

5,911

2,375
1,005
686
101
1,043
212
201
1,791

2,247
834
701
114
1,129
841
355
1,571

2,644
1,172
530
216
1,089
314
339
1,441

2,551
1,041
299
136
1,020
504
333
1,216

—

—

—

1,682
701
258
61
817
663
110
817
351

1,516
1,362
570
98
712
169
169
637
680

45

108

86

50

66

65

7,W

7,900

7,832

7,150

5,525

5,976

4,636

yg

4,775

5,446
M78

4,795

404
238
166
333
383

165
331
276
187
420

54
289
188
66
324

3,570
1,610
n.a.
n.a.
n.a.
n.a.
199
146

3,770
1,730
n,a.
n.a.
n.a,
n.a.
474
2

7,900

7,832

7,150

5,525

5,976

Schools 2/
Highways, bridges and tunnels
Residential buildings
Hospitals and institutions
Sewer and water
Misc. public service enterprises
Veterans1 aid
Other
Unidentified 1/
Refunding
Total
Type of issue:
General obligation
Revenue
Utility
Quasi-utility
Special tax
Rental
Public Housing Authority
iederal Government loans 3/
Total

829
79
198
403
379
7,489

i.a.—Not available.
L/ Issues of less than ,$500,000 not further classified in 1954, 1955 and first half
of 1956.
Data for 1955 probably understate school issues by about one-fourth because of
unclassified small issues.
y Coverage for 1957-60 is broader than for earlier years.
tote. —Details may not add to totals because of rounding.
Source.—1955-June 1956, Bond Buyer and Federal Reserve; July 1956-1960, Investment
Bankers Association of America. Data for 1957-60 not strictl^ comparable with data
for earlier years.
\




for other major purposes were in smaller volume in 1960 than a year earlier.
The decline was particularly sharp for sales for miscellaneous public
service enterprises—primarily electric utilities—and veterans' aid bonds.
Type of issuer - As they had been in 195)9, municipalities were
the most important type of State and local governmental unit selling bonds.
Bond sales by these units totaled $2.k billion, slightly more than a year
earlier. School districts, counties and townships also sold a larger
volume of bonds last year than in 195>9. Offerings by States and special
authorities, however, were sold in smaller volume.
Type of issue - Revenue bond financing declined much more last
year than did general obligation bond sales. The volume of revenue bond
offerings--42.1' billion—was lh per cent smaller in i960 than a year .
earlier, while general obligation financing, totaling $4..6 billion, was
only 3 per cent smaller. Revenue bond sales had been particularly large
in 1959, reflecting in part the sale of a number of very large issues to
provide funds for .electric utility systems. Offerings of public housing
authority bonds were in larger volume in i960 than a year earlier, while
Federal Government loans were made in about the same volume.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Canadian capital markets are presented in
Part II at the end of this report.

Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




V)

LONG-TERM BOND

YIELDS

HIGH-GRADE




.

f

/vi

U . S . GOVERNMENT

'sis

-7ji. u

Exhibit B - Tables for Exhibit A
Long-term Bond Yields
/
High-grade

Date

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

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

State and
local govt.
Aaa y

(Per cent)
1957 1958 1959 -

Low
High
Low
High
Low.
i960 - High
Low
Dec.
Jan.
Jan.
/fan.
Jan.

30
6
13
20
27 2/

2.85
4.14
3.55
U.61
4.09
4.61
4.23

(4/23)
(9/27)
(5/2)
(12/31)
(1/9)
(1/29)
(9/9)

2.45
3.76
3.07
4.37
3.83
4.42
3.75

4.35
4. 3b

3.82
3.81
3.90
3.92
3.89

k.33

4.32
4.31

(8/6)
(10/18)
(4/25)
(12/31)
(1/2)
(1/8)
(8/5)
.

III

3.06 (3/26)
3.53 (1/7)
. 2.99 (9/1)
3.11
3.13
3.14
3.16
3.16

s

.22

.92

fe
.19

.53
.92
.53

'

.53
.50

.71
.71
.76
.76
.73

.h3
.ho
.U2

/Lower-grade
/Date

Corporate
Baa 1/

State and
local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1954
1957
1958
1959

-

Low
High
Low
High
Low
i960 - High

3.a
5.10
4.51
5.32
4.83
5.36
4.98

Dec.
Jan.
Jan.
Jan.
Jan.

30
6
13
20
27

5.09
5.08
5.10
5.11
5.12

2/

(12/31)
(11/29)
(7/11)
(12/31)
(1/17)
(2A2)
(9/9)
,

2.93
4.51
3.64
4.46
3.92
U.46
3.98
3.98

k.03

4.04
4.09
4.09

(8/5)
(8/29)
(5A)
(7/2)
(3/26)
(1/7)
(12/22)

.52
1.27
.77
.77
.56
.84
.71

.96
1.21
.93
.98
.79
1.08
.86

.74
.75
.77
.79
.81

.87
.90
.90
.93
.93

y Weekly averogo of daily figures. Averse Urn of bgnds Included Is 26-26 years.
2/ Weekly average of daily figurss. The series includes beads due or callable in 10 years or more.
S/ Thursday figures. Only general obligation bends are inoludedi average tore is 20 years.
Mote.—Wigh# and lews are for individual seriss and eey be en different dates for different series.




"d

SHORT-

AND

INTERMEDIATE-

TERM

INTEREST

RATES

GOVERNMENT

MARKET

YIEIDSA/

PRIVATE




"finance

company

rapeF

1959

Exhibit D - Tables for Exhibit C
Short- and Intermediate-term Interest Rates
/
Date

Discount
rate 1/

Government

«
3-month
bills 2/

Yields
6-month
bills 2/

3-5 year
issues 2/

Spread between yields on
3-month bills and yields on
6-mo. bills|3-5 yr. issues

(per cent)
Low
High
Low
High
Low
I960 - High
Low
1951*
1957
1958
1959

Dec.
Jan.
Jan.
/an.
/Jan.

-

30
6
13
20
27 E/

3.00

.61
3.61*
.58
li.57
2.63
L59
2.11

3.00
3.00
3.00
3.00
3.00

2.18
2.28
2.28
2:25 ^
2.17 /

1.50
3.50
1.75
LOO
2.50

Loo

(6/11)
(10/18)
(5/29)
(12/21*)
(2/20)
(1/8)
(10/28)

__
——

3.02
L91
2.92
5.07
2.38

(12/26)
(12/31)
(1/2)
(1/8)
(12/30)

2.38
2.18
2.51
2.16
2.12

1.66 (V30)
l . l (10/18)
*0*
2.1!* (6/6)
5.00 (12/210
3.70 (1/2)
U.97 (1/8)
3.1*0 (12/30)

.26
.79
.19
. .58
.16
.20
.20 .
.23
.21
.25

3.140
3.39
3.52
3.59
3.57

.66
.86
.1
0*
1.1*2
.*
10
1.81
.38
1.22
1.11
1.2i*
1.3k
1.1*0

Private

Date

Stock Exchange
call loan 1/

Spread between 3-month
v/
Prime
Finance company Treasury bill yield and
rate 1/ paper j/
finance company
paper' rates
(per cent)

1951
1957
1958
1959

Low
High
Low
High
Low
I960 - High
Low
Dec.
Jan.
Jan.
Jan.
Jan.

-

30
6
13
20
27 2/

3.00
l*.5o
3.50
5-00
Loo
5.50
L5o

3.00
li.50
3.50
5.00
1*.00
5.oo

1.25
3.88
1.13
1*.88
3.00
5.13
2.88

h.SO

h.SO
h.SO
. h.SO
h.SO

2.88
2.83
2.81
2.81
2.71

a. 50
L50
ll.50
L50

h.SO

L50

0 (12/16)
.59(7/19)
-.35 (8/29)
.86 (10/9)
.13 (12/1*)
1.02 (3/25)
.22 {h/15)

(12/31)
(11/15)
(0/8)
(12/31)
(3/6)
(1/22)
(11/1*)

^

.
V

.70 .
.55
.53
-56
.51*

1/ Weekly rate shown Is that In effect at end of period. Dlsoount rate l a f or'Federal Reserve Bank of New York.
Stock wcohange call loan rate le going rate oh eall loans secured by customers' stock exchange collateral at
New York City banks. Prime rate la that charged ty large banks on short-term loans to business borrowers of
the highest oredlt standing.
^
2/ Market >leldj weekly averages computed from dally cloning bid prices. Series of 3-5 year Issues unncleto of
selected notes and bonOi.
3/ Averaflu of dally rat** puMlntied
flmtnoe aompanlee for directly placed paper for vnrylnjj maturities In the
110-179 duy ruivi*.
Hole.— l j t e and lows tre for Individual e<trles.u,ad nay be on different dalee for different nerlee. Per upreadp,
ifh
hlKti roftro to widest, *.nd low to narrowest.'




STOCK

MARKET

STOCK

1957

MORTGAGE

RECORDINGS




1958

AND

LOANS

MARKET

CREDIT

1959

1940

Exhibit F- Tables for ExhiblL E

-11-

Stock Market
Stock price
index 1/

1957-59- High
Low
I960 - High

60.51
39.78
59.50
53.32

November
December
Jan. 13 •
Jan. 20
Jan. 27 2/

55.47
56.83
59.60
#.96

Common
Trading
Stock market customer credit
volume y
Customers1
Bank
yields 2/ (millions
Total J debit bal- loans to
(per cent) of shares)
ances 4/ "others" 5/
(Millions of dollars)

(7/31/59)
(12/27/57)
(1/8)
(10/21)

3.07

4.66
3.18

3.62
3.51

28
:

61.2k

3.24
3.18

k,76k

1.1*
4.1
2.2

3,55k
4,406
. 4,132

3,461
2,482
3,222
3,004

1,111

il

4,294
4,406

3,141
3,222

1,153
1,184 .

It. 3

3.1

4.1
4.4

1,373

l,06o

1,184

1,168
1,158
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's <*f%mposite index of 500 common stocks, weekly closing prices, 1941-43=10. Monthly data
are averages of daily figures ra-ther than of Fridays' only. Highs and lows are for Fridays' data only,
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by
Federal Reserve. Yields shown are for da tea on which price index reached its high or low.
3/ Averages of daily trading volume on the New York Stock Exoluvnge.
4/ End of month figures for member firms of the New York Stock Exchaiye 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 earring U, S,
Government securities• Prior to July 1, 1959, such loans are excluded only 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.

Nonfarm Mortgage Recordings and Loans 1/
Date

1959 - Nov.

Dec.

1960 - Jan.
Feb.
Mar.
Apr.
MayJune
July
Aug.
Sept.
Oct.
Nov.

Unadjusted
Total
Seasonally
Unadjusted
• VA.
PHA
adjusted 2/
(Millions of dollars)

18
:

2.487
2,430
2,441
2,400
2,446
2,427
2,493
2.488
2,464
2,451.
n.a.

2,442"
2,487
2,079
2,149
2,406

2,366

2,500
2,690
2,528
2,784
2,598
2,525
2,378

448
451
417
368
361
336
322
365
362
417
425
434
404

220
241
195
170
173
153
155
175
160
181
169
162
150

Conv.
1,775
1,794
1,467
1,612
1,872
1,878
2,023
2,150
2,006
2,186
2,004
1,929
1,824

n.a.—Not available.
1/ Total recordings data are estimates based on reports from about 450 areas and include
mortgages of $20,000 or less secured by nonfarm real estate, primarily residential properties.
VHA-lnsured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA and PHA loans w e not strtotly comparable lg concept or timing.
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Sourcei Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.




Exhibit G
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1961
January
February
March

Mew capital
State and local 2/
Corporate 1/
1961
1 I960
1 I960
1 1959
1 1959
577
715
860
766
567

639
858
646

1,03k

89k
785
887

731
550
1,033

932
593
1,006

727
962
738

535
7I4O
703

572
602
689

5#
516
465

p/965
2/927
e/850

879
861;
900

2,151
e/2,742

2,204
2,567
1,979
2,642

1,943
2,316
1,863
2/1,322

2,143
2,531
1,548
1,571

1,519
6,9#
e/9,687

4,771
6,750
9,392

4,259
6,122
2/7,444

4,674
6,222
7,793

April
- May
July
August
September

••
••
•-

October
November
December
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

821
738
646

739
623
582

e/500
e/500

2,367
2,427

e/725
e/500

"

339
502
fi/48l

.
.

597
§ 5

Excluding finance companies 3/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

I

1,999
2,a2
1,716
2,503

e/8,231

Year

1,722
2,150
2,017
e/2,342

0,630

-

Estimated.
Preliminary.
Securities and exchange Commission estimates of net proceeds.
Investment Bankers Association of America estimates of principal amounts.
Total new capital issues excluding offerings of sales and consumer finance
companies.




a

H.lli

Exliibit H
Other Security Offerings 1/
(In millions of dollars)
Long-tern
Foreign government 2/
Federal agency 3/
I960
1958
I960
|
1959. 1
1
1959

January
February
March
April
May

2

81
60
2

196
53

• 58

139
198
120

175
70
34
72
40

—

?
°
1*2

July
August
September

25
1
36

85
l
35,

October
November
December

34
2

33
30
70

Year

W

9
5
17
58
123
7I
t

.

992

182
150
15b

199

1958
1,163
251

175

148
354

—

. 523
—

—

161
199
—

98
150

—

220

160
1 49
2/181

66

2/1,673

70?

Short-t&rm
State and local government 4/

—

2,321

•,
Federal agency 3/

January
February
March

2 68
345
365

190
• 428
295

233
1*60
273

479
475
511

3#
500
48 9

371
208
114

April
May

365
351
297

563
111
215

357
354
26k

509
632
435

486
675
289

209
161
329

July
August
September

280
505
199

216
46?
399

289
423
369

312
1*68
296

72?
365
665

437
206
330

251
&/4i8

235
3U3
358

?3X
41$
*43

2lil
282
177.

733
471
288

454
114
137

4,-179

3,910

6,047

3,090

October
November
December
Year

2/4,817

E/ Prellnirwry.
1/ Data presented in this exhibit differ from those in Exhibit E in - h t refunding isrjn3, An wall as n«w
ta
capital lesuea, e r included. Long-term eeeurltles are defined as those matm-Am# In m^ro t a . one year.
.e
hr
2/ Inoludos securities offered in the United States by foreign govorwnonts and their ry'odlvleions end by
lnXernnt'.onal organisations, "nureei Securities a v Z u r n e C r n s l r .
il x h . g o o i s o .
3/ Issues not gmrsrrUad by the U. S. Oovirnnar.?.. Source 1 lon«-t«rri, Securities and Btehange Coa-fllnslonj
short-term, Federal Reserve.
4/ Principally tax and bond anticipation not*s, warrants or certificates ar.d Public Housing Authority
not»n. In some instances PHA rotes included may have a somewhat longer tens than ons year. Source: Bond Buyer.




-Ill-

Exhibit I
Large Long-term Public Security Issues for iie\i Capital
(Other than U. S. Treasury'). 1/
Proceeds of Large Issues Offered
(In millions of dollars)

Corporate

Month

State and
local government

230
279
262
381*
309
139
14*2
303
581
266
566
1*65
260

1959 - December
i960 - January
February
March
April
May
July
August
September
October
November
December

217
388
283
2#
370
231*
561
191
298
367
16
*
186
222

Other 2/

70
100
320
191
71
28
30
75
25
77
150
99

Large Individual Issues Offered January 1 through 27

Issuer

Type 3/

Coupon
Amount
(millions Maturity
Off*, ring
Hating
net inter- yield
of
est cost
dollars)

CORPORATE
Texas Eastern Trans. Corp. Pfd. stk.
15.0
Texas Eastern Trans. Corp.1st mtg.p.l.bds.30.0
Lone Star Gas Co.
Com. stk.
26.2
Brunswick Corp.
Conv.sub.deb. 25.6
Montgomery Ward Cred.Corp.
Deb.
25.0
Montgomery Ward Cred.Corp. Sub. deb.
25.0

1981

5

5.00

Baa

I98I
1981
1981

l*-l/2
1.31
4-/*
5-1/1*

1 . 50
*
1*.83
5.21

Ba
A
Baa

STATE AND LOCAL GOVERNMENT
Fulton Co., Georgia
Port of New Orleans, La.
Los Angeles Sch. Dists.,
California
State of California
State of Oregon
State of New York
'iontgomeiy Co., Md.
Jontra Costa Co. Wtr.

Dist., California

00 .
..

Ik.5
17.0

0.0.

30.0
1961-85
3.63
3.68
95.0 1963-87/82
30.0
1976-78
3.1*3
63.5 1962-2011/01 3.1*9
11.0
1962-91
3A9

0.0.
0.0.

0.0.

0.0.
0.0.

Rev.-Ut.



12.8

1962-8?
1966-96/76

1963-96

3.28
3.77

3.98

1.50-3.1*5 Aa
2.1iO-3.90 A
1.50-3.80
1.95-3.80
3.30-3.1*2
1.50-3.65
I.70-1U0

Aa
Aa
Aa
Aaa
A

• 2.104*. 20

Baa

1-2

-

-15-

Large Individual Issues Offered January 1 through 27 (Cont'd)

Issuer

Type lJ

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

Rating

STATE AND LOCAL GOVERNMENT
C Cont' d)
Penna. St. Pub. Bldg.Auth. Rev.-Sent.
New York City, New York
G.O.
State of Mazyland
G.O.

20.6 1961-2000/70
76.5
1962-91
20.3
1961-76

3.85
3.1*2
2.72

1.50-U.OOV —
1.70-3.80 A
1.85-2.85 Aaa

OTHER
None
1/

Includes corporate and other security offerings of $15 million and over; State
and local government security offerings of #10 million and over.
Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
2/ In the case of State and local government securities, G.O. denotes general
obligationsj Rev. -Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue" bonds secured only by revenue from qua si-utilities
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.
h/ 1 per cent securities of 1998-2000 not reoffered.
2/




-16-

Forthcoming Large Long-term Public Security Offerings for New Capital
(other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
I960 - Jan. 29
Feb. 29
Mar. 31
Apr. 29
May 31
June 30
July 29
Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1961 - Jan. 31

During month following
date shown
State and
Other 2/
Corporate
local govt.
207
301
299
202
483
237
$96
216
576
44o
260
91
110

. 210
2#
2#
243
277
180
2#
283
212
#8

2h2

412
181

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

45
35
30 .
30
77
50

—

310
385
280
258
502
380
324
283
3#
391
560
682
360

372
372
344
357
553
455
1,006
731
8# '
585 ;
335
1,036
1,046

45
35
60
30
127 •
50
—

Forthcoming Large Offerings, as of January 27
Type

Consolidated Natural Gas Co.
Southern Co.
^'Chesapeake & Potomac Telephone Co.
Puget Sound Pwr. & Light Co.
American Machine & Foundry Co.
American Telephone & Telegraph Co.
Commerce Oil Refining Coip.
Liberian Iron Ore, Ltd.
Realty Collateral Corp.

Deb.
Com. stk.
Deb.
1st mtg. bds.
Conv. deb.
Com. stk.
Deb., bds. & com.
Bds. & stk.
Coll. tr. notes

Amount

TT

45.0
30.0
20.0
15.0
40.5
e/800.0
45.0
30.0
20.0

7

Feb. 8
Feb. 11
Feb. 16
Feb. 17
Mar. 16
(rights expire)
Apr. 14
(rights expire)
Indefinite
Indefinite
Indefinite

STATE AND LOCAL GOVERNMENT
State of Connecticut
Houston Ind. Sch. Dist., Texas
Milwaukee Co., Wise.
State of North Carolina
State of Texas
St. Louis, Missouri
Baltimore, Maryland
Dallas, Texas
Kentucky Turnpike Authority
Digitized forPaul, Minnesota
FRASER
->St.



G.O.
G. 0.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.
Rev.
G.O.

29.0
14.0
10.3
10.0
12.5
15.8 .
32.6
19.0
38.0
10.6

,^

Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
Feb.
ireb.
Mar.

1
2
3
8
9
15
15
20
8

J-2

-17f

Forthcoming Large Offerings, as of January 27 (Cont d)
Issuer

Type

Amount
(millions Approximate, date
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
Los Angeles Dept. of Wtr. & Pwr.,
Calif ornia
Orleans Parish School Dist., La.
Dade County, Florida
New %ork State Housing Fin. Agency

Rev.-Ut.
G.O.
G.O.
Rev.

12.0
10.0
1*6.0
100.0

Indefinite
Indefinite
Indefinite
Indefinite

OTHER
None
*—Included in table for first time.
e/ Estimated.
1/ Includes corporate and other issues of $1$ million and over; State and local
government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
Note.—Deletions for reasons other than sale of issue: None.




Erhiblt K
Yields oh Km: and Outqtending
ELcctric Povor Bonda, Rated Aa end A \J

Pato

1952-1959 - High
Low
1959 - July
A113.
Sept.
Oct.
Nov.
Dec,
I960 - Jan.
Feb.
Mar.
Apr.
May 10
12
25
June 1?
28
29
July 8
13
Sept. 15
23
28
Oct. 5
21
Nov. h
16
17
18
Dec. 7
Lp6l

- - J a n . .12 .

18
25

\J

2/

Aa-rated offering yioldg A-rated. offering yields
Amount above
Amount <ibove
Actual
Actual
seasoned yields (per cent) seasoned yields
(psr cent)
(basis points)
(basis points)
5.30 (12/8/'59) £7
2.93 (3/31/5L) -3
*4.93
L83

31
23

.

36
12
4
63

5.13%/
*5.08
*5.30
5.09
JU-82
b.91
li.88

15
4
25
37
32

h. 82
h.8h

25
27

L 5 %

5.65 (9/18/59) 123
3.00 (3/17/5U) -15
5.07

17

*5.65
5.33

60
13
*
51
28

27
17

5.1k

h.97

9
35

5.10
5.20
14.95

26
33
11

lt.93
L88
I . 80
t

11
8
2k

I1.88

26

5.05

13
4

2h

22

h.78
k.8$
5.00

h.to
b .'55

.

33
lO
i

to

11
7

-2

Single observation, not on average.
.?
4
Covers only 30-ycar first mortgage bonda, as reported in Moody's Bond Survey.
„
^ Except whero indicated, the actual yiflld figure and the amount above oeaooned
yields are averages of offerings during the Indicated period and of the differ- J?
encoa between thooo naf-offering yields and yields on seasoned ioaueo of eimila*,
quallty for tho ecma day. Avoraga raturity for the seasoned ioauoa varies frour
Provides for o 5-year period during which issue may not be called for refunding)
at a lover coupon rate. Monthly overages so narked include one or more ioaueo |
vith such a provision. Othor issues have no such provision.




January 30, 1961
Part II - Canada
•
There was a marked easing in the Canadian short Treasury bill last
week largely in response to heavy Treasury bill purchases by the chartered
banks. The Bank of Canada was a net seller during the week. However, the
incentive to hold the Canadian bill over the U.S. bill remained at Q.So
per cent per annum on a covered basis. Bond yields eased slightly during
the week. Industrial stock prices continued to rise for the eighth straight
week5 stock prices exceeded I960 high during the week on the Toronto exchange.
The Canadian dollar strengthened and closed above 101 (U.S. cents) last
Thursday.
Money market. The average yield on the Canadian 3-month Treasury
bill declined lb basis points at last Thursday's auction from 3.22 per cent
on January 19 to 3*0U per cent on January 26. The yield on the 6-month
bill declined 17 basis points from 3.53 per cent on January 19 to 3.36
per cent on January 26 (see Table). The chartered banks purchased $Wi million
of bills during the week while the Bank of Canada sold $20 million, the
Government Accounts sold $13 million, and the general public sold $10 million
(see Table), The average yield on day-to-day loans declined during the
week to 2.60 per cent per annum, from 2.80 per cent the'week before.
While there was a slight narrowing of the spread favoring the
Canadian over the United States 3-month bill, this was offset by a narrowing
of the discount on the forward Canadian dollar. The net incentive to hold
the Canadian bill on a covered basis increased slightly to 0.£0 per cent
per annum compared with 0.U5 per cent a week ago (see Table).
Bond market. Bond yields eased slightly last week in most
maturities. The spread between selected comparable Canadian and United
States securities (Thursday yields for bills and Wednesday yields for
bonds) was as follows (figures in parentheses refer to the previous week):
0.87
O.96
0.8U
1.29
1.U8

per
per
per
per
per

cent
cent
cent
cent
cent

on
on
on
on
on

a 91-day bill (0.92)
a 182-day bill (1.06)
an 80-year bond (0.78)
a 30-year bond (1.29)
a 35-year bond (I.£0)

Activity in the bond market on a net basis was much below the leve&s of
the preceding week: the general public purchased $7 million of Government
bonds last week while the chartered banks sold $6 million and the Bank of
Canada sold $1 million (see Table).
The $1$ million, 20-year Irving Oil Co. issue (see Capital Market
Developments, January 23, 196l) was offered last week and oversubscribed.
A three-part issue of Trans-Prarie Pipe Lines Ltd., has been sold as follows:
$2.5 million, 6-1/2 per cent, l$-year, first mortgage bonds at par; $1
million, 6-l/U per cent, lS-year debentures at par5 $20,000, 6 per cent
preferred shares, par $50. There was a yield of 6 per cent on 1» to 8-year
maturities and 6.25 per cent on 8- to 20's for the $1<>2£ million Metro
Toronto Separate School Board.




-20-

Foreign exchange. The Canadian dollar showed a tendency to strengthen
during the week] sharp rises on January 25 and January 26 following large
grain purchases with U.S. dollars brought the rate above 101 U.S. cents.
Closing rates of the Canadian dollar in U.S. cents for the week ending
January 25 were:
Spot rate

Date
Jan. 19
20
23

2k

25
26

100.66
100.70
100.78
100.8U
100.91
101.05

There was some narrowing of the discount on th'e Canadian dollar during the
week (see Table).
Stock market. Prices of industrial stock continued to rise for
the eighth straight week with the Toronto index exceeding the high for I960.
A comparison of industrial stock price indices in Toronto, Montreal, and
Standard and Poor of New York is as follows:
Toronto

Montreal

New York
Standard

High
Low

532.28
172.38

320.0
250.3

65.00
55.98

Jan. 16
17
18
19
20
23

536.13
535.9k
173.31
539.38
5U0.63
5U2.08
536.81

289.6
287.0
287.7
289.7
292.1
292.5
288. k

63.07
62.77
63.lL
63.26
63.U6
63.86
6U.11

2h

The volume of stock sold on the Canadian exchanges last week was $10.57
million compared with the high volume of shares sold the week before of
fclU.655 million.

British Commonwealth Section
Division of International Finance
Board of Governors of the Federal Reserve System




Selected Canadian Money Market and Related Data
3-mo. Treaa. bills
Canada
Spread
y
U.SJy over U.S.

Spot
V

-21-

Canadian dollar
3-mo. discount (-1
forward premium (+)j/

1959 - High
Low
I960 - High
Low

6.16
3.2S
5.1U
1.68

U.U9
2.80
H»63
2.10

2.96
0.30
1.62
-0.82

105.51
102.58
105.27
100.33

Jan. 5
12
19
26

3.3k
3.18
3.22
3.0U

2.27
2.27
2.27
2.17

1.07
0.91
0.9$
0.87

100.17
100063
100.66
101,05

——
——

Net incentive to
hold Can.
l
billg/

—
——

. ——

0.99
-0.91
100.36
100.56
100.53
100.95

1.99
-0.57

-0.I1U
-0.25
-0.50
-0.37

0.63
0.66
0.U5
0.50

a/ Average yield at weekly tender on Thursday.
3/ Composite market yield for the U.S. Treasury bill on Thursday close of business#
c/ In U.S. cents,
<T/ Spread between spot rate and 3-month forward Canadian dollar on Thursday
closing, expressed as per cent per annum.
e/ Spread over U.S. Treasury bill (column 3)1 plus 3-month forward discount or
premium (column 6).
Selected Government of Canada Security Yields
6-00. Treas.bills
spread
Canada

a

Intermediate
bonds (8 yr.)
spread

6.2L
5 oil
5.33
1.99

1.37
—0 086

5.55

U0O9

1.11
0.21

5

3-63
3oU8
3-53
3.36

1=15
0.98
1.06
0.96

U.70
U068
U.73
1.72

0.99
0.82
0.78
•0.8U

12
19
26

a

a

1959 - High
Low
I960 - High
Low
Jan.

Lona-term bonds
(20 year)
135 year)
Spread
Spread
Canada
Canada

5.27

U.5o

——

.

5.12

U.63

1.36
0.85

5.05
U.73
5.28
U.68

5.19
5.17
5.20
5.18

1.37
1.29
1.29
1.29

5.23
5.20
5.20
• 5.18

5.30
u.uu

__
——

a/ Average yield at weekly tender on Thursday
composite market yield of U.S.
Spread between Canadian auction rate and c<
on close of business Thursday.
0/ Government of Canada 2 - 3 A per cent of June 1967-68.
a/ Spread over U.S. Government 2-1/2 per cent of 1963-68.
e/ Government of Canada 3-lA per cent of October 1979.
l/ Spread over U.S. Government 3-lA per cent of 1978-83.
y
Government of Canada 3-3A per cent of September 1996 - March 1998.
Spread over U.S. Government of 1995.

i




——

1.61
0.95
1.59
1.50
loli7
1.U8

-22-

Canada: Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
(millions of Canadian dollars, par value)
Bank of Canada
Treas.
Bonds
bills
Nov, 2k
Dec. 1
8
15 '
22
29
Jan. $
12
19
26

Sources

+ 1
+ 10
+ 9
- 2
- 5
- 3
+ 2
- 9
- 1U
- 20

+
+
-

Government
Total

3
3
3
1
9
0
2
12
25
1

+ 8
+ 2U
- h
- 6
-103
- 2
r
- 11
+ 16
+ 25
- 15

"

Chartered banks
Treas.
Bonds
bills
+
+
+
+
+
+

30
21
7
13
18
6
18
39
10
11.
**

+
+
-

General public
Savings Treas.
bonds
bills
Bonds
+271
+ 1
*
- 1
*
- 13
- 11
- 8
- 1
*
+ 16
- 7
- 7

3
8
28
5
23
Hi
12
2
17
6

+ 29
+ 3
+ 1
+ 19
- 11
- 15

- 2h

+ 3
- 10

- 5
- 27
+ 31
+ U
- 62

- 2h

+ 10
- 11
+ 17
+ 7

Bank of Canada, Weekly Financial Statistics#
Selected Canadian Financial Statistics
(in millions of Canadian dollars or per cent)
Oct*

lo Money supply^/
Currency
Deposits
Total
Change in period
2, Govt, deposits
.
3. General bank loans-/
Change in period
1*. New security issues^/
Of which sold in U.S.
5. Govt, securities outstanding
Treasury bills
Bonds
Savings bonds
6. Chartered bank liquidity
Cash reserve
Cash ratio
Liquid assets
Liquid asset ratio

Monthly
Novo

1,760
1,838
11,621
11,302
13a381 . 13,lU0
+ 101
- 2Ul
• 20i*
628
a,971
5,027
0
+
56
l,53l*.6 1,013.8
0.0
0^0
+7,359
17,991*
1,980
1,985
12,380
12,377
2,999
3,632
981*
8.2
2,196
18.3

998
8L1
2,125
17.3

1/ Less float, end of period.
'
2/ Monthly estimates only are seasonally adjusted.
V Sources A. E. Ames & Co., Ltd.




Dec.
1,808
11,1*55
13,263
+ 123
5U8
5,117
+
90
1,310.5
lli.0
17,760
1,985
12,179
3,596
1,017
80?
2,093
1&8

Weekly
Jan. 12

Jan. 1$

1,805
11,580
13,385
+ 122
1*68
5,01*5

1,756
ii,Wa
13,197
- 188
526
l*,99l*
51

1,712
11,399
13,Hi
56
1*87
U,98l
13

17,71*6
1,985
12,169.
3,592

17,759
1,985
12,161*
3,610

17,750
1,985
12,163
3,603

Jan. 5

+

2h

1,026
8.1
2,170
17.2

1,031
8.2
2,173
17.2

1,021*
8.:
2,165
17.:

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