Full text of H.16 Capital Market Developments : January 9, 1958

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Hot for Publication DECONTROLLED AFTER SIX MOUTHS
H.lU

-

January 9, 1958.

CAPITAL MARKET DEVELOPMENTS
The volume of large publicly offered securities was very
small last week, but is expected to be much larger this week. During
the week ending January 3j no large corporate issues were sold and
only two State and local government security issues, amounting to $18
million, were offered. The calendar for this week (ending January 10)
includes corporate offerings totaling $100 million and State and local
government issues amounting to $53 million. The corporate total includes a $50 million note issue of Commercial Credit Company which
was originally scheduled for sale in late October, and postponed at
that time because of market conditions. A §150 million bond issue of
the International Bank for Reconstruction and Development was sold
on January 7.
Bond yields - Changes in yields on outstanding bonds were
mixed last week. Yields on corporate bonds declined, while
yields on Aaa State and local government bonds increased and yields
on Baa's remained stable.
Yields on new corporate bond issues have declined further
recently. A new A-rated, 30-year, first mortgage electric utility
issue was offered to investors Wednesday of this week to yield 1|.07
per cent — 33 basis points below that for the last comparable issue,
an offering made on December 12. Another issue of the same rating
and similar terms was sold on Thursday to yield It.10 per cent.
The postwar peak yield recorded for this grade and type of issue was
5.50 per cent on November 7, 1957.
. Stock prices - The Standard and Pocr:s index of 500 common
stocks increased about 3 per cent last week, closing at I4.O.87 on
January 3, 1958. Trading volume averaged 3.3 million shares a day
with the heaviest activity concentrated on Monday and Tuesday. Prices
increased on balance for the first three days of this week, closing at
1*0.99 on Wednesday.
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,




EXHIBIT A

HIGH-GRADE BOND YIELDS

\ U. S. GOVERNMENT:/A/ ^
V
long.ierm
'/

"A

1953

1954

1955

1956

long-term 2/
Date

Corporate
Aaa 1/

New series

1957

1958

Spread between
Siate and
local govt. (old series) and
Corporatel State and
Aaa 3/
1 local Aaa

(Per cent)

1957 - High
Low

3.U2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
L.llv
3.66

December 6
December 13
December 20
December 27
January 3•

3.97
3.96
3.77
3.73
3.o3

1953 - High
Low
195lt - High
Low
1955 - High
Low
1956 - High

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

3.15
2.78
2.7k
2.1U,
2.9L
2.62
3.19
2.80
3.87
3.15

(6/6)
2.73 (6/25)
(12/26)
n.a.
1.98 (1/8)
2.21 (6/10)
(1/9)
1.90 (9/2)
(8/7)
2.3U (9/8)
(8/5) 3.03 ( 8/5)
(1/7) 2.89 (6/10) •2.05 (5/26)
(12/21)3.39 (12/28) 3.05 (12/27)
(2/17) 2.92 (2/3)
2.17 (2/23)
(10/18)3.66 (10/18) 3..L5 (8/29]1
2.76 (2/21]1
(2/8) 3.22 (2/8)

3.32
3.25
3.19
3.15
kf

lot available.
1/ Weekly average of daily figures.

3-41
3.35
3-29
3.?9
v

3.03
2.94
2.9.4
2 ,?6

.

.38
.19
.13
.32
.3L
.13
.W
.13
-65
.20

' .81
.30
.61
.29
•70
.5h
.68
•32
' .58
.lh

.65
.59
.59
.58

.29
• ?1
.31
n.a.

Average term of bonds included la 25-26

2/ Weekly averages pf 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 l» per cent bond of 1969. The new series is comprised
of the 3 per cent bond of 1995 and the 3 1A per cent' bond of 1978-83.
3/ Thursday figures. Only general obligation bonds are included; average
term Ta 20 years.
y Discontinued as of December 31, 1957. New series to be available shortly.
Note.—Highs and I'-vs are for iniividjil series tni nay be on different dates
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS

Date

Corporate
Baa 1/

State and
local govt.
Baa 2/

Spread between
Aaa and Baa
1 State and
1local govt.

Corporate

(Per cent)
1953-- High

1955 - High
Low
1956 - High
Low
1957 - High
Low

3.89
3.50
3.7k
3.44
3.63
3.45
it.U
3.58
5.10
4.42

December 6
December 13
December 20
December 27
January 3 •

5.09
5.-06
5.00
5.oo
4.96

1954 - High

(9/18)
(1/2)
(V8)
(12/31)
(12/30)
(1/14)
(12/28)
(3/9)
(11/29)
(1/12)

3.79 ( 6 / 2 5 )
2.96(1/6)
3.32 (1/7)
2.93(8/5)
3.26 ( 1 2 / 2 9 )
3.02 (1/6)
it.22 (12/27)
3.20(3/8)
L.51 (8/29)
3.90 ( 2 / 2 1 ) .
. 4.14
4.03
3.92
3.92
3.92

.45
' .63
.42
1.27
.64

1.21
.98
1.16.
.93
1.03
~ .87
1.17
.89
1.21
1.04

1.12
1.22 •
1.23
1.27
1.28

1.11
1.09
1.06
1.08
1.06

.69
.42
.68
.52

.54

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




y
EXHIBIT C

STOCK MARKET

1

Stock price
index 1/ •

°LUME

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

Stock market customer credit
Customers'
debit bal- loans to
ances V "others" £/
(Millions of dollars)

1957 - High
Low

26.5U (1/2)
22.95 (9/18)
35.98 (12/31)
214.93 (1/8)
1*5.89 (12/9)
35.28 (l/lU)
1*9.614 (8/3)
143-22 (1/20)
1*9.08 (7/12)
39.1*8 {12/20)

November
December
December 20
December :7
January 3

1*0.35
1*0.33
39.1*8
39.78
1»C.«7

1953 - High
1951* - High
Low
1955 - High
Low
1956 - High

2.5
0.9
3.7
1.1*
lt.6
1.5
3.1
1.5
1*.2
• l.L

6.25
5.38
5.82
l*-32
1*. 1*2
3.6I4
1*.35
3.82
a.72
• 3.91

2,1*55
2,055
3.1*36
2,1*05
1*,030
3,537
l*,0l*7
3,911*
t*,031
3,577

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,517

2.5
2.6
2.6
2.5
3.3

a.62
1*.63
it". 72
i*.68
1*.56

3,577
n.a.

2,517
n.a.

n.a.

.

780
661*
1,01*8
71*6
1,21*1
1,018
;
1,267 '
1,155
1,163
1,05/*
1,060
l]066

n.a.—Not available.
\J Standard and Poor's composite index of '500 common stocks, weekly closing
prices, 191*1-1*3"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.
2/ 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 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 end
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 State and Local Government
Security Offerings and Placements
(In millions of dqllars)

1958
January
February
March

e/ 800

April
May
June
July
August
September

Corporate
1 1957
1

New capital

State and local 1/
1 1956
r
1957

1956

1958

1,063
1,071
1,3a

573
712
817

e/ 700

924
771
1,189
991
914
973

742
572
506

404
696
390

818
1,11*6
641

765
546
393

378
490
735

1,063
651
838

529
584
430

408
206
357

745_,
1,089^/
1,088

696
632
688

639
347
409

October
November
December

1,01k
e/900
e/1,000

1st Quarter
2nd quarter
3rd quarter
lith quarter

3,179
3,184
2,878
e/2„9U,

2,102
2,805
. 2,556
2,922

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

1,490
1,603
971
1,395

6,662
9,510
e/12,454

4,907
7,463
10,384

3,524
5,068
7,084

3,093
4,00k
5,459

1st half
Three quarters
Year

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

quarter
quarter
quarter
quarter

Year

3,268
2,92k
2,560
e/2,764

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

e/ll,5i5

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.
j/ Total new capital issues excluding offerings of sales and consumer finance
companies. ,
„
Note.—Details may not add to totals due to rounding.




io

H.ll*

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

/-

(Millions of dollars)

Corporate

Month

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

^

State and
local government

701
U30
567
671
788
1*77
329
877
525
526
537
571*
1*20

135
201
386
306
19U
1*99
2l*8
176
265
357
185
1*35
386

Other 2/

100
50
125
25
39
25
30
75

Large Individual Issues Offered during December

Issuer

Type y

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

CORPORATE
Virginia Elec. & Pwr. Co. lat&ref.rotg.bds.20.0 - 1987
S.F. deb.
25.0 , 1977
Northern Natural Gas £0.
Chesapeake & Pjotomac pel.
Co. of Maryland
Deb.
30.0
1993
Commonwealth 01*1 Refining
Conv. sub.deb. 16,5
1972
Nat'l. Cylinder Gas Co.
Conv. sub.deb. 17.5
1977
Standard Oil Co. of N. J.
Common stk. 288.2

1* 1/2
U 5/8

1.1*7
U.63

U 1/8
!6
i 5 1/8

3.98
6.ou
'5.-13

Aa
A
Aaa
Ba

STATE AND LOCAL GOVERNMENT
Akron, Ohio
Los Angeles Sch. Dists.,
Calif.
Indianapolis, Ind.
State of Ohio




Water rev.
G.O.
G.O.
G.O.

5*0 1959-78

3.36

2.50-3.U0 A

15.0 1959-83
3.19 ' 2.35-3.25 Aa
5.1 1960-89
2.91
2.25-3.00 Aaa
1
2.00-2.70 Aaa
25.0 1958-77/67 2.65

E-2T

H.lii

Large Individual Issues Offered during December (Cont'd;
Issuer

Type 3/

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

STATE AND LOCAL GOVKIOTNT
(Continued!
.Greater Baton Rouge Port
Rev.
Comm., Louisiana
Bergen Co., New Jersey
G.O.
Phoenix, Arizona
Wtr. rev.
State of Texas
G.O.
Minneapolis and St. Paul
Met. Airport Comm.,Minn,
G.O.
Atlanta, Georgia
G.O.
Mobile, Alabama
Wtr. rev.
Richmond, Virginia
G.O.
Chicago Bd. of Educ., 111,
G.O.
Chelan Co. pub. Ut. Dist.
No. 1, Washington
Rev.
University of Minnesota
Rev.
. Minneapolis-St. Paul Met.
Airport Comm., Minn.

19. h 1960-77/67
7.2

1959-82

16.0 1959-87/68

12.5

1966-86/67

13.0 1961-88/73
1958-86
6.0 1961-91/68
6.8 1959-78
25.0
1960-77

15.0

3.36

2.60-3.W Baa

2.70

2.10-2.80

3.51

2.50-3.50 A

2.70

2.L0-2.70

2.79
2.96
3.93
2.1,8
3.07

2.25-2.90 Aa
2.00-2.90 Aa
2.90-L.00 Baa
2.00-2.50 Aaa
2.50-3,10 A

250.0
5.0

2013
1959-97

5.20
2.75

5.00

13.0

1961-88

2.69

V

Aa
Aa

Aa

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.
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
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/ Reoffering deferred until July 1> 1958.




H.lU
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
Corporate State and Other 2/
local govt.

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

1*76
591
7U0
1*61
187
525
370
5#
578
576
158
383
378

280
153
153
290
179
97
172
2#
2143
#0
369
#7
383

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

100
35
.

796

966

795
486
258

25
25
25
30
30
18
150

his

811
815
61*7
815
1,193
1,161

763
61*8
631
862
3#
388
498
5 Hi
1*39
587
573
5#
61U

100
35
25
25
25
30
15
1*5
63
165

Forthcoming Large Offerings, as of January 3
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Commercial Credit Co.
Washington Water Power Company
Connecticut Light & Power Co.
Commonwealth Edison Co.
Pacific Power & Light Co.
West Virginia Pulp & Paper Co.
Commerce Oil Refining Corp.
Alabama Power Co.
Pacific Gas & Electric Co.
*Kimberly Clark Corp.
Royal Dutch Petroleum Co.

Notes
50.0
1st mtg.-bds.
20.0
1st mtg. bds.
30.0
S.F.- deb.
50.0
1st mtg. bds.
15.0
Deb.
liO.O
Deb. bds. & Common h5.0
1st mtg. bds.
23.0
1st & ref. mtg. bds.75.0
. S.F. deb.
30.0
y
Common stk.
1st mtg. bds.
Conv. deb.

25.0
718.3

Gas Pipeline Co. of America j 1st mtg. bds.
Digitized Natural
for FRASER


1*0.0

Indiana & Michigan Electric Co.
American Telephone & Telegraph Co.

Jan. 8
Jan. 9
Jan. 9
Jan.; 15
Jan. 16
Jan. 16
Jan. 16
Jan. 17
Jan. 22
Jan. 22
Feb. 10
(rights expire)
Feb. 11.
March 12
(rights expire)
Winter

H.U*
Forthcoming Large Offerings, as of January 3 I Cont'd)
Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Caddo Parish Sch. Dist., La.
Los Angeles, California
Dade Co., Florida
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
^Dallas, Texas
.Florida State Board of Education
Los Angeles, California
State of New Hampshire
No. Hempstead Sch. Dist. No. 9, N.Y,
East Baton Rouge Par. S.D. No.l, La,
Denver, Colorado
^Public Housing Authorities
Wichita. Sch. Dist. No. 1, Kansas
New York State Thruway Auth.
Pennsylvania Turnpike Commission
Inter-American Center Auth., Fla.

G.O.
G.O.
G.O.
G.O.
Rev.
G.O.
Rev.
G.O.
G.O.
G.O.
Rev. .
G.O.
G.O.
G.O.
Water rev.
G.O.
G.O.
G.O.
Water rev.
.

G.O.
Rev.
Rev.
Rev.

7.5

25.0

1U.5
5.7
7.5

n

55.0
25.5
. 10.0
20.0
100.0
11.8
7.9
9.0
28.it
7.k

10.0
20.0
67.1
5.0
iiO.O
62.0

20.0

Jan. 7
Jan. 7
Jan. 8
Jan. 9
Jan. 13
Jan. 1U
Jan. 11;
Jan. 15
Jan. 15
Jan. 16
Jan. 17
Jan. 22
Jan. 27
Jan. 28
Jan. 29
Jan. 30
Feb. k
Feb. U
Feb. 5
Feb. 5
Feb. 6
Winter
Winter
Winter

OTHER
Int'l Bank for Reconstruction and
Development
Union of South Africa

Bds.
Ext. loan bds.

150.0
15.0

Jan. 7
Winter

*—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.