Full text of H.16 Capital Market Developments : July 13, 1955

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No.t f o r P u b l i c a t i o n
—
.

;

DECONTROLLED AFTER SIX MONTHS

H.lii

J u l y 13, 1 9 #
CAPITAL 1.IARXET DEVELOPMENTS

New c a p i t a l volume small l a s t week r- Only one l a r g e i s s u e
was p u b l i c l y o f f e r e d f o r new c a p i t a l d u r i n g t h e week ending J u l y 8—
a 5 m i l l i o n d o l l a r S t a t e and l o c a l government o f f e r i n g . T h i s week
161 m i l l i o n d o l l a r s of S t a t e and l o c a l i s s u e s and one 30 m i l l i o n
d o l l a r c o r p o r a t e o f f e r i n g were scheduled f o r f l o t a t i o n . •
I n c l u d e d i n t h i s week's S t a t e and l o c a l s c h e d u l e however,
was 12^ m i l l i o n d o l l a r s of New Y o r k . S t a t e Thruway bonds, t h e only
b i d f o r which was r e j e c t e d on J u l y 12 by t h e S t a t e C o m p t r o l l e r .
I t was r e p o r t e d t h a t " t h e s u b s t a n t i a l change i n t h e m u n i c i p a l bond
market s i n c e t h i s f i n a n c i n g was o r i g i n a l l y announced would have t h e
e f f e c t of i n c r e a s i n g t h e c o s t of f i n a n c i n g t h e thruway. The Comp- .
t r o l l e r has t h e r e f o r e d e c i d e d t o postpone t h e f i n a n c i n g u n t i l a
more advantageous t i m e . " No i n d i c a t i o n was given as t o t h e t i m i n g
of another o f f e r i n g . The s o l e b i d f o r t h e l a r g e s t tax-exempt i s s u e
of t h e year would have produced a n e t i n t e r e s t c o s t of 2.7892 per
c e n t . M a t u r i t y of t h e o f f e r i n g averaged about 35 y e a r s .
The scheduled o f f e r i n g was an a d d i t i o n t o p r e v i o u s i s s u e s
which were S t a t e - g u a r a n t e e d and r a t e d Aaa b y Moody's. The y i e l d on
Moody's 20-year m u n i c i p a l Aaa bonds h a s r i s e n from 2 . 0 7 on June 10,
when t h e New York f i n a n c i n g was announced, t o 2 . 1 9 f o r t h e week endi n g J u l y 8, r e f l e c t i n g t h e b u i l d - u p . i n the volume of expected new
i s s u e s and t h e h i g h l e v e l of d e a l e r s ' i n v e n t o r i e s .
Bond y i e l d s - Yields on o u t s t a n d i n g S t a t e and l o c a l government Aaa and Baa bonds r o s e 5 and 3 b a s i s p o i n t s r e s p e c t i v e l y
d u r i n g t h e week ending J u l y 8. Treasury o b l i g a t i o n y i e l d s i n c r e a s e d one b a s i s p o i n t . .
No change occurred i n t h e c o r p o r a t e or S t a t e , and l o c a l
revenue bond y i e l d s .
Stock p r i c e s - Stock p r i c e s , a s measured by t h e SEC index
of 265 common s t o c k s , i n c r e a s e d '3»h p o i n t s t o a new h i g h of 257.0
l a s t week.
L i t t l e change i n p r i c e s was i n d i c a t e d by d a i l y f i g i r e s
f o r t h e f i r s t two days of t h i s week.
More d e t a i l e d i n f o r m a t i o n c o n c e r n i n g r e c e n t c a p i t a l mark e t developments w i l l be found i n t h e a t t a c h e d e x h i b i t s .

Business Finance and C a p i t a l Markets S e c t i o n ,
D i v i s i o n of Research and S t a t i s t i c s ,
Board of Governors of t h e F e d e r a l Reserve System.




EXHIBIT A

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

(Per c e n t )
1 9 # - High
Loir
1953 - Higfr
Low
195k - H i g i
Low
1955 - High
Low
-June
June
June
July
July

10
17
2k
1
8

3.63 ( 1 A )
3.U8 ( 5 / 1 6 )
3.89 (9/18)

sga

2.98 (10/23)
2.kd (kA7)
3.79 (6/25)

2.96 (1/8)

3.32 (1/7)
2.93 (8/5)

3.UU ( 1 2 / 3 1 )
3.51 (7/8)
3.1*5 (1/1U)

3.114- ( 7 / 7 )

3.50
3.51

3.06
3.07

11

3.02 (1/6)

3.10

2.69
2.27
3.27
2.71

(12/19)
(V25)
(6/26)
(1/2)

3.00 (1/1)

2.72 (8/13)
2.84 (7/8)
2.76 (3/7)
2.79

2.80
2.80
2.81*
2.8k

1 / Weekly average o f - d a i l y f i g u r e s . Average term of bonds
included i s 25-26 y e a r s .
2 / Thursday f i g u r e s . Only g e n e r a l o b l i g a t i o n bonds a r e
i n c l u d e d ; average term i s 20 y e a r s .
3 / F r i d a y f i g u r e s . Average r a t i n g of bends i n c l u d e d i s
between Baa and Aj average term i s 20 y e a r s .
Note.—Highs and l e w s a r e f o r i n d i v i d u a l s e r i e s and may
b e on d i f f e r e n t d a t e s f o r d i f f e r e n t s e r i e s .




EXHIBIT B

L O W E R - G R A D E BOND YIELDS

j r '

1952

1953

Corporate
Aaa 3 /

I

1954

U. S. Govt.
lcng-term 2 /

1955

S t a t e and l o c a l
g o v t . , Aaa 3 /

Spread between
U . S . )ovt . and
Corporate S t a t e and
l o c a l Aaa
Aaa

(Per c e n t )

1954 - High
Low
1955 - High
Lor

3.03
2.91
3.42
2.99
3.09
2.85
3.05
2.91

June
June
June
July
July

3.0k
3.Q5
3.05
3.05
3.05

1952 - High
1953 - High

10
17
24
1
8

(lA)

(2/15)
(6/19)
(1/9)
(1/8)
(4/23)
(7/8)
(1/7)

(12/27)
(5/17)
(6/6)
(12/26)
2.7k
(1/9)
2 . a (8/7)
2.82 ( 7 / 8 )
2.62 ( 1 / 7 )

2.00
1.65
2.73
1.98
2.21
1.90
2.19
2.05

2.74
2.75
2.78
2.81
2.82

2.07
2.08
2.09
2.1b
2.19

2.79
2.56
3.15
2.78

1 / Weekly average of d a i l y f i g u r e s .

(10/23)
(5/1)
(6/25)
(1/8)
(6/10)
(9/2)
(7/7)
(5/26)

.37
.19
.38
.19
.43
.32
.34
.23
.30
.30
.27
.:2k

.23

'

1.02
.71
.84
.30
.61
.29
.70
.54
.67
.67
.69
.67
.63

Average term of bonds included i s 25-26

2 / Weekly average of d a i l y f i g u r e s ; old s e r i e s . Average term t o f i r s t c a l l
of bonds included i s 13-14 y e a r s .
3 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds are included; average
term i s 20 y e a r s .
Note.—Hi$is and lows are f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t dates
for different-series.




STOCK MARKET

1952

Date

•

Stock p r i c e

1953

1954

Canmon
Trading
stock
volume 2 /
(millions yields 2 /
of s h a r e s ) (per c e n t )

1955

Stock market
Customers 1
d e b i t b a l - loans t o
ances 4 / " o t h e r s " 5 / '

Total

• ( M i l l i o n s of d o l l a r s )
1S52 - High
Low
1953 - High
low
1954 - High
Low
1955 - High

165.3
151.7
167.1
144.0
221.lt
156.5
257.0
217.4

May

233.3
2 44.5
251.1
253.6
257.0

June 24
July 1
July 8

(12/26)
(10/24)
(1/2)
(9/18)
(12/31)
(1/6)
(7/8)
(1/14)

2.0
0.9
2.5
0.9
3.7
1.4
4.6
2.0

5.77
5.13
5.75
5.15
5.33
4.20
It .22
3.87

1,986
1,804
2,445
2,055
3,436
2,405
3,787
3,537

1,332
1,241
1,665
1,314
2,388
1,653
2,704
2,517

2.2
2.7
2.7
2.3
2.3

4.14
3.87

3,787

2,684

n.a.

n.a.

n.a.

.

656
552
780
664
1,048
746
1,163
1,018
1,103
1,160
1,163
1,160
n.a.

t o 1947-49=100 by F e d e r a l Reserve. The conversion f a c t o r I s 123.91.
2 / Averages of d a i l y t r a d i n g volume on the New York Stock Exchange.
V Moody's 200 common s t o c k s ; end of month f i g u r e s . £ / End 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 ; excludes c r e d i t extended on mcney borrowed f o r c a r r y i n g
U. S . Government o b l i g a t i o n s .
£ / 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 a l l loans
f o r purchasing or c a r r y i n g U. S . Governments f o r 1952; s i n c e 1953 only t h e s e l o a n s
a t banks i n New York and Chicago a r e excluded. Weekly r e p o r t i n g banks account f o r
about 72 per cent of l o a n s t o o t h e r s .
n.a.—Not a v a i l a b l e .
Note.—Highs'and lows a r e f o r i n d i v i d u a l s e r i e s and may be an d i f f e r e n t d a t e s
for different series.




Exhibit D

H.14

Corporate and S t a t e and Local Government
Security Offerings and Placements
( i n millions of d o l l a r s )

1955

Nevr c a p i t a l

Corporate
1
1%
rI

1953

1955

S t a t e and l o c a l
1
195IT \

1953

January
February
March

546
436
1,261

547
426
63$

623
623
666

535
312
538

396
411
565

3-90
#0
426

April
May
June

e/500

497
6#
842

779
#5
1,123

427
e/350
e/630

734
748
853

329
649
434

909
335
747

483
,325
753

e/600

279
261
649

519
259
475

July
August
September

e/900

e/6?5
e/SQO

October
November
December
1st quarter
2nd q u a r t e r
3rd q u a r t e r
i+th q u a r t e r
Year

2,243
e/2,075

1,003
290
604

577
429 i /
1,438 y

1,606
1,995:
1,991
1,896
7,490

1,912
1,385
e/1,405
2,578
1,561 w
2,a4 y
8,495

'

594
423
877

453
408
774

1,372
2,334
1,188
1,894
.6,789

1,176
1,412
1,253
1,636
5,477

Excluding f i n a n c e companies 2 /
1st quarter
2nd q u a r t e r
3rd quarter
4th q u a r t e r
Year

1,791
e/2,000

1,527
1,927
1,911
1,792
7,158

1,669
1,991
1,223
2,344
7,227

2 / Total new 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 personal f i n a n c e
companies.
e / Estimated.
Note.—Details may not add t o t o t a l s due t o rounding.




.

H.lb

Exhibit :
Large Public S e c u r i t y issues f o r New C a p i t a l
(Other than U . S . Treasury) 1/
Proceeds of Large.Issues Offered
(Millions of d o l l a r s )

Month

Corporate

195U - June
July .
August
. September
October
November
December
1955 ~ January
February
March
April
May June

S t a t e and
l o c a l government
603
92,
86 455.
388
268
689
3U
107
337
238
152

350 •
iill
75
,
362*
U33
0 .
121
Ihl

63
750 .
175
ii83
182

Other 2 /

30
35
*

15

h09

l a r g e I n d i v i d u a l I s s u e s Offered J u l y 1 .through i

Issuer

Type 3 /

Amount
Coupon
(millions
O f f e r i n g Rating
Maturity r a t e or
of
net i n t e r - • yield
dollars)
e s t cost

CORPORATE
None
STATE AMD LOCAL GOVERNMENT
T u l s a , Oklahoma

$.h

1958-80

2.6?

1.80-3.05

A

OTHER
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 m i l l i o n d o l l a r s and
over5 S t a t e 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 5 m i l l i o n 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 .
3/ In the case of S t a t e and l o c a l government s e c u r i t i e s , G.O, "denotes general
o b l i g a t i o n ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured by
f a c i l i t i e s revenues; and, L.L., l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
designated revenues.




H.14

Exhibit F

Forthcoming Large Public S e c u r i t y Offerings f o r New C a p i t a l
(Other than U. S . Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown

Date of
computation•

Corporate

1954 - June 30
J u l y 30
Aug. 31
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1 9 # - Jan. 31
Feb. 28
Mar. 31
Apr. 29
Kay, 31
June 30

336
100

1
94.

18k
16

710
211
160
67

Other 2 /

Subsequent t o
date shown S t a t e and
Corporate l o c a l govt. Other £
.532
303
608

54
300
383
436
661
56?
682
%
208
116
339
344

4l4

30

135
246
. . 216
422
1,395
922
1,141
850
830

1,521
1,553
1,876
2,158
1,957
2,682

30
30
35 .

2,144

1,961
1,978
2,009
1,917
1,861
1,845

—

Forthcoming Large O f f e r i n g s , as of J u l y 8
Issuer

^

' Type

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

CORPORATE
I l l i n o i s B e l l Telephone
P a c i f i c Finance
American Natural Gas
Consumer Power
Goodyear Tire and Rubber
Western Union Telegraph
^ P a c i f i c Telephone and Telegraph
American Telephone and Telegraph
Southern C a l i f o r n i a Gas
Freedom Insurance.Company

•1st mtg. b d s .
Deb.
Common stock
Common stock
Common stock
Common stock
Deb. .
Conv. deb.
Bonds
Common stock

30.0
20.0
37.0
17.7
50.0
25.0
67.0
650.9
40.0
22.0

G.R.
L.L.
L.L.
Rev.
G.O.

125.0
15.0
5.1
8.0
8.3

J u l y 12
July 20
August 2
August 5
August 8
August 8
August 16 .
1955
1955
1955

STATE AND LOCAL GOVERNMENT '
New York S t a t e Thruway .
Alabama Highway Authority
Wayne County, Michigan
L o u i s v i l l e , Kentucky
Pierce Co., Wash., Taccma Sch. D i s t .




.

July
July
July
• July
July

12
12
12
12
14

H.lh

F-2
Forthcoming Large O f f e r i n g s , as of J u l y 8 (Cont'd)
Issuer

Type

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

STATE AND LOCAL GOVERNMENT (Cont'd)
S t a t e of Ohio .
Public Housing A u t h o r i t i e s
Chicago, I l l i n o i s
Los Angeles, C a l i f o r n i a
S t a t e of New Mexico
Norfolk, V i r g i n i a
Denver, Colorado
^Calcasieu P a r i s h , Louisiana
-xLos An.geles, C a l i f o r n i a
-*Los Angeles, C a l i f o r n i a
Connecticut Expressway
Inter-American Center Auth., F l a .
Michigan Turnpike Authority
S t a t e of Louisiana
I l l i n o i s Turnpike Authority
Texas Turnpike Company ^
Springfield,'Illinois
Allegh eny C ounty, Pennsylvania,
S a n i t a r y Authority
C a l i f o r n i a T o l l Bridge A u t h o r i t y
J e r s e y City Sewerage A u t h . , N. J .
North Carolina Turnpike Authority

Rev.
Rev.
Rev.
. n.a.
Rev.
Rev.
n.a.

£2.0
121.5
25.3
25.0
lii.O
;
5.0
12.0
8.2
12.0
18.0
100.0
60.0
186.0
80.0
390.0
140.0
9.0

J u l y 20
J u l y 20 .
July 26
J u l y 26 •
J u l y 26
J u l y 26
J u l y 28
August 3
August 23
September 21
Summer
1955
1955
1955
1955
1955
1955

Rev.
• Rev.
Rev.
n.a.

85.0
235.0
16.0
200.0

1955
1955
1955
1955

L.L.
——

n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.

OTHER
None
and l o c a l government i s s u e s of 5 m i l l i o n 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 .
n.a.—Not a v a i l a b l e .
*—Included in t a b l e f o r f i r s t time.
__