Full text of H.16 Capital Market Developments : July 19, 1971
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
IBD£NM f ^ £>/- • & •<& L.5.8 Confidential (F.R.) July DECOraOLLED AFTER SIX MOHTHS APITAL MARKET DEVELOPMENTS Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System, Washington, D. C. , 1971 INDEX Developments in the Corporate and Municipal Bond Markets Capital Market Yields Capital Market Volume Stock Market Mortgage Market SYMBOLS: e Estimate p Preliminary r n.a. Revised Not available TABLE 1: Yields, Volume and Reception YIELDS MOODY'S SEASONED NEW ISSUE 1 Aaa WEEK ENDING: 1971 - June July 4 11 18 25 7.79 7.93 8.05 7.84 7.70 7.66 7.63 7.62 2 9 16 23 7.89 7.87 7.82 7.63 7.65 7.64 YIELDS MOODY'S BOND BUYER SEASONED SEASONED 20 Aaa BOND INDEX WEEK ENDING: 1971 - June 4 11 18 25 July 2 9 16 23 ' CORPORATE BOND MARKET VOLUME2 PER CENT GROSS SOLD BY END BONDS SCHEDULED OFFERINGS OF WEEK WITHIN 28 DAYS 220 92 n.a. 355 79 839 98 634 76 310 99 238 450e 88 86 58 n.a. n.a. n.a. MUNICIPAL BOND MARKET VOLUME2 PER CENT ' GROSS SOLD BY END OF WEEK OFFERINGS BONDS SCHEDULED , WITHIN 28 DAYS 5.50 5.60 5.70 5.80 5.70 5.87 6.00 6.23 320 429 486 405 80 70 73 71 806 851 918 1,351 5.90 5.70 5.70 6.19 6.06 6.03 331 633 347 56 2e 88 86 76 1,219 916 1,059 n.a. 1 Derived by adjusting to a Aaa basis, new issues of publicly-offered corporate bonds with call protection, rated A, Aa, or Aaa by Moody's Investors Service (except serial and convertible issues, offerings of natural gas pipeline and foreign companies, and bonds guaranteed by the Federal Government.) 2 Millions of dollars unless otherwise indicated. Note: See footnotes to Table 3 , TABLE 2: Details on Inventories DATE OFFERED 1 7/15 7/13 7/13 7/8 7/7 6/29 OFFERED CORPORATE BONDS IN SYNDICATE END OF LATEST WEEK ORIGINAL RATING AND ISSUER \ YIELD CALL PROTECTION COUPON AMOUNT M I L . $) 50.0 15.0 150.0 30.0 15.0 20.0 DATE | RELEXSED Columbia Broad Sys. Indiana Gas N.Y. Tel. Carrier Corp. Wash. Gas Lt. A C F Ind. 7.,80 8..25 8.,00 8--1/8 8•-3/8 8,,40 7.,85 8,,30 7.,90 8,,25 8.,25 8,,40 Aa A Aaa A A A 10 yrs. 5 yrs. 5 yrs. 10 yrs. 5 yrs. n.c. ESTIMATED PROPORTION SOLD 95% 95% 35% 90% 45% 85% CORPORATE BONDS RELEASED FROM SYNDICATE DURING LATEST WEEK ORIGINAL INCREASE RATING AND ESTIMATED PROISSUER COUPON IN YIELD CALL PROT. PORTION RELEASED YIELD AMOUNT None INVENTORIES 1 MUNICIPALS BLUE LIST 1 IN SYNDICATE DATE 1971 - June 18 25 July 2 9 16 CORPORATES IN SYNDICATE 656 603 226 203 20 149 495 499r .91 129 113 27 115 ii. a 116 N.C. - No call protection. 1 All figures in millions of dollars. Blue List is daily average for week ended Friday, except for latest v : o e k v'hich is daily average of three days endt-d Wednesday. All other figures are as of Friday. TABLE 3: High Grade Bond Yields DATE 1969 - High Low 1970 - High Low 1971 - High Low 1971 - June 11 18 25 July 2 9 16 1 NEW CORPORATE Aaa 1 8.85 6.90 9.30 7.68 8.23 6.76 (12/5) (2/21) (6/19) (12/18) (5/21) (1/29) 7.93 ' 8.05 7.84 7.89 7.87 7.82 MOODY'S SEASONED CORPORATE Aaa2 7.84 6.55 8.60 7.48 7.69 7.06 (12/26) (1/12) (7/3) (12/31) (6/4) (2/12) U.S. GOVERNMENT 20-YEAR CONSTANT MATURITIES 3 6.97 5.96 7.55 6.17 6.51 5.69 (12/26) ' (1/24) (5/29) (12/18) (6/18) (3/23) BOND BUYER'S SEASONED MUNICIPALS 4 6.90 4.82 7.12 5.33 6.23 5.00 7.66 7.63 7.62 6.32 6.51 6.44 5.87 6.00 6.23 7.63 : 7 .65 ' 7.64 6.44 6.38 6.30 6.19 , 6.06 6.03 New corporate issues, with call protection, adjusted (as described in footnote 1 of Table 1) to a Aaa basis. 2 Weekly average of daily figures. Average term of bonds included is 22-24 years. ' 3 Weekly average of daily figures. 4 Thursday figures. The average rating of the 2G bonds used in this index ' falls midway between the four top groups as classified by Moody's Investors Service. Note--Highs and lows are for individual series and may be on different dates for different series. (12/18) (1/28) (5/29) (12/11) (6/24) (3/18) 6 TABLE 4: Long-term Corporate and State and Local Government Security Offerings and Placements (In millions of dollars) GROSS PROCEEDS CORPORATE1 PERIOD 1971 STATE AND LOCAL 2 1970 1969 1971 1970 1969 January February March 3,115 3,000 6,075 2,636 1,802 3,539 2,075 2,045 2,098 2,702 1,833 2,107 1,340 1,214 1,555 1,262 987 538 April May 4,007 3,174 4,100e 3,170 3,909 3,389 2,748 2,076 2,530 1,888 2,106 l,900e 1,647 996 1,085 1,801 1,110 737 July August September 2,768 2,274 3,518 2,478 1,427 2,427 1,348 1,359 1,758 1,097 808 559 October November December 3,777 4,182 3,980 1,933 2,375 2,532 1,924 1,748 2,190 1,280 886 816 7,977 10,468 8,560 11,939 6,218 7,354 6,332 6,840 4,109 3,728 4,465 5,862 2,787 3,648 2,464 2,982 18,445 27,005 38,944 13,572 19,904 26,744 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 1st half Three quarters Year 12,190 ll,281e 6,642 5,894e 7,837 12,302 18,164 6,435 1 8,899 11,881 j Excluding finance companies 3 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter 6,170 7,037 Year V 2 3 Securities and Exchange Commission estimates of gross proceeds. Investment Bankers Association of America estimates of principal amounts. Total gross proceeds excluding offerings of sales and consumer finance companies. J - .*i '• JK «- 7 TABLE 5: New Corporate Security Issues, Type of Issue and Issuer (In millions of dollars) ' QUARTER OR MONTH TOTAL GROSS PROCEEDS BY TYPE OF ISSUE COMMON BONDS AND MEMO: PUBLICLY PRIVATELY PFD. ISSUES INCLUDED MFG. PLACED STOCK FOREIGN | CONVERTIBLE OFFERED 1970 - II 10,468 6,994 1,282 2,190 III IV 1971 - I II £/ 8,560 11,938 12,190 11,281 5,987 7,827 8,369 6,515 914 1,421 1,516 1,618 1,659 2,690 2,306 3,145 1970 - June July Aug. Sept. Oct. Nov. Dec. 3,389 2,768 2,274 3,518 3,777 4,181 3,979 1,931 1,831 1,731 2,425 2,390 3,001 2,436 436 320 205 389 304 283 834 1,021 617 338 704 1,083 898 709 1971 - Jan. Feb. Mar. . 3,115 3,000 6,075 2,033 2,201 4,135 594 275 647 489 524 1,293 4,007 3,174 4,100 2,118 2,097 2,300 473 445 700 1,415 630 1,100 Apr. May g/June 1 < 135 83 226 84 GROSS PROCEEDS BY TYPE OF ISSUER PUBLIC UTILITY OTHER ISSUERS1 2,162 868 1,346 1,606 876 3,048 2,663 4,020 3,594 4,496 710 287 737 824 1,362 2,445 2,314 3,169 3,794 3,281 2,812 2,714 3,406 3,197 2,627 26 68 11 4 56 11 159 82 107 59 121 388 184 939 638 682 994 1,006 1,107 1,056 1,103 843 630 1,241 1,101 j 1,350 955 353 144 279 445 371 693 282 994 1,143 682 838 1,300 1,033 1,687 43 3 38 99 168 557 716 661 2,417 676 1,069 1,452 391 683 532 1,332 587 1,675 1,115 766 1,400 1,265 587 775 269 407 200 1,358 1,413 1,725 113 35 n.a. 1 165 384 253 725 ' L Other issuers are extractive, railroad and other transportation, real estate and finance, and commercial and other. Source: Securities and Exchange Commission. Quarterly supplements are available . COMMUNICATIONS \ TABLE 6: Large Long-term Public Security Issues for New Capital (Other than U.S. Treasury) 1 July 5 thru July 16, 1971 ISSUER TYPE 2 AMOUNT (MILLIONS OF DOLLARS) MATURITY COUPON RATE OR NET INTEREST COST OFFERING YIELD MOODY'S RATING Corporatea Penna. Pwr. & Lt. Co. Carrier Corp. Quaker St. Oil Refining Corp. Washington Gas Lt. Co. Wisconsin Pwr. & Lt. Co. American Century Mtg. Inv. New York Telephone Co. Indiana Gas Company * AT&T Duquesne Light Co. Cartridge T.V. Inc. Property Capital Trust C.B.S. 2um Pref. 40.0 Stk. Sr.debs w/w 30.0 3ap. Stk. 16.6 15.0 1st. Mtg. 30.0 Let. Mtg. )ebs. 25.0 150.0 1st mtg 15.0 1st mtg 3onv. pref 1,375.0 35.1 Com. stk 22.0 3om. stk 15.8 Benf int. 50.0 Debs -m 1996 •-- 8.13 — 8.25 A -- -- 8.25 8.00 6.75 7.90 8.30 8.00 A Aa 1996 2001 1991 2008 1996 8.38 8.00 6.75 7.96 8.20 -- -- — -- -- -- — -- -- -- -- — — 2001 7.85 7.85 mm — Aaa A — -- A TABLE 6: Large Long-term Public Security Issues for New Capital (continued) (Other than U.S. Treasury) 1 ISSUER TYPE State and Local Penna, State of Bds. New York G.O. •Massachusetts G.O. Boston, Mass. G.O. Delaware Co. Coram Coll Auth, Pa. Rev. Pueblo, Colo. G.O. Port of Oakland, Calif. Rev. Pott of Oakland, Calif. R*v. Santa Ana Unified S/D, Calif, G.O. Murray State University, Ky G.O. Gloucester, Mass. \ Bds. Chicago Bldg. Commission Rev. N Houston ISD, Texas G.O. Michigan St. Housing Dev Auth Rev. Michigan St. Housing Dev. Auth Rev. Murray State University Ky. Rev. .Oklahoma City G.O. Muskegon Co., Mich. G.O. Texas G.O. Gloucester Co Server Auth, N.J. Rev. * 1 2 3 2 AMOUNT (MILLIONS OF DOLLARS) 70.0 357.1 125.0 25.0 17.0 16.1 3.5 16.3 15.0 2.7 10.8 55.0 10.0 15.0 25.0. 12.5. 14.1 16.0 12.5 20.0 MATURITY 1972-2001 2012 1972-2019 1972-91 1973-2000 1972-1985 1974-1981 COUPON l RATE OR j OFFERNET INTER-' I INC EST COST | YIELD 5.79 7.58 5.43 6.48 6.18 6.20 3.30-6,40 5.50-7.80 3.40-6.20 4.25-7.00 WW • »— — 1972-1995 1973-2000 1972-1991 1973-1991 1972-1981 1973-2004 1974-2015 1973-2000 1974-1996 1972-1991 1976-1991 — 5.58 7.07 ** 6.48 ; 4.19 6.92 6.92 7.08 5.36 -—— • #.** 3.50-5.70 5.00-6.75 8.00 3.40-5.90 4.25-7.20 3.40-6.00 3.50-6.90 N.R. 4,10-7.10 4.40-7.00 4.25-7.20 3.75-6.30 4.15-5.85 3.90-5.50 MOODY'S RATING Aa Baa-1 Aa . Baa -- ' -- — Baa Aa A A-l A A Baa A Aa Aaa 4.75 Rights offering. 1^Includes corporate and other security offerings of $15 million and over; State and local security offerings of $10 million and over. In case of State and local government securities, G.O. denotes".general obligation; Kev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.-Ut., revenue bonds secured only by income from quasi-utilities; Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenuje bonds secured solely by lease payments. 1 Includes foreign government and International Bank for Reconstruction and Development issues and non-quaranteed issues by Federal Agencies. ' TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital (Other than U.S. Treasury) 1 (continued) AMOUNT (MILLIONS OF DOLLARS) ISSUER As of July 16, 1971 APPROXIMATE DATE OF OFFERING Corporate Gulf Life Holding Co. Debs Guardian Mtge Investor Debs General Waterworks" Corp. 1st mtg Ford Motor Co. Notes Chrysler Financial Corp. Notes (5 yrs) Continental Can Co Notes Flintkote Co. Debs Commonwealth Edison Co. 1st mtg Int'l Harvester Credit Co. Debs 'Alabama Pwr Co. Bonds Diamond State Tel. Co. Debs Philadelphia Elec. Co. 1st mtg McDonald Corp Debs Gen'l Portland Cement Co. Debs Pepsico Inc. Conv debs First Wisconsin Bkshares Debs Valu Vend Credit Corp Debs Cleveland Elec 111 Com stk Monumental Corp Notes Debs Interlake Inc Beneficial Corp Bonds Beneficial Corp Bonds Microdot Inc. Notes Central Tel & Util Corp 1st mtg^ General Tel Co of the S.E. Bonds 1st mtg Consumer Power Co. Genstar Ltd Debs Bank of California Conv debs Debs . Equimark Corp 1st mtg Pub Serv Co of N. Mexico debs GAC Properties Credit Inc. Indiana Bell Tel. Co. Debs Louisville Gas & Elec Co Debs 1st mtg Dayton Pwr & Light Co Pref stk Dayton B?r & Light Co. 1st mtg Jersey Central R/r & Lt. Co. Public Service Elec & Gas Co. Debs / Public Service Elec & Gas Co. Debs Debs •Cincinnati Bell Inc Pfd stk Arkansas Pwr & Light Co. Debs Penna Elec Co 1st mtg Arkansas Elec Co. Southern Bell Tele Co. Debs VEPCO VEPCO Southwestern Bell Tel. 1st mtg Com stk Debs 25.0 30.0 25.0 100.0 100.0 60.0 40.0 100.0 50.0 85.0 15.0 80.0 25.0 22.0 50.0 50.0 25.0 50.0 20.0 60.0 25.0 50.0 20.0 20.0 40.0 120.0 25.0 20.0 15.0 20.0 50.0 100.0 100.0 45.0 20.0 25.0 75.0 85.0 50.0 15.0 20.0 30.0 175.0 July July July July July July July July Jtely July July July July July Jely July July July July July July July July July July July July July July July July August August August August Autust August August Autust August August August August 50.0 80.0 200.0 September September September 19 19 19 19 19 20 20 20 20 21 21 26 27 28 3 3 5 5 10 17 17 17 19 19 19 24 8 8 TABLE 7: Forthcoming Large Long-term Public Security Offerings for New Capital ' (Other than U.S. Treasury)' As o f J u l y 16> 1 9 7 1 ISSUER State and Local Cook Co. BSD #214, III. Arlington Hgts & Mt. Prospect S/D #214, 111. Florida, State of *0regon, State of Indianapolis, Ind. Ohio Rib Fac Conm Maryland, State of Louisville & Jefferson Co Metro Sws Dist, Ky N Y. State Dorm Authority Milwaukee, Wise. Biloxi, Miss Baton Rouge, La. East Baton Rouge Parish, La Oakland Co., Mich. Houston, Texas Memphis, Tenn East Bay MUD, CAL Los Angeles DWAP Ohio, State of Kansas-Nebraska Nat. Gas Co. South Carolina Bib Ser. * 1 2 TYPE G.O. AMOUNT (MILLIONS OF DOLLARS) ^ APPROXIMATE DATE OF OFFERING 10.5 July 19 10.5 25.0 60.0 12.0 50.0 79.3 July July July July July Jyly 19 20 20 20 21 21 July July July July July July July August August August August August August August 22 26 27 28 28 28 28 4 10 10 11 26 - G.O. Rev. G.O. G.O. Bonds G.O. Rev. Rev. G.O. Rev. G.O. G.O. Bonds G.O. G.O. G.O. Rev. G.O. S.F. debs Rev. 30.0 26.9 15.0 69.0 15.1 15.0 12.2 26.5 29.0 12.0 39.0 100.0 15.0 100.0 . ^/ Included in table for first time. . Includes corporate and other issues of $15 million and over; State and local Government issues of $10 million and over. Includes foreign government and International Bank for Reconstruction and Development issues and non-guaranteed issues of Federal Agencies. 12 STOCK PRICES AND VOLUME STOCK PRICES 1 NYSE INDEX3" DJ.INDUSTRIALS TRADING VOLUME 2 AMEX 4 - NYSE 1969 - H i g h Low 50.32 49.31 (5/14) 968.85 (5/14) 32.91 (7/29) 769.93 (12/17)25.02 (1/3) 16.5 (3/29) 8.0 (1/31) (7/29) 8.6 (8/29) 3.6 (11/21) 1970 - High Low 52.36 37.69 (1/5) 842.00 (12/29)27.02 (5/26) 631.16 (5/26) 19.36 (5/27) 1971 • High Low 57.76 49.73 (4/28) 950.82 (1/4) 830.57 (12/4) 7.1 (8/14) 1.8 (4/28)26.68 (1/4) 22.72 (4/28) 22.1 (1/4) 12.5 (2/12) 6.7 (2/12) 7.8 (7/2) 2.9 June 4 11 18 25 55.95 55.80 54.63 54.10 922.15 916.47 889.16 876.68 26.07 25.90 25.38 25.18 15.7 13.3 13.7 13.3 4.3 3.3 3.4 3.2 July 2 9 16 55.18 55.76 54.97 890.19 901.80 888.51 25.52 25.83 25.61 12.5 12.9 13.4 2.9 3.4 3.2 1. Figures other than highs and lows are Fridays only. Highs and lows are for the year and are not necessarily for Fridays. 2. NYSE is the New York Stock Exchange; AMEX is the American Stock Exchange. Volume figures are daily averaged for the entire week, (millions of shares). Trading is normally conducted for 5-1/2 hours per day and 5 days per week, or In recent years, however abbreviated trading to the extent, and over the time Days/ Through: Week January 3, 1969 July 7, 1969 January 2, 1970 July 3, 1969 December 31, 1969 May 1, 1970, 3. 12/31/65 - 50 4. Average dollar value of shares listed. (1/2) (1/8) 18.5 27-1/2 hours per week. periods, shown below: Hours/ Week 20 22-1/2 25 (8/14) (7/2) TABLE 9: Security Credit END OF PERIOI Outstanding: CREDIT EXTENDED TO • * MARGIN CUSTOMERS BY: BROKERS 1 | BANKS 2 | TOTAL CUSTOMERS' NET DEBIT BALANCES - 1970 - May 4,160 3,860 June 3,800 July .3,810 Aug. Sept. .3,920 Oct. .4,010 Nov. .4,010 Dec. .4,030 2,290 2,290 2,290 2,300 2,330 2,270 2,320 2,330 6,450 6,150 6,090 6,110 6,250 6,280 6,330 6,360 5,433 5,281 (4) (4) (4) (4) (4) (4) ,4,000 4,090 4,300 4,530 .4,620 2,300 2,330 2,360 2,340 2,340 6,300 6,420 6,660 6,870 6,960 - 40 -240 -300 - 60 20 140 30 50 30 .1971 - Jan. Feb. Mar. •Apr. -May NET CREDIT CUSTOMERS' NET EXTENDED BY FREE CREDIT BROKERS AND DEALERS 3 BALANCES 2,222 2,009 (5)2,180 2,083 2,236 2,163 2,197 2,286 3,211 3,272 (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) 2,452 2,743 2,798 2,660 2,550 (4) (4) (4) (4) (4) -552 -152 - 26 -213 171 97 153 - 73 34 89 -513 - 61 Change in Outstanding:. 1970 - May June July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May -200 -300 - 60 10 110 90 -20 - 30 90 210 230 90 - - -- 10 30 - 60 50 10 - 30 30 30 - 20 - 60 120 240 210 90 w w — - - - ~ - - - —' — — - - 166 291 55 -138 -110 - - * « - - . — — — — - - _ _ w 'w Margin debt, as reported by the New York Stock Exchange. Although margin debt until March 1968 included loans secured by U.S. governments, the amount of such loans included is thought to have been small. "Bank loans to others than brokers and dealers for purchasing or carrying securities other than U.S. governments." The difference between customers' net debit balances and customers1 net free credit balances, this figure represents the net credit extended by brokers and dealers to the nonfinancial public. NOTE: With the exception of bank loan data, figures are supplied by the New York Stock Exchange and are end of month data. Bank loans are for weekly reporting large commercial banks. Broker data includes loans for regulated securities; bank data includes loans for the purpose of purchasing or carrying any security, whether regulated or not. z" TABLE 10: Savings Flows at Nonbank Depositary Intermediaries ($ millions) DATE 1968 1969 1970 MUTUAL SAVINGS BANKS NET REGULAR DEPOSITS 3 NEW ANNUAL MONEY: GROWTH NET 1 RATE FLOW 4,203 2,549 4,466 1,143 -763 936 7.0 4.0 6.7 TOTAL SAVINGS & LOAN ASSOCIATIONS DEPOSITS NET SHARE CAPITAL ANNUAL NEW , ANNUAL GROWTH MONEY : NET GROWTH NET RATE 1 FLOWRATE 1 FLOW NET NEW MONEY 2 Not Seasonally Adjusted 2,738 6. 0 7,432 -1,003 3,,2 4,200 5,295 8,,2 11,173 11,635 I 6,749 15,639 3,881 -1,766 6,231 188 705 280 213 1,079 2,305 V 2,092 2,069 1,344 3,012 2,962 3,928 2,743 2,749 1,518 1970 - April May June 6 326 504 207 753 1,801 - M -136 224 -133 - • - - 1971 r April r/ May £./ June £/ 801 800 900 - - - - 2,211 2,162 3,028 - * 651 680 174 - W - 6.3 Seasonally Adjusted 1971 - January February March April r/ May 2.1 June £/ 885 939 1,287 1,176 776 783 15.5 15.8 21.2 19.0 12.4 12.4 - - - « u s 3,619 2,472 3,376 2,996 1,998 2,088 29.8 19.8 26.7 23.1 15.1 15.6 (/ 25.1 18.5 24.9 21.8 14.2 14.6 4,504 3,411 4,663 4,173 2,774 2,871 - - - ^ . . . . 52 929 147 - - Seaifc,,tto* 1 TABLE 11: Mortgage Commitments at Selected Thrift Institutions 1 DATE TOTAL OUTSTANDING COMMITMENTS | ALL MUTUAL I SAVINGS & SAVINGS TOTAL LOAN BANKS (N.Y. STATE) ASSOCIATIONS NET CHANGE ALL SAVINGS & LOAN ASSOCIATIONS MUTUAL SAVINGS BANKS (N.Y. STATE) (Billions of Dollars, Sea: onally Adjusted) 1/ 1970 - April May June July 7.8 8.0 8.2 8.6 5.4 5.8 6.1 6.5 2.4 2.2 2.1 . 2.0 Aug. Sept. Oct. Nov. Dec. 9.8 8.9 9.3 9.6 10.1 6.8 7.1 7.5 7.8 8.1 1971 - Jan. Feb. Mar. April May 10.4 11.2 12i6 13.8 15.4 8.3 8.9 10.1 11.1 12.3 1 -.08 .20 .17 .37 .21 .34 .26 .41 -.13 -.14 -.09 -.04 2.0 1.8 • 1.8 1.8 2.0 .21 .25 .30 .35 .51 .29 .36 .37 .34 .28 -.08 -.11 -.07 .01 .23 2.1 2.3 2.5 2.8 3.1 .25 .80 1.36 1\30 1.54 .20 .60 1.16 1.01 1.22 .05 .20 .20 .29 32 Based on data from Federal Home Loan Bank Board and Savings Banks Associations of New York State. Data for savings banks and S&L's include a minor amount of nonresidential commitments. All commitments include loans in process. Net changes are derived directly from unrounded outstandings levels as reported and after seasonal adjustment by Federal Reserve. Subtotals may not add to total# because of rounding. 15 16 TABLE 12: Net Change in Mortgage Holdings 1 FINANCIAL INSTITUTIONS MUTUAL SAVINGS & COMMERCIAL SAVINGS LOAN BANKS BANKS ASSOC. TOTAL INCLUDING FNMA-GNMA TOTAL 20,016 23,781 24,189 21,822 18,219 21,273 19,814 16,913 4,639 6,677 5,404 2,462 3,153 2,787 2,682 1,845 7,520 9,350 9,676 10,288 2,907 2,459 2,052 2,318 1,797 2,508 4,375 4,909 1970 - Mar. Apr. May 1,154 1,421 1,621 625 944 1,243 49 125 187 153 160 144 198 486 723 225 173 189 529 477 378 1971 - Mar. Apr. May 2,690 2,810 2,690 2,920 1,765 . 2,14* 2,182 79 20 0 -110 -50 416 631 789 1,055 983 1,104 1,175 1,289 1,710 1,311 *1,425 1,774 2,044 2,092 191 199 222 213 83 151 200 131 232 24 97 154 38 507 435 468 508 408 364 320 229 100 -33 -87 -8 "79 DATE LIFE INSURANCE COMPANIES FNMA-GNMA Not Seasonally Adlusted 1967 1968 1969 1970 2/ 1970 - Apr. May June July Aug. Sept. Oct. Nov. Dec. 1971 - Jan. Feb. Mar. Apr. May 1,347 1,485 1,749 2,083 1,917 2,192 2,128 2,049 2,604 1,860 1,997 2,888 2,739 840 1,050 1,281 1,575 1,509 1,828 1,808 1,820 2,504 1,893 2,084 2,896 2,818 500 346 256 500 300 315 Seasonally Adlusted 76 157 155 65 81 189 142 165 268 175 328 245 138 295 224 176 250 312 383 175 217 345 380 588 283 453 325 240 ' 1 i i i ! i Monthly data for commercial banks based on Federal Reserve estimates benchmarked to Call Report data on real estate loans outstanding as available. Other data derived from mortgage debt outstanding as reported separately by National Assn. of Mutual Savings Banks, Federal Home-Loan Bank Board, Institute of Life Insurance and, through August 1968, the Federal National Mortgage Association, and thereafter by FNMA and the Government National Mortgage Association. Data for mutual savings banks and for Life Insurance companies may differ somewhat from those derived from regular quarterly series because of minor conceptual differences for which adjustments are not made in the monthly series. Altogether, these groups accounted for 8 4 per cent of the net increase estimated for all holders in 1970. 17 TABLE 13: Net Increases in Mortgage Debt Outstanding Billions of dollars, SAAR QUARTER TOTAL RESIDENTIAL^ 1- to 4- MULTIFAMILY FAMILY COMMERCIAL MULTI-AND COMMERCIAL FARM - II IV , 18.6 15.1 10.9 9.1 8.3 7.0 2.6 2.1 5.5 4.1 8.2 6.0 2.2 1.8 - I - II III IV 15.9 20.7 26.6 27.3 10.3 13.9 19.2 19.8 7.0 10.5 15.3 16.0 3.3 3.4 3.9 3.8 3.9 5.0 4.9 4.8 7.3 8.4 8.8 8.4 1.8 1.8 2.5 2.8 1968 - I II III IV 27.7 26.2 26.0 29.6 19.0 18.2 17.7 20.2 15.8 15.0 14.1 16.4 3.1 3.2 3.4 3.8 6.4 5.9 6.5 7.5 9.4 9.2 10.2 11.1 2.3 2.2 1.8 1.8 - I II III IV 31.3 28.9 26.5 25.1 25.0 21.5 19.3 18.3 18.6 16.8 14.6 13.0 4.4 4.7 4.7 5.3 6.2 5.2 5.3 5.4 10.4 10.1 io.o 10.7 2.2 2.2 i-5 1.4 - I II III IV 20.2 22.7 28.5 30.5 13.8 16.9 21.2 21.6 8.8 11.5 14.9 15.1 5.0 5.4 6.3 6.4 4.9 4.3 5.2 6.9 9.9 9.7 11.5 ,13.3 1.5 1.5 2.1 2.1 - IP 32.9 22.6 15.6 7.0 8.3 15.3 2.0 • • 1 Derived from data on mortgage debt outstanding from Federal Deposit Insurance Corporation, Federal Home Loan Bank Board, Institute of Life Insurance, National Association of Mutual Savings Banks, Departments of Commerce and Agriculture, Federal National Mortgage Association, Federal Housing Administration, Veterans Administration and Comptroller of the Currency. Separation of nonfarm mortgage debt by type of property, where not available, and interpolation and extrapolations, where required, estimated mainly by Federal Reserve. 2 May differ somewhat from related flow of funds series mainly because of more aggregative type of seasonal adjustment. . 3 Residential mortgage debt includes nonfarm only and is sum of 1-to 4- family and multifamily mortgage debt combined. TABLE 14: FNMA Weekly "Auction" Results WEEK ENDED Apr. 12 26 COMMITMENTS IN $ MILLIONS IMPLICIT YIELD2(per cent) ACCEPTED 901-YEARN TOTAL 6TOTAL 901-YEAR 1 6MONTH & OVER OFFERED DAY DAY & OVER MONTH 126.9 687.2 54.5 313.9 39.8 154.0 9.4 126.6 5.4 33.4 7.32 7.43 7.45 7.54 .7.53 7-57 May 10 24 1,168.0 785.7 236.8 151.6 145.8 44.6 71.3 84.4 19.7 22.6 7.57 7.95 7.68 7.97 7.74 8.03 June 1 14 28 322.4 664.4 539.3 146.6 191.2 262.2 77.1 133.7 191.8 57.8 47.3 60.3 11.6 10.2 10.4 8.05 7.91 7.92 8.18 8.15 8.22 8.16 8.22 8.28 July 12 606.0 241.1 161.8; 58.2 21.1 7.98 8.23 8.31 Note: Under the FNMA auction system, approved sellers of Governmentunderwritten mortgages bid for FNMA forward purchase commitments, BJLds i v.i.« Li.» vvtiV-i ix. uu J, ' ar iimit snnoiifictiu oy •• :*:*.« ^. accepted by FNMA are for delivery at the seller's option, and at any time within the specified period. Bids on proposed homes relate to construction not yet started on which mortgages may be delivered only after completion and occupancy. 1 For "proposed construction" of new homes only. 2 Average secondary market yield after allowance for commitment fee and required purchase and holding of FNMA stock, assuming prepayment of 15 years for 30-year Government-underwritten mortgages. Yields shown are gross, before deduction of 38 basis points fee paid by investors to servicers. 19 TABLE 15: Private Housing Starts and Permits STARTS DATE SEASONALLY ADJUSTEDANNUAL RATE TOTAL 1-FAMILY 2 OR MORE 1970 - June July Aug. Sept. Oct. Nov. Dec. 1,393 1,603 1,425 1,509 1,583 1,693 2,054 835 827 838 881 890 934 1,240 558 776 587 627 693 759 814 1971 - Jan. Feb. Mar. Apr. May June g/ 1,725 1,754 1,959 1,912 1,959 ,982 946 985 1,048 1,098 779 769 911 809 839 817 1,120 1,165 TOTAL UNADJUSTED TYPE OF FINANCING FHA VA OTHER BUILDING. PERMITS (SEASONALLY ADJUSTED ANNUAL RATE) 2 135.2 140.8 128.7 130.9 140.9 126.9 121.4 40.7 43.3 34.1 34.3 40.4 33.7 63.2 5.1 5.3 5.6 5.3 5.8 5.5 5.7 89.4 92.1 87.7 91.3 94.7 87.2 52.5 1,285 1,309 1,378 1,388 1,523 1,487 1,768 110.6 102.2 32.2 27.3 33.4 44.6 40.7 4.6 4.7 6.9 8.4 8.3 72.8 68.4 127.6 148 J1 147.9 1,635 1,563 1,627 1,638 1,927 1,817 167.9 201.1 196.9 192.3 Total starts are Census estimates including farm for both permit-issuing and riou-issuing areas. A dwelling unit is started when excavation begins; all units in an apartment structure are considered started at that time. FHA and VA starts are units started under commitments by these agencies to insure or guarantee the mortgages. As reported by FHA and VA, a unit is started when a field office receives the first compliance inspection report, which is made before footings are poured in some cases but normally after the foundations have been completed. Other starts are derived as a residual, although total and FHA and VA starts are not strictly comparable in concept or timing; other starts include both units financed by conventional mortgages and units without mortgages. Building permits are for 13,000, or all known peirmit-issuing places. Unlike starts, seasonally adjusted building permits reflect direct adjustment for differences in the number of working days per month, as well as other differences in timing and coverage. 20 TABLE 16: Mortgage and Bond Yields FHA MORTGAGES DATE 30-year 2 CONVENTIONAL MORTGAGES 3 SPREAD BETWEEN YIELDS ON CONV, & FHA MORTGAGES 5 1 NEW Aaa CORPORATE BONDS 4 SPREAD BETWEEN YIELDS ON NEW CORPORATE BONDS AND FHA MORTGAGES 6 1968 - High Low 1969 - High Low 7.52 6.78 8.62 7.99 7.40 6.75 8.35 7.55 .02 -.27 -.13 -.40 6.79 6.15 8.75 6.91 1.20 .26 1.08 -.13 1970 - High Low 9.29 8.40 8.60 8.30 -.10 -.74 9.11 7.80 .99 .01 1971 - Jan. Feb. Mar. Apr. May June —— 7.95 7.75 7.60 7.55 7.65 7.70 n.a. .28 .18 -.10 -. 19 7.24 7.28 7.46 7.57 8.01 7.90 1 2 3 4 5 6 7.32 7.37 7.75 7.89 -.14 -.20 -.26 -.01 Neither mortgage nor bond yields include allowance for servicing costs which are much higher for mortgages than for bonds. Generally, bonds pay interest semiannually; mortgages, monthly. Mortgage yields, if computed as equivalent to a semi-annual interest investment, would be slightly higher than given in the table. Based on FHA-field-office opinions about average bid prices in the private secondary market for new-home mortgages for immediate delivery. Data shown are for 30-year mortgaged with minimum downpayments, 'and weighted by probable volume of transactions. Yields computed by FHA, assuming prepayment period of 15 years for 30-year mortgages. Based on FHA-field-office opinion on typical interest rates (rounded) on conventional first mortgages prevailing in the market areas of insuring office cities See note for Table 1. ,j, Yield spread equals conventional mortgage rate less FHA secondary market yield. Yield spread equals FHA secondary market yield less new Aaa corporate bond yield. TABLE 17: Conventional Mortgage Terms NEW HOMES DATE 1970 May Juae July Aug. Sept. Oct. Nov. Dec. 1971 Jan. Feb. Mar. Apr. May])/ jl I f | i 2 "3 4 CON- JffiES & TRACT CHARGES EFFEC- MATURITY (PER (YEARS) RATE TIVE CENT) RATE (PER CENT) 3 2 1 . 75. EXISTING HGMI!£; CON- FEES & LOAN/ LOAN / TRACT CHARGES EFFEC- MATU- PRICE PRICE LOAN (PER RATIO AMIc RATE TIVE RITY RATIO (PER ($000) (PER CENT) RATE (YEARS) (PER CENT) CENT) CENT) 4 f 3 LOAN AMT. ($000) 4 8.28 8.31 8.32 8.35 8.31 8.33 8.26 8.20 0.98 0.99 1.01 0.98 1.03 1.05 0.99 1.07 8.45 8.48 8.49 - 8.52 8.48 8.51 8.43 8.38 25.3 25.1 25.1 24.8 25.2 25.1 25.3 25.8 71.7 71.3 71.5 71.6 72.7 72.4 72.1 73.8 25.3 25.6 24.9 25.5 25.3 24.8 25.2 25.8 8.18 8.19 8.21 8.25 8.27 8.20 8.18 8.12 0.94 0.98 0.95 0.89 0.88 0.88 0.85 0.85 8,.34 8 .36 8,.37 8..41 8 .42 8..35 8..32 8,.26 22.8 23.0 23.1 23 1 22.8 22.8 22.7 23.3 70.3 71.5 71.5 71.5 71.7 71.5 71.5 71.9 21.1 21.5 21.7 21.4 21.0 20.5 21.1 21.7 8.03 7.74 7.52 7.37 7.35 0.92 1.00 0.83 0.73 0.71 8.18 7.91 7.66 7.49 7.47 25.8 26.2 25.9 26.3 26.0 73.3 73.9 73.7 73.6 73.6 26.4 26.2 26.0 26.2 26.6 7.94 7.67 7.47 7.34 7.34 0.82 0. 79 . 0.72; 0.75 0.69 8. 08 7.,80 7. 60 7.47 7.45 23.5 24.0 24.1 24.2 23.9 72.5 73.1 73.5 73.6 73.0 22.0 22.5 23.0 23.1 23.3 Compiled by Federal Home Loan Bank Board in cooperation with Federal Deposit Insurance Corporation. Data are weighted averages based on probability sample survey of characteristics of conventional first mortgages originated by major institutional lender groups (including mortgage companies) for purchase of single family homes. Data exelude loans for refinancing, reconditioning or modernization; construction loans to home-builders; and permanent loans which are coupled with construction loans to ownerbuilders. Related series on conventional mortgage rates only, based on unweighted . opinions of field-office directors of the Federal Housing Administratipn, are available somewhat sooner than the results of the FHLBB-FDIC survey, and are included-in the case of new home mortgage rates--in Table 16. Fees and charges—expressed as a percentage of the principal mortgage amount—include loan commissions, fees, discounts, and other charges which provide added income to the lender and are paid by the borrower. They exclude any closing costs related solely to transfer of property ownership. Includes fees & charges amortized over a 10 year period in addition to the contract interest fate. Derived by FRB.