Full text of H.16 Capital Market Developments : July 7, 1958

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

Not for Publication

DECONTROLLED AFTER SIX MONTHS
July 7, 1958

H.Ut
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing for new capital was
quite small last week, but is expected to be much larger this week,
particularly for corporate securities. During the week ending July It,
only one large corporate issue for $25 million was sold. Another
' corporate issue — Martin Company's $25 million debenture issue — was
originally scheduled for sale last week, then postponed because of
market conditions. No large State and local government issues were
soldi This week, large corporate issues, including expiration of subscription rights, are expected to total $227 million. State and local
government offerings amounting to $U5 million are also scheduled for
sale,
. Bond yields - Yields on outstanding bonds changed little
last week. Yields on high-grade corporate bonds increased slightly,
while those for U. S» Government ahd State and local government obligations remained stable. Yields on corporate Baa's declined slightly.
A new A-rated, first mortgage electric utility issue was
offered to the public last week to yield 3.98 per cent — 3 basis
points above that for a comparable offering made in late May. Unlike
the earlier issue, the recent offering carried a provision providing
for a 5-year restriction on refunding.
Stock prices - Stock prices, as measured by the Standard and
Poor's index of 500 common stocks, advanced to a new high for the year
last week, closing at U5.U7 on July 3. Prices are now nearly 16 per
cent higher than the December 1957 low and only 7 per cent below the
July 1957 high.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

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




H I G H - G R A D E B O N D YIELDS

STATE AND LOCAL
GOVERNMENT Aoa

LOWER - GRADE B O N D

YIELDS




CORPORATE Baa

D LOCAL GOVT. Boo_

Exhibit B

H.lli

Tables for Kxhibit A
High-grade Bond Yields
State and
local govt.
Aaa

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

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

1953 - H i g h

19Sh - Low
1957 - high
1958 - High
Low

3.1*2
2.85
LlU
3.68
3.55

3.19 (6/5)
2.1*5 (8/6)
3.76 (10/18)
3.28.(1/31)
3.07 (V25)

2.73 (6/25)
1.90 (9/2)
3.1*5 (8/29)
2.86 (1/9)
2.61* (5/1) ,

.38
.30
.60
.51
.28

.83
.30
.17
.62
.31*

June
June
June
June
July

3.56
3.56
3.57
3.61
3.62

3.ia
3.15
3.21
3.26
3.26

2.72
2.72
2.75
2.78
2.78

.1*2
.1*1
.36
.35
.36

.1*2
.1*3
.1*6
.1,8
.1*8

Date

(Per cent)

6
13
20
27.
li 2/

(6/19)
(li/23)
(9/27)
(1/3)
(5/2)

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
.local govt.
Baa y

Spread between
Aaa and Baa
State and
Corporate
local govt.

(Per cent)
1953
19514
1957
1958
June
.June
June
June
July

-

High
Low
High
High
Low

6
13
20
27
1* 2/

3.89 (9/18)
3.1*1* (12/31)
5.10 (11/29)
1*.96 (1/3)
I*. 53 (7A)

3.79 (6/25)
2.93 (8/5)
"2*.5l (8/29)
' 3.92 (1/2)
3.61* (5/1)

.69
.52
1.27 .
1.28
.91

1.21
.96
1.21
1.11
.99

1*.58
1*.55
1*.53
U.51*
1*.53

3.76
3.76
3.76
. 3.81*

1.02
.99
.96
.93
.91

1.01*
1.0U
1.01
1.06
1.06

3.8k

1/ Weekly average of daily figures. Average term of bonds included is 25-26 year9.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
" 2 / Thursday figures. Only general obligations bonds are included; average tern .
is 20 years.
Note.—Highs and lows are for individual series and nay be on different dates for
different series.




STOCK MARKET




-^T^VOLUME
I• I T r ^ l T l ^ r .

Exhibit D
Table for Exhibit C
Stock Market
Stock price
index 1/

Stock market customer credit
Trading
Common
Customers' Bank ,
stock
volume 2/
(millions * yields V Total debit bal- loans to
of shares) (per cent)
I ances h/ "dthers" 5/
(Millions of dollars)

1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

26.5k (1/2)
22.95 (9/18)
35.98 (12/31)
21.93 (1/8)
1*5.89 (12/9)
35.28 (l/ll*)
1*9.61* (8/3) 1*3.22 (1/20)
1*9.08 (7/12)
39.1*8 (12/20)
1*5.1*7 (7/1*)
1*0.37 (1/10)

2.5
0.9
3.7
1.1*
1*.6
1.5
3.1
1.5
1*.2
1.1*
2.8
1.7

5.38
6.25
1*.32
5.82
1*.08
1*.1*1
3.82
1*.3U,
3.91
1*.72
1*.02
1*.58

2,1*55
2,055
3,ll36
2,U05
U,030
3,537
l»,0li7
3,911.
It,031
3,576
1I,069
3.55U

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
2,1*82
2,856
2,1*87

780
66U
1,01*8
71*6
1,21*1
1,018
1,267
1,155
1,163
1,051*
1,297
1,051

April
May
.
June 20
June 27
July It 2/

1*2.31*
1*3.70
1*1*. 85
1*1*.90
1*5.1*7

2.1*
2.6
2.7
2.7
2.6

1*. 33
1*.17
1*.07
1*.07
1*.02

3,980
1,069
n.a.
n.a.
n.a.

2,735
2,856

1,21*5
1,213
1,296
1,297
n.a.

n.a.

n.a.—Not. available.
p/ Preliminary.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, I9ljl-L3=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. Yields shown are for dates
on which price index reached its high or low.
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.
J5/ 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 E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1958
January
February
March

New capital
Corporate 1/
State and local 2/
1
1956
1958
1 1957
1 1957 1 1956

723

April
May

2/1,12k
e/700
e/800

July
August
September

e/1,150

October
November
December
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

1,060
1,065
1,320

573
712
817

765
1,1IS3

812
953
511

7k2
572
506

kok
696
390

818
l,lk6
8kl

797
871
2/532

765
5k6
393

378
k90
735

1,003
92k
973

1,063
65k
838

e/525

529
58k
k31

k08
206
357

1,090
789
1,076.

1,088

698
633
698

3U7
k09

.

3,135
e/2,62k

3,kk5
.3,119
2,899
2,95k

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

2,276
2/2,200

1,820
1,70k
l,5kk
2,029

l,k90
1,603
971
1,395

e/5,759

6,59k
9,1*3
12,kk7

k,907
7,k63
10,38k

E/k,k7d

3,52k
5,069
7,099

3,093
k,06k
5,k59

Excluding finance companies J5/
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

2,891
e/2,57U

Year

3,237
2,889
2,582
2,810

l,6k7
2,5kl
2,2k6
2,826

11,518

9,260

e/ Estimated.
__
1/ Securities and Exchange Commission estimates of net proceeds.
2/ 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.
3/ Includes $718.3 million AT&T convertible debenture issue.
k/ Includes $571-5 million AT&T common stock issue.
Total new capital issues excluding offerings of sales and consumer finance
companies.




Exhibit F

H.ll*

Other Security Offerings 1/
(In millions of dollars)
Long-tent
Federal agency
Foreign government 2/
1956
I
1957
1
1935"
1957
S H
January
February
March

196
53

April
May
June

139

—

81*
1*9
30

37

123
1*8
1*2

50

8

1,163
251
—

$23

—

28
7
30

—

215

October
November
December

1*
60
1

hh
5
21

100

300

572

507

—

2
39

109
—

—

—

Short-1
State and local government h/

January
February
March

—

60

95

1956

60

125

July
August
September

Year

£

72

169

Federal agency 3/

233
1*60
273

326
1*55
1U7

196
357
21*9

371
208
11*1*

638
1*30.
505

380
220
283

357
2/353

205
337
153

125
252
176

209
161

336
1*69
501

260

July
August
September

272
272
252

195
207
179

OctoberNovember
December

303
91*
159

291*
328
11*8

1,238
255
116

3,271*

2,706

5,51*3

April "

May

June

Year

±

221*
370
512

323

31k

-

222
1*25
273
1*07
222
128

'

3A57

e/ Estimated.
jo/ Preliminaiy.
~
1/ Ebta presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission.
2 / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
hjFRASER
Principally tax and boad anticipation notes, warrants or certificates and Public
Digitized for
Housing Authority notes. In some instances PHA notes included may have a somewhat
http://fraser.stlouisfed.org/
longer term than one year. Source: Bond Buyer.

Federal Reserve Bank of St. Louis

H.Ik

Exhibit G
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Month

Corporate

1957 - June
July
August
September
October
Noveniber
December
1958 - January
February
March
April May
June

State and
local government

Other 2/

99

81

877
525
526
537
57U
1*20
399
318
605
1,093
725
356
281

22h

25

266
133
393
3Wi

kOh

2U5
75
100
<

lilO
553
182
300
505
195

1,378
266
653
165
86

Large Individual Issues Offered July 1 through It

Issuer

Type y

Amount
Coupon
(millions
rate or Offering
Maturity
of
net interyield
dollars)
est cost

Rating

CORPORATE
Florida

Power Corp.

1st mtg. bds.

25.0

1988

Ul.O

Oct. 1959

k 1/8

3.98

A

STATE AND LOCAL GOVERNMENT
None
OTHER.
Loan bds.

Federal Land Banks

1 3/h

1.90

1
1/ Includes corporate and other security offerings of $15 million and over;
State and local government security offerings of $L0 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues tyr 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
utilitiesj Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilities;
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.




H.lU
Forthcoming Large Long-tern Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
Hay 31 .
June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
Jan. 31
Feb..28
Mar. 31
Apr. 30.
May 29
June 30

Subsequent to
date sli own
State and
Corporate I ^ ^ J o t h e r 2/ Corporate local govt. Other 2/
During month following
date shown

525
370
526
578
576
383
378
198
1,123
555

356
266
768

87
153
218
183
- 33U
339
363
3U5
370
13U
298
L93
177
225

25
30
30
18
150
110
150
36
—

1*07
1*79
1*71

' S 811
81*5
61*7
815
1,193
1,161
1,378
1,208

•g'
51*3
558
561*
187

3hl

330
1*93
208
235

" 670

561
1*61*
l,0li8

25
30
15
1*5

&
110
150
36

Forthcoming Large Offerings, as of July it
Type

Amount
Approximate date
(millions
of offering
of dollars)

Northern Indiana Public Service Co.

Common stk.

15.2

Pacific Gas & Electric Co.

Common stk.

hh.h

New York Telephone Co.
Ref. mtg. bds.
Mead Corp.
Deb.
New England Telephone & Telegraph Co. Common stk.
Southern Natural Gas Co.
Boston Edison Co.
^Southern Railway Co.
Boeing Airplane Co.
United States Steel Corp.
Pacific Lighting Corp.
Burroughs Corp.
Washington Water Power Co.
Boeing Airplane Co.




. 65.0
17.2
22.6

S.F. deb.
' 30.0
Pfd. stk.
25.0
1st coll. tr. bds. 22.0
S.F. deb.
60.0
S.F. deb.
300.0
Common stk.
1*5.0
Deb.
25.0
let mtg. bds.
15.0
Conv. sub. deb.
30.6

.July 7
(right's expire)
July 8
(rights expire)
July 10
July 10
July 11
(rights expire)
July 11
July 11
July 16
July 17
July 17
July 17
July 18
July 21*
July 29
(rights expire)

H.lh

H-2
Forthcoming Large Offerings, as of July U (Cont'd)
Amount
Approximate date
(millions
of offering
of dollars)
CORPORATE (Cont'd)

Burroughs Corp. .

Common stk.

^Montana. Power Co.
1st mtg. bds.
Natural Gas Pipeline Co. of America
Conv..deb.
Consolidated Natural Gas Co.
. S.F. deb.
Commerce Oil Refining Corp.
Deb., bds. & common
Deb.
Standard Oil Co. of California
Martin Co.
S.F. deb.

15.0
20.0
35.0
15.0
45.0
150.0

25.0

Aug. 1
(rights expire)
Aug. 13
Aug.
Aug.
1958
1958
1958

STATE AND LOCAL GOVERNMENT
Pennsylvania General State Auth.
Rev.-Ut.
Metro. Sanitary Dist. of Chicago,111 Rev.-Ut.
•^Memphis, Tennessee
Rev.-Ut.
Los Angeles Dept. of YJtr. & Pwr.,
California
Rev.-Ut.
G.O.
State of North Carolina
State of Ohio
Rev.-S.T.
Territory of Hawaii
Rev.-Ut.
State of California
G.O.
^Philadelphia, Pennsylvania
G.O.
San Diego Unif. Sch. Dist., Calif.
G.O.

30.0
15.0

July 9
July 10
July 15

21.0

July 16
July 16
July 22
July 22
July 23
Aug. 5
Sept. 10

10.0
15.0

31.0
12.5

100.0
12.0

10.0

OTHER
None
*—Included in table for first time.
1/ Includes corporate and other issues of Sl5 million and over; State and
local government issues oftflOmillion 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.




H.lli

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Date

1952 - 1957
High
Low

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual seasoned yields Actual
seasoned yields
(per cent) (basis points)
(per cent)
(basis points)
5.00(8/11/57)
2.93(3/31/51)

87
-3

5.50(11/7/57)
3.00(3/17/5k)

123
-15

1958 - January
-8
*3.60, y
3.962/
3
February
. It. 07
3.891/
22
9
6
March It
it. 25
it.15
lilt
5
6
li.22
50
12
it.00
28
26
LOO
19
21
it.07
-7
25
U.05
31
April 1
23
3.98
2
it. 00
25
- 17
3.98
5
23
3.75
5 *
it.Oit
11
29
May 7
it. 00
3
. 13
21
3.90
it
15
it.07
16
it. 35
32
20
16
3.85
21
16
3.85
it. 00
22
-1
-6
28
3.95
June 10
3.85
17
12
3.82
17
2lt
25
3.95
July 2
1
3.90
*—Single observation, not an average.
1/ Covers only 30-year first mortgage bonds, as reported in Moodyrs Bond
Survey. Except where indicated, the actual yield figure and the amount above
seasoned yields are averages of offerings during the indicated period and of the
differences between these new offering yields and yields on seasoned issues of
similar quality for the same day. Average maturity for the seasoned issues varies
from 26 to 28 years.
2/ Provides for a 5-year period during which issue may not be called for
refunding at a lower coupon rate. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.