Full text of H.16 Capital Market Developments : June 15, 1955

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Not for Publication
DECONTROLLED

AFTER SIX MONTHS

H.lU

June 15, 1 9 #
CAPITAL MARKET DEVELOPMENTS

Moderate volume of issues for new capital last week - One
large State and local government offering of 74 million dollars, and
one large public utility bond issue of 25> million dollars were publicly floated for new capital during the week ending June 10. Large
issues scheduled for offering this week total 93 million dollars for
the State end local governments and hi million for corporations.
Bond yields - Yields on outstanding corporate Aaa bonds
declined one basis point last week. U. S. Government long-term bond
yields did not change. State and local government Aaa yields in-,
creased one. basis point. Yields on lower-grade bonds remained
steady. According to daily figures, the corporate Aaa yields rose
slightly on Monday and remained steady on Tuesday of this week.
Treasury yields did not change during the first two days of this
week.
As indicated in Exhibit G, the spread between yields on
newly-offered 30-year first mortgage electric power bonds with A
ratings'and yields on similarly rated outstanding bonds of somewhat shorter maturity is currently 10 basis points, moderately less
than in the last several months but still considerably larger than
the spread in 195b.
Stock market credit - Customers' debit balances, excluding borrowings for carrying U. S. Government securities, of member
firms of the New York Stock Exchange, declined 20 million dollars
to total 2,68U million at the end of May, the first decrease since
February 195U. Money borrowed by member firms on collateral other
than U. S. Government securities increased but only by 58 million
dollars, considerably less than one-half the increase during each
of the two preceding months. Free credit balances fell substantially
for the third consecutive month aid totaled 928 million dollars at
the end of May.
Despite the decline in customers' debit balances, total
stock market credit increased 2 million dollars during May because
bank loans to "others" increased more than debit balances declined.




H.lU

-2-

Below are April and May 1955 figures for stock market
credit.outstanding:
(Millions of dollars)•
April

May

2,752

2,731

2,7014.

2,68b.

. 2,062

2,119

Customers' debit balances - total
Customers1 debit balances - excluding money
borrowed for carrying Government obligations
"
"foney borrowed by member firms maintaining
margin accounts

1

Money borrowed, by member firms maintaining margin accounts, on collateral
- other than Government obligations

1>988

'2,0H7

973

928

Bank loans to others for purchasing
and carrying securities (last
Wednesday of month - weekly reporting member banks, excluding Governments for Mew York and Chicago reporting banks)

1,081

1,103

Total stock market credit (equals sum
of item 2 and item 6)
'

, 3,785

3,787

Customers' free credit balances

Stock prices rise - The SEC index of 265 common stocks
increased U.U points to a new high of 2U1.9 during the week ending
June 10. Trading volume on the New York Stock Exchange averaged
2.9 million shares a day last week, moderately above the low for
the year. Stock prices rose moderately on Monday and decreased
very slightly on Tuesday of this week according to daily indexes.
More detailed information concerning recent capital market developments will be found 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 BOHD YIELDS

CORPORATE A a a

—

U. S. GOVERNMENT

Corporate
Aaa 1/
~

J
! U. S. Govt.
I long-term 2/
I
~

H
'
' State and local
J govt., Aaa 3/
i
~

T Spread between
!
U. S. Govt, and
!Corporate!State and
(
Aaa
'local Aaa

(Per cent)
1952 - High
Low
1953 - High
195U - High
Low
1955 - High
Low
May 13
May 20
May 27
June 3
June 10

•

3.03
2.91
3.U2
2.99
3.09
2.85
j 3.05
2.91

(lA)

(2/15)
(6/19)
(1/9)
(1/8)
(U/23)
(6/3)
(1/7)

3.0U
3.0k
3.05
3.05
3.0U

2.79 (12/27)
2.56 (5/17)
3.15(6/6)
2.73 (12/26)
2.7U (1/9)
2 . W (8/7)
2.77 (5/6) • .
2.62 (1/7)
2.75
2.7U
2.75
2.7U
2.7U

1/ Weekly average of daily figures.

2.00
1.65
2.73
1.98
2.21
1.90
2.11
2.05
. 2.07
2.05
2.05
2.06
2.07

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

.37
.19
.38
.19
.U3
.32
. 3U

.2h

.29
.30
.30
.31
.30 •

1.02
.71
. 8U
.30
.61
.29
.70
.5U
.68
.69
.70
.68
.67

Average term of bonds included is 25-26 .

2/ Weekly average of daily figures; old series. Average term to first call
of bonds included is 13-lb years.
3/ Thursday figures. Only general obligation bonds are included; average
term Ts 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




LOWER-GRADE BOND YIELDS
Per cent p e r a n n u m

Weekly

CORPORATE B e e

V \

STATE A N D LOCAL GOVT.

V i '

T |

I

STATE A N D L O C M G O V T . REVENUE

1952

Date

1954

Corporate
Baa 1/

j
!

State and
local govt.
Baa 2/

1955

'
State and
1 local govt.
'
rev. 3/

(Per cent)
1952 - High
1953 - High
Low
195U - High
Low
1955 - High
May 13
May 20
May 27
June 3
June 10

3.63
3.U8
3.89
3.50
3.7k
3.UU
3.50
3.U5
1 3.50
3.U9
3.50
3.50
! 3.50

(1A)

(5/16)
(9/18)
(1/2)
(1/8)
(12/31)
(6/10)
(1/lM

2.98 (10/23)
2.U8 (U/17)
3.79 (6/25)
2.96(1/8)
3.32 (1/7)
2.93 (8/5)
3.08 (5/12)
3.02 (1/6)

2.69
2.27
3.27
2.71
3.00
2.72
2.90
2.76

3.08
3.06
3.06
3.06
3.06

2.77
2.77
2.77
2.79
2.79

(12/19)
(U/25)
(6/26)
(1/2)
(1/1)
(8/13)
(U/15)
(1/7)

„
Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are
inducted; average term is 20 years. .
3/ Friday figures. Average rating of bonds included is
between Baa and A; average term is 20 years.
Note.—Highs and lows'are for individual series and may
be on different dates for different series.




EXHIBIT C

STOCK MARKET

-1—VOLUME

I Stock price
I' index 1/

Stock market credit
Trading I Common - r
"
volume 2j I stock
I
Customers'J
Bank
(millions
yields 3/1 Total debit bail- loans to
of shares) I (per cent) I
ances k/ ["others" 5/
(Millions of dollars)

165.3
151.7
167.1
116.0
221. k
156.5
2kl. 9
217. k

1 9 5 2 - High
Low
1953 - High
Low
195k - High
Low
1 9 5 5 - High
Low
April
May
toy 20
May 27
June 3 .
June 10

(12/26)
(10/210
(1/2)
(9/18)
(12/31)
(1/6)
(6/10)

(1/lk)

231.ii
233.3

,

233.3
231.6

237.5

2U1.9

2.0
0.9
2.5
0.9
3.7
l.k
k.6
2.0
2.7
2.2
2.1
2.0
2.U
2.9

1,986
1,80k
2,165
2,055
3,U36
2,k05
3,787
3,537

1,332
l,2kl
1,665
1,31k
2,38.8.
1,653
2,70k
2,517

656
552
- 780
66k
l,0k8
7k6
1,126
1,018

a. 12
k.lk

3,785
3,787

2,70k
2,68k

1,081
1,103
1,092
1,103
1,126

n.a.

n.a.

n.a."-

5.77
' 5.13
5.75
5.15
. 5.33
k. 20
It. 22
U. 12

to 19H7-L9"10O by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
3 / Moody's 200 common stocks; end of month figures.
t/ End of month figures for member firms of the New York Stock Exchange which
carry"margin accounts; excludes money borrowed for carrying U. S. Government obligations. '
'
,
5/ Wednesday figures for weekly reporting member banks. Excludes all loans
on U."S. Governments for 1952; since 1953 only loans secured by Governments at
banks in New York and Chicago are excluded. Weekly reporting banks account for
about 72 per cent of loans to others.
n.a. — N o t available.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




E.Ik
r •
*"

, 9

Exhibit'D 1

Corporate and State and Local Gov>rnment
Security Offerings and Placements
(In millions of dollars)

January
FebruaryMarch .
April
.May
June

State and local
1
1954
1

1953

1955

S&6
h3 6
1,261

547
426
6#

623
623
666

• 535
312
538

#6
411
565

e/500
e/900

- h97
656

779
675
1,123

e/425
e/350
3/550

731
748
853

k3k

$

483

279
261
649

519
259
175

1,003
290
604

577
42-9 2/
1,438 y

5%
423
877

408

1,608
1,992
1,991
1,896
7,190

1,912
2,578

"e/6$0

842

July
August
September
October
November
December
1st quarter
2nd quarter
3rd quarter
Lth quarter
Year

New capital

Corporate
1954
1
1

1955

2,243
e/2,0#
'

%
1,385
1,325

lift1-/
6 ,k95

1,372 :

2,33k

1,188
1,894
6,789

1953
389
• 360

. k26

329
61*9 .

77k

1,176
1,102
1,253
1,636
5,177

Excluding finance companies 2/
1st quarter
2nd quarter
3rd quarter
l±th quarter
Year .

1,791
e/2,000
j

1,527
1,927
1,911 1,792
7,128

i:S!
1,223
2,3UU
7,227

1/ Includes 602o million dollar AT&T debenture issue.
2/ Total nevr capital issues excluding offerings of sales and personal finance
companies.
eJ Estimated.
Note.—Details may not add to totals due to rounding.




H.lU

Exhibit E
Large Public Security Issues for Mew Capital
(Other than U. S. Treasury) l/
Proceeds of Large Issues Offered
(Millions of dollars)

~t~
1

Month

„
Corporate

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

State.and
|
ilocal government

32k
350
336
75
335
U13
o

.Other 2/

557
603
92
86
U55
388
268
6#
3U1
.107
337
238
109

9k

lid
-72
750
175
U83

——

30
35
15

Large Individual Issues Offered June 1 through 10

Issuer

Type 3/

1 Coupon
Amount
1 (millions
rate or . °
Maturity
!
of
net inter1dollars)
est cost

s

g

CORPORATE
Virginia Electric and
Power Company •

1st & re£ bds.
.

25.0

1985

'

3'#

3.20

4a -

STATE AND LOCAL GOVERNMENT
Houston, Texas
Nexv York City Housing
Authority
State of North Carolina
Baltimore, Maryland
Galveston Co. Navigation
District, Texas
Minneapolis, Minnesota
Florida Turnpike Auth.




G.O.

12.5

1956-80

2.U7

1. 20-2.65

A

G.R.
G.O.
G.O.

27.2
11.0
2U.7

1958-03
1957-75
1956-8U.

3.01
1.96
2.15

1.75-2.78
1.20-2.05
1.05-2.30

A
Aa
Aa

G. 0.
G.O.
Rev.

6.0
5.2
71.0

1957-91
1956-75
1995

2.93
3.32

J_.U0-3.00-i' A
1.15-2.10
Aa
3.25

H.lU

E-2
Large Individual Issues Offered June 1 through 10 (Cont'd)

Issuer

Type 3/

Coupon
Amount 1
Offering
rate or
^ of10nSj Maturity-net interyield
est cost
dollars) 1

Rating

OTHER
None
1/ Includes corporate and other security offerings of 15 million dollars 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
obligation; Rev., revenue bonds; G.R., general obligations additionally secured by,
facilities revenues; and, L.L., limited liability obligations secured by pledge of
designated revenues.
h/ Subject to avrard.
.




Exhibit F

H.lii

Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
!

195U - May 28
June 30
July 30
Aug. 31
Sept. 30
Oct. 29
Nov. 30
Dec. 31
1955 - Jan. 31
Feb. 28
Mar. 31
Apr. 29
May 31

Subsequent to
" During month following
date shorn
date shorn
State and
State and
Corporate
Other 2/ JCorporate
j Other 't
(local govt.
local govt.
332
336
100
33U
3U3
15

9k

18U
16
.710
211
U25
160

#6
86
5U
300
383
U'36
661
567
682
52U
208
116
339

30

#6
#2
303
608
UlU
135
2U6
216

k22

——

1,395
922
1,1U1
850

v

1,971
1,521;
1,553
1,876
2,158
1,957
2,682
2,m
1,961
1,978
2,009
1,917
1,861

30
30
35

Forthcoming Large Offerings, as of June 10
Issuer

ering^8

of "dollar s) j

CORPORATE
Southern California Edison
. Southern New England Telephone
and Telegraph
Oklahoma Gas and Electric
Consolidated Natural Gas
Baltimore Gas and Electric
Peoples Gas Light & Coke
Merritt-Chapman & Scott Corp.
^American Natural Gas
American Telephone and Telegraph
Southern California Gas
^Goodyear Tire and Rubber

Conv. deb.
Deb.
1st mtg. bds.
Common stock
Common stock .
Common stock
Deb.
Common stock
Conv. deb.
Bonds
Common stock

Ul.0
20.0

15.0
22.9
17. U
15.7
25.0
37.0
650.9
UO.O

50.0

June lU
-June
June
June
June
June
June
July
1955
1955
1955

21
21
21
22
2k

June
June
June
June

lU
ll;
lit
16

STATE AND LOCAL GOVERNMENT
Texas Turnpike Authority
Kansas City, Kansas
Prince George's County, Maryland
Dade County Port Authority, Fla.




G. 0.
Rev.

58.5
7.0

6.0
21.0

H.lU

-

F-2

Forthcoming Large Offerings, <?s of June 10 (Cont'd)
Issuer

Type

STATE AND LOCAL GOVERNMENT (Cont'd)

|

Maryland State Roads Commission
Cleveland, Ohio
Tacoma, Washington
-xState of Connecticut
. Pennsylvania General State Auth.
Dallas, Texas
^Dayton, Ohio School District
•it-New York State Thruway
Inter-American Center Auth., Fla.
Michigan Turnpike Authority
State of Louisiana
Illinois. Turnpike Authority
Connecticut Expressway
Texas Turnpike Company
Springfield, Illinois
Allegheny County, Pennsylvania
Sanitary Authority
California Toll Bridge Authority
-Jersey-City Sewerage Auth., N. J.
North Carolina Turnpike Authority

None

Amount
}Approximate date
(millions
1 of offering
of dollars)

Rev.
G.O.
Rev.
G.O. .
Rev.
G.R.
Rev.
Rev.
n. a.
Re.v.
Rev.
Rev.
Rev.
Rev.
Rev
n.a.

25.0
13.2
15.0
. 20.0
50.0
9.2
12.0
125.0
60.0
186.0
80.0
390.0
100.0
1U0.0
9.0
85.0
235.0
16.0
200.0

June 20
June 21
June 21
. June 21
• June 22
june 27
30
July 12
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955
1955

!

~
1/ Includes corporate and other issues of 15 million dollars and over; State
and local government issues of 5 million and- over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
n.a.—Not available.
^--Included in table for first time.




Exhibit G
Yields on New and Outstanding
Electric Pov/er Bonds, Rated 4a and A l/

Date

Aa-rated offering yields
Actual
Amount above

A-rated oi'fering yields
Amount above
Actual
(per cent) seasoned yields
(basis points)

195)2 average

3.16

13

3.35

12

1953 average

• r/3.U6

r/l6

r/3.78

r/26

195U average

r/3.03

195L - January
February
March
April
May
.June
July
August
September
October
November
December

r/3.19
r/3.01
~"*2. 93
2.99
3.00
*3.00
None •
None
3.02
3.03
None
None

1955 - JanuaryFebruary
March
April
May 11
11
18
2U
June 9

3

*3.15
*3.H
*3.17
None

3.12

6
r/-l
~ 0
5
' U
1
—
—
3
3
• —
—

1

13
7
8
—

3.22

10

>3
2
-1
-10
-6
0
-2
-1
-1
-3
-2

*3.35
*3.?0
3.05
3.10
3.1U
3.1h
*3.13
3.11
*3.10
3.10
None
3.11

0

None
*3.23
3.29
. 3.31

9
1U
16

3.35
3.32

1L
11

3.37
3.30

•

16
10. •

i
•

I
1

Survey. Except v,'here 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.
rj Revised. .
"
*—Single observation, not an average.
,