Full text of H.16 Capital Market Developments : June 21, 1956
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Not for Publication DECONTROLLED AFTER SIX MONTHS H.lU June 21, 1956 CAPITAL MARKET DEVELOPMENTS The volume of publicly offered securities was moderate during the week ending June 15, but will be quite large this week. State and local governments sold large bond issues totaling $91 million last week and an $18 million corporate preferred stock -issue was floated. This week, ending June 22, State and local governments are expected to offer large issues totaling $20ii million, including the $166 million Grant County Public Utility District offering, and corporate issues amounting to $U3 million are scheduled for sale. Bond yields - There were few changes in yields on outstanding bonds last week. Corporate Baa and U. S. Government (old series) bond yields were stable, while yields on other major categories of bonds declined. Yields on newly offered corporate bonds appear to have been stable. A 30-year, first mortgage, electric utility bond issue was reoffered at 3.52 'per cent on June 8, about the same yield as on a similar offering of late May. Stock prices - Common stock prices, as measured by the SEC index of 265 stocks, increased 7.2 points during the week ending June 15, closing at 277.0. At this level stock prices are still 5 per cent below the 1956 high, however. Daily data indicate little change in prices through Wednesday of this week. Business Finance and 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 BOND YIELDS CORPORATE Aqo s. GOVERNMENT: J \ / STATE AND LOCA1 GOVERNMENT Aaa | U. S. Govt.. long-term t] Corporate Aaa 3/ Old series New series Spread between U. S. Govt. Stave and local govt. (old series) and Corporate(State and Aaa J / Aaa Ilocal Aaa (Per cent) 1953 - High Low 1951 - High Low 1955 - High Low 1956 - High Low 3.1*2 2.99 3.09 2.85 3.17 2.91 3.30 3.07 Hay 18 May 25 3.27 3.27 3.27 3.27 3.26 (6/19) (1/9) (1/8) (ii/23) (12/23) (1/7) (5A) (3/2) 3.15 2.78 2.7k 2.1*1* 2.9U 2.62 n.a. (6/6) (12/26) (1/9) (8/7) (8/5) 3.03 (8/5) (1/7) 2.89 (6/10) 3.13 U/20) 2.92 (2/3) 2.73 1.98 2.21 1.90 2.3U 2.05 2.51 2.17 2.9U 3.03 3.00 2.99 2.98 2.97 2.a 2.89 2.87 2.87 2.87 2.bh 2.1*2 2.38 2.33 (6/25) (1/8) (6/10) (9/2) (9/8) (5/26) (5/3) (2/23) .38 .19 .1*3 •32 .31* .13 .1*0 .13 •33 .38 .1*0 .1*0 .39 .81* :S.29 1 .1*5 I .50 ~ l / Weekly average of daily figures. Average term of bonds included is 25-26 years. The old series includes fully taxable, a v e r a g e g o f daily figures. 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; the average term to first call of the bonds included declined from lit years in early 1953 to 11 1 / 2 years in e a r l y 1956. The new series is comprised of the 3 per cent bond of 1995 and the 3 l/k per cent bond of 1978-83. j/ Thursday figures. Only general obligation bonds are included; average t e m Note.--Highs and lows are for individual series and may be on different dates for different series. EXHIBIT rB L O W E R - G R A D E B O N D YIELDS Weekly Per cent per annum CORPORATE B a a STATE AND LOCAL GOVT. B a a /I I Moody', I ! /V V"! ! Z STATE AND LOCAL GOVT. REVENUE J S D M J 1953 1954 S D - M J . 1955 "I Date Corporate• Baa 1/ S O State and local govt. Baa y M J S D 1956 State and local govt, rev. 3/ (Per cent) 1953 - High Low 1S5U - High Low 1955 - High Low 1956 - High Low 3.89 3.50 3.7k 3.lUt 3.63 3.U5 3.75 3.58 May 18 May 25 June 1 June 8 June 15 3.73 3.73 3.7k 3.75 3.75 (9/18). (1/2) (1/8) (12/31) (12/30) U M ) (6/15) (3/9) 3.79 2.96 3.32 2.93 3.26 3.02 3.UU 3.20 3.37 3.33 3.31 3.28 3.23 (6/25) (1/8) (1/7) (8/5) (12/29) (1/6) (5/3) (3/8) 3.27 2.71 3.00 2.72 2.99 2.76 3.12 2.89 (6/26) (1/2) (1/1) (8/13) (12/30) (1/7) (k/27) (2/2U) 3.Oli 3.0U 3.03 3.02 3.00 1/ Weekly average of daily figures. Average term of bonds included is 25-26 years. 2/ Thursday figures. Only general obligation bonds are included; average term is 20 years. 2/ 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. STOCK M A R K E T Stock price index 1/ Trading Common volume 2/ stock (millions yields of shares) (per cent) Stock market customer credit Customers1 Bank loans to "others" jy (Millions of dollars) 167.1 lWi.O 221.lt 156.5 270.7 217. k 290.8 257.a (1/2) (9/18) (12/31) (1/6) (12/30) (1/lli) (lt/6) (1/20) 286.8 280.1 272.9 269.8 277.0 2.5 0.9 3.7 l.U U.6 1.5 3.1 1.7 5.75 5.15 5.33 it. 20 it.22 3.78 It.08 3.68 2,Wt5 2,055 3,U36 2,lt05 U,030 3,537 lt,0lt7 3,991 1,665 1,31U 2,388 1,653 2,805 2,517 2,810 2,7lt0 780 661t l,0lt8 7lt6 l,2ltl 1,018 1,267 1,232 2.6 2.It 2.2 2.0 1.7 3.69 3.97 lt,0it3 lt,0lt7 2,788 2,810 1,255 1,237 1,237 1,232 n.a. available. 1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted to 19U7-ii9-100 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. U/ 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 and Chicago. Weekly reporting banks account for about 72 per cent of loans to others. 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 dollars) 1956 .January February March 1 Corporate .' 1 New capital 1956 5k7 U26 635 kok 696 e/375 535 312 5# 396 111 565 e/350 e/500 e/700 U27 350 61*1 73k 7k8 853 kos k70 2k9 279 261 6k9 919 6# k08 59k k23 877 1,385 l,kl8 1,12k 1,96k 5,911 1,372 2,33k 1,188 1,89k 6,789 579 70k 790 535 U07 1,223 e/890 e/1,100 e/875 i+78 886 687 k97 . 656 8k2 "July August September 597 6kk 670 909 335 7U7 October November December 1,162 y 632 900 1,003 290 60k 2,165 2,052 1,911 2,695 8,821 1,608 1,995 1,991 1,896 7,k90 April May June 1st quarter • n d quarter 3rd quarter Uth quarter Year 2,073 e/2,865 State and local 1 1955 1 195k 195k e/l,k75 e/1,550 '• Excluding finance companies 2/ 1st quarter 2nd quarter 3rd quarter Uth quarter Year 1,617 e/2,6'65 1,727 1,870 l,k3k 2,55k 7,569 1,527 1,927 1,911 1,792 7,158 1/ Includes $637.2 million AT&T convertible debenture issue. £/ Total new. capital issues excluding offerings of sales and personal finance companies. , Note.—Details may not add to totals due to rounding. Exliibit E H.14 Large Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Corporate 1955 - MayJune JulyAugust September October November December 1956 - JanuaryFebruary March April May State and local government Other 2/ 152 1*03 278 183 175 101 it05 ' 328 805 s 716 U01 227 192 221 263 95 212 278 395 623 I khb 163 157 233 50 Large Individual Issues Offered June 1 through 15 Issuer. Coupon Amount Offering Rating Type 3/ • (millions Maturity rate or net inter- yield of est cost dollars) - CORPORATE Commonwealth Edison U. S. Plywood Household Finance Boston Edison 1st mbg.bds. Deb. Deb. Pfd. stk. itO.O 15.0 50.0 18.0 1986 1981. 1978 Rev. G.O. G.O. G.O. G.O. Elec. rev. Util. tax rev. Rev. 6.0 1956-96 8.5 1957-96 30.0 1957-71 5.3 1967-95 22,0 .1958-75 U.o 1959-78 1.5 1958-82 20.0 1958-82 3 1/2 h 1/h k U.25 3.50 iw25 U.00 Aaa Baa — STATE & LOCAL GOVERNMENT Wash. Toll Bridge Auth. Cincinnati, Ohio New York, N. Y. Denver, Colorado Chicago, Illinois Tallahassee, Florida Tallahassee, Florida Pa. Gen. State Auth. n.a. 2.35 2.80 2.50 2.61 3.13 3.07 2.66 y 1.70-2.50 2.00-2,80 2.10-2.55 2.10-2.65 2.60-3.15 2.25-3.10 2.10-2.70 . ' — *• Aaa A Aa A Baa A H.lU E-2 Large Individual Issues Offered June 1 through 15 (Cont'd) Issuer - Type 3/ Amount 1 Coupon Offering Rating (millions M * « j n e f L w yield of 1 est cost dollars) STATE & LOCAL GOVERNMENT (Cont'd) Georgia Rural Roads Auth. State of California Hudson County, N. J. Rev. G.O. G.O. 15.5 50.0 5.1 1958-72 1958-77 1958-81 2.81 2.30 2.7U 2.20-2,75 1.80-2.35 2.00-2.75 OTHER None 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; L.L., limited liability obligations secured by pledge of designated revenues. h/ Ho reoffering. A Aa A H.lit Exhibit F Forthcoming. Large Public Security Offerings for New Capital (Other than U. S. Treasury) 1/ Expected Proceeds from Forthcoming Large Issues Date of computation Subsequent to During month following date shown date shown State-and Other 2/ Corporate State and Other 2/ Corporate local govt. local govt. 160 67 1955 - May 31 June 30 July 29 Aug. 31 SeptJ 30 Oct. 31 Nov. 30 Dec. 30 1956 - Jan. 31 Feb. 29 Mar. 30 Apr. 30 May 31 b07 222 805 202 215 70 176 123 380 568 198 339 3a 100 184 8U3 330 205 121 327 220 132 173 332 wmmm —* mmwm mmm, mmmm 50 — 850 830 1,135 920 909 b!2 230 85 376 233 1,013 818 168 1,861 1,845 2,018 1,971 2,205 1,650 756 6l8 917 785 811 832 9hl ~ — — - — - i— . 50 •• -- • • —— - Forthcoming Large Offerings, as of June 15 Type Amount Approximate date (millions of offering of dollars) CORPORATE Combustion Engineering Halliburton Oil Well Cementing Co. National Gypsum Pacific Gas and Electric ^Florida Power Corp. American Telephone and Telegraph ^Consolidated Natural Gas CIT Financial Pacific Finance Conv. sub. deb. .Common stk. Common stk. Common stk. 1st mtg. bds. Deb. Deb. Deb. Deb. 15.0 27.6 19.6 36.6 20.0 250.0 30.0 75.0 25.0 June 19 June 20 . June 25 (rights expire) July 2 (rights expire) July 2 July 10 Summer 1956 1956 STATE AND LOCAL GOVERNMENT Alexandria, Louisiana ' Long Beach, California .'Washington Suburban Sanitary District, Maryland ' -State of Vermont Power Authority of the State of New York Rev. G.O. 8.3 5.9 June 19 June 19 G.O. G.O. 8.5 7.6 June 21 June 21 Rev. 7.3 June 21 H.lU F-2 Forthcoming Large Offerings, as of June 15 (Cont'd) Issuer Type Amount Approximate date (millions of offering of dollars) STATE AND LOCAL GOVERNMENT (Cont'd) Grant County Public Utility District, Washington Public Housing Authorities *State of Massachusetts Florida State Turnpike Authority Oklahoma Turnpike Authority Pennsylvania Turnpike Commission Washington State Toll Bridge Autli. Inter-American Center Auth., Fla. - G.O. Rev. Rev. • Rev. Rev. Rev. 166.0 91.8 38.0 185.0 65.0 62.0 227.0 70.0 June 21 June 27 July 11 Summer 1956 1956 1956 1956 SF deb. 20.0 June 27 • Rev. OTHER British Columbia Power Commission *—Included in table for first time. n.a.—Not available. 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. Exhibit G Yields on Mew and Outstanding Electric Power Bonds, Rated Aa and A 1/ Date 1952 1953 195U 1955 average average average average Aa-rnted offering yields A-rated offering yields Amount above Actual Actual I Amount above (per cent) seasoned yields (per cent) lseasoned yields I(basis points) (basis points) 3.16 3-U6 3.03 3.23 1956 - January February March 8 16 23 30 April h Kone *3. is 3.19 13 16 3 9 2k June 8 22 26 -3 12 3.23 -5 — — 3 5 3.37 18 3.77 ho 3.5:3 3.52 19 18 3.3S h 11 25 May 9 lo 3.35 3.78 3.12 3.33 * 7 3»55 3-57 3.60 3-67 25 23 26 29 3.80 3.73 32 21 / " *—Single observation, not an average. l/ Covers only 30-year first mortgage bonds, as reported in Moody's 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. The number of new issues included in the monthly averages varies from 2 to b except for October 195U when 6 A-rated issues were included. Average maturity for the seasoned issues varies from 26 to 28 years. #