Full text of H.16 Capital Market Developments : June 28, 1956

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7/ v

Not for" P u b l i c a t i o n DECONTROLLED AFTER SIX MONTHS
Ho lit

June 28, 1956
C a p i t a l Markets Development

The volume of p u b l i c l y o f f e r e d s e c u r i t i e s was q u i t e l a r g e
during the week ending June 23, and w i l l be l a r g e again t h i s week* S t a t e
arid l o c a l governments sold l a r g e bond i s s u e s t o t a l i n g <?20U m i l l i o n
l a s t week, while corporate i s s u e s of Wi3 m i l l i o n were o f f e r e d* The
l a r g e s t i s s u e of the week, the ;:?l66 m i l l i o n Grant County Public U t i l i t y
D i s t r i c t i s s u e , was favorably received by i n v e s t o r s and was quoted a t
• above the o f f e r i n g p r i c e on the day of o f f e r i n g . This week, ending June 29,
a $92 m i l l i o n Public Housing A u t h o r i t i e s i s s u e i s scheduled f o r s a l e
. and r i g h t s expire on a ^20 m i l l i o n common stock o f f e r i n g .
Bond y i e l d s - Yield on outstanding bonds were s t a b l e or
increased s l i g h t l y during the week ending June 23, except f o r those on
Aaa-rated S t a t e and l o c a l government bonds which decreased s l i g h t l y .
A new 30-year, f i r s t mortgage, e l e c t r i c u t i l i t y bond i s s u e was r e o f f e r e d
on June 20 a t a y i e l d 3.75 per c e n t , 27 b a s i s p o i n t s higher than y i e l d s on
s i m i l a r outstanding bonds of somewhat s h o r t e r m a t u r i t y ; a s i m i l a r new
o f f e r i n g on May 16 was made a t about the same y i e l d and s p r e a d .
Estimated J u l y volume - The volume of corporate s e c u r i t y i s s u e s
f o r new c a p i t a l during J u l y i s estimated a t ^1,075 m i l l i o n , f o u r - f i f t h s
. l a r g e r than the volume a year ago and one-fourth g r e a t e r than i n June.
Included i n the t o t a l are expected l a r g e public i s s u e s t o t a l i n g $U37
^ m i l l i o n , including the $250 m i l l i o n AT&T debenture o f f e r i n g ; smaller
public o f f e r i n g s and take-downs of p r i v a t e placements "are a l s o expected
to continue i n s u b s t a n t i a l volume.
S t a t e and l o c a l government bond i s s u e s during J u l y are expected
to t o t a l # 0 0 m i l l i o n , 15 per c e n t l e s s than i n J u l y 1955, and f o u r - f i f t h s
smaller than i n June of t h i s y e a r . The estimate f o r J u l y does n o t
include any very l a r g e i s s u e s i n c o n t r a s t t o the June volume, of which
almost t w o - f i f t h s was accounted f o r by two l a r g e i s s u e s .
Stock p r i c e s - Common stock p r i c e s , as measured by the SEC
index of 265 s t o c k s , increased f r a c t i o n a l l y l a s t week, c l o s i n g on
June 22 a t 277.7* Trading volume averaged only 1 . 6 m i l l i o n shares per
day, the s m a l l e s t volume t h i s year to d a t e . Daily indexes i n d i c a t e
some f u r t h e r increase i n stock prices through Wednesday of t h i s week.
More d e t a i l e d information concerning r e c e n t c a p i t a l market
developments i s presented i n the a t t a c h e d e x h i b i t s .

Business Finance and Capital 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 the Federal Reserve System,


'

EXHIBIT A

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

| CORPORATE A g o

--v""
U. S. GOVERNMENT: / \ /

V

"

STATE AND LOCAL
GOVERNMENT A a a

. Govt., long-term - /
Date

Corporate
Aaa 1 /

Old series

New s e r i e s

Spread between
S t a t e and
U. S. Govt,
l o c a l govt. (old s e r i e s ) and
Aaa 3/
Corporate 1State and
Aaa
l l o c a l Aaa

(Per cent)
1953 - High
195U - High
Low
1955 - High
1956 - High
Low
May 25

June 22

3.1*2
2.99
3-09
2.85
3.17
2.91
3.30
3.07

(6/19)
(1/9)
(1/8)
(U/23)
(12/23)
(1/7)
(5/1*)
(3/2)

3.27
3.27
3.27
3.26
3.26

3.15
2.78
2.71*
2.1*
2.91*
2.62
3-08
2.80

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)
(V20)
(2/17)

2.89
2.87
2.87
2.87
2.86

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

n.a.

3.03 (6/5)
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

3.00
2.99
2.98
2.97
2.98

2.1iU
2.U2
2.38
2.33
2.32

(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

.81*
.30
.61
.29
.70
.51*
.68
.1*5

.38
.1*0
.1*0
• 39
.38

.1*5
•1*5
.1*9
.51*
• 56

Average term of bonds included i s 25-26

2 / Weekly averages of d a i l y f i g u r e s . The old s e r i e s "includes f u l l y taxable,
marketable 2 1/2 per cent bonds due or f i r s t c a l l a b l e a f t e r 12 years through
September 1955* and those due or c a l l a b l e in 10-12 years t h e r e a f t e r ; the average
term to f i r s t c a l l of the bonds included declined from 1U years in e a r l y 1953 to
11 1/2 years in e a r l y 1956. The new s e r i e s i s comprised of the 3 per cent bond
of 1995 and the 3 1/U per cent bond of 1978-83.
3/ Thursday f i g u r e s . Only general obligation bonds are included; average
term i s 20 y e a r s .
Note.—Highs and lows are f o r individual s e r i e s and may be on d i f f e r e n t dates
for different series.




EXHIBIT B

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

STATE AND LOCAL GOVT.

STATE AND LOCAL GOVT. REVENUE

Date

Corporate
Baa \ /

State and
local govt.
Baa 2/

State and
local govt,
rev. 3/

(Per cent)
1953 -High
Low
195U - High
1955 - High
Low
1956 - High
Low

3.89
3.50
3.7U
3.B
3.63
3.U5
3.75
3-58

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/1L)
(6/22)
(3/9)

3-79
2.96
3.32
2.93
3.26
3.02
3.UU
3.20

(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)
(U/27)
(2/2U)

3.01* •
3.33
May 25
3.03
3-31
June 1
3.02
3.28
June 8
7
3.00
3.23
1. 4
June 15
! 3.01
3.2k
June 22
3.75
1/ Weekly average of daily figures. Average term of bonds
included i s 25-26 years.
2/ Thursday figures. Only general obligation bonds are
included; average term i s 20 years.
,
3/ Friday figures. Average rating of bonds included i s ,
between Baa and Aj average term i s 20 years.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

1953

Stock p r i c e
index 1 /

1954

1955

Trading
Common
volume j y
(millions yields j /
of s h a r e s ) (per cent)

1956

Stock market customer c r e d i t
Customers 1
d e b i t b a l - loans t o
ances h/ " o t h e r s " 5 /

Total

(Millions of d o l l a r s )
1953 - High
1951 - High
1955 - High
1956 - High
Low
April
May
June 22

167.1
U6.0
221.h
156.5
270.7
217.U290.8
257.lt

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/1U)
(b/6)
(1/20)

286.8
280.1
269.8
277.0
277.7

2.5
0.9
3.7
l.li
U.6
1.5
3.1
1.6

5.75
5-15
5.33
U.20
U.22
3.78
U.08
3.68

2,165
2,055
3,136
2,U05
L,030
3,537
W 7
3,991

1,665
1,31U
2,388
1,653
2,805
2,517
2,810
2,7UO

780
66k
1,0U8
7U6
1,21*1
1,018
1,267
1,217

2.6
2.U
2.0
1.7
1.6

3.69
3.97

U,0U3
U,0U7

2,788
2,810

n.a.

n.a.
i

n.a.

1,255
1,237
1,232
1,217
n.a.

.

ilea.—Not a v a i l a b l e .
1 / SEC index of 265 common s t o c k s , weekly closing p r i c e s , 1939*100; converted
t o 1957-U9"100 by Federal 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.
3 / Moody's 200 common s t o c k s ; end of month f i g u r e s .
"k/ Ehd 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 accounts; excludes balances secured by U. S. Government o b l i g a t i o n s .
5 / Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes loans f o r
purchasing or carrying U. S . Government s e c u r i t i e s a t banks i n New York and Chicago.
Weekly r e p o r t i n g banks account f o r about 72 p e r cent of loans t o o t h e r s .
Note.—Highs 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.




H.lii

Exhibit D
Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1956
JanuaryFebruary
„ March

579
70k
790

5#
U07
1,223

April
May
June

e/890
e/l,lOO
e/875

k78
886
667

July
August
September

e / l , 075

October
November
December
1st q u a r t e r
Ind quarter
3rd quarter
kth quarter
Year

2,073
e/2,865

New c a p i t a l
1

Corporate

19bk

1

1,617
e/2,6'65

.
195k

5k7
i|26
635

!
i
{

boh
696
5/375

535
312
5#

U97
656
81,2

t
I
I

e/350
e/500
e/700

U27
350
641

597
6hh
670

909
.335
7k7

1

e/hOO

U70
2k9
ko6

279
261
6k9

1,162 y
632
900

1,003
290
60 k

919
658
k08

59k "
k23
877

2,165
2,052
1,911
2,695
8,821

1,608
1,995 .
1,991
1,896
7,k90

•
•

Excluding finance companies 2/
1 s t quarter
2nd quarter
3rd quarter
kth quarter
Year

State and l o c a l
1 1955
1

1,727
1,870
l,k3k
2,55k
7,569

1
1
!

i

1,385
l,kl8
1,12k
1,98k
5,911

396
111
565

-

73k
7k8
853

1,372
2,33k
1,188
1,89k
6,789

1 .

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

e / Estimated.
'
!
'
. 1 / Includes $637.2 million AT&T, convertible debenture issue.
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 sales and personal finance
companies.
.

Note.—Details may not add t o t o t a l s due t o rounding.




H.lU

Exhibit E
Large Public S e c u r i t y I s s u e s f o r New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )

Month

1955 - May
June
July
August
September
October
November
December
1956 - January
&
February
™
March
April
May

Corporate

State and
l o c a l government

1*83
175
101
l|05
328
805
221
26]
95
212
278
3#
623

152
l|03
278
65
23U
716
Uoi
227
192
uuu
163
157
233

.

,

,

.

Other 2/

25
50
——

50

Large I n d i v i d u a l Issues Offered June 1 through 22

Issuer

type 3 /

Amount
(millions
Maturity
of
dollars)

Coupon

j
Rating

CORPORATE
Commonwealth Edison
U. S. Plywood
Household Finance
Boston Edison
Combustion Eng'g.
Halliburton Oil Well
Cementing Co.

1 s t mtg.bds.
Deb.
Deb.
Pfd. s t k .
Conv. sub.deb.
Common s t k .




UO.O
15.0
50.0
18.0
15.0
27.6

1986
1981
1978
1981

3 1/2

U 1/h
U

U.25
3 3/8

3*50
U.25
>.00

Aaa
Baa

3*38

Baa

H.llr

E-2

Large I n d i v i d u a l I s s u e s Offered June 1 through 22 (Cont'd)

Issuer

3/

Coupon
Amount
O f f e r i n g Rating
r a t e or
(millions jMaturityyield
net interof
dollars)|
est cost

STATE & LOCAL GOVERNMENT
Rev.
Wash. Toll Bridge Auth.
G.O.
C i n c i n n a t i , Ohio,
G.O.
New York, N. Y»
G.O.
Denver, Colorado
G.O.
Chicago, I l l i n o i s
Elec. r e v .
Tallahassee, F l o r i d a
3til. t a x rev.
Tallahassee, F l o r i d a
Rev.
Pa. Gen. S t a t e Auth.
Rev.
Georgia Rural Roads Auth,
G.O.
S t a t e of C a l i f o r n i a
G.O.— .
. Hudson County, N. J .
U t i l . rev.
Alexandria., La.
G.O.
Long Beach, C a l i f .
G.O.
. Wash. Sub. San% Dist.,Md,
G.O.
I t a t e of Vermont
Rev.
Pwr. Auth. of the S t a t e
of N. Y.
Rev.
Grant Co. Pub. U t i l .
D i s t . , Wash..

6.0
1956-96
8.5
1957-96
30.0
1957-71
1967-95 5.3
22.0
1958-75
U.o
1959-78
1958-82
1.5
20.0
1958-82
1958-72
15.5
5o.o . 1958-77
5.1
1958-81
8.3
1959-86
1958-81
5-9
1957-95
• 8.5
7.6
1957-66
1961-85
7.3
"166.0

2005

n.a.
2.35
2.80
2.50
, 2.61
3.13
3.07
2.66
2.91
2.30
2.71+
3.2lt
2»U6
3.12
1.98
2.86
>.05

V
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
2.20-2.75
1.80-2.35
2.00-2.75
2.1*0-3.25
1.90-2.52
2.50-3.60
1.65-2.00
2,30-3.00
3.92

OTHER

1 / Includes corporate and other s e c u r i t y o f f e r i n g s of 015 m i l l i o n and over;
State"and local'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 gene r a l 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; L . L . , l i m i t e d l i a b i l i t y obligations* secured by
pledge of designated revenues.
k / No r e o f f e r i n g .




—

Aaa
A
Aa
A
Baa
A
A
Aa
A
A
Aa
Baa
Aaa
—
—

H.lit

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) ] /
Expected Proceeds, from Forthcoming Large I s s u e s

Date of
computation
1955 - May 3 1
June 30
J u l y 29
Aug. 31
Sept.30
Oct. 31
Nov, 30
Dec. 30
Jan. 31
1956
Feb. 29
Mar. 30
Apr. 30
May 31
June 30

During month following
date shown
Corporate
Other.2/
160
67
U07
222
805
202
215
70
.176
123
380
568
198
1*37

339
3UU
100
18 U
813
330
205
121
327
220
132
.173
332
81

50

Subsequent t o
date shown
Corporate

Other t /

1,861

850
830
1,135
920
909
L12
230
85
376
233
1,013
818
168
567

l,8U5

2,018

1,971
2,205

1,650
756

618

50

917
785

811

832
9U1
690

Forthcoming Large O f f e r i n g s , as of June 22
Issuer

Type

Amount
Approximate date
(millions
of o f f e r i n g
of dollars)

CORPORATE
N a t i o n a l Gypsum

Common s t k .

19.6

P a c i f i c Gas and E l e c t r i c

Common s t k .

36.6

F l o r i d a Power Corp.
American Telephone and Telegraph
-it-Union E l e c t r i c Co. of h o .
•itSperry Rand
^Tennessee Gas Transmission
Consolidated Natural Gas
CIT F i n a n c i a l
P a c i f i c Finance




1 s t mtg. bds.
Deb.
1 s t . m t g . bds.
Common s t k .
Deb.
Deb.
Deb.
Deb.

20.0
250.0
W.O
60.0
30.0
30.0
75.0
25.0

June 25
(rights expire)
July 2
( r i g h t s expire)
July 2
July 10
July 17
July 25
(rights expire)
July
Summer
1956
1956

H.lU

,

F.-2

Forthcoming Large O f f e r i n g s , as of June 22 (Cont'd)

Issuer

Type

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

STATE - AMD LOCAL GOVERNMENT
Public Housing A u t h o r i t i e s
S t a t e of Mas s achusetts
* Dearborn School D i s t r i c t
* Maryland S t a t e Road Commission
* Jacksonville, Florida
F l o r i d a S t a t e Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvcjiia Turnpike Commission
Washington S t a t e T o l l Bridge Auth.
Inter-American Center Auth., F l a .

91.8
G.O.
38.0
G.O.
lit.0
G.O.
15.0
E l e c . r e v , ,bds. lli.O
Rev.
185.0
Rev.
65.0
Rev.
62.0
Rev.
227.0
Rev.
70.0

June
July
July
July
July
Fall
1956
- 1956
1956
1956

27
11
18
2h
2h

OTHER
B r i t i s h Columbia Power Commission

SF deb.

20.0

June 27

n.a.—Not a v a i l a b l e .
1/ Includes corporate and other i s s u e s of $1$ m i l l i o n and over; S t a t e
and l o c a l government i s s u e s of $5 m i l l i o n and over.
2f 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 .
*—Included i n t a b l e f o r f i r s t time.




H.lU

Exhibit G
Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /

Date

1952
1953
195k
1955

average
average
average
average

1956 - January
February
March 8
16
23
30
April U
k
11
25
May 9
16
2k
June 8
20

A-rated o f f e r i n g y i e l d s
Aa-rated o f f e r i n g y i e l d s
Amount above
• Actual 1 4*3™% above
Actual
seasoned
y
i
e
l
d
s
(per cent)
(basis points)
3.16
3.U6
3.03
3.23

13
16
3
9

None
*3.15
3.19

*3
5

3-37

18

3-77

kO

3.53
3.52

19
18

3.35
3.78
3-12
3.33

12
26
-3
12

None
3.23

-5

3-35

7

3.#
3.<7
3-60
3.67

25
23
26
29

3.80
3.73

32
2k

3.75

27

*—Single observation-, not an average.
1 / Covers only 30-year f i r s t mortgage bonds, as r e p o r t e d i n Moody's Bond
Survey. Except where i n d i c a t e d , t h e a c t u a l y i e l d f i g u r e and the amount above
seasoned y i e l d s are averages of o f f e r i n g s during the i n d i c a t e d period and of
the d i f f e r e n c e s between t h e s e new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r the same day. The number of new i s s u e s included in the
monthly averages v a r i e s from 2 to U except f o r October 19 5U when 6 A-rated
i s s u e s were included. Average maturity f o r the seasoned i s s u e s v a r i e s from 26
to 28 y e a r s .