Full text of H.16 Capital Market Developments : June 6, 1957

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Not for Publication

H.lU

DECONTROLLED AFTER SIX MONTHS

•

June 6, 1957
CAPITAL MARKET DEVELOPMENTS

Large public security offerings issued for new capital
during the week ending May 31, totaled $6$: million for corporations
and $17 million for State and local governments. Two State and
local government issues scheduled for sale last week were not sold.v
Texas received no bids for its $13 million general obligation
issue, which" carried a 3 per cent interest cost limitation, and
Mississippi rejected all the bids received for its $10 million bond
issue. The best bid named a 3«l6^per cent interest cost.
The calendar for this week includes corporate offerings
totaling $105 million and State and local government issues for $55
million. Another corporate issue — Southern California Edison
Company's $30 million preferred stock issue — was originally
scheduled for sale this week, but withdrawn before it came to the
market. Press reports indicate that the company may substitute a
bond offering, possibly in July,
Bond yields - Bond yields increased last week for all types
of outstanding bonds. The increase was moderate for corporate bonds,
but it was quite sharp for State and local government bonds — 11
basis points for Aaa bonds„ Yields on all categories of bondsj
except those for corporate Aaa's and Uc S„ Government (old seriies)
are currently at their highs for the year and only the old series
bond yields are,below their 1956 peaks„
Yields on new corporate issues also continue to increase.
A new Aaa-rated 30-year, electric utility bond issue was offered
to the public on Wednesday to yield lu53 per cento This is 36
basis points above the yield for the last comparable offering, one
made early in May. A similar Aa-rated utility issue was offered
this week to investors to yield L63 per cent — 13 basis points
above a comparable offering made on May 16, and 25 basis points
above an Aa-rated issue on May 21, which included a 5-year no-call
provision.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks reached a new high for the year last week,
closing at 286.6 on May 31. Daily figures through Wednesday of
this week indicate a slight decline in prices.
More detailed information concerning recent capital market
developments is presented 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 BOND YIELDS

v\ U.S.; GOVERNMENT:/•
' i i Vt\r~
'°
c

long-term £J
Bate

Corporate
Old series

Spread between
State and
- U. S. Govt,
local govt. (old series) and
Aaa y
CorporatelState and
Aaa
1local Aaa

(Per cent)
1953 - High

1957 - High
Low

3.12
2.99
3.09
2.85
3.17
2.91
3.79
3.07
3.82
3.66

May
May
May
May
May

3.71
3.72
3.73
3.75
3-79

195k - High
1955 - High
1956 - High

3
10
17
2lt
31

(6/19)
(1/9)
(1/8)
(1/23)
(12/23)
(V7)
(12/28)
(3/2)
(1A)
(k/12)

3.15
2.78
2.7k
2.a
2.9k
2.62
3.k9
2.80
3.53
3.15

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)
(12/21)
(2/17)
(1/k)
(2/8)

3.35
3.35
3.39
3.W)
3.U8

1/ Weekly average of daily figures.

n.a.

3,03
2.89
3.39
2.92
3.U5
3.22

2.73
1.98
2.21
1.90
(8/5) 2.3k
(6/10) 2.05
(12/28)3.05
(2/3) 2.17
(5/31) 3.10
(2/8) 2.76

3.U2
3. la
3.U1
3.U2
3.U5

2.97
2.99
2.99
2.99
3.10

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(12/27)
(2/23)
(5/29)
(2/21)

.38
.19
.k3
.32
.3k
.13
.kk
.13
.5k
.29

.8k
.30
.61
.29
.70
.5k
.68
•32
.k8
.26

.36
.37
• 3k
.35
.31

.38
.36
.ko
.kl
.38

Average term of bonds included is 25-26

2/ Weekly averages of daily figures. The old series includes fully taxable,
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 Ik years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/k per cent bond of 1978-83.
J / Thursday figures. Only general obligation bonds are included; average
term is 20 years.
'
Note.—Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS

V

Late

!

Cornorate
Baa 1/

State and
local govt,
rev. 3/

State and
local govt.
Baa y
(Per cent)

1953 - High

195k - High
1955 - High

3.89 (9/18)
3.50
3.714
3.Mi
3.63

(1/2)
(1/8)
(12/31)
(12/30)

3.79 (6/25)
2.96 (1/8)
3.32 (1/7)
2.93 (8/5)
3.26 (12/29)

1957 - High
Low

3.15 (1/lU)
U.Ul- (12/28)
3.58 (3/9)
U.56 (5/31)
U.U2 (U/12)

U.23 (5/29)
3.90 (2/21)

May
May
May
May
May

U.U8
U.$0
U.53
U.5U
U.56

U.03
U.05
lt.06
k.15
U.23

1956 - High

3
10
17
2k
31

3.27 (6/26)
2.71 (1/2)
3.00 (1/1)

2.72 (8/13)
2.99 (12/30)

3.02 (1/6) .

2.76 (1/7)

It.22 (12/27)
3.20 (3/8)

3.98 (12/28)

2.89 (2/2U)
3.98 (VU)
3.70 (2/22)
V

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.
3/ Friday figures. Average rating of bonds included is
between Baa and A; average term is 20 years.
U/ Series discontinued, as of March 15.
N o t e . — H i g h s and lows are for individual series and may
be on different dates for different series.




STOCK M A R K E T

Date

Stock price
index 1/

Trading
Common
volume 2/
(millions
yields J/
of shares) (per cent

Stock market custc>mer credit
Customers'
debit bal- loans to
ances h/
"others" 5/
(Millions of dollars)

1953 - high

1956 , High
Low
195? - High
Low

167.1
IWj.O
221.lt
156.5
270.7
217.U
295.5
257.U
286.6
260.3

March
April
May 17
May 2lt
May 31

265.1
273.3
285.6
285. U
286.6

1 9 5 V - High
1955 - High

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/Ht)
(8/3)
(1/20)
(5/31)
(2/8)

2.5
0.9
3.7
l.li
k.6
1.5
3.1
1.5
2.7
1.6

5.88
5.15
5.1*9
14.09
U.23
3^9
L.13
3.65
It. 28
3.81

2,Ul45
2,055
3,1436
2,1405
It,030
3,537
l4,OU7
3,9Ut'
3,938
3,832

1,665
1,3114
2,388
1,653
2,805
2,517
2,823
2,7140
2,792
2,713

780
661t
1,0148
7146
l,2ltl
1,018
1,267
1,155
1,163
1,117

1.7
2.3
2.6
2.2
2.2

4.16
3.96
3.83
3.83
3.81

3,832
3,938

2,713
2,792

1,119
1,1#
1,133
1,130
n.a.

n.a.

n . a . — N o t available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to 19H7-li9"100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the «ew *ork Stock Exchange.
3/ Moody's 125 industrial stocks; weekly data based on Friday.
5 / 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.
i




Exhibit D

H.ll*
^
•9

Corporate and State and local Government
Security Offerings and Placements
(In millions of dollars)

1957
January
February
March

Corporate
* 1 19561/ 1

New capital
1957

1955

State and local
1
1956
I 1955

1,063
1,071
1,344

573
712
817

535
107
1,223

685
566
499

404
696
390

535
312
538

e/ 9 #
V
7#
e/1,200

818
1,146
811

478
886
687

e/750
e/550
e/425

378
490
735

427
350
642

July
August
September

1,063
654
838

597
644
670

376
199
333

470
249
406

October
November
December

7U5
o/
1,0892/
1,088

1,1621/
632
900

645
311
426

919
658
408

3,479
e/2,900

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

2,165
2,052
1,911
2,695

e/6,379

1,907
7,#3
10,381

4,216
6,127
8,821

April
May

^Lst
2nd
3rd
4th

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

1,750
e/1,725

-

,

1,490
1,603
908
1,382

1,385
1,418
1,124
1,984

3,093
4,001
5,383

2,803
3,927
5,911

Excluding finance companies J/
1st quarter
2nd quarter
3rd quarter
ij-th quarter

3,268
e/2,650

Year

1,647
2,541
2,246
2,826

1,727
1,870
' 1,444
2,554

9,259

7,595

:

rj Revised.
9/ Estimated.
1/ Includes $637.2 million AT&T convertible debenture issue.
2/ Includes $571.5 million AT&T common stock issue.
2/ Total new capital issues excluding offerings of sales and consumer finance
companies.
*
Note.—Details may not add to totals due to rounding.




li.lk

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

Corporate

Month

State and
local government

623
185
592

1956 - Hay
July
August
September
October
November
December
1957 - January
F ebruary
March
.
April

233

217

#8
3%
701
. 1j30
#7
' 671
788

h63
16k

20

35

37

383
. 135
201
386
306
19U

. 35

181

100
50
125
25

h99
2hB

U77

May

329

Other 2/

Large Individual Issues Offered durlmg May
Issuer

Type y

Coupon
Amount
(millions Maturity rate or Offering Rating
net inter- yield
of
est cost
dollars)

CORPORATE
Pacific Great Eastern Ry. S. F. deb.
Cincinnati Gas & Elec. Co. 1st mtg. bds.
Central Maine Power Co.
1st & gen. mtg.
bds.
N.Y. State Elec. & Gas. Co, 1st mtg. bds.
Florida Power & Light Co. 1st mtg. bds.
Public Serv. Co. of Col. 1st mtg. bds.
New York Telephone Co.
Ref.mtg. bds.
Acme Steel Co.
S. F. deb.
Niagara Mohawk Power Co.
Pfd. stk.
Interstate Power Co.
1st mtg. bds.
National Fuel Gas Co.
Deb.
Tenn. Gas Trans. Co,
1st mtg. P.L.
bds.




20.0
25.0

1982
1987

k 3/8
h 1/8

li.6l
lt.17

A
Aaa

18.0
25.0
15.0
30.0
70.0
22.0
20.0
18,5
15.0

1987
1987
1987
1987
1991
1977

h
h
h
U
U
h

ii.70
U.53
li.50
it.38
k M
k .95

A
A
Aa
Aa
Aaa
A

1987
1982

5 1/2

S.hQ

5.00

A
A

50.0

1977

5 1A

5.25

A

7/8
5/8
5/8
3/8
1/2
7/8

5

h.lh

Large Individual Issues Offered during May (Cont'd)

Type 3/

Amount
(millions
of
dollars)

Maturity-

Coupon
rate or
Offering
net inter- yield Rating
est cost

STATE AND LOCAL GOVERNMENT
State of Ohio
60.0
G.O.
New York St. Power Auth.
'6.8
Rev.
Melbourne, Florida
totr.&swr.rev.6.8
Cincinnati, Ohio
G.O.
l£.l
Chicago, Illinois
G.b.
12.5
Shelby Co., Tennessee
G.O.
6.8
Territory of Hawaii
G.O.
ih.O
Tulsa Ind. Sch. Dist. No :
Oklahoma
G.O.
5.0
State of North Dakota
G.O.
9.0
State of Massachusetts
G.O.
19.1
State of Washington
Fuel tax rev. 20.7
'State of Washington
Sales tax rev. 10.0
Boston, Massachusetts
G.O.
5.3
State of Tennessee
G.O.
10.0
King Co., Sch. Dist.
No. 1, Washington
G.O.
15.0
Tonkers, New %ork
G.O.
6.1
Wash. Sub. San. Dist.,
Maryland
G.O.
9.1
State of Maryland
G.O.
9.8
Panama City, Florida
G.O.
7.0

1958-72
1961-85
1960-96
1958-2007.
1958-76
1958-82
1960-77

2.9h

3.78
n.a.
3.15
3.36
3.12
3.71

2.00-2.95 Aaa
3.00-3.75 __
3.50-5.00 •
2.10-3.20 Aaa
2.50-3.55 A
2.15-3.20 • Aa
2.85-3.75 A

3.30

2.50-3.30

2.83

2.10-2.90
2.10-3.U0

l.hD

3.12

2.30-3.W
3.00-3.05

A
Aa
Aa
.. A
Aa
A
Aa

1959-77
1958-77

3.67
3.81

2.80-3.70
2.10-3.80

A
A

1958-96
1960-72
n.a.

4.28
3700
n.a.

3.00-U.UQil/ Baa
2.1*0-3.00 Aaa
y
n.a.

1959-72
1958-69
1958-2007
1957-76
1958-77
1958-77
1967-68

3.2k
3.96
3.71

2.25-3.85

2.60-3.60

OTHER
British Columbia Pwr.Comm.

S.F. deb.

25.0

1987

h

3/8

k.50

n.a.—Not available.
'
1/ Includes corporate and other security offerings of $15 million 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; L.L., limited liability obligations secured by pledge of
designated revenues.
h/ 1995-96 maturitiesriotreoffered.
£/ Not reoffered.




H.l h
Forthcoming Large Public Security .Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
During month following
date shown
date shown
State and
State and
Other 2/
Corporate
Other 2/ Corporate
local govt.
local govt.

Date of
computation
1956 - viay 31
June 29
July 31
Aug. 31
Sept. 28
. " ' . Oct. 31
Nov. 30
Dec. 31
1957 - Jam 31
Feb. 28
Har. 29
30

•

>iay 31

198
ii37
2U7
369
315
683
I36
U76
591
7 ho

lt6l
187
525

332"
81

hh8

131 •

%

h8
280
153
153
290
179
97

23
100
35

567
1,096
1,202
1,009
990
181
796
966

795
1,66
256

•25 '
25

9bl
690

726
958
1,197
955
979
763
618
631
662
396

37

23
100
35
25
25

Forthcoming Lafge Offerings, as of Hay 31
Issuer

Type

Amount
(millions approximate date
of offering
of dollars)

CORPORATE
Virginia Elec. & Pwr. Co.
Boston Edison Co.
General Telephone Co. of Calif.
Columbia Gas System, Inc.
Georgia Power Co.
General Telephone Corp.
.

.

.

!
Common stk.
j 1st mtg. bds.
• 1st mtg. bds.
Deb.
1st mtg. bds.
j
Conv. deb.

|

1
Metropolitan Edison Co.
International Business Machines Corp.

Commercial Credit Co.
Consolidated Natural Gas Co.
Michigan Wisconsin Pipe Line Co.
• Michigan Consolidated Gas Co.
Fairbanks Morse & Company
•Southern Bell Tel. & Tel. Co.
•Public Service Electric & Gas Co.
•Associates Investment Co.
•Texas Eastern Transmission Corp.
•Texas Eastern Transmission Corp.




j

1st mtg. bds.
Common stk.

Notes
S.F. deb.
i 1st mtg. bds.
1st mtg. bds.
i
Deb.
j
Deb.
• Pfd. stk.
Deb.
Conv; pfd. stk.
Deb.

itS

20.0
20.0

15.5
hh.S

19.0

231.0
75.0
'25.0

30.0
30.0

15.0
70.0
25.0

20.0

20.0

•15.0

June 5
June 5
June 6
June 7
June 7
June 10
(rights expire)
June 10
June 10
(rights expire)
June 12
June 12 v
June 13
June 18
June 18
June 19
June 19
June 20
June 20
June 20

i-.llj

¥-2

t'orthcouing Large Offerings,.as of May
Type

(Cont'd)
Amount
(millions Approximate date
of dollars) of offering

CORPORATE (Cont'd)
Puget Sound Power & Light Co,
•Delaware Power & Light Co.
•Southern California Gas Co.
•Kerr McGee Oil Industries, Inc.
•Rochester Gas & Electric Co.
•Jersey Central Power & Light Co.

1st mtg. bds.
20.0
1st & coll. tr. bds. 15.0
1st mtg. bds.
35.0
S. F. deb.
_15»0
lst mtg. bds.
15.0
1st mtg. bds.
15.0

Jung
June
June
June
July
July

25
25
28
3
17

STATE AND LOCAL GOVERNMENT

Tacoma, Washington
Lt. & Pwr. rev.
Columbus, Ohio
G.O,
Los Angeles, California
Elec, rev,
State of Louisiana
G.O.
San Antonio, Texas
Water rev.
•Cheltenham Sch. Dist. Auth., Pa.
Rev.
State of Ohio
Highway rev.
Pittsburgh, Pennsylvania
G.O.
San Diego, California
G.Oi
•Independence, Missouri
Elec. rev.
•East Baton Rouge Parish Sch.
Dist., La#
G.O.
•Atlanta, Georgia
G.O.
^Milwaukee, Wisconsin
Water rev.
Los Angeles City Sch. Dists., Calif.
G.O*
State of Texas
G.O.
Jacksonville, Florida
Utilities rev.
Louisville & Jefferson Cos. Sewer
Dist., Kentucky
Rev.
University System Bldg. Auth., Ga.
Rev.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth., Florida
Rev.
New York State Thruway Authority
G.O.
Oklahoma Turnpike Authority
Rev.

5.0
5.2

15.0

16.0
32.0
5.2
5.0

8.0

10.0

15.0

10.0

a.o
12.5

30.0

8.0

12.0
62.0
20.0

50.0
65.0

June It
June k
June 5
June 6
June 6
June 11
June 12
June 12
June 13
June 18
June 22
July 20
July 23
August 13
1957
1957
1957
1957
1957
1957
1957
1957

OTHER
None
•—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $5 Trillion- and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
'
Note.—Deletions for reasons other than sale of issues State of Mississippi,
$10 million general obligation issue — bids rejected. Southern California Edison*
30 million preferred stock issue —• withdraw.




Exhibit G
Yields on .New.and Outstanding
Electric Power Bonds, Rated Aa and A 3/
Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
1
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)

Bate

1 9 5 2 - 1 9 # .

-

High
Low

L30(12/12/56)
2.93(3/31/54)

4.58(12/6/56)
3.00(3/17/54)

February
March

*3.15
3.28
*3.77
*3.53
*3.52
3.66
*4.07
4.13
*4.20
*4.30
*4.30

April

Lay

July
August
September
October
November
December

4.50

1957 - J a n u a r y 8
16
18

3.23
3.45
3.61
3.76
*3.75
*3.82
*4.00

3
11
ho
19
18
29
52
53
48
52
47
:

- 6
15
26
• 28
27
28
43

- Wone
j *4.40

63

1 )ione
1 *4.58

.

•Si

4.67
4.43
4.4o

:

February 5
March 6

4.29

. 19
27

4.#
4.22-

Anril 3

4.29

53
45
46
43

Hay 10

4.50
.
4.38 y

"

57

'
4.41
4.58
4.55
4.45

35
52
49
43

4.60
4.50
4.53
4.532/

59
49
52
52

50

10
12

___

70

56
'

12
20
29

15
16
21
23

70

62

4.56
•

70
-15

None .

None

1956 - J a n u a r y

^

62
- 3

65
51

4.70

6?

5.00
5.25

_28
123

29
*—Single observation, not an average.
1/ 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. 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. Other issues have no such provision.




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