Full text of H.16 Capital Market Developments : March 23, 1959

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Mot f o r P u b l i c a t i o n DECONTROLLED AFTER SIX MONTHS
Si

H.lU

March 23, 1959
CAPITAL MARKET DEVELOPMENTS

Public s e c u r i t y f i n a n c i n g f o r new c a p i t a l continues t o be
small. During t h e week ending March 20, only one l a r g e corporate
i s s u e f o r $15 million was o f f e r e d t o i n v e s t o r s and S t a t e and l o c a l
government i s s u e s amounting to $62 m i l l i o n were s o l d . This week,
corporations a r e expected t o s e l l l a r g e i s s u e s t o t a l i n g $75 m i l l i o n ;
no l a r g e State and l o c a l government bond i s s u e s a r e scheduled f o r
sale.
Bond y i e l d s - Bond y i e l d s changed l i t t l e l a s t week. Yields
on high-grade corporate and S t a t e and l o c a l government and U. S. Government bonds remained s t a b l e while those f o r Baa-rated corporate and
S t a t e and l o c a l government bonds declined s l i g h t l y .
Mortgage recordings and loans - E x h i b i t s C and D include a
c h a r t and t a b l e showing monthly data on mortgage recordings and l o a n s .
This i s the second of a s e r i e s of new c h a r t s and t a b l e s which w i l l be
included i n t h i s r e p o r t , with d i f f e r e n t m a t e r i a l s covered each week
on a four-week cycle.
The amount of nonfarm mortgage r e c o r d i n g s , a f t e r r i s i n g i n
195b and 1955 and then declining f o r two y e a r s , advanced sharply i n
1958 surpassing previous highs. Recordings f o r the f u l l y e a r were
one-eighth higher than i n 1957. Conventional a c t i v i t y s e t new records
during 1958 i n d o l l a r volume and as a proportion of the t o t a l . VA
loans reversed a t h r e e - y e a r downtrend by t u r n i n g up i n mid-1958 and
FHA mortgage insurance w r i t t e n , which changed comparatively l i t t l e i n
e a r l i e r y e a r s , rose a b r u p t l y t o new peaks toward the end of 1958.
During December, conventional mortgage a c t i v i t y was moderately below
the October 1958 peak, but VA loans closed were i n the l a r g e s t volume
of the year and FHA insurance w r i t t e n was a t an a l l - t i m e high.
Stock p r i c e s - Standard and P o o r ' s index of 500 common
stocks declined s l i g h t l y , on balance, l a s t week, closing a t 56.39 on
March 20. Trading a c t i v i t y i n c r e a s e d , averaging lu3 m i l l i o n shares
a day.
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented i n t h e attached e x h i b i t s .
Capital Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




AND

10CAI

GOVT.

3.0

H.ll*

Exhibit b
Tables f o r Exhibit A
High-grade bond Yields
Date

Corporate
Aaa 1 /

Spread between
U. S. Govt, and
Corporate S t a t e and
Aaa
l o c a l Aaa

S t a t e and
l o c a l govt.
Aaa 1/

U. S. Govt,
long-term 2/
(Per cent)

19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
h.lk
1*.13
3.55
£.16
h.09

Feb.
Feb.
Mar.
Mar.
Mar.

li.lii
li.13
It. 11
li.13
li.13

20
27
6
13
,
20 £ /

U/23)
(9/27)
(10/10)
(5/2)
(1/30)
(1/9)

2.1*5
3.76
3.81
3.07
3.96
3.83

(8/6)
(10/18)
(12/26)
(V25)
(1/23)
(1/2)

3.91
3.90
3.87
3-92
3.92

1.90
3.1*5
3.31
2.61*
3.20
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(2/5)
(3/19)

3.13
3.11
3.06
3.06
3.06

.30
.60
.51
.22
.27
.16

.30
.1*7
.72
.3U
.86
.65

.23
.23
.2k
.21
.21

.78
.79
.81
.86
.86

Lower-grade Bond Yields
Date

Corporate
Baa 1 /

S t a t e and
l o c a l govt.
Baa y

Spread between
Aaa and Baa
S t a t e and
Corporate
l o c a l govt.

(Per cent)
1951* - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.1*1*
5.10
1*.96
It. 51
1*.90
1*.85

Feb.
Feb.
Mar.
Mar.
Mar.

it. 89
1*.89
1*.87
it. 87
It. 85

20
_27
6
13 ,
20 p /

(12/31)
(11/29)
(1/3)
(7/11)
(2/13)
(3/20)

2.93
1*.51
l*.3l*
3 .61*
lt.13
3.92
It.05
li.03
3.95
3.93
3.92'

(8/5)
(8/29)
(9/11)
(5/1)
(2/5)
(3/19)

.52
1.27
1.20
.77
.77
.72

.96
1.21
1.11
.93
.98
.86

.75
.76
.76
.7ii
.72

.92
.92
.89
.87
.86

£ / Preliminary.1 / Weekly average of d a i l y f i g u r e s . Average term of bonds included i s 25-26 y e a r s .
2/ Weekly average of daily f i g u r e s . The s e r i e s includes bonds due or c a l l a b l e in
lO^years or more.
J / Thursday f i g u r e s . Only general obligation bonds a r e included; average term
i s 20 y e a r s .
Note.—highs and lows a r e f o r individual s e r i e s and may be on d i f f e r e n t dates f o r
different series.




STOCK

MARKET

MORTGAGE

RECORDINGS AND

f

J - /—\-<t - I

n

A




\

LOANS

\—I —

V'-\—j
CONVENTIONAL

Exhibit D - Tables f o r Exhibit G
Stock Market
Stock p r i c e
index 1/

Date

1953-1958 - High
Low
1959 - High
Low

54.11
22.95
56.67
54.37

JanuaryFebruary
Mar. 6
Mar. 13
Mar. 20 j d /

55.82
54.77
56.21
56.67
56.39

Trading
Common
stock
volume j /
y i e l d s 2 / (millions
( p e r cent) of shares)

(12/2^/58)
(9/18/53)
(3/13)
(2/6)

Stock market customer c r e d i t
Customers 1
Bank
Total debit b a l - loans t o
ances 4 / "others" 5 /
(Millions of d o l l a r s )

3.30
6.25
3.21
3-34

4.9
0.9
4.3
3.0

4,492
2,055
it,554
4,527

3,265
1,314
3,297
3,253

1,317
669
1,274
1,210

3.24
3.32
3.24
3.21
3.22

4.0
3.5
4.2
4.2
4.3

4,554
4,527

3,297
3,253

n.a.

n.a.

1,257
1,274
1,270
1,271
n.a.

n.a.—Not a v a i l a b l e .
2 / Preliminary.
1 / Standard and Poor's composite Index of 500 common stocks, weekly closing p r i c e s , 1941-43=10. Monthly data
are averages of d a i l y f i g u r e s rather than of M d a y s ' only. Highs and lows are for Fridays' data only.
2 / Standard and Poor's composite stock y i e l d based on Wednesday data converted t o weekly c l o s i n g prioes by
Federal Reserve. Yields shown aro for dates on which price index reached i t s high or low.
3 / Averages of daily trading volune on the New York Stock Exchange.
4 / End of month figures for member firms of the New York Stock Exchange which carry 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 reporting member banks. Excludes loans for 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 reporting banks account for about 70 per cent of
loans t o othe rs. For further d e t a i l see B u l l e t i n .

Nonfarm Mortgage Recordings and Loans 1 /
Date

1957 - Dec.
1958 - Jan.
Feb.
Mar.
Apr. .
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.

Total
Unadjusted
Seasonally
Unadjusted
FHA
VA
a d j u s t e d 2/
(Millions of d o l l a r s )
1,954
1,976
1,959
1,971
1,993
2,087
2,192
2,291
2,413
2,488
2,576
2,652
n.a.

1,851
1,782
1,701
1,866
2,022
2,151
2,275
2,543
2,535
2,596
2,857
2,432
2,629

249
306
279
319
306
311
343
3#
371
480
501
457
5io

176
160
142
123
85
73
98
127
156
189
239
216
257

Conv.

1,426
1,315
1,280
1,424
1,632
1,767
1,835
2,048
2,007
1,927
2,116
1,759
1,861

n.a.—Not a v a i l a b l e .
1/ Total recordings data are estimates based on reports from about 450 areas and include
mortgages of $20,000 or l e s s secured by nonfarm real e s t a t e , primarily r e s i d e n t i a l p r o p e r t i e s .
FHA-insured loans represent gross amount of insurance w r i t t e n , and VA-guaranteed loans the gross amount
of loans closed,on 1-4 family houses. Conventional data are derived as a r e s i d u a l , although t o t a l
recordings and VA and FHA loans are not s t r i c t l y comparable i n concept or timing.
2 / Three-month moving average, seasonally adjusted by Federal Reserve.
Sources Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.




Exhibit E

H.14

Long-term Corporate and S t a t e and Local Government
S e c u r i t y O f f e r i n g s and Placements
( I n m i l l i o n s of d o l l a r s )

1959
, January
February
:• March

New c a p i t a l
Corporate 1 /
S t a t e and l o c a l 2 /
1
1958
1
1957
1959
1
1958
1
1957

JB/782
1/650
e/650

• April
May
June
July
August
September
October
November
December
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/2,082

1st half
Three q u a r t e r s
Year

i , ^

1,060
1,065
1,320 .

l,l4l
600
881

723

634

812
! §

742
572
506

' 8 '
1,453

798
895
551

7 65
546
393

1,102
538
1,144

1,003
924
973

806
403
651

529
584
431

858
473
914

1,090
78 9
1,076

456
474
435

698
633
698

3,135
2,622
2,781
2,250

3,445
3,149
2,899
2,954

2,276
2,244
1,660
1,365

1,820
1,704
1,544
2,029

5,757
8,511
10,791

6,594
9,493
12,447

4,520
6,380
7,746

3,524
5,069
7,099

„

e/2,126

Excluding f i n a n c e companies k / 1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

e/1,882

Year

2,894
2,583
2,753
2,1-61

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

10, 391

11,518

1

1 / S e c u r i t i e s and Exchange Commission e s t i m a t e s of n e t proceeds.
2 / Investment Bankers Association of America e s t i m a t e s of p r i n c i p a l amounts.
3 / Includes $718.3 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
4 / T o t a l 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 s a l e s and consumer f i n a n c e
companies.




Exhibit F

H.lii

Other Security Offerings 1 /
( I n m i l l i o n s of d o l l a r s )
Long-term
Foreign government 2/
1956
I
l W
"1959
" W
Januaiy
February
March

196
53

8k
k9
30

139
198
120

123

9
5
17

28
7
30

October
November
December

58
123
7h

k
60
1

Year

992

507

77

April
May
July
August
September

199

125
60

16k
215
100
2,321

572

Federal agency 3/""
638
U30
505

205
337
153

209
161
329

1*69
501

272
272
252

W7
206
330

22k
370
512

28
2U3

303
,9k
k59

k5k
11k
137

1,238
255
116

3,910

3,27k

3,098

5,5k3

April
May
June

357
35k
26I4

July
August
September

289

Year

523

371
208
ikk

326
U55
lk7

October
November
December

72

h2

233
I460
273

190
EA23

1,163
251

1*8

Short-term
S t a t e and l o c a l government V
January
FebruaryMarch

gency 3 C
1951
19^7
r z t

369

:

270
500

2 / Preliminaiy.
1/ Data presented in t h i s exhibit d i f f e r from those in Exhibit E i n t h a t r e f u n d ing i s s u e s , as well as new c a p i t a l i s s u e s , are included. Long-term s e c u r i t i e s are def i n e d as those maturing i n more than one year.
2 / Includes s e c u r i t i e s o f f e r e d in the United S t a t e s by f o r e i g n governments and
t h e i r subdivisions and b y , i n t e r n a t i o n a l o r g a n i z a t i o n s . Source: S e c u r i t i e s and Exchange Commission.
Issues not guaranteed 'by the U. S. Government. Source: long-term, S e c u r i t i e s
and Exchange Commission; short-term, Federal Reserve.
k / P r i n c i p a l l y t a x and bond a n t i c i p a t i o n notes, warrants or c e r t i f i c a t e s and Public

Housing
Authority n o t e s . In some instances PtoA n o t e s included may have a somewhat
l o n g e r term than one year. Source: Bond- Buyer.
http://fraser.stlouisfed.org/

Federal Reserve Bank of St. Louis

Exhibit 0

H.lk

Large Long-term Public Security Issues f o r New Capital
(Other than U. S. Treasury) 3 /
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

Month

S t a t e and
l o c a l government

605
1,093
725
356
281
771
209
825
259
227
305
369
3W

1958 - February
March
April
May
June
July
August
September
October
November
December
1959 - January
February

Type 1 /

266

553
182
300
505
195
275
109
288
172
259
229
335
551

Large Individual Issues Offered March 1 through
Issuer

Other 2 /

653
161*
86
w.
18
209
100
79
17U
35
20

Amount
Coupon
( m i l l i o n s Maturity
r a t e or Offering Rating
net i n t e r - y i e l d
of
dollars)
e s t cost

CORPORATE
No. Indiana Pub. Serv. Co. 1st mtg. bds.
25.0
KLM Royal Dutch Airlines
Conv. sub. deb. 18.5
American Natural Gas Co,
Com. stk.
28.0
Colorado Interstate Gas Ca l e t mtg.p.1.bds.33.0
Texas Eastern Trans. Corp.
Pfd. s t k .
15.0

1?8 9
1979

t $ s

h.hQ
It. 75

1979

U.70

L67

STATE AND LOCAL GOVERNMENT
Detroit-Metro. Expressway
Rev . - S . T .
P h i l a d e l p h i a , Pa.
- G.0.
Port of New York Auth.
Rev ,-Ut.
New York, N. Y.
G.0.
Metro.Wtr.Dist.of So.Calif Rev,i -Ut.
S tate of C a l i f o r n i a
G. 0.
Rev, , -Ut.
Phoenix, Arizona
West Virginia Univ.
Rev.- •Q.Ut.
Baltimore, Md.
G. 0.
G. 0.
S t a t e of Delaware




25.0
25.5
30.0
26.3
26.1*
100.0
10.0
10.2
28.9
12.5

1960-81
1960-89
1989/68
1960-7it
1960-71
1960-8V79
1960-88/68
1960-89/69
1960-81
1960-79

3.54
3.27
3.68
3.17
2.96
3.55
3.69
L27
3.11
2.96

1.90-3.65, / A
1.85-3.1*5^ A
3.63
A
1.90-3.37
A
1.90-3.05 Aa
1.90-3.60
Aa
C#VV^JeUV^y A
2.00-3.80f
3.25-i.30» —
1.90-3.20
Aa
1.80-3.05
Aa

H.lU

G-2
Large I n d i v i d u a l I s s u e s Offered March 1 through 20 (Cont'd)
Type 3 /

Coupon
Amount
( m i l l i o n s Maturity r a t e or
Offering
net i n t e r - y i e l d
of
dollars)
e s t cost

Rating

OTHER
Federal Land Banks

Farm loan bds.

86.0

1968

h 1/k

h.36

1/ Includes corporate and o t h e r s e c u r i t y o f f e r i n g s of $15 m i l l i o n and over;
S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of $10 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 and non-guaranteed i s s u e s by Federal a g e n c i 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 general
o b l i g a t i o n s ; Rev.-Ut., revenue o b l i g a t i o n s secured only by income from public u t i l i t i e s ; . Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c t a x e s only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.
V 1987-89 m a t u r i t i e s not r e o f f e r e d .
~bj 1989 m a t u r i t i e s not r e o f f e r e d .




H.llt
|

*

Exhibit H
Forthcoming Large Long-tern Public Security O f f e r i n g s f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large Issues

'•s,
£
?

,
's
•
\
\
i
I

Date of
computation

During month following
date shown
Corporate State arid IOther 2 /
l o c a l govt.

1958 - Feb. 28
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30
Feb. 27

1,123
555
356
266
. 768
161
785
113
204
301
210
270
198

.
.

134
298
493
177
225
55
2hl
295
258
229
261
551
292

110
150
36

71
75
45

Subsequent t o
date shown
State and
Corporate l o c a l govt. Other 2 /
1,208
670
561
1*64
1,048
381
914
216
326
401
370
365
279

341
330
493
208
235
125
435
524
67 5
683
' 515
856
481

110
150
36

71
75
45

Forthcoming Large O f f e r i n g s , as of March 20
Issuer

type

Amount
date
( m i l l i o n s Approximate
of o i f e r i n g
of d o l l a r s )

CORPORATE

Cleveland E l e c t r i c Illuminating Co.
Montana Power Co.
Ohio Edison Co.
Ohio Power Co.
Monongahela Power Co.
Armco S t e e l Corp.
*W. T. Grant Co.
^Natural Gas Pipeline Co. of America
Food F a i r S t o r e s , Inc.
^Tennessee Gas Transmission Co.
Columbia Gas System, I n c .
•KGlickman Corp.
Commerce Oil Refining Corp.

1 s t mtg. bds.
1 s t mtg. bds.
1 s t mtg. bds.
1 s t mtg. bds.
1 s t mtg. bds.
S.F. deb.
Com. s t k .
1 s t mtg. p . 1 . bds.
Conv. sub. deb.
Pfd. s t k .
Com. s t k .
Com. s t k .
Deb., bds. & common

31.0
45.0

Mar. 25
Mar. 25
Mar. 26
Mar. 31
Apr. 1
Apr. 2
Apr. 8
Apr. 10
Apr. 10
(rights expire)
Apr. 16
Apr. 20
(rights, expire)
Apr.
Spring

18.8
30.0
11.0

Mar. 31
31
Mar. 31

25.0
20.0
30.0
25.0
16.0
75.0
15.0
20.0
21.8
44.0
4o.o

STATE AND LOCAL GOVERNMENT
Milwaukee, Wisconsin
Pennsylvania General S t a t e Auth.
Shelby Co., Tennessee




G.O.
Rev.
G.O.

H
H.lU

Forthcoming Large O f f e r i n g s , a s of March 20 ( C o n t ' d )
Type

Amount
Approximate d a t e
(millions
of o f f e r i n g
of d o l l a r s )

STATE AND LOCAL GOVERNMENT ( C o n t ' d )
^ T e r r i t o r y of Hawaii
Los Angeles Sch. D i s t s . , C a l i f .
Alabama Highway A u t h o r i t y
B u f f a l o , New York
•Florida Development Commission
S t a t e of Minnesota
-^Oakland Co., Michigan
-x-Los Angeles, C a l i f o r n i a
Chesapeake Bay F e r r y Commission
S t a t e of New J e r s e y
Memphis, Tennessee

Rev.-Q.Ut.
G.O.
Rev.—Ut.
G.O.
Rev.-Ut.
- G.O,
Rev.-Ut.
Rev.-Ut.
Rev.-Ut.
G.O.
G.O.

lk.o
27.0
20.0
10.2
2^.0
12.0
12.7
15.0
llih.O
25.0

10.0

Mar. 3 1
Apr.
Apr.
Apr.
Apr.
Apr.
Apr.
May 12
Spring
Spring
Spring

OTHER
None
*—Included i n t a b l e f o r f i r s t t i m e .
1 / I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of &L5 m i l l i o n and o v e r ; S t a t e and
l o c a l government i s s u e s of $10 m i l l i o n and o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n
and Development i s s u e s and non-guaranteed i s s u e s by F e d e r a l a g e n c i e s .
N o t e . — D e l e t i o n s f o r reasons o t h e r t h a n s a l e of i s s u e : None.




I

H.Xli

Exhibit I

Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
Date
1952 - 1957
High
Low
1958 - January
February
March .
April
May
June
July 2
9
18
23
Oct. 7
15
28
29
Dec. 17
1959 - Jan. 7
20
28
Feb. 18
Mar. 11

Aa-rated offering y i e l d s
A-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
seasoned
y
i
e
l
d
s
(per cent)
(per cent) seasoned y i e l d s
(basis points)
( b a s i s points)
5.00(9/lU/57)
2.93(3/31/51)

87
-3

*3.60./
3.89^
It. 08
3.91
3.87
3.87

-8
22
35
18
18
17

it. 00
it. 10
it. 10
it. 57
it. 50
it.it0 5 /
kM*
it.itit

25
28
29
25
22
12
lit
23

it. 60
it.65o/

3it
itO

^

u\-

5.50(11/7/57)
3.00(3/17/54)

123
-15

3.962/
4.07
4.16
4.01
4.07

3
9
-1
8
6

3:98^

"

4.35^

31

4.75S/

23

*—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 , the 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 a r e averages of o f f e r i n g s during t h e i n d i c a t e d period and of
t h e 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 t h e same day. Average maturity f o r the seasoned i s s u e s
v a r i e s from 26 t o 28 y e a r s .
2 / Provides f o r a 5 - y e a r period during which i s s u e may not be c a l l e d f o r
refunding a t a lower coupon r a t e . Monthly averages so marked i n c l u d e one o r
more i s s u e s with such a p r o v i s i o n . Other i s s u e s have no such p r o v i s i o n .