Full text of H.16 Capital Market Developments : May 19, 1955

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I

Mot f o r P u b l i c a t i o n ^

^

^

^

H.lli

'
May 19, 1 9 # '

CAPITAL IIARIST DEVBL0P1IENT5
Volume of o f f e r i n g s f o r new c a p i t a l somewhat heavier
than in recent -weeks - Four l a r g e corporate stock i s s u e s t o t a l i n g
111 m i l l i o n d o l l a r s and tliree l a r g e S t a t e and l o c a l government
o f f e r i n g s v;ith proceeds of 36 m i l l i o n were p u b l i c l y f l o a t e d for
new c a p i t a l during the week ending Hay 13. Included i n the c o r porate issueswere t h r e e s u b s c r i p t i o n o f f e r i n g s with r i g h t s exp i r i n g l a s t week. The volume of l a r g e s e c u r i t y i s s u e s expected
this.week i s 87 m i l l i o n d o l l a r s .
Bond y i e l d s on outstanding corporate Aaa bonds increased .
two b a s i s p o i n t s l a s t week. Yields on U. S. Government long-term
bonds and on S t a t e and l o c a l government Aaa bonds decreased two and
one b a s i s p o i n t s r e s p e c t i v e l y . According t o d a i l y f i g u r e s , Treasury
y i e l d s decreased on Monday and remained steady on Tuesday of t h i s
week. Corporate y i e l d s did not change.
Corporate Baa bond y i e l d s rose one b a s i s p o i n t l a s t week.
S t a t e and l o c a l government Baa y i e l d s continued steady. Yields on
S t a t e and l o c a l revenue bonds dropped one b a s i s point i n the f a c e
of p r e s s r e p o r t s t o t h e e f f e c t t h a t ; l e g a l obstacles to two of t h e
delayed t o l l road bond i s s u e s had been overcome and s a l e of t h e s e
i s s u e s might take place in the near f u t u r e .
As i n d i c a t e d in Exhibit G, the spread between y i e l d s on
newly-offered 30-year f i r s t mortgage e l e c t r i c power bonds with A
r a t i n g s and y i e l d s on s i m i l a r l y r a t e d outstanding bonds of somewhat
s h o r t e r m a t u r i t y i s c u r r e n t l y about 13 b a s i s p o i n t s , about t h e same
as e a r l i e r t h i s year and considerably l a r g e r than the spread in
195&. .
Stock market c r e d i t - Customers' d e b i t balances, excluding borrowings f o r c a r r y i n g U. S . Government s e c u r i t i e s , of member
firms o f . t h e New York Stock Exchange, increased £2 m i l l i o n d o l l a r s
l a s t month t o t o t a l 2,704 m i l l i o n a t t h e end of A p r i l . Free c r e d i t
balances f e l l s u b s t a n t i a l l y f o r the second month aid t o t a l e d 973
m i l l i o n a t the end of A p r i l ,




II.Ill

-2-

Bela/? are the March and April 1955 figures for stock market credit outstanding:
( M i l l i o n s of d o l l a r s )
March

April

Customers' d e b i t b a l a n c e s - t o t a l

2,701

2,752

Customers' d e b i t b a l a n c e s - excluding money borrowed
f o r c a r r y i n g Government o b l i g a t i o n s

2,652

2 , 7 01;

Money borrowed by member f i r m s m a i n t a i n i n g margin
accounts

1,939

2,062

Money borrowed, by member f i r m s m a i n t a i n i n g margin
a c c o u n t s , on c o l l a t e r a l o t h e r than Government
obligations

;

1,861

Customers' f r e e c r e d i t b a l a n c e s

1,022

Bank loans t o o t h e r s f o r p u r c h a s i n g and c a r r y i n g
. s e c u r i t i e s ( l a s t "Wednesday of month-weekly r e p o r t i n g member b a n k s , excluding Governments f o r
New York and Chicago r e p o r t i n g banks)

1,080

1,988
,

973

1,081

Stock p r i c e s d e c l i n e - Stock p r i c e s , a s measured by t h e
SEC i n d e x of 265 common s t o c k s , d e c r e a s e d 2 . 8 p o i n t s t o 231.2 d u r i n g the week ending May 13 i n t h e l o w e s t average d a i l y t r a d i n g v o l ume of t h e y e a r . D a i l y i n d e x e s i n d i c a t e t h a t p r i c e s d e c l i n e d on
Monday and Tuesday of t h i s week b u t r e c o v e r e d somewhat on Wednesday.
More d e t a i l e d i n f o r m a t i o n concerning r e c e n t c a p i t a l market
developments w i l l be found i n t h e a t t a c h e d e x h i b i t s .

Business Finance and C a p i t a l 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 t h e F e d e r a l Reserve. System.




:

EXHIBIT A

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

T

13 50

/

W53

Corporate
Aaa y

U. S. Govt.
long-term 2/

1955 - High.
Lew

3.03
2.91
3.12
2.99
3.09
2.85
3.OU
2.91

2.79 (12/27)
2.56 (5/17)
3.15 (6/6)
2.78 (12/26)
2.71* (1/9)
2 .111* (8/7)
2.77 (5/6)
2.62 (1/7)

April 15
April 22
April 29
May 6
May 13

3.01
3.01
3.01
3.02
3.0b

Date

State and local
govt., Aaa j /

Spread between
U. S. Govt, and
Corporate State and
local Aaa

(Per cent)
1952 - High
Low
1953 - High
Lew
1951* - High

(1A)
(2/15)
(6/19)
(1/9)
(1/8)
(k/23)
(5/13)
(1/7)

2.76
2.77
2.77
2.77
2.75

1/ Weekly average of daily figures.

2.00 (10/23)
1.65 (5/1)
2.73 (6/25)
1.98 (1/8)
2.21 (6/10)
1.90(9/2)
2.11 (2/10)
2.06 (1/6)
2.08
' 2.08
2.08
2.08
2.07

.37
.19
.38
.19
'.1*3
.32
.31*
.21*

1.02
.71
.81*
.
.30
.61
.29
.69
.51*

.25
.22*
.21*
.25
.29

.68
.69
.69
.69
.68

Average term of bonds included i s 25-26

2/ Weekly average of daily figures; old s e r i e s . Average term to f i r s t c a l l
of bonds included i s 13-Hi years.
3/ Thursday figures. Only general obligation bends are included; average
term i s 20 years.
Note.—Highs and lews are for individual series and may be on different dates
for different series.




EXHIBIT B

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

\
i V " \ STATE A N D LOCAL GOVT. B e e

i

I\

Date

Corporate
Baa 1 /

f v V ' '

State and
l o c a l govt.
Baa If

State and
l o c a l govt,
revenue 3 /

(Per cent)
1952 - High
Lew
1953 - High
195k - High
Lou
1955 - High
Low

3.63
3.LB
3.89
3-50
3.7k
3.1*1*
3.50
3.1*5

April 15
April 22
April 29
May 6
May 13

3.1*8
3.1*8
3.1*9
3.1*9
3-50

(VU
(5/16)
(9/18)
(V2)
(1/8)
(12/31)
(5/13)
(lM)

2.98
2.1*8
3.79
2.96
3.32
2.93
3.08
3.02
3.08
3.08
3.08
3.08.
3.08

(10/23)
(1*/17)
(6/25)
(1/8)
(1/7)
(8/5)
(5/32)
(1/6)

2.69
2.27
3.27
2.71
3.00
2.72
2.80
2.76

(12/19)
(4/25)
(6/26)
(1/2)
(1/1)
(8/13)
(1*/15)
(1/7)

2.80
2.78
2.78
2.78
2.77

included i s 2>-2o years.
2 / Thursday f i g u r e s . Only general obligation bonds are
included; average term i s 20 years.
3 / Friday f i g u r e s . Average rating of bonds included i s
between Baa and A; average tern i s 20 years.
Mote.—Highs and lows are for individual s e r i e s and may
be on d i f f e r e n t dates for d i f f e r e n t s e r i e s .




STOCK MARKET

Date

Stock p r i c e

Common
Trading •
volume 2 /
( m i l l i o n s y i e l d s "if
of s h a r e s ) (per c e n t )

Stock market c r e d i t
Customers'
d e b i t b a l - loans t o
11
others" 5 /
ances k/

Total

( M i l l i o n s of d o l l a r s )

1955 - High
Low

165.3
151.7
167.1
144.0
22l.ii
156.5
231.0
217.1

l&rch
April
A p r i l 29
May 6
Kay 13

225.6
231.it
233.6
231.0
231.2

1952 - High
Low
1953 - High
Low
195b - High

(12/26)
(10/21*)
(1/2) .
(9/13)
(12/31)
(1/6)
(5/6)
(1/Uj)

2.0
0.9
2.5
0.9
3.7
1.4
4.6
2.2

5-77
5.13
5.75
5.15
5.33
4.20
4.22
4.12

1,986
1,80k
2,445
2,055
3,431
2,105
3,785
3,537

1,332
1,241
1,665
1,314
2,388
1,653
2,70k
2,517

656
552
780
, 664
1,048
746
1,083
1,018

2.9
2.7
2.6
2.3
2.2

4.21
4.22

3,732
3,735

2,652
2,704

n.a.

n.a.

n.a.

1,080
1,081
1,081
1,083
n.a.

;

t o 1947-49»100 by Federal Reserve. The c o n v e r s i o n f a c t o r i s 1 2 3 . 9 1 .
2 / Averages of d a i l y t r a d i n g volume on t h e 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 ,
U/ End 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
carry margin a c c o u n t s ; excludes money borrowed f o r c a r r y i n g U. S . Government o b l i gations.
jj'tj Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes a l l loans
on U. S . Governments f a r 1952; s i n c e 1953 only l o a n s secured by Governments a t
banks i n New York and Chicago are excluded. Weekly r e p o r t i n g banks account f a r
about 72 per cent of lomns t o o t h e r s .
n.a.—Not available.
Note.—Hi^is and lows a r e 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 d a t e s
for different s e r i e s .




H.1U

Exhibit D
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
(In m i l l i o n s of d o l l a r s )

19#
JanuaryFebruary
March

546
436
1,261

S&7
426
632

April
May

e/500
e/850

197
6^6
81(2

July •
August
September

.

"

1st quarter
2nd quarter
3rd quarter
4th q u a r t e r
Year

2,243

1,003
290
60k
1,608
1,99S
1,991
1,896
7,U9.0

.

S t a t e and l o c a l
1 1954
1

1953

1953

1955

g

532
312
e/540

#6
411
565

389
360
426

e/425
e/300

734
748
853

#9
649
434

483
325
753

279
261
649

519
259
475

577
429
1,438 - /

594
423
877

453
408
774

666

909
3#
747

October
. November
December

Nevr c a p i t a l

Corporate
1 r / 1954 1

779
. 675
1,123

1,912
2,578

e/1,385

8,495

1,372
2,334
1,188
1,894
6,709

-

1,176
1,412
1,253
1,636
5,477

Excluding f i n a n c e companies 2 /
1 s t quarter
2nd quarter
3rd q u a r t e r
4th quarter
Year

1,791
•

1,^27
1,927
1,911
1,792
7,158

1,669
1,991 .
1,223
2,344
7,227

r / Revised.
1 / Includes 602.5 m i l l i o n d o l l a r AT&T debenture i s s u e .
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 s a l e s and personal finance
..companies.
e / Estimated.
Mote.—Details may not add t o t o t a l s due to rounding.




.

.

H.lh

'

Exhibit E

Large Public S e c u r i t y Issues f o r New C a p i t a l
(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 )

Corporate

Month

166
32h
350
.
336
.75
335
. U13
0
9k
lit! '
72
750
175

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

,

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

-

557,
603
92
86
kSS
383
268
689
3a
107
337
238

Other 2 /

30
35
15

Large I n d i v i d u a l Issues Offered Hay 2 through 13
Issuer

Type 3 /

Amount
Coupon
(millions Maturity r a t e or : O f f e r i n g
Rating
of
yield
net i n t e r dollars)
est cost

CORPORATE
Public•Service of
Indiana, I n c .
P a c i f i c Morthwest Pipeline
American Trust Co. of
San Francisco
Transamerica Corp.

Pfd. stock
Com. stock

21.3
15.5

Com. stock
Com. stock

19.5
5b.5

Rev.
G.O.
Rev.

6.6
19.7
6.0

1957-77
1956-95
1956-35

3.02
2.10
2.28

1.80-3.05
1.05-2.15
1.05-2

9.9

1960-81;

2.87

2.00-2.90

STATE AND LCCAL GOVERNMENT
Wash. Tivp.-Uarion Co.
Sch. Bldg. Corp., Ind.
C i n c i n n a t i , Ohio
Los Angeles, C a l i f o r n i a
Louisiana S t a t e B u i l d ing Authority
•OTHER
None




L.L. .

.

„

Aaa
Aa
Baa

.2-2

1 / Includes corporate and other s e c u r i t y o f f e r i n g s of 1$ m i l l i o n d o l l a r s 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 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 Recons t r u c t i o n and Development i s s u e s .
3/ In the case of S t a t e and l o c a l ^overmaent s e c u r i t i e s , G t 0 .
denotes general o b l i g a t i o n ; Rev., revenue bonds; and, L.L., l i m i t e d
l i a b i l i t y o b l i g a t i o n s secured by pledge, of designated revenues.




H.14

Exhibit F

Forthcoming Large P u b l i c S e c u r i t y O f f e r i n g s f o r Hew C a p i t a l
• (Other t h a n U. S . T r e a s u r y ) l /
Expected Proceeds from Forthcoming Large I s s u e s
During month f o l l o w i n g
d a t e shown
S t a t e and Other 2 /
Corporate
l o c a l govt.

Date of
computation
1954 - Apr. 30
Hay 28
June 30
J u l y 30
Aug. 3.1
S e p t . 30
Oct. 29
Nov. 30
Dec. 31
1 9 # - J a n . 31
Feb. 28
Mar. 31
Apr. 29

323
332
3#
100
33U
343
15.
94
184
16
710
211
425

•

#6
86

27

%

300
383
436
66l
567
682
524
208
116

30

Subsequent t o
d a t e shown
S t a t e and Other 2j
Corporate
local govt.
617
#6
#2
303
608
4l4
135
216
216
bZ2
1,395
922
l,l4l

2,322
1,971
1,52k
1,553
1,876
2,158
1,257
2,682
2,144
1,961
1,978
2,009
1,917

27

30
30
35

Forthcoming Large O f f e r i n g s , a s of May 13
Issuer

Type

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

CORPORATE
Ohio Edison Co.
W. R. Grace
Bethlehem S t e e l Co.
Alabama Power
D e t r o i t Edison
^General Telephone Corp.
Lockheed A i r c r a f t Corp.
V i r g i n i a E l e c t r i c and Power
Southern C a l i f o r n i a Edison
Peoples Gas Light & Coke
Consolidated N a t u r a l Gas
American. Telephone and Telegraph
Southern C a l i f o r n i a Gas Co.




1 s t mtg. bonds
30.0
Conv. s u b . deb.
30.0
Conv. d e b .
191.7
1 s t mtg. bonds
15.0
60.0
Genl.&ref. mtg.bds .
P r e f e r r e d stock
15.0
Conv. s u b . d e b .
30.0
1st & ref.mtg.bds.
25.0
Conv. deb.
lii.o
Common s t o c k
15.5
Common s t o c k
25.1
Conv. d e b .
6#.9
Bonds
4o.o

May 17
May 18
Kay23
• May 24
May 24
May 24
May 2$
•June 7
June 14
June 24
• June
1955
1955

II. 11;

F-2
Forthcoming Large O f f e r i n g s , as of May 13 (Cont'd)
Issuer

Type

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

STATE AND LOCAL GOVERN! ENT
S t a t e of Maryland
Memphis, Tennessee
S t . Paul, Minnesota
Port of New York Authority
Chicago, I l l i n o i s
Allegheny County, Pennsylvania
Oakdale > C a l i f o r n i a
South San Joaquin, C a l i f o r n i a
•^Maryland S t a t e Roads Commission
^Kansas C i t y , Kansas
F l o r i d a S t a t e Turnpike Authority
Inter-American Center Auth., P l a .
Michigan,Turnpike Authori t y
S t a t e of Louisiana
I l l i n o i s Turnpike Authority
'Connecticut Expressway
Texas Turnpike Authority
Sam Houston Turnpike Corp.
Texas Turnpike Company
Dade County Port Authority, F l a .
Springfield, Illinois
Allegheny County, Pennsylvania
S a n i t a r y Authority
C a l i f o r n i a T o l l Bridge Authority
J e r s e y City Sewerage Auth., N. J .
North Carolina Turnpike Authority

G.O. •
G.O.
G.O.
Rev.
. G.O.
G.O.
Rev.
Rev.
n.a.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
n.a.
Rev.
Rev.
Rev.'

1U6.O
liiO.O
21.0
9.0

Hay 17
May 17
May 18
Hay 23
May 2k
May 2k
May 25
Hay 25
June
June
1955
1955
1955
1955
1955
1955 *
1955
1955
1955
1955
1955

85.0
235.0
16.0
200.0

1955
1955
1955
1955

11.3
8.3
6.9
30.0
6,0
W
20.8
20.8
25.0
7.0
7h .0
60.0
186.0
80.0
390.0
100.0

OTHER
None /
'
1/ Includes corporate and other i s s u e s of 15 m i l l i o n d o l l a r s ancl over 5 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.
2 / Includes f o r e i g n government and -International Bank f o r Reconstruction and
Development i s s u e s .
n.a.—Not a v a i l a b l e .
-x—Included i n t a b l e f o r f i r s t t i m e .




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

Date

Aa-rated o f f e r i n g 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
seasoned y i e l d s
(per c e n t ) ( b a s i s p o i n t s ) (per c e n t ) ( b a s i s points')

1952 average

3.16

13

1953 average

3.43

195k average -

3.0k

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

3.20
3.02
*2.93
2.99
3.00
*3.00
None
None
3.02
3.03
None
None

1955 - January
February
March
April

*3.12
*3.Hi
*3.17
None

May 11
11

3.35

12

15

3.79

27

3

3.12

-3

6
0
0
5
k
1

*3.35
*3.20
3.0S
3.10
3.14
3.H,
*3.13
3.11
*3.10
3.10
None
3.11

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

3
3

13
7
8
—

•

•

0

None
*3.23
3.29
3.31

9
1k
. 16

3-35
3.32

Ik
11

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 p e r i o d 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 for the same day. Average m a t u r i t y 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 .
*—Single observation, not an average.