Full text of H.16 Capital Market Developments : May 2, 1960

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Not for Publication DECONTROLLED AFTER SIX MONTHS
E.lk

May 2, I960
CAPITAL M A R K E T D E V E L O P M E N T S
IN T E E U N I T E D STATES A N D CANADA

4 idGO

(Including a Review of Foreign Borrowing
in International Capital Markets)
Part I - United States

During the week ending April 29, corporations sold large
issues totaling $1|5 million and State and local governments sold bonds
with total proceeds of $Lli9 million. This week, the calendar includes
corporate issues for $55 million and State and local government issues
aggregating $182 million. The State and local government financing
total includes a $133 million Public Housing Authorities issue which
is expected to be sold at mid-week.
Bond yields - Yields changed little for seasoned bonds, except those for State and local government bonds which increased
moderately. Yields on corporate bonds increased slightly, while yields
on U. S. Government obligations declined slightly.
A new Aa-rated, first mortgage electric utility bond issue .
was offered to the public last week to yield ii.95 per cent, about the
same as that for a comparable issue offered two weeks earlier.
. Yields for corporate and State and local government bonds were
relatively stable during April showing net increases from 1 to 6 basis
points. U. S. Government bond yields increased throughout the month,
with the rise for the month totaling 16 basis points.
Mortgage recordings - For the third month in a row, the estimated amount of nonfarm mortgage recordings in February was below yearearlier totals. Conventional loans continued to represent about threefourths of total activity.
The seasonally adjusted annual rate of mortgage recordings
changed little in January. At $29.8 billion, it was the second highest
rate on record for the month, but 7 per cent below a year earlier.
May security volume estimates - The volume of public security
financing for new capital for 'both corporations and State and local
governments is expected to continue to be moderate in May. The volume
of corporate security financing is estimated at $700 million, slightly
below the volume in April and one-eighth smaller than in May 1959.
Large public issues are expected to total over $200 million.




-2-

State and local government bond sales are expected to total
#650 million in May, including a large Public Housing Authorities issue
which is expected to be sold this week. This volume of bond sales
would be one-tenth smaller than the April total, but one-tenth larger
than the volume in May 1959.
Stock prices - Standard and Poor's index of 500 common stocks
declined further last week, closing at
39 on April 27. Trading
volume averaged 3.0 million shares a day.
Stock prices had increased during the first half of April, but
in recent weeks have declined substantially with the net decline for
the month being about 2 per cent. At the end of April, prices were
10 per cent below the January high and 2 per cent above the March low.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.
Developments in the Candaian capital ma rkets are presented
in Part II at the end of this report.

Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.




HIGH-ORAP1

BOND

YIELDS

f

LOWER-GRADE

BOND

/vf

• U.S. G(

YIELDS

L
W
L
l
T
Z
i

/\>

/

•

c
o
i

/ VjXL/l
/I
Z

/ 1 1/

v
f
x
J

i

J

11S7

$

O

V

M




x_a
f
V
J

J

list

S

0

M

T
i
]

VVk

T
o
"
i

GOVT

i

"TUT

S

0

M

__J

Hto.

v_TU=
S'

T
i
l

- 5 11.11*

Exhibit B - Tables for Exhibit A
High-grade Bond Yields
State and
local govt.
Aaa y

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

Corporate
Aaa 1/

U. S. Govt,
long-term 2/

Low
High
Low
High
Low
1960 - High
Low

2.85 (lt/23)
I t . l l t (9/27)
3-55 (5/2)
I1.61 (12/31)
U.09 (1/9)
It. 61 (1/29)
It.Ut ( V 8 )

2.1.5 (8/6)
3.76 (10/18)
3.07 ( V 2 5 )
ij-37 (12/31)
3.83 (1/2)
lt.l»2 (1/8)
LOO (3/25)

1.90 (9/2)
3.1.5 (8/29)

.60

3.06 (3/26)
3.53 (1/7)
3.28 ( V 7 )

.19

.68

Apr.
Apr.
Apr.
Apr.
Apr.

1*.1*5
u. a
ia5
l*.lt5
k.k6

It. 07
lt.10
lt.18
It. 21
U. 20

3.28
3.28
3.29
3.29
3.3k

.37
.34
.27
.21*
.26

.79
.82
.89
.92
.86

Date

(Per cent)
1951*
1957
1958
1959

-

1
8
15
22
29 2/

.30

.1*7
.31*
.92
.53
.92

.22
.50
.16.

.1*6

Lower-grade Bond Yields

Date

Corporate
Baa 1/

State and
local govt.
Baa y

Spread between
Aaa and Baa
I State and
. Corporate
1local govt.

(Per cent)
1951*
1957
1958
1959

-

Low
High
Low
High
Low
I960 - High
Low

3.1*1* (12/31)
5.10 (11/29)
l*.5l (7/11)
5.32 (12/31)
It.83 (Vl7)
5.36 (2/12)
5.17 (lt/8)

2.93 (8/5)
l*.5l (8/29)
3.61* (5/1)
It. 1*6 (7/2)
3.92 (3/26)
It. 1*6 (1/7)
It. 22 ( V 7 )

Apr.
Apr.
Apr.
Apr.
Apr.

1
8
15
22
29 E/

5.18
5.17
5.18
5.21
5.23

It. 22
It. 22
It. 21*
lt.23
It. 28

.52
1.2?
.77
.77
.56
.79
.71

.96
1.21
.93
.98
.79
.97
.93

.71*
.73
.73
.76
.77

.91*
.91*
.95
.91*
.91*

2/ Preliminary.
1/ Weekly average of dally figures. Average term of bonds Included Is 25-26 years.
2/ Weekly average of dally figures. The series Includes bonds due or callable in 10 years or more.
3/ 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.




STOCK

MARKET

5

. .. P.

M

1957
"MORTGAGE

J

.

s

°,

195$
RECORDINGS




AND

M

-

J

5

•

1959

I960

LOANS

S-/-1
V-\

,

V

i

J-

-A/V
»

Exhibit D - Tables for Exliibii, C

•7-

Stock Market
Stock price
index 1/

Date

Trading
Stock market customer credit
Coimnon
Customers1
Bank
volume Jl/
debit bal- loans to
yields 2/ (millions
ances 4/ "others" 5/
(per cent) of shares)
(Millions of dollars)

1957-59 - High
Low
I960 - High
Low

60.51
39.78
59.50
54.24

3.07
4.66
3.18
3.51

4.3
1.4
3.6
2.4

4,764
3,554
4,365
4,158

3,401
2,482
3,198
3,028

1,373
1,060
1,167
1,130

Februa ry
March
Apr. 15
Apr. 22
Apr. 29 2/

55.69
55.02
56.43
55.^2
54.37

3.38
3.45
3.36
3.43
3.49

3.6
2.9
2.6
3.0
3.0

4,274
4,158
n.a.
n.a.

3,129
3,028
n.a.
n.a.

1,145
1,130
1,112
1,114
n.a.

n.a.—Not available.
g/ Preliminary.
1/ Standard and Poor's Tmposlte Index of 500.oonmon stocks, weekly closing prices, 1941-43=10. Monthly data
are averages of dally figures rather than of Fridays' only. Highs and lows are for Fridays' data only.
2/ Standard and Poor's Composite stock yield based on Wednesday data converted to weekly closing prices by
Federal Reserve. Yields shown are for dates on which price Index reached its high or low.
3/ Averages of dally trading volume on the New York Stock Exoliange.
—
Aj 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* Prior to July 1, 1959, such loans are excluded only at banks in New York and Chicago.
Weekly reporting tanks account for about 70 per cent of loans to others. For further detail see Bulletin.

Date

1959 - Feb.
Mar.
Apr.'
MayJuly
Aug.
Sept.
Oct.
Nov.
Dec.
1960 - Jan.
Feb.

Nonfarm Mortgage Recordings and Loans 1/

'

Unadjusted
Total
Seasonally
FHA
-VA.
Unadjusted
adjusted 2/
(Millions of dollars)

Conv.

2,631
2,683
2,683
2,757
2,780
2,787
2,769
2,650
2,639
2,589
2,185
2,187

2,245 " •
2,586
2,776
2,768
2,974
3,100
2,871
2,834
2,799
2,442
2,487
2,079
2,149

506
530
490
478
521
524
504 •
-510
523
448
451
417
368

238
260
231
211
221
227
202
221
238
220
241
195
170

1,500
1,796
2,055
2,079
2,233
2,349
2,165
2,103
2,039
1,775
1,794
1,467
1,612

n.a.—Not available.
1/ Total recordings data are estimates based on reports from about 450 areas and Include
mortgages of $20,000 or less secured by nonfarm real estate, primarily residential properties.
FHA-lneured loans represent gross amount of insurance written, and VA-guaranteed loans the gross amount
of loans closed#on 1-4 family houses. Conventional data are derived as a residual, although total
recordings and VA- and FHA loans are not strictly comparable in concept or timing.
2/ Three-month moving average, seasonally adjusted by Federal Reserve.
Source1

Federal Home Loan Bank Board, Federal Housing Administration and Veterans Administration.




Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

I960

1

New capital
Corporate 1/
State and local 2/
I960
1959
1
1958
1 1958
1 1959
638
858616

E/596
fi/739
E/775

81*0
7l*5
631

728

731*

e/725

899
791
87U

1,11*0
597
887

e/700
e/650

July
August
September

531
718
709

1,107
510
1,111

567
511*
1*68,

806
1*03
651

October
November
December

887
8#
936

862
518
920

593.
513
lt55

1*56
1*71*
1*35

January
February
March
April
May
June

1st
2nd
3rd
iith

quarter
quarter
quarter
quarter

S/700

g/2,110

1st half
Three quarters
Year

2,216
2,561*
1,9#
2,688.

3,139
2,623
2,760
2,300

1,780
6,738
9,U27

m

10,823

6/1,816

593:
1,00.6

2,11*2

;js

1,562

4,673
6,223

812
953
511
"

7#

If

2,276
2,2W*
1,860
1,365
1*,520
6,380
7,71*6

Excluding finance companies hj
1st
2nd
3rd
l*th

quarter
quarter
quarter
quarter

e/l,76Q

Year

2,011
2,1*0 9
1,695
2,519

2,899
2,586
2,731
2,213

8,665

10,1*29

e/ Estimated.
__
1/ Securities and Exchange Commission estimates of net proceeds.
2/ Investment Bankers Association of America estimates of principal amounts.
3/ Includes $718.3 million AT&T convertible debenture issue.
%/ Total new capital issues excluding offerings of sales and consumer finance
companies.




-9~
H.ll*

Exilibit F
Other Security Offerings 1/
(In millions of dollars)
Long -te m
Federal agency 3/
Foreign government 2/
I960
I960
| 1959
1959
1 1958
1 1958

JanuaryFebruary
March

77
59
2

196
53

April
May
June

56
50
1*2.

139
198
120

July
August
September

85
1
36

9
5
17

October
November
December

33
1*2
70

58
123
7l*

558

992

U*7

Year

182
150

.

—

190
1*28
295

233
1*60
273

April
May
June

563
1*11
2 1*5

July
August
Sept emb er
October
November
December

268
315'
E/363

Year

1,163
251
—

523
—

—

161*

98
150

—

220
86
707

Short-term
State and local government 1*/
January
February
March

199
175

—

2,321

Federal agency 3/
359
500
1*89

371
208
H*l*

357
351*
261*

1*86
675
289

209
161
329

21*6
1*67
399

289
1*23
369

727
365
665

1*37
206
330

235
3li3
358

231
1*15
21*3

733
1*71
288

1*51*
111*
137

h,179

3,910

6,01*7

3,098

1*79
1*63

1

EZ Pre Urinary.
1/ Data presented in this exhibit differ from those in Exhibit E in that refunding Issues, ao well as new
capital issues, are Included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and their subdivisions end ty
international organizations. Source: Securities and Exchange Commission,
3/ Issues not guaranteed by the U. S. Government. Sourcet long-term, Securities and.Exchange Commission;
short-term, Federal Reserve.
4/ Principally tax and bond anticipation not#s, warrants or certificates and Public Housing Authority
notfcir. In some instances PHA notes included may have a somewhat longer term than one year. Source« Bond Buyer.




Exhibit Q
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate

Month
1959 - March
April
May
June
July
August
September
October
November
December
i 9 6 0 - January
February
March

State and
local government

215
359
31*2
28U
110
363
199
Loo
1*21
230
279
262
381*

369
563
258
635
191*
263
211*
29l|.
163
217
388
283
225

Other 2/
176
20
50
60
50
98
175
20

~

70
100
320
191

Large Individual Issues Offered during April

Issuer

Type y

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

CORPORATE
Carolina Power & Lt. Co. 1st mtg. bds.
1st mtg. bds.
Commonwealth Edison Co.
1st mtg. bds.
Alabama Power Co.
S.F. deb.
National Fuel Gas Co.
Pfd. stk.
Kratter Corp.
Mountain Sts.Tel.&Tel.Co.
Deb.
Iowa-111. Gas & Elec. Co. 1st mtg. bds.
United States Plywood Corp S.F. deb.
Middle South Util., Inc.
Com. stk.
Transcon.Gas Pipeline Co. 1st mtg. bds.
Transcon.Gas Pipeline Co. Com. stk.
1st mtg. bds.
Metropolitan Edison Co>
Cincinnati Gas & Elec. Co. 1st mtg. bds.




25.0
30.0
19.5
18.0
23.6
1(0.0
15.0
25.0

16.k

35.0
16.2
15.0
30.0

1990
1990
1990
1985

li-7/8
1-5/8
5
5-1/8

U.85
a. 63
L98
5.05

Aa
Aaa
A
Aa

2000
1990
1985

5
5
5-i/li

lu 87
l*.9k
2.25

Aaa
Aa
Baa

1980

5-iA

5.33

Baa

1990
1990

5
5

li.9 5
4.88

Aa
Aaa

H.lli

-11-

G-2
Large individual Issues Offered during April (Cont1d)

Type 1/

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

Rating

STATE AND LOCAL GOVERNMENT
State Public School Bldg.
Auth., Pa.
Rev. -Rent.
N. I. City Msg. Auth.
G.O.
Puerto Rico Wtr. Res.Auth. Rev.-Ut.
Chicago, Illinois
G.O.
State of California
G.O.
Term
Triborough Br. & Tun.Auth.
Serial
Philadelphia, Penna.
G.O.
Cleveland, Ohio
G.O.
Los Angeles C.S.D.,Calif.
G.O.
State of Tennessee
G.O.
New York,i New York
G.O.
Sacramento Mun. Ut. Dist.,
Serial
Calif.
Term

16.0
4.00 3.10-4.05
1962-99/65
20.5 1962-2010/75
1.01 2.85-1.02
20.0
1962-97
4.40 3.00-4.38
10.0
1962-79
3.60 2.85-3.65
25.0 1962-86/81
3.84 2.80-3.91
Loo
74.0
1985
4.03
26.0
1970-75
3.50-3.75
1961-90
29.3
3.77 2.40-3.88
1961-80 ' 3.39 2.50-3.45
13.3
16.0
1961-85 \ 3.87 2.40-3.90
1961-80
15.0
3.32 2.40-3.35
3.86 2.65-3.90
1961-90
75.0
1966-80
11.3
3.25-3.60
3.9k
18.8
4.00
1999

A
Ba<
A
Aa
A
Aa
Aa
Aa
A
Aa

OTHER
Federal Land Banks
Commonwealth of Australia

Bds.
Bds.

1*6.0
25.0

1964
I960

4-1/2
5-1/4

4.40
5.45

1/ La eludes corporate and other security offerings of #15 million and over;
State and local government security offerings of Sip million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
2/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue from quasi-utilities;
Rev.-S.T., .revenue bonds secured by revenue frcm specific taxes only; Rev.-Rent.,
revenue bonds secured solely by lease payments.




Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasuiy) 1/
Expected Proceeds from Forthcoming Large Issues
Subsequent to
date shown

During month following
date shown

Date of
computation

Corporate
21*6
287
165
238
198
37JU
385
226
210
207
301
299
202

Apr. 30
May 29
June 30
July 31
Aug. 31
Sept. 30
Oct. 30
Nov. 30
Dec. 31
Jan. 29
Feb. 29
Mar. 31
Apr. 29

^
25b
2h7
ll»6
356
385
270
115
295
bhS
210
255
250
2U3

|other 2/
50
50
25
70
30
b5
35
—

coi

Porate

3U6
332
272
305
517
69U
509
271
280
252
372
3 liU
357

50

517
761
500
h06
h02
U70
336
185
BhS
310
3#
280
258

50
25
70
30
ii5
35
—

Forthcoming Large Offerings, as of April 29
Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

CORPORATE

-

Columbia Gas System, Inc.
Com. stk.
E.T.
General American Transportation Corjx
S.F. deb.
Uris Building Corp.
Deb.
Wisconsin Telephone Co.
1st nrfcg. bds.
Milwaukee Gas Light Co.
Deb.
Texas Eastern Transmission Corp.
1st mtg. bds.
Midwestern Gas Transmission Co.
1st mtg. p. 1. bds.
Michigan Wisconsin Pipe Line Co.
1st mtg. bds.
-^Southern Electric Generating Co.
S.F. deb.
-^National Cash Register Co.
Commerce Oil Refining Corp.
Deb., bds. & com.

25.0
30.0
20.0
20.0
22.0
25.0
60.0
30.0
I4O.O
liO.O
1:5.0

May i|
May 5
May 11
May 11
May 18
May 26
May
June 2
June 3
June
Indefinite

STATE AND LOCAL GOVERNMENT
State of Minnesota
Public Housing Authorities
Jacksonville, Fla.
Cincinnati, Ohio
^Detroit, Michigan
-^Memphis, Tennessee


None


G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.

k8.8
133.4
30.0
12.2
19.0
15.0

May 3
May ii
May 10
May 17
May 2li
June 7

H-2
Footnotes
•a—Included in table for first time.
\] Includes corporate and other issues of $15 million and over; State
and local government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues and non-guaranteed issues by Federal agencies.'
Note.—Deletions for reasons other than sale of issue; None.




-ill-

Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Date

1952 - 1958
High
Low
1959 - January
February
March
April
May
June
July
Aug.
Sept.
Oct.
Nov. 25
' Ere. 8
9
10
1960 - Jan. 7
Feb. 25
26
Mar. 15
16
18
29
Apr. 6
8
1U
21
27

Aa-rated offering yields A-rated offering yields
Amount above
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)
5.00 (9/lh/$7)
2.93 (3/31/5W

it

h.97
*1.95
*li.93
b. 83

87
-3

1
37
29
31
23

5.13&/
5.08
5.30

36
1|2
63

5.08
5.10

¥1
2i6

trfy

17

iu85

33

li.Sli

39

h.?S

39.

5.50 (11/7/57)
3.00 (3/17/5U)

123
-15

*1I.752/

23

*li.67

18

5.07

%
17

*5.65
5.33

60
h3

5.15
5.Wi,,
5.30^

51
50
. 28

5.00
h.93

11
7

h.98

21

5.30

50

*—Single observation, not an average.
\J 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. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.
2/ Includes one issue which provides for a 7-year period during which the
issue may not be called for refunding at a lower coupon rate.




May 2S I960

-Im-

part II - Canada
The Treasury bill yield declined rather sharply even though the
Bank of Canada was a net seller of bills for the first time in ten weeks.
The rate on the Canadian dollar increased slightly and the 3-month forward
premium was eliminated. Bond yields declined during the weel% while stock
prices fluctuated.
Money market conditions. The yield on the short Treasury bill
in last Thursday's auction declined 2h basis points from 3«£>0 per cent the
previous week to 3.26 per cent. The yield on the 6-month bill declined
28 basis points during the same period from 3,71 per cent to 3#U3 per cent.
For the first time in ten weeks, the Bank of Canada decreased its Treasury
bill holdings by $10 million while the chartered banks and the general
public increased their holdings by the same amount. The average rate on
day-to-day loans eased slightly to 3.38 per cent.
p
The decline in the Canadian 3-month bill was slightly greater
than the decline in the United States rate, resulting in a small decrease
in the spread favoring the Canadian bill. The„3-month forward Canadian
dollar, which was at a premium of 0.12 per cent (annual basis) the week
before, was flat with the spot rate at last Thursday's closing.
Bond market developments. Canadian bond yields declined during the
week in all but the longest maturities. The spread between comparable
Canadian and United States securities (Thursday yields for bills and
Wednesday yields for bonds) were as follows (figures in parenthesis refer
to the previous week):
0.10 per
-0.13 per
0.70 per
0.97 per
1.U2 per

cent on a 91-day bill (0.15)
cent on a 182-day bill (-0.05)
cent on an 8-year bond (0.80)
cent on a 20-year bond (0.98)
cent on a 35-year bond (l.UO)

During the week, the Bank of Canada purchased modest amounts of
bonds, the first week since February when it has not'been a net seller
to the market (see Table).
Press comments indicate a strengthening of the bond market from
the previous week following a dearth of new issues. A break in prices
the previous week came a few days after the offering of a $20 million
Manitoba 5-1/2 per cent debenture as follows: 9-year maturities at 98-3/L
yielding 5.68 per cent and 19-year maturities at 96-1/2 to yield 5.81 per
cent. Bids on the 1979 issue fell three-quarters of a point below issue
price during the general shake-out, then rose again last week.
Exchange rate. The spot rate on the Canadian dollar recovered
slightly last week to 103.72 (U.S. cents) following a steady U-week decline'.




-16-

The premium on the 3-month dollar was eliminated on April 28. Recent
market rates for the Canadian dollar (U.S. cents) follow:

March 17
31
April 7
1U
21
28

S£Ot

2 mos.
forward

10^.27
10U.38
lOU.OO
103.86
103.67
103.72

105.1k
10U.31
103.97
103.89
103.70
103.72

Stock market. Prices of industrial stocks in the Canadian
exchanges fluctuated last week after declining the week before, as noted
in the following table:
Date
April 20
21
22
25
26
27
28
29

Toronto
U90.52
U89.1t2
189.06
U85.81
U88.UO
188.23
U86.52
U85.27

Montreal
286.8
283.1
283.9
283.5
282.7
283.1
283.3
282.5

British Commonwealth Section
Division of International Finance
Board of Governors of the Federal Reserve System




New York
Standard & Poor
59.15
59.31
59.09
58.U2
58.63
58.63
58.09
57.85

J
|

-it-'
Selected Government of Canada Security Yields
3-month
Treasury
billd/

Date
1957 - High
1958 - Low
1959 - High
Low
I960. - High
Low
April 7
1U
21
28

U.08

a

Spread between
Canadian & U.S. rates
long-term
3-tao*.
bonds/
billaS/

Longterm
Govt.>
bonds/

3.25
5.iii
3.01

U.81
3.31
5.30
U.U5
5.55
5.05

U.35
3.78
5.30
U.U1
5.U2
5.15

3.2b
3.58
3.50
3.26 .

5.08
5.16
5.1U
5.05

' 5.13
5.22
5.2U
5.22

0.87

6.16

f

Intermediate

Discount
on 3-mo.
Canadian
dollar^/

1.19
0.U7
1.22
0.91

2.96
0.30
0.90
-0.01

0.72
(P)0.12 ,

0.98
0.98 •
0.99
0.96
•

0.19
0.06
,0.15
. 0.10

0.12
(P)0.12
(P)0.12
0.00

Average yield at weekly tender on Thursday.
'
Government of Canada 2-3/1; per cent of June 15, 1967-68.
Government of Canada 3-1/U per cent of 1979.
U.S. Government 3 - l / U per cent of 1978-83• Government of Canada 3 - l A per
cent of 1979* Bond prices are Wednesday closing quotations.
5 / Spread between Canadian auction rate and composite market yield for the
U.S. bill on the close of business on Thursday.
6/ Spread between 3^K>nths forward and spot price of the Canadian dollar,
expressed as per cent per annum, on Thursday.
Canada? Changes in Distribution of Holdings of Canadian
Government Direct and Guaranteed Securities
(millions of dollars, par value)
"
Bank of Canada
Treas.
Bonds
bills

Government
Total

March 3
10
17
23
30

+
+
+
+
+

31
31
11
U3
25

- u
- 7
- 10
- 9
- 3k

, - 6
- 3
- 18
-17
- 10

April 6
13
20
27

+
+
+
-

28
37
1U
10

- 30
0
0
t 7

-- 3
- 11
+ 3
+ 2

Chartered banks
Treas.
bills
Bonds
+
+
+

12
33
1
9
2

+ 1U
- 10
- 3
0
+ 16

' - 27
- 7
0
- 32
- 12

- 6
+ 28
+ 23
'+ 3
+ 11

- 10
- 33
- U
> 7

+ 9
+ 3
+ 2
- 18

- 19
+ 1U
- 11
+ 3

+ 32
, - 17
- 10
- 1

Source: Bank of Canada, Weekly Financial Statistics.




General public
Treas.
. bills
Bonds

C A N A D A - U N I T E D STATES
THREE-MONTH TREASURY

B I L L RATES
Per cent

Monthly

G O V E R N M E N T M E D I U M TERM B O N D YIELDS

L O N G TERM G O V E R N M E N T




B O N D YIELDS

May 2, I960

-19-

Publicly-issued Foreign Borrowing in Major International
Capital Markets, 1958 and 1959
,
During 1959,, total flotations of publicly-issued bonds of foreign
governments and private companies in major international capital markets
declined about 16 per cent below the issues sold in 1958, according to
a compilation of the Economic Staff of the Worid Bank. Figures on private
placements and special institutional financing are excluded from the
estimates. Total borrowings by foreigners in the four major international
markets (United States,' United Kingdom, Switzerland and Germany) were reduced from $89U million in 1958 to $?5U million in 1959. The reduced
flotations in the United States and British markets account for the drop.
Publicly-issued Foreign Bonds in Major Capital
(nominal amounts in millions of U.S,. dollars)
United
States

59U
35

m

Grand total

667

1959
Government s
New issues
Refunding
Total
Private issues

m
11
515

98

Grand total

Switzerland

Germany

126

li dsy

1958
Government:
New issues
Refunding
Total
Private issues

U.K.a/

173

U35

36

12

36

• 12

1*2
11

3k

' 107

3k

3

Sweden

Total

\ 6

72lt

6

#

891

-EE

5U1
1U8
389
J*

——

75U

a/ Includes borrowings by independent members of the Commonwealth but
excludes those of dependent members.
Sources Economic Staff ,of the I.B.R.D.
The United States remained the largest supplier of capital
to foreigners but its share of the total declined from 75 per cent in
1958 to 68 per cent in 1959. Flotations in Britain were also sharply




BS
83

~~5

reduced. Britain's share fell from 19 per cent of the total in 1958 to
13 per cent in 1959; moreover, refundings and not new cash issues made
up the bulk of the British flotations. In 1958, Switzerland was the
second major market for publicly-issued foreign borrowings as its total
lending increased from the restricted level of only $36 million in 1958
to $107 million last year. There was a further growth during 1959 in
foreign borrowing in Germany as money rates were reduced and the activity
in the German capital market increased.
In the United States, borrowings by European countries during
1959 were maintained at the 1958 levels but borrowings by Canadian
governmental units and by Commonwealth countries were sharply reduced.
Comparative flotations by areas (in millions of U.S. dollars) were:
1958

1959

Canada
Commonwealth
Europe
Other areas

325
1U6
133
.63

276
38
128
-J2

Total

667

5IU

The countries (other than Canada) borrowing as much as $50 million were:
in 1958, Australia, South Africa and the European Steel Community;
in 1959, France.
Foreign flotations in Britain declined from $173 million in
1958 to $98 million in 1959» However, new cash issues (excluding
refundings) were reduced from $126 million in 1958 to only $30 million
last year. Borrowings were confined to four Commonwealth countries,
as may be seen in the following figures on foreign borrowings in London
(in millions of U.S. dollars):
Government .

II

Government
new issues
1959

1958

1959

1958

1959

U2
56
28

.U5

56

28
1U
98

Australia
New Zealand
Hhodesian Federation
South Africa
Total




126

28
2

2

12

87
56
28
2

30

U7

68

173

56

-21-

Withdrawal of temporary restrictions on foreign borrowing in
Switzerland, announced in late 1958, was followed t?y a rapid growth in
Skis s lending in 1959. The large number of private company flotations
makes Switzerland the leading center for private foreign borrowers. During
the past two years European corporations have been the principal borrowers
but even U.S. and Canadian issues were reported. Total Swiss landings
increased from $ 3 6 million in 1958 to $107 million in 1959> broken down
as follows (in millions of U.S. dollars):
Government
new issues '
1958
1959
Europe
Austria
Belgium
Denmark
Eurofima
France
Germany
Interfrigo
Norway
Sweden
U.K.
Total

Private
new issues
193#
l9f>9

12&/
15
9

12
3

\/
ia

2U

Total
195B
T359

15
9
_13
37

2k

5
12

12

3
12
15
9
2

15
9
_13
78

Other areas
Canada
U.S.
South Africa
Total

12
12

"12

"17

™12

5
12
12
29

Total, all areas

53

36

5U

36

107

— '
12

a/ Refunding.
West Germany emerged as an exporter of long-term capital in
the form of publicly-issued securities in 1958 and 19595 a private South
African loan by a consortium of German banks in 1958 was reported to have
been the first foreign flotation in Germany since 191b. The rapid reduction in bond yields in Germany, especially in 1959; contributed to the
increase in total new issues from $22 million in 1558 to $3U million
in 1959= The.breakdown of these totals are as follows (in millions of
U.S. dollars):




ioS/

2k
7

10

31

Other areas
Japan
South Africa
Total
10

10

2U

To

31

*3

Ill 1

Total, all areas

3y

—

Total
1956

rolro !

Europe
Austria
NorwayTotal

Private
new issues
1956
1959

II

Government
new issues
1956
1959

1
1
12

-3U

12

—

22

3
~3
3h

a/ Includes $10 million of an original Austrian issue of $25 million in
the United States which was reoffered in Germany.
b/ Includes $3 million of an original Japanese issue of $30 million
in the United States which was reoffered in Germany.

British Commonwealth Section
Divison of International Finance
Board of Governors of the•Federal Reserve System