Full text of H.16 Capital Market Developments : May 21, 1958

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Not f o r Publication

DECONTROLLED AFTER SIX MONTHS
L

I

May 21, 1958.

Ho l l ;

CAPITAL MARKET DEVELOPMENTS
The volume of public security financing continues to be subs t a n t i a l . Large public security issues f o r new c a p i t a l during t h e week
ending May 16 t o t a l e d §127 million f o r corporations and $183 million
f o r S t a t e and l o c a l governments. The calendar f o r t h i s week includes
l a r g e corporate i s s u e s , including expiration of subscription r i g h t s ,
t o t a l i n g $130 m i l l i o n . State and l o c a l government security o f f e r i n g s
amounting to $ l 6 l million are also scheduled f o r s a l e .
Bond y i e l d s - Changes i n y i e l d s on outstanding bonds were
mixed l a s t week. Yields on State and l o c a l government and U. S.
Government obligations increased, while those f o r corporate Aaa-rated
bonds remained s t a b l e . Yields on corporate Baa's declined s l i g h t l y .
Offering y i e l d s on new corporate i s s u e s show l i t t l e change.
Two new Aa-rated, 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 s were
offered to the public t h i s week, each to y i e l d 3.85 per cent — 5 basis
points.below t h a t f o r a comparable o f f e r i n g of l a s t week.
Stock market c r e d i t - Customer c r e d i t in the stock ma licet
(excluding that f o r U. S. Government s e c u r i t i e s ) increased f u r t h e r i n
A p r i l , t o t a l i n g $>3,980 million a t the end of the month, the highest
since l a s t July and only s l i g h t l y below the June 1957 peak. In A p r i l ,
net debit balances increased $70 million and bank loans to "others"
advanced $1*7 m i l l i o n . Borrowing by member firms of t h e NYSE maintaining margin accounts (excluding borrowing on U. S. Government s e c u r i t i e s )
also continued t o increase l a s t month. Customers' net f r e e c r e d i t
balances were $985 million a t the end of A p r i l , #31 million higher
than a month e a r l i e r . These and other data on stock market c r e d i t f o r
April and March are shown in the following t a b l e .
End of month
Apr.
1 Mar.
Cuotomer c r e d i t
Excluding U. S=. Govt, s e c u r i t i e s - t o t a l
Net d e b i t balances
Bank loans t o "others"
Net debit balances secured by U. S. Govt, s e c u r i t i e s
- Bank loans, to others f o r purchasing or carrying
U. S. Government s e c u r i t i e s
Broker and dealer c r e d i t
Money borrowed except on U. S. Govt, s e c u r i t i e s
On customer c o l l a t e r a l
Money borrowed on U. S. Government s e c u r i t i e s
Customers' net f r e e c r e d i t balances




Change

(millions of dollars)
3,980
2,735
1,21*5
13U

3,863
2,665
1,198
111

117
70
1*7
23

70

86

-16

1,822
1,10*3
230
^985

1,781*
1,1*65
206
951*

38
-22
21*
31

H.lli

-

2

Stock p r i c e s - Stock p r i c e s , a s measured by Standard and
P o o r ' s index of 500 common stocks, declined l a s t week, closing a t
1*3.36 on May 16. P r i c e s have changed l i t t l e 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 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.




EXHIBIT A
HIGH-GRADE

BOND

1953

Date

YIELDS

1954

1955

1956

Corporate
Aaa 1 /

U. S. Govt,
long-term 2/

3.1*2
2.99
3.09
2.85
3.17
2.91
3.79
3-07
U.1U
3.66

3.19 (6/5)

1957

State and
l o c a l govt.
Aaa 2 /

1958

Spread between
U. S. Govt, and
Corporate 1 State and
1local Aaa

(Per cent)
1953 - High
195U - High
1955 - High
1956 - High
1957 - High
1958 - High
Low

3.68
3.55

April 18
April 25
May 2
May 9

3.61
3.57
3.55
3.57
3.57

May 1 6

(6/19)
(1/9)
(1/8)
(V23)
(12/23)
(1/7)
(12/28)
(3/2)
(9/27)
(1/12)
(1/3)
(5/2)

^

2.73 (6/25)

2.714 (12/31)
2.7U (1/8) '
2.1*5 (8/6)
2.97 (8/5)
2.6k (1/7)
3.L5 (12/28)
2 . 8 k (2/17)
3.76 (10/18)
3.18 (2/8)
3.28 (1/31)
3.07 (1/25)

1.98
2.21
1.90
2.3U
2.05
3.05
2.17
3.1:5
2.76
2.86
2.6U

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

3.10
3.07
3.Ht
3.lit
3.15

2.69
2.61
2.61t
2.66 .
2.71

.38
.20
. .1*3
.30
.27
.11
. .11
.12
.60
.27
.51
.28
.51
.50
.la
.14-3
-1*2

.83

•

• 33 •
.62
.30
.76
.57
.71 .
.32
.hi
.15
.62
• 3lt
.la
.U3

.50
.1*8
.itit

1 / Weekly average of daily f i g u r e s . Average terra of bonds included i s 25-26 years.
2/ Weekly average of daily f i g u r e s . The series includes bonds due or callable in
10 years or more.
y Thursday f i g u r e s . Only general obligations bonds are included; average term i s
20 years.
Note.—Highs and lows are f o r individual series and maybe on d i f f e r e n t dates f o r
different series.




LOWER - GRADE

BOND

YIELDS

Corporate
Baa 1/

Date

State and
l o c a l govt.
Baa 2/

|

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

(Per cent)
1953 - High
195U - High
1955 - High
1956 - High
1957 - High
1958 - High
Low
April 18
April 25
May 2
May 9
May 16 . .

3,89
3.50
3.74
3.a
3.63
3.U5
4.41
3.58
5.10
4.42
4.96
4.62
4.66
4.66
4.66
4.63
4.62

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/14)
(12/28)
(3/9)
(11/29)
(4/12)
(1/3)
(5/16)

3.79 (6/25)
2.96 (1/8)
3.32 (1/7)
2.93 (8/5)
3.26 (12/29) •
3.02 (1/6)
4.22 (12/27)
3.20 (3/8)
4.51 (8/29)
3.90 (2/21)
3.92 (1/2)
3.64(5/1)

.69
.42
.68
.52
.54
.45
.63
.42
1.27
.64
1.28
1.04

1.21
.98
1.16
.93
1.03
.87
1.17
.89
1.21
1.04
1.11
.99

3.78
3.66
3.64
3.65
3.76

1.05
1.09
1.11
1.06
1.05

1.09
1.02
1.00
1.05

1/ Weekly average of daily f i g u r e s . Average term of bonds Includes i s
25-26/ears.
2/ Thursday f i g u r e s . Only general-obligation bonds are included; average
term i s 20 years.
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 f o r d i f f e r e n t s e r i e s .




STOCK

MARKET'

tote

Stock p r i c e

Trading
Common
volume 2 /
(millions
yields ^ /
of s h a r e s ) ( p e r cent)

Stock market customer c r e d i t
Customers'
debit bal- loans to
ances 1*/ " o t h e r s " 5 /

Total

( M i l l i o n s of d o l l a r s )
1953 - High
Low
195k - High
1955 - High
1956 - High
195V - High
Low
1958 - High

26.5k
22.95
35.98
2l*.93
1*5.6°
35.28
1*9.61*
1*3.22
1*9.08
39.18
Ui.00
1*0.37

March
April
May 2

1*2.11
1*2.31*
1*3.69

May 16

1.3.36

(1/2)
(9/18)
(12/31)
(1/8)
(12/9)
(1/11*)
(8/3)
(1/20)
(7/12)
(12/20)
(5/9)
(1/10)

2.5
0.9
3.7
1.1*
1*.6
1.5
3.1
1.5
1*. 2
1.1*
2.8
2.2
2.1*
2.5
2.8
2.7

.

6.25
5.38
5.82
1*. 32
I*.1*2
3.61*
U.35
3.82
It.72
3.91
1*.58
. I*.15

2,1*55
2,055
3,1*36
2,1*05
1*,030
3,537
l*,0l*7
3,911*
U,031
3,576
3,980
3,551*

1,665
1,311*
2/308
1,653
2/105
2,517
2,823
2,71*0
2,887
2,1*82
2,735
2,1*87

780
661*
1,01*8
•71*6
1,21*1
1,018
1,267 •
1,155
1,163
1,051*
1,21*5
1,051
•

1*. 35
1*. 33

3,863
3,980
n.a.

2,665
2,735

1,198
1,21*5
1,21*5

n.a.

n.a.

n.a.

l*!l5
i*.21

n.a.—Not available.
1 / Standard and P o o r ' s composite index of 500 common s t o c k s , weekly c l o s i n g
p r i c e s , 19l*l-l*3"10.' Monthly data a r e averages o f d a i l y f i g u r e s r a t h e r than of
F r i d a y s ' only. Highs and lows a r e f o r F r i d a j ' s data o n l y .
2 / Averages of d a i l y t r a d i n g volume on t h e New York Stock Exchange.
2 / Standard and P o o r ' s composite stock y i e l d based on Wednesday d a t a c o n v e r t e d t o weekly c l o s i n g p r i c e s by Federal Reserve.
h / End of month f i g u r e s f o r member-firms of the New York Stock Exchange which
c a r r y margin accounts; excludes b a l a n c e s sectired by U. S. Government o b l i g a t i o n s .
£ / Wednesday f i g u r e s f o r weekly r e o o r t i n g member banks. Excludes loans f o r
purchasing or c a r r y i n g U. S. Government s e c u r i t i e s a t banks in New York and
Chicago. Weekly r e p o r t i n g hanks account f o r about 70 p e r cent of l o a n s t o o t h e r s .
For f u r t h e r d e t a i l see B u l l e t i n .
Note.—Highs 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 o n ' d i f f e r e n t d a t e s
for different series.




H.ll*

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

1958
January
February
March

1

Corporate
1957
1
1,060
1,065
1,320 .

New ca p i t a l
1956

1958

State and l o c a l 1/
1
1956
1
1957

573
712
817

812
952
571

71*2
572
506

hok
696

931
765
1,153

818
1,11*6
8Ul

E/779
5/825

765
51*6
393

378
1*90
735

July
August
September

1,003

1,063
- 651*
. 838.

529
581*
1*31

1*08
206
357

October
November
December

1,090
769
1,076

71*5.,
1,0892/
1,088

633

698

639 31*7
1*09

April
May

1st
2nd
3rd
Uth

quarter
quarter
quarter
quarter

723
J b /

e/1,075.
e/775

92h

973

3,135

1st half
Three quarters
Year

3,1*U5
3,lh9
2,899
2,95b

. *2,102
2,805
2,556
2,922

9,1*93
12, U,7

'l*,907
-7,1*63
10,38k

698

2,275

390

1,820
1,70k
1,511*
2,029

1,1*90
1,603
971
1,395

3,521
5,069
7,099

3,093
U,061|
5,1*59

Excluding finance companies h/
1st
2nd
3rd
lith

quarter
quarter
quarter
quarter

2,89k

Year

,

3,268
2,921*
2,560.
2,788
11,51*0

1,61*7
2,51*1
2,216
2,826
9,260

e / Estimated.
g / Preliminary.
1 / Data through June 1956 are Bond Buyer data c l a s s i f i e d as new c a p i t a l by
f e d e r a l Reserve; l a t e r data are from the Investment Bankers Association of America
and are somewhat more complete as t o coverage than the e a r l i e r data, p a r t i c u l a r l y
f o r Federal Government loans.
2/ Includes $718.3 million AT&T convertible debenture issue.
3 / Includes $571.5 million AT&T common stock i s s u e .
h j Total new c a p i t a l issues excluding o f f e r i n g s of sales and consumer finance
companies.
Note.—Details may not add to t o t a l s due to rounding.




R.lii '

Exhibit E
Large Public Security Issues f o r New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of d o l l a r s )

^

Month

Corporate

.1957 - A p r i l
May

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

477
877
<25
526
537
574
420
399
318
605
1,093
. 725

July
August
September
October
November
December
1958 - January
February
. March;
April

Other 2/

125
25
39
25

499
248
176
265
357
185
435
386
439
506
629
264
5i4

.

30
75
215
15
133

Large Individual Issues Offered Hay 1 through 16

Issuer

Type y

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

Rating

CORPORATE
Potomac Elec. Pwr. Co.
R. R. Donnelly & Sons Co.
Public Servi Co. of Okla.
United Gas Impr. Co.
Long Island Lighting Co.
Long Island Lighting Co.
N a t ' 1 D i s t i l l e r s & Chem.

Conv. deb.
Deb.
1 s t mtg. bds.
1 s t mtg. bds.
1 s t mtg. bds.
Com. s t k .
S.F. deb.

19.7
15.0
16.0
15.0
20.0
15.5
60.0

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

5.8
29.7
25.0
10. U
5.0

1973
1978
1988
1983
1988.

3
3
3
4
4

3/4
3/4
7/8
1/8
1/8

3.75
3.05
3.90
4.03
4.07

A
Aa
Aa
A
A

1983

4 3/4

4.80

Baa

STATE AND LOCAL GOVERNMENT
Peoria Co. S.D.#105, H I .
S t a t e of Connecticut
Cook Co., I l l i n o i s
j
Fulton Co., Georgia
S t a t e of West Virginia




1960-78
1959-78
1959-73
1959-87
1959-83

2.56
2.47
2.54
2.85
2.65

1.00-2.70
.80-2.70
.85-2.80
.80-3.00
.85-2.85

Aa
A
Aa
A

H.lU

E-2
Large I n d i v i d u a l I s s u e s Offered May 1 through 16 (Cont'd)
Igsuer

Coupon
Amount
r a t e or Offering
(millions
Rating
Maturity n e t i n t e r yield
of
e
s t cost
dollars)

Type 3 /

STATE AND LOCAL GOVERNMENT
(Continued)
S t a t e of New York
Boston, Massachusetts
Cincinnati, Ohio
Wichita, Kansas
S tate of South Carolina
Franklin Co., Ohio
Bergen Co. Swr. Auth., N.JL
New York, New York

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

. Uo.o

'

1959-78
2k.$
1959-78
13.1
1959-98
6.8 1959-78/68
25.0 1959-78/73
10.0
1959-82
* 1 5 . 8 1961-97/67
1*7.3
1959-73

2.37
2.89
2.82
2,61*
2.23
2.73
3.59
2.53

.75-2.60
.90-3.10
.75-3.00
.90-3.00
.80-2.70
.80-2.95
1.50-3.65
.85-2.90

Aaa
A
Aaa
' A
• Aa
Aa
A
A

OTHER
Montreal, Canada
I n t . Bk. f o r Reconstruction
and Development

S.F. deb.
Bds.

2U.5

1978

U 3/U

b.75

A

150.0

1968

3 3/U

• 3.75

Aa

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 Reconstruction and
Development i s s u e s .
3/ In t h e 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
obligations5 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 of 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 taxes only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.




H.H*

Exhibit F
Forthcoming Large 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

Date of
computation
- Apr. 30
May 31
June 28
July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
- Jan. 31
Feb. 28
Mar. 31
Apr. 30

During month following
Subsequent t o
date shown
date shown
S t a t e and
S t a t e and
Corporate l o c a l govt. Other 2 / Corporate l o c a l govt. Other 2 /
187
$25
370
526
573
576
1*58
383
378
1*98
1,123
555
356

179
97
172
252
22*3
370
369
387
383
1*29
175
3U0

52k

25
25
30
30
18
150
110
150

258
525
' 105
811
81*5
61*7
815
1,193
1,161
1,378
1,208
670
'
561

396
388
1*98
511*
1*39
587
573
589
6lL
51*6
389
372
530

25
25
30
15
1*5
63
165
110
150

Forthcoming Large O f f e r i n g s , as of May 16
Type

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

CORPORATE
Gulf S t a t e s U t i l i t i e s Co.
I n t e r n a t i o n a l Tel. & Tel. Co.

1 s t mtg. bds.
Conv. sub. deb.

I l l i n o i s Power Co.
1 s t mtg. bds.
Public Service Co. of Colorado
Pfd. s t k .
1 s t mtg. bds.
- Brooklyn Union Gas Co.
Central Hudson Gas & E l e c t r i c Corp. T 1 s t mtg. bds.
Appalachian E l e c t r i c Power Co.
1 s t mtg. bds.
Transcontinental Gas Pipe Line Corp.. 1 s t mtg. p. 1. bds.
Transcontinental Gas Pipe Line Corp.
Cum. p f d . s t k .
1 s t r e f . mtg. bds.
Consolidated Edison Co.
Pfd. s t k .
#Texas Eastern Transmission Corp.
S.F. deb.
*Owens-Illinois Glass Co.
Virginia E l e c t r i c & Power Co.
1 s t r e f . mtg. bds.
Gen. mtg. bds.
-^Niagara Mohawk Power Corp.
^Oklahoma Gas & E l e c t r i c Co.
1 s t mtg. bds.
*New England Telephone & Telegraph Co,
Comnon s t k .




20.0
28.7
25.0
16.0
22.0
18.0
25.0
25.0
15.0
50.0
15.0
35.0
25.0
50.0
15.0
22.6

May 20
May 21
( r i g h t s expire)
May 21
May 21
May 22
May 22
May 28
May 28
May 28
June 1*
June 5
June 5
June 11
June 12
June 17
July
( r i g h t s expire)

F-2

H.lU

Forthcoming Large O f f e r i n g s , as of May 16 (Cont'd)
Issuer

Type

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

CORPORATE (Continued)
Commerce Oil Refining Corp.
Natural Gas P i p e l i n e Co. of America
Consolidated Natural Gas Co.

Deb., bds. & common U5.0
1 s t mtg. bds.
Uo.o
S.F. deb.
16.0

1958
1958
1958

STATE AND LOCAL GOVERNMENT
P i t t s b u r g h Sch. D i s t . , Pennsylvania
S t a t e of Ohio
Greensboro, North Carolina
. E l i z a b e t h , New Jersey
Baltimore Co., Maiyland
Public Housing A u t h o r i t i e s
Houston, Texas
^Richmond-Petersburg Turnpike Auth.,
Virginia
^Louisiana State Board of Education
S tate of Iowa
T e r r i t o r y of Hawaii
S t a t e of Michigan
Tacoma, Washington
^Kansas City, Missouri
Pueblo Co. Sch. D i s t . No. 60, Colo.
Sacramento U t i l i t y D i s t . , C a l i f .
^Norfolk, V i r g i n i a
^Florida Development Commission

G.O.
Rev. S.T.
G.O.
G.O.
G.O.
G.O.
G.O.

5.0
32.0
10.0
.5.0
12.0
69.9
15.6

Rev.-Ut.
Rev.-Q.Ut.
G.O.
G.O.
Rev.-S.T.
G.O.
G.O.
G.O.
Rev.-Ut.
G.O.
Rev.—Ut.

6.2
5.5
2U.7
8.0
100.0
7.9
6.0
7.8
5.7
6.0
6.2

May
May
May
May
May
May
May

20
20
20
20
21
21
21

May 21
May 23
May 27
May 27
May 27
May 27
June U
June 10
June 12
June 17
June 18

None
*—Included in t a b l e f o r f i r s t time.
1 / Includes corporate and other i s s u e s of $15 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.
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 .
Note.—Deletions f o r reasons other than s a l e of i s s u e : None.




Exhibit G
Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
A-rated o f f e r i n g yields
Aa-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
( p e r cent) (basis points) (per cent) ( b a s i s points)

Date
1952 - 1957
High
Low

5.00(8/lV57L
2.93(3/31/51)

87
-3

&

1958 - January 8
h

21
23
February 5

lb

March k

20
21
25
26
28

i

12
19
21
25
April 1
2
17
23
29
May

5.50(11/7/57)
3.00(3/17/51)

3.60 . .
3:^/

13
12

3.95
LOO

28
33

L 15

.

3.85
3.80

9
13
-3
-8

3.90

-3

3.92

-3

L25

h.ko

35
6

L07

-7

hh

It. 00
U.00

k.22

50
28
26

Lo5
3.98
Loo

31
23
25

3.75

5

3.90

123
-15

3.98

5

LOU
Loo

11
3

U.07
L35

'

h

32

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage bonds, as reported in Moody's Bond
Survey. Except where indicated, the actual 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 the indicated period and of the
d i f f e r e n c e s between these new o f f e r i n g y i e l d s and yields on seasoned issues of
similar quality f o r the same day. Average maturity f o r the seasoned issues v a r i e s
from 26 t o 28 years.
2/ Provides f o r a 5-year period during which issue may not be called f o r
refunding a t a lower coupon r a t e . Other issues have no such provision.