Full text of H.16 Capital Market Developments : May 7, 1958

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Not for Publication DECONTROLLED AFTER SIX MONIES
H.lV

' '

May 7, 1958.
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing was substantial last
wejek, but is expected to be much smaller this week. During the week
ending May 9 corporations sold large issues totaling
million and
State and local governments offered issues with aggregate proceeds of
$15U million, A foreign government issue for $25 million was also
sold. This week5 large corporate issues for new capital, including
expiration of subscription rights, are expected to total §35 million
and State and local government issues amounting to »?6 million are
scheduled for sale. A $1^0 million issue of the International Bank
for Reconstruction and Development was sold early in the week.
Bond yields - Changes in yields on outstanding bonds were
mixed last week. Yields on U. S. Government obligations increased
sharply while those for State and local government Aaa and corporate
Baa bonds remained stable. Yields on corporate Aaa and State and
local government Baa bonds declined.
A new A-rated, first mortgage electric utility issue was *
offered to investors this week to yield i±.00 per cent — h basis .
points below that for a comparable offering made last week.
Stock prices - Stock prices, as measured by the Standard
and Poor's index of 500 common stocks increased again last week to
a new high for the year. Prices continued to increase in the early
part of this week, closing at hk„01 on Tuesday. Trading activity
continues to be relatively heavy.
More detailed information concerning recent capital market
developments is presented in the attached exhibits.

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




EXHIBIT A

HIGH-GRADE BOND YIELDS

Date

Corporate
Aaa 1/

. U. S. Govt,
long-term 2/

State and
local govt.
Aaa y

Spread between
U. S. Govt, and
Corporate [State and
Ilocal Aaa

(Per cent)
1953 - High

1955 - High
Low

3.1»2 (6/19)
2.99 (1/9)
3.09 (1/8)
2.85 (L/23)
3.17 (12/23)
2.91 (1/7)
3.79 (12/28)
3.07 (3/2)
lull* (9/27)
3.66 (1/12)
3.68 (1/3)
3.55 (5/2)

3.19 (6/5) ^
2.71* (12/31)
(1/8)
2.1,5 (8/6)
2.97 (8/5)
2.61, (1/7)
3.L5 (12/28)
2.81* (2/17)
3.76 (10/18)
3.18 (2/8)
3.28 (1/31).
3.07 U / 2 5 )

2.73
1.98
2.21
1.90
2.3k
2.05
3.05
2.17
3.15
2.76
2.86
2.61*

April
April
April
April
May 2

3.61*
3.62
3.61
3.57
3.55

3.19
3.15
3.10
3.07
3.1k

2.77
2.70
2.69
2.61a
2.6b

1951* - High
1955 - High
1956 - High
1957 - High

Ii
11
"..8
25

2.7U

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

.38
.20
.2*3
.30
.27
.11
* .a
.12
.60
.27
.51
.28

.83
.33
.62
.30
.76
.57
.71
.32
.1*7
^ .15
.62
.31*

.15
.1)7
.51
.50
.lil

.1*2
.1*5
.1*1
.1*3
-50

1/ Weekly average of daily figures. Average tern of bonos included is 25-26 years.
2/ Weekly average of daily figures. The series includes ccndt, duo or callable in
• 10 years or more.
3/ Thursday figures. Only general obligations 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.




LOWER - GRADE BOND YIELDS
I

-

A

/

-

J7 r
tI V-1

ii V /

-

\
\

-

li

1
7

/f

/

V

/'

s

1953

VLf"
-XV

\

\

r

1
STAT

i

-

%

v

-

1954

Date

1955

Corporate
Baa 1/

1956

State and
local govt;
Baa 2/

1957

1958

Spread between
Aaa and Baa
1 State and
(local govt.

Coiporate

(Per cent)
1 9 5 3 - High
195U - High
1955 - High
1956 - High
1957 - High
1958 - high
Low
April" h
April 11
April 18
April 25
May 2

3.89
3.50
3.71*
3.1*1*
3.63
3.L5
U.Ul
3.58
5.10
h.h2
li.96
li.61i
L.69
it. 67
1*.66

a. 66
U.66

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/H*)
(12/28)
(3/9)
(11/29)
(L/12)
(1/3)
(2/21) -

3.79
2.96
3.32
2.93
3.26
3.02
14.22
3.20
h.51
3.90
3.92
3.61*

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(12/27)
(3/3)
(8/29)
(2/21)
(1/2)
(5/1)

3.88
• 3.81
3.78
3.66 .
3-6U

,69
.1*2
.68
.52
.51*
.1*5
.63
.1*2
1.27
.6k
1.28
1.0U

1.21
.98
1.16
.93
1.03
.87
1.17
.89
1.21
l.Ol*
1.11
1.00

1.05

1.11
1.11
1.09
1.02
1.00

1.05
-1.05
1.09
l.ii

1/ Weekly average of daily figures. Average term of bonds includes is
25-26years.
2/ Thursday figures. Only general obligation bonds are included; average
term is 20 years.
N o t e . — H i g h s and lows are for individual series and may be on different
dates for different series.




I

M

STOCK M A R K E T

Stock price
Index 1/

Trading
Stock market
olume 2/
Customers'
Bank
(millions
yields J/ Total debit bal- loans to
of shares) (per cuiit)|
ances U/ ("others" 5/
(Millions of dollars)

1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
Low
1958 - High
Low

26.51* (1/2)
22.95 (9/18)
35.98 (12/31)
21*.93 (1/8)
1*5.69 (12/9)
35.28 (1/H*)
1*9.61. (8/3)
1*3.22 (1/20)
1*9.08 (7/12)
39.1*8 (12/20)
1*3.69 (5/2)
1*0.37 (1/10)

2.5
0.9
3.7
1.1*
1*.6
1.5
3.1
1.5
1*.2
l.U
2.7

6.25
5.38
5.82
1*.32
i* .1*2
3.61,
U. 35
3.82
It.72
3.91
U-58
1*. 22

March

1*2.11
1*2.31*
1*2.71
1*3.36
1*3.69

2.2
2.U
2.1
2.7
2.5

lt.35
1*-33
1*.29
1*.22
1*. 19

April 18

2,1*55
2,055
3,L36
2,1.05
1,030
3,537

U,0h7
3,9114

U,031
3,576

1,665
1,653
2,605
2,517
2,823
2,71*0
2,887

2,1.82
blf

3,863

2,665

780

66k

1,018
•71*6
1,21*1
1,018
1,267

bill

1,051.
1,21*3
1,051
1,198
1?208
1,21*3

n.a.--Not available.
. >•
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
• prices, 19l*l-l*3"10. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Fridaj's data only.
2/ Averages of daily trading volume on the New York Stock Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve.
h/ £nd 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 reoortirig 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 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




Exhibit D

H.lU

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

1958
January
February
March
April
May
June

e/800

sk*&/

%

July
August
September

quarter
quarter
quarter
quarter

S/3,125

1st half
Three quarters
Year

New capital
1956

1,063
1,071
l,3Wt

573
712
817

92lt
771
1,W

818
1,11*6
. 81*1

991
91b
973

October
November
December
1st
2nd
3rd
iith

Corporate
1957
1
1

1958
812
952
511
s ®

838

1,055
792
1,086

71*5

3,1*79
3,181*
2,878
2,933

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

6,662
9,51*0
12,173

It,907
7,to
10,381*

2,275

State and local 1/
1
1956
1
1957

506

ltOl*
696
390

ss
393

378
1*90
735

85
1*31

1*08
206
357

698
633
698

639
3U7
1*09

1,820
I,70lt
2,029

l,lt90
1,603
971
1,395

3,52lt
5,069
7,099

3,093
lt,o6U
5,1*59

7lt2

II,M

Excluding finance companies 1\J
1st
2nd
3rd
itth

quarter
quarter
quarter
quarter

e/2,825

Year

3,268
2,92U
2,560
2,788
•11,^0

l,61t7
2,51(1
2,21*6
2,826

-

9,260

5/ Estimated.
Preliminary.
1/ Data through June 1956 are Bond Buyer data classified as new capital by
Federal Reserve; later data are from the Investment Bankers Association of America
and are somewhat more complete as to coverage than the earlier data, particularly
for Federal Government loans.
Includes #718.3 million AT&T convertible debenture issue.
Includes $571.5 million AT&T common stock issue.
Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




H.UU

'

Exhibit E

Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)

Corporate

Month

1957 - March
April
May
June
July
August
September
October
November
December
1958 - January
February
March

State and
local government

788
1*77.
#9
877
525
#6
537
57U
120
#9
318
605
1,093

Other 2/

19k
2*99
2U8
176
265
357
185
1*35
386
1*39
506
629
26k

125
25
39
25
30
75
215
15

Large Individual Issues Offered April 1 through May 2

Type 3/

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

CORPORATE
1st mtg. bds. 30.0
Wisconsin Elec. Pwr. Co.
1988
20.0
Gen. American Transp. Corp, E. T. ctfs.
1978
21.1*
General Telephone Corp.
Com. stk.
1st mtg. bds. 15.0
1988
Duquesne Light Co.
Deb.
1*0.0
J. E. Seagram & Sons, Inc.
1983
1*0.0
1988
Deb.
American Can Co.
S. F. deb. . 60.0 - 1978
Douglas Aircraft Co.
Deb.
125.0
Aluminum Co. of America
1983
S. F. deb.
30.0
Pacific Petroleums Ltd.
1973
Conv. sub. deb.19.0
1983
Richfield Oil Corp.
1st mtg. bds. 50.0
1968
Commonwealth Edison Co.
S. F. deb.
1963
Diamond Gardner Corp.
25.0
1988
Mississippi Pwr. & Lt. Co. 1st mtg. bds. 15.0
Deb.
30.0
Tennessee Gas Transm. Co.
1978
So. Counties Gas of Calif. 1st mtg. bds. 15.0
1983
1st mtg. bds. UO.O
1988
Philadelphia Elec. Co.
Deb.
150.0
1983
Texas Company




1* 1/8
1* 1/8
3 3A
1* 1/1*
3 3/U
5
3 7/8
5 1/2
1*3/8
3 3/1*
h
: Ll/8
5
1*
3 3/1*
3 5/8

3.98
1*.13

Aa
A

3.71*
It. 38
3.75
5.00
3.90
.
5.30
1*.38
3.70
1*.00 ...
3.98
5.oo
3.87
3.76
3.65

Aaa
A.
Aa
Baa
Aa
tia .
Baa
Aaa
A
A
Baa
A
Aaa
Aaa

Belli

E-2
Large Individual Issues Offered April 1 through May 2(Cont'd)

Issuer

Type 3/

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

Rating

STATE AND LOCAL GOVERNMENT
Texas Veterans .Land Board
G.O.
12.5
Comm. of Puerto Rico
G.O.
. 18.3
Los Angeless California •
Rev.-Ut.
13.5
Lafayette Par. S.D.#1, La.
G.O.
• 7.0
Tampa, Florida
Rev.-Ut.
8. U
Anne Arundel Co., Maryland
G.O.
5.0
State of Maryland
G.O.
2L6.
Chicago^ Illinois
G.O.
.7.5
Erie Co. Wtr. Auth., N. Y.
Rev.-Ut.
6.5
San Francisco, California
G.O.
"2L.2
Wash. Sub. San. Dist.3 Md.
G.O.
10.0
State of Massachusetts
G.O.
.96.9
Louisiana State University Rev.-Q.Ut.
7.5
Babylon-U.F.S.D. ir33 N. Y
G.O.
• 5.5
Honolulu, Hawaii
G.O.
7.3
State of California
G.O.
100.0
Washington Toll Br. Auth.
Rev.-Ut.
5.2
Illinois Toll Hwy. Comm.
Rev.-Ut.
64.0
Burbank5 Calif o rnia
G.O.
5.6
Baltimore2 Maryland
G.O.
24.2
Colleges of State of Texas
G.O.
IB oh
Wake Co.2 North Carolina
G.O.
6.3
Philadelphia, Penna.
G.O.
31.9
Yonkers, New York
G.O.
6.9
'

1966-88/68
1959-73
1959-88
1961-88/69
1959-87/68
-1960-83
1961-73
1960-71
1961-97/67
1959-78
1959-97/73
1959-98
1959-83/63
1959-87
1961-78/68
1959-84/78
1961-71/61
1998
1959-78/68
1961-82
1959-68
1959-80
1959-88
1959-78

2.05-3 00 Aa
1.20-3.50 A
1.00-3.35 Aa
Baa
2.20-3 90
1.25-3
1.40-3 'St/ A
1.25- .50 - Aaa
1.20-2 70 A
Baa
1.75-3 70
2.16 0.85-2.75,, Aa
1.25-3.652/ Baa .
3.33
0.85-3 .25 Aa
2.92
1.50-3,.75 A
3.73
3.62 1.20-3,. 70 Baa
3.15
1.75-3,
2
0.85-3,
2
.2.00-3,,00
4
4.77
2;
0o-90-3«,00 A
2
1.20-2,,80 Aa
2,
0.85-2=,25 Aa
2,
C.B5-2.
2,
0.80-3.
l.OO-J.15 .A
2.73
2.89
3.39
3.15
1.03
3.56
2.98
2.31
2.1:6
3.69

:ik'l

' OTHER

Ontario, Canada
Ext. deb.
25.0
Ontariov Canada
Ext. deb
50.0
Edmonton, Alberta, Canada
Ext. deb
18.0
Belgian Congo
Ext. loan bds ,15.0
Commonwealth of Australia
25.0
Montreal9 Canada
S. F. deb. 21.5

1963
1983
1983
1973
1973
1978

3
4
4
5
a
I

1/4
3/4
1/4
3/4
3/4

3.40
4.13
4.93
5.40
4.85
ho?5

1/ Includes corporate and other security offerings of »l5 million and over;
State and local government security offerings of 4$ million and over.
2j 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
obligations; Rev.-Ut., revenue obligations secured only by income from public
utilities; Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilitiesj
Rev.-S.T., revenue bonds secured by revenue from specific taxes only; Rev.-Rent.>
revenue bonds secured solely by lease payments„
4/ I982-83 maturities not reoffered.
6/ Is of 1984 not reoffered.
bj Is of 1992-97 not reoffered.
%/ I/us, 1988 reoffered at 3.90%




Exhibit F

H.U*

Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
Subsequent to
date shown ,
date shown
State and
0the
Corporate
r t/
local govt. Other 2/| Corporate i^caiVoTt. |

Hate 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

187
5#
370
526
578
576
1*58
#3
378
1*98
1,123
555
356

179
97
172
252
2U3
370
369
387
383
1* 29
175
3U0
521*

25
25
30
30
18
150

.

110
150

258
525
1*15
811
81*5
61*7
815
1,193
1,161
1,378
• 1,208
670
561

#6
388
1*98
511*
1*39
587
573
589
6lU
51*6
389 "
372
530 -

25
25
30
15
1*5
63
165
110
150

Forthcoming Large Offering's, as of May 2
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Potomac Electric Power Co.
R. R. Donnelly & Sons, Co.
Public Service Co. of Oklahoma
United Gas Improvement Co.
Long Island Lighting Co.
Long Island Lighting Co.
Gulf States Utilities Co.
International Tel. & Tel. Co.

Conv. deb.

19.7

Deb.
1st mtg. bds.
1st mtg. bds.
1st mtg. bds.
Common stk.

15.0
16.0
15.0
20.0
15.5

1st mtg. bds.
Conv. sub. deb.

20.0
28.7

1st mtg. bds.
Illinois Power Co.
25.0
Public Service Co. of Colorado
Pfd. stk.
16.0
1st mtg. bds.
Brooklyn Union Gas Co.
22.0
Central Hudson Gas & Electric Corp.
1st mtg. bds.
18.0
Appalachian Electric Power Co.
1st mtg. bds.
25.0
S.K deb. ,
. 60.0
National Distillers & Chem. Corp.
^Transcontinental Gas Pipe Line Corp. 1st mtg. p. 1. bds. 25.0
^Transcontinental Gas Pipe Line Corp. Cum. pfd. stk.
15.0




May 6
(rights expire)
May 7
May 13
May lli
May 15
May 15 (rights expire)
May 20
'
May 21
(rights expire)
May 21
May 22
May 22
May 27
May 28
May
May
May

Rdh

F-2
Forthcoming Large Offerings, as of May 2 (Cont'd)
Issuer

Type

Amount
Approximate date '
(millions •
of offering
of dollars)

CORPORATE (Continued)
Consolidated Edison Co.
-^Virginia Electric &-Power Co.
Commerce Oil Refining Corp.
Natural Gas Pipeline Co. of America
Consolidated Natural Gas Co.

. ref. mtg. bds.
,
ref. mtg. bds.,
1., bds. & common
1st mtg. bds.
S-.F. deb.

50.0
25.0
1*5.0
UO.O
U5.o

June k
June 10
1958
1958
1958

STATE-AND LOCAL GOVERNMENT
Peoria Co. Sch. Dist. No. 150, 111.
State of Connecticut
Cook Co., Illinois
Fulton, Georgia
State of 'West Virginia
State of New York
Boston, Massachusetts
Cincinnati, Ohio
• Wichita, Kansas
State of South Carolina
Franklin Co., Ohio
-"-Bergen Co. Sewer Auth,, W. J„
New York, New York
Pittsburgh, Pennsylvania
, State of Ohio
-"-Greensboro, North Carolina
Public Housing Authorities
Houston, Texas'
'"
State of Iowa
Territory of Hawaii
-x-State of Michigan
-x-Sacramento Utility Dist., Calif.

G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
G.O.
G.O.
G.O.
G.O.
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
Rev.-S.To
G.O.
G.O. .
G.O.
G.O.
G.O.
G.O.
Rev.-Ut.

5-8
29.7
-25.0'
10.u
5;o
liO.O
2L.5
"I3.li.
6.8
25.0
10.0
15-8
U7.3
5.0
32.0
10.0
69.9
15.6
21,7
8.0
100.0
5.7

May 5
May 6
May 6
May 7
May 7
May 13
May 13
May 13
May 13
May Ik
May lit
May lit
May 15
May 20
May 20
May 20
May 21
May 21
May 27
• May 27
May 27
June 12

OTHER
^International Bank for Reconstruction
and Development

BdSo

150.0

May 6

-x-—Included in table for first time.
1/'Includes corporate and other issues of $15 million and over3 State and
local government issues of 55 million and over.
• 2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issue: None.




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

Date
1952 - 1957
High
Low
1958 - January 8
9
17
21
23
February 5
1h
20
21
25
26
28
March it
5
6
12
19
21
25
April 1
2
17
23
29

Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
Actual
seasoned
yields
(per cent)
(per cent) seasoned yields
(basis points)
(basis points)
5.00(8/11/57)
2.93(3/31/510

3.60
3.80 ,
3.80%/

87
-3

-8
13
. 12

3.95
It.00

28
33

k.15
It. 22
It. 00
It.00

Itlt
50
28
26

U.05
3.98
It. 00

31
23
25

3.75

5

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

123
-15

lt.°7 ,
1*.102/
3.85
3.80

9
13
-3
-8

3.90

-3

3.92

-3

lt.ltO
It. 25

35
6

It.07

-7

3.98

5

lt.olt

11

*—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.