Full text of H.16 Capital Market Developments : November 14, 1957

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Not for Publication

DECONTROLLED AFTER SIX MOUTHS

HelU

November Hi, 1957•.
CAPITAL MARKET DEVELOPMENTS

The volume of large public security offerings continues to be
substantial. During the week ending November 8, large corporate issues,
including expiration of subscription rights, totaled $102 million and
large State and local, government offerings amounted to $92 million.- This
week, corporations are expected to offer large, issues aggregating $120
million and State and local governments have scheduled for sale issues
totaling $155 million.
Bond yields - Changes in yields on outstanding bonds were mixed
last week. Yields on corporate Baa's increased, while yields on corporate
Aaa's and State and local government bonds remained stable. Yields on
U. S. Government obligations declined.
Stock prices - Stock prices, as measured by the Standard and Poor's
index of 500 common stocks, declined last week, closing at 1^0.19 on November 8.
Prices for the first three days of this week show a further decline, closing
at 39-55 on Wednesday.
More detailed information concerning recent capital market developments is presented in the attached exhibits.

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




H I G H - G R A D E B O N D YIELDS

T

V

V

U . S . Govt., long-term 2/
Corporate
Aaa 1 /

Old series

New series

Spread between
State and
U . S. Govt.
local govt. (old series) and
Aaa 3/
CorporatelState and
Aaa
1 local Aaa

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

3.L2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
L.lli
3.66

.15
.78
.71
.hh
.91*
.62
.1*9
.80
.87
.15

October 11
October 18
October 25
November 1
November 8

ii.09
U.07
ii.ll
it .12
Ii.l2

r/3.8l
f/3.87

e

(6/6)
n.a.
(12/26)
n.a.
(1/9)
n.a.
(8/7)
n.a.
(8/5) 3.03 ( 8/5)
(1/7) 2.89 (6/10)
(12/21)3.39 (12/28)
(2/17) 2.92 (2/3)
(10/18)3.66 (10/18)
(2/8) 3.22 (2/8)

3.61
3.66
3.6L
3.6U

3.60

r/ Revised
n . a . — N o t available.
1 / Weekly average of daily figures.

2.73 (6/25)
1.98 (1/8)

2.21 (6/10)

.38
.19
.13

•1.90 (9/2)
2.*05
3.05
2.17
3.L5
2.76

\9//ll)
(12/27)
(2/23)
.13
(8/29)
.51
(2/21) r/.20

3.29
3.29
3.28
.3.30
3.30

r/.28
r/.20
r/.26
• P/.27
* .35

.30

.61
;29

1

•32
r/.58
~ .lit

1

'
" •
Average terra of bonds included is 25-26

2/ Weekly averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cent bonds due or first callable after 12 years through
September 1995, and those due or callable in 10-12 years thereafter, including,
beginning October 1957, the b per cent bond of 1969. The new series is comprised
of the 3 per cent bond of 1955 and the 3 l/li per cent bond of 1978-83.
3 / Thursday figures. Only general obligation bonds are included; average
term T s 20 years.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

LOWER - GRADE BOND YIELDS

Date

Corporate
Baa 1/

State and
local govt.
Baa 2/

State and
local govt,
rev. y

(Per cent)
1953 - High
195U - High
1955 - High
1956 - High
1957 - High
Low
October 11
October 18
October 25
November 1
November 8

- 3.89
3.50
3.7k
3.W
3.63
3.U5
h.lil
3.58
5.09
U.L2
U.96
U.98
5.01
5.oli
5.09

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/1W
(12/28)
(3/9)
(11/8)
(L/12)

3.79
2.96
3.32
2.93
3.26
3.02
h.22
3.20
u.51
3.90
. 1.36
h.33
lw36
b.37
b.37

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

3.27
2.71
3.00
2.72
2.99
2.76
3.98
2.89
3-98
3.70

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/28)
(2/2L)
d A )
(2/22)

u/

1 / Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are included; average term is 20 years.
3/ Friday figures. Average rating of bonds included is
between Baa and A; average term is 20 years.
h/ Series discontinued, as of March 15.
N o t e . — H i g h s and lows are for individual series and may
be on different dates for different series. '




STOCK MARKET

T,

11

:

11
i :

!

r
i

1

M

—

F
1

p- —

!
-1

---

z"

-

y

-:n , n

.,i,;

Stock price

j

Trading
volume 2/
(millions yields 2/
of shares) {per cent)

Stock market customer credit
Customers
Bank
debit balances h/ "others" g/
(Millions of dollars)

1953 - High
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957 - High
September
October 25
November 1
November 8

26.5U
22.95
35.98
2U.93
U5.89
35.28
1*9.61*
1*3.22

S3

(1/2)
(9/18)
(12/31)
(1/8)
(12/9)
(1/11,)
(8/3)
(1/20)

1*3.98
1*0.1,3
1*0.59'
1*0.1,1,
ho .19

2.5
0.9
3.7
1.1*
1*.6
1.5
3.1
1.5
U.2
1.1*
1.8
2.8
lt.2
2.0
2.1*

.

6.25
5.38
5.82
1*.32
1*.1*2
3.61*
1*;35
3.82
1*.70
3.91

1,665
2,1*55
2,055
1,311*
•2,388
3.1*36
2,1*05
1,653
1*,030 . 2 , 8 0 5
2,517
3,537
4,01*7
2,823
2,71*0
3,9H*
1*,031
2,887
3,832
1,713

780
661*
1,01*8
. 71*6
1,21*1
1,018
1,267
1,155
1,163
1,058

1*.31*
1*.60
1*.67
l*.68
1*.70

3,882

1,093
1,058
1,080
1,058

2,789

n.a.--Not available.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19U.-1,3"10. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Friday'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 concerted to weekly closing prices by Federal Reserve.
k/ 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 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.




8

Exhibit D

H.lh

Corporate and State and local Government
Security Offerings and Placements
(In millions of dollarsJ
New capital
1957
January
February
March

1

Corporate
3956
|

State anu loc ^
1
IV 56

V

1955

1957

535
Lu7
1,223

7U2
572
. 506

livii
6v6
390

535
312 '
>38

1,063
1,071

573
712
817

92lt
771
1,1*89

818
1,11.6 .
61,1

1.76
866
667

. 765
5U6
395

376
L90
735

1.27
350
61.?

1,063
838

597
61,L
670

529
58U
130

1.06
206
#7

l.i 70
2L9
L06

7^3/
1,089^
1,088

1,162-/
632
900

672
e/550

639
31,7
Lo?

919
658
1,08

3,1*79
3,181
o/2,975

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

2,165
2,052
1,911
2,695

1,820
1,706
1,513

1,1.90
1,603
971
1,395

1,365
1,1.16 •
1,12b •
i,98L

1st half
Three Quarters
Year

6,663
e/9,638

1,907
7,1,63
10,38k

1,216
6,127
8,821

3,526
5,056

3,093
li,u6h
5,1,59

2,802
3,927
5,911

1st quarter
2nd Quarter
3rd" Quarter
Lth ouarter

• 3,268
2,921
e/2,675

April
May
June
July
August
September
October
November
December
1st
2nd
3rd
Lth

ouarter
ouarter
ouarter
ouarter

!

e/1,075
e/900

e/1,000

e/950
e/850

6$h

Excluding finance companies U/

Year

l,6h7
2,5Ul
2,216
2,826

1,727
.. 1,870

9,259

7,595

IMU

2,5LL

e/' Estimated.
~~
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.
2/ Includes #637.2 million AT&T convertible debenture issue .
3/ Includes $571.5 million AT&T common stock issue .
17/ Total new capital issues excluding, offerings of sales and consumer finance
cc-panies.
Note.—Details may not add to totals due to rounding.




H.lU

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

Month

Corporate

1956 - October
November
December
1957 - January
February •
March
April
May
June
July
August
September
October

386
701
1*30
#7
671
788
477
329
877
525
526
537
571

State and
local government

3%
135
201 .
386
306
191

-

Other 2/

35
100
50

b.99

125
25
39
25

22*8
176
265
357
185
L35

30
75

Large Individual Issues Offered November 1 through 8

Issuer

Type 3/

Coupon
Amount
(millions Maturity rate or
Offering
yield
of
net interest cost
dollars)

Rating

CORPORATE
Consumers Power Co.
Dayton Power & Light Co.
So. New England Tel. Co.
Beneficial Finance Co.

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

35.2
25.0
27.lt
50.0

1972
1987

U 5/8
5

ii.63
U.97

1977

5

5.21

Aa
Aa

STATE AND LOCAL GOVERNMENT
Fairfax Co., Virginia
Hamilton City S.D., Ohio
Jacksonville, Fla.
Port of New York Auth.
Cook Co., Illinois

G.O.
5.5 1959-83
G.O.
5.5 1959-80
Utilities Rey.30.0 1959-95/68
Rev.
30.0 1987/67
G.O.
20.7 1958-77

OTHER



None

b. .21
3.78
I1.6I4
3.83
3.58

3.00-5.00 • Baa
2.80-3.80 - A
3.20-U.60
A,
A
3.78
2.60-3.60
A

@H.llt

E-2

n.a.—Not available.
1/ Includes corporate and other security offerings of $15 million and over;
State"~and local government security offerings of $5 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues.
3/ In the case of State and local government securities, G. 0. denotes general
obligation; Rev., revenue bonds; G. R., general obligations additionally secured by
facilities revenues; L. L., limited liability obligations secured ty pledge of
designated revenues.
\




Exhibit F

H.Ik

Forthcoming Larj-e Public Security Offerings for New Capital
(Other, than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
During month following
date shown
State and
Corporate
Other 2/
local govt.

Date of
computation

1956 - Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31
Feb. 28
Mar. 29
Apr. 30
May 31
June 28
July 31
Aug. 30
Sept. 30
Opt. 31

683
136

162
U8

116

280

591
7li0
L6l
187
525
370
526
578
576
158

153
153

290

179
97
172

252
213
370
369

Subsequent to
date shown
Corporate

—

990
181
796
966
795
186
258
525
115
811
81,5*
617
815

23
ICO
35
25
25
25
30
30

.

955
979
763
61*8
631
862
396
388
1x98.
5H»
139
587
573

• ——•

23
100
35
25
25
25
30
15
U5

Forthcoming Large Offerings, as of November I

^

Issuer

Type

Amount
(millions Approximate date
of offering
of dollars)

CORPORATE
Caterpillar Tractor Co.
S. F. deb.
65.0
Transcontinental Gas Pipe Line Corp.
S. F. deb. •
20.0
Pfd. stk.
20.0
Texas Eastern Transmission Corp.
Idaho Power Co.
1st mtg. bds.
15.0
Michigan Bell Telephone Co.
Deb.
1*0.0
Florida Power & Light Co.
Common stk.
15.0
Ohio Power Co.
1st mtg. bds.
25.0
1st mtg. bds.
Houston Lighting & Power Co.
10.0
Conv. sub. deb.
60.0
Olin Mathieson Chemical Corp.
Virginia Electric & Power Co.
1st & ref. mtg. bds.2-0.0
Commonwealth Oil Refining Co.
Conv. sub. deb.
20.0
Standard Oil Co. of New Jersey
Common stk.
288.2
Commercial Credit Co.
National Cylinder Gas Co.




Notes •
Conv. sub. deb.

50.0
17.5

Nov. 13
• Nov. lit
Nov. lli
Nov. 15
Nov. 19
Nov. 20
Nov. 20
Nov. 21
Nov. 21
Dec. li
Dec. 11
Dec. 18
(rights expire)
1957
1957

i H.lU

F-2
Forthcoming Large Offerings, as of November 8 (Cont'd)

Issuer.

Type

1 Amount
Approximate date
J (millions
of offering
|of dollars;

STATE AND LOCAL GOVERNMENT
State of Kentucky
G.O.
Los Angeles Co. Flood Control Dist.,
Calif.
Rev.
State of Maryland
G.O.
New York, New York
, G.O.
Springfield, Missouri
Water rev.
Chicago, Illinois
Water works rev.
Lincoln Park Sch. Dist., Mich.
G.O.
New York State Thruway Auth.
Rev.
State of Ohio
Thoroughfare rev.
Territory of Hawaii
G.O.
Oklahoma Co., Okla.
G.O.
Washington Toll Bridge Auth.
Rev.
#State of So. Carolina
G.O.
Los Angeles Sch. Dists., Calif.
G.O.
*State of Ohio
G.O.
Greater Baton Rouge Port Comm., La.
Rev.
Chicago Bd. of Education, H I .
G.O.
*Caddo Parish Sch. Dist., La.
G.O.
Penna. State Highway & Bridge Auth.
Rev.
State of Missouri
G.O;State of Texas
G.O.
Pennsylvania Turnpike Commission
Rev.
Inter-American Center Auth., Fla.
Rev.

35.0
20.0
lit.2
36.5
22.0
20.0
6.8
50.0
30.0
7.0
6.0
30.5
5.0 "
15.0
25.0
19.U
25.0
7.5
20.0
30.0
12.5
62.0
20.0

Nov. 12
Nov. 12
Nov. 12
Nov. 13
Nov. 13
Nov. 13
Nov. 13
Nov. 19
Nov. 19
Nov. 19
Nov. 19
Nov. 20
Nov. 26
Dec. 3
Dec. h
Dec. 11
Dec. 17
Jan. 7
Jan. 17
Winter
Winter
Winter
Winter

OTHER
Pacific Great Eastern Ry. Co.
Union of South Africa

S. F. deb.
Ext. loan bds.

30.0
15.0

1957
1957

'
~
~
*—Included in table for first time. "
1/ Includes corporate and other issues of $15 million and over; State and
local"~g overmen t issues of $$ million and over.
2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.--Deletions for reasons other than sale of issue: Merrimack-Essex
Electric Company's $20 million 1st mortgage bond issue — proceeds for new
capital were less than $15 million.
.




ti.iu

Exhibit G
fields on New and Outstanding
Liectrie Power Bonds, Itated Aa and A 1/
Aa-rated offering yields
A-rated offering yields
Amount above
. Actual
Actual • Amount above
(per cent) seasoned yields (per cent) seasoned yields
(basis points)
(basis points)

Date

1952 - 1956"
High
Low

/

a.30(!2/12/$6)
2.93(3/31/51)

1957 - January.
February
March
April 3
10
12
May 10
15
16
21
23
29
June 5
7
11
July 3
10
11
16
17
August 111
September 5
6
25
October ^

62
- 3

k.kk

70
-15

I1.62
None
11.50

57

kk

I1.25
None
L29

6I1
li5

50
I1.60

59
U9
52
52
69

k.bO

U.50
it.38 2/

65
51

li.63

75

ii.78

87
1,8
68
56

a.57
ii.77
I1.65
5.00
L80
L65
1.76

.

75
51
56
16

11
2k
November 7
8

L58(12/6/56)
3.00(3/17/51)

a.97
I4.86 2/

.63
52

L.53
1,.53 2/
k.70
i

5.oo
5.25

98
123

5.10

106

li.80 2/
I1.88 2/

6h
7k

I1.90.

71

5.10
^ . UU '
i . 95
5.30
5.50

'

51

39

3k

- 67
86

1/ Covers only 30-year first nortgage 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 sane 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.