Full text of H.16 Capital Market Developments : November 27, 1957

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z

Not for Publication DECONTROLLED AFTER SIX MONTHS
H.llt

November 27, 1957.
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing was large last week,
but is expected to be very small during this holiday-shortened week.
Large public security offerings for new capital during the week ending
November 22 totaled $180 million for corporations and $109 million for
State and local governments. This week, three State and local government issues aggregating $32 million are expected. No large corporate
issues are scheduled for sale.
Bond yields - Yields declined,in the week ended Friday, November 22, for all categories of outstanding bonds. The decline was substantial for the yields on higher rated corporate and State and local
government bonds, and was particularly sharp for the U. S. Government
bond yields — 20 basis points for the old series and 10 basis points
for the new.
Estimated December volume - Corporate security offerings for
new capital are expected to total $1 billion in December, nearly onefifth greater than the estimated November volume and only slightly below the'volume of December last year. Large publicly offered issues
are expected to total over $1*00 million, including a $288 million common
stock issue by Standard Oil Company of New Jersey, for which subscription
rights expire in mid-December. Takedowns of private placements are expected to be seasonally large. Including this estimate for December,
fourth quarter offerings are estimated to total $2.8 billion, slightly
smaller than.in the corresponding period of 1956. The volume for the
year as a whole would be about $12.3 billion, a record, and nearly onefifth larger than last year.
State and local government issues for December are currently
estimated at $600 million, the same as the estimated November volume
and almost one-half larger than the volume in December of the past two
years. This estimate includes a $2£0 million revenue bond issue by 6,
Chelan County Public Utilities District in Washington, which press re. ports indicate may be marketed in mid-December. Offerings for the
entire fourth quarter are expected to total $1.9 billion, more than
one-third greater than in the comparable quarter last year. The total
volume for the year is likely to be about one-fourth larger than in
1956.




H.lii
Stock prices - Stock prices, as measured by the Standard and
Poor's index of 500 common stocks, increased last week, closing at
ltO.8? on November 22. Prices increased further on Monday, then dropped
sharply on Tuesday with news of the President's illness. However, prices
recovered this loss on Wednesday, closing at ltl#25>e
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.




EXHIBIT A

HIGH-GRADE

BOND

YIELDS

-I V'x

Corporate Aaa 1/

U. S. Govt•, long-term 2/
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
1951 - High
Low
1955 - High
Low
1956 - High
1957 - High
Low

3.1*2
2.99
3.09
2.85
3.17
2.91
3.79
3.07
L.lb
3.66

October 25
November 1
November 8
November 15
November 22

li.ll
It.12
li.12
U.12
li.06

I

3.15 (6/6)
n.a.
2.78 (12/26)
n.a. .
2.7U (1/9)
n.a.
2.IiU (8/7)
n.a.
2.9k (8/5) 3.03 ( 8/5)
2.62(1/7) 2.89 (6/10)
3.19 (12/21)3.39 (12/28)
2.80 (2/17) 2.92 (2/3)
3.87 (10/18)3.66 (10/18)
3.15 (2/8) 3.22 (2/8)
3.85
3-85
3.77

3.6I4
3.6L
3.60
3-5U
3-M

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

2.21 (6/10)

1.90 (9/2)

2^5

3.05 (12/27)
2.17 (2/23)
3.15 (8/29)

2.76 (2/21)
3.28
3.30
3.30
3.28
3.23

.38

s

.30

.61

:S

.29
.70

22

a
.32

.13
.56
.26
.27

if
.56

1

.h2

.27

n.a.--Not available.
1/ Weekly average of daily figures. Average term of bonds included is 25-26
years!
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 li per cent bond of 1969. The new series is comprised
of the 3 per cent bond of 1955 and the 3 1/b per cent bond of 1978-83.
3/ Thursday figures. Only general obligation bonds are included; average
term Ta 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,
rev. y

State and
local govt.
Baa 2/
(Per cent)

1953 - High

1956 - High

3.89
3.50
3.7k
3.W
3.63
3.15
U.Ul

3.58(3/9)

3.79
2.96
3.32
2.93
3.26
3.02
h.22
3.20

1957 - HighLow

5.10 (11/15)
U.142 (a/12)

lt.51 (8/29)
3.90 (2/21)

3.27
2.71
3.00
2.72
2.99
2.76
3.98
2.89
3.98
3.70

October 25
November 1
November 8
November 15
November 22

5.01
5.ok
5.09
5.io
5.09

U.37
a. 37
1.39
a. 37

L.36

V

1951 - High
1955 - High

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/llt) "
(12/28)

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

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(12/28)
(2/21)
(1/U)
(2/22)

•

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.
2 / Friday figures. Average' rating of bonds included is
between Baa and A; average term is 20 years.
h/ Series discontinued, as of March 15.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




EXHIBIT C
STOCK

MARKET

STOCK MARKET

.

^
—
YIELDS

r"

,,i

Stock price
index 1/

mIm

T

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

„L

Stock market customer credit
Customers'
debit bal- loans to
"others" £/
(Millions of dollars)

1953 - High
1954 - High
. Low
1955 - High
Low
1956 - High
Low
1957 - High
September
October
November 6
November 15
November 22

26.54
22.95
35.98
24.93
1*5.89
35.28
49.64
43.22
1*9.08
40.19

(1/2)
(9/18)
(12/31)
(1/8)
(12/9)
(1/14)
(8/3)
(1/20)
(7/12)
(11/8)

43.98
40.43
40.19
#40.37
40.87

2.5
0.9
3.7
1.4
4.6
1.5
3.1
1.5
4.2
1.4
1.8
2.6
2.4
2.3
2.5

.

• 6.25
5.38
5.92
,4.32
4.42
3.64
4.35.
3.82
4.70
3.91
4.34
4.60
4.70
rj 4.65
4.59

•

2,455
2,055
3.436
2,405
4,030
3,537
4,047
3,914
4,031
3,643

1,665
1,314
2,388
1,653
2,805
2,517
2,823
2,740
2,887
2,568

780
664
1,048
746
1,241
1,018
1,267
1,155
1,163
1,063

3,882
3,643

2,789
2,568

n.a.

n.a.

1,093
1,075
1,071
1,063 .
n.a. ;

, available.
r/ Revised.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 1941-43"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.
3/ Standard and Poor's composite stock yield based on Wednesday data con- vertea to weekly closing prices by Federal Reserve.
4/ 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.




Exhibit D

H.lh

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

1957

Corporate
1 1956 -|

1957

573
712
617

535
ho7
1,223

• 506

7U2
572

liuL
6c/6
390

535
312
538

1,78
866
687

765
5L6
395

376
L90
735

61,2

597

529
581i
U30

I1O6
206
357

1,70
2L9
L06

. 672
e/600
e/600

639
31-7
Loo

1,08

1,820
1,706
1,513
e/1,872

i,L9o
1,6u3
971
1,395

1,365
l,lil6
l,12h
1,98b

1,216
3,526
6,127
5,069
8,821 • e/6,9lil

3,093
t,u61i
5,1,59

2,802
3,927
5,911

1,063
1,071
l,3Wi

April
May
June

921
771
1,189

810
1,116
81,1

991

1,063

91k

6Sh

July.
August
September

-

61,L

838

670

.October
November
December

e/950
e/850
e/T,000

716,/
1,0891,088

1,162-/
632

ist
_nd
3rd
Lth

3,179
3,18U
2,878
e/2,800

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

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

ouarter
quarter
Quarter
ouarter

1st half
Three quarters
Year

973

6,663
9,5U1
e/l2,3Ul

State aviu local 1/
T"
|

1955

January
February
arch

M

New capital

L,907
7,1,63 \
10,38U

900

.

12 7

350

919
658

Excluding finance companies h/
1st quarter
2nd Quarter
3rd quarter
hth. Quarter
Year

1,61,7
2,5141

3,268
2,92L
2,560
e/2,650

2,2),6
2,826

1,727
1,870
--l,bldi
2,5LL

e/ll,li02

9,259

7,595

2/ 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 .
?/ Includes $571.5 million AT&T common stock issue .
IT/ Total new capital issues excluding offerings of sales and consumer finance
,companies.
Note.—Details may not add to totals due to rounding.




H.lU

Exhibit E

l

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

State and
local government

386
701
1*30
567
671
768
177
329
877
525
526
537
571

Other 2/

383
135
201
386
306
19ti
L99
21*8
176
265
357
185
1)35

35
100
50
125
25
39
25
30
75

Large Individual Issues Offered November 1 through .22
Issuer

Type 3/

Amount
(millions Maturity
of
dollars)

Coupon
rate or Offering Rating
net inter- yield
est cost

CORPORATE
Consumers Power Co.
Conv. deb . 35.2
Dayton Power & Light Co. 1st mtg. bds. 25.0
So. New England Tel. Co.
Common stk. 27.U
Beneficial Finance Co.
Deb.
50.0
S.F. deb.
Caterpillar Tractor Co.
65.0
Transcontinental Gas Pipe
S.F. deb.
20.0
Line Corp.
Trans. Gas Pipe Line Corp. Common stk. 17.8
Deb.
Michigan Bell Tel. Co.
UO.O
Ohio Power Co.
1st mtg.bds. 25.0
Olin Mathieson Chem. Corp. Coriv.sub.deb.60.0
Houston Ltg. & Pwr. Co.
1st mtg.bds. liO.O
Id=tho Power Co.
1st mtg.bds. 15.0




1972
1987

U 5/8
5

U.63
U.97

Aa
Aa

1977
1977

£ 1/2

5.2k
U.5U

Aa

1978

6 1/8

6.17

Ba

1992
1987
1982
1987
1987

k 3A
U 7/8
5 1/2
h 3A
h 3/U

U.65
U.82
' 5.50
U.65
U.65

Aaa
Aa
Ba
Aa

Aa

E-2

H.l

Large Individual Issues Offered November 1 through 22 (Cont'd)
Issuer

Type J/

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

STATE AND LOCAL GOVERNMENT
Fairfax Co., Virginia
G.O.
5.5
Hamilton City S. D., Ohio
G.O.
5.5
Jacksonville, Fla.
Utilities rev.3'0.0
Port of New York Auth.
Rev.
30.0
Cook Co., Illinois
G.O.
20.7
State of Kentucky
G.O.
35.0
Los Angeles Co. Flood Control Dist., Calif.
Rev.
20.0
State of Maryland
G.O.
14-2
New York, New York
G.O.
36.5
Springfield, Missouri
Water rev. 22.0
Chicago, Illinois
Water rev. 20.0
Lincoln Park S. D., Mich.
G.O.
6.8
State of Ohio
Thoroughfare rev.30.0
Terr, of Hawaii
G.O.
7.0
Oklahoma Co., Okla.
G.O.
6.0
State of Connecticut
Exp. rev.
35.0
Wash. Toll Bridge Auth.
Rev.
30.5

4.21
• 1959-83
1959-80
• 3.78
1959-95/68
4.64
1987/67
3.83
1958-77
3.58
1959-72/681
2.97
1958-83
1960-72
1958-72
1961-97/67
1963-82
1960-86/68
1958-72
1960-77
1961-77
1963-87
1997

3.00-5.00
2.80-3.80
3.20-4.60
3.78
2.60-3.60
2.30-3.00

Baa
A.
A
A
A
Aa

3.72 2.50-3.00 Aa
2.99 2.50-3.00 Aaa
3.54 • 2.60-3.55 A
4.47 3.30-4.50 A
3.97 3.40-4.00 A
U. 77 3,25-4.75 Baa
3.35 2.10-3.30 Aa
3.69 3.00-3.70 A
3.44 2.85-3.45 A
3.40-4.00 A
3.99
n.a.
—

OTHER
None
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.
2/ In the case of State and local government securities, G. 0. denotes general
obligation5 Rev., revenue bonds; G. R., general obligations additionally secured by
facilities revenues; L. L., limited liability obligations secured by pledge of designated revenues.




H.lii

Exhibit F
Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues

1957

Subsequent to
date shown

During month following
date shown

Date of
computation

Corporate

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

683
1*36
1*76
591
7lt0
i*6l
18?
525
370
526
578
576
1*58

S

r
162
1*8
280
153
153
290
179
97
172
252
213
370
369

CorPcratej^ ^

i

990
1*81
796
966
795
•1*86
258
525
U15
811
81*5
61*7
815

. ——

23
100
35

.

25
25
25
30
30

955
979
763
618
631
862
396
388
198
5U*
1*39
587
573

Other 2/
——

23
100
35
25
25
25
30
15
1*5

Forthcoming Large Offerings, as of November 22
Issuer

Type

Amount
Approximate date
(millions of offering
of dollars j

CORPORATE
20.0
25.0

Virginia Electric & Power Co.
Ist&ref.mtg.bds.
*Northem Natural Gas Co.
S.F., deb.
Chesapeake & Potomac Telephone Co.
of Maryland
Deb.
Commonwealth Oil Refining Co.
Conv. sub. deb.
^Natural Gas Pipeline Co. of America
1st mtg.bds.
Standard Oil Co. of New Jersey
Common stk.

30.0
20.0
1*0.0
288.2

•^American Telephone & Telegraph Co.

720.0

Commercial Credit Co.
National Cylinder Gas Co.

Conv. deb.
Notes
Conv. sub. deb.

50.0
,17.5

Dec. 1*
Dec. 6
Dec. 10
Dec. 11
Dec. 12
Dec. 18
(rights expire)
March 12
(rights expire)
Winter
Winter

STATE AND LOCAL GOVERNMENT
*Johnson Co. Wtr. Dist.,No. 1, Kan.
State of So. Carolina




Rev.
G.O.

20.0
5.0

Nov. 2$
Nov. 26

H.lli

F-2
Forthcoming Large Offerings, as of November 22 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
Bethel Municipal Auth., Pa.
Akron, Ohio
Los Angeles Sch. Dists., Calif.
•Indianapolis, Ind.
State of Ohio
Greater Baton Rouge Port Comm., La.
•Bergen'Co., N. J.
•Phoenix, Arizona
Chicago Bd. of Education, 111.
•Chelan Co. Pub. Ut. Dist.,No.l,Wash,
Caddo Parish Sch. Dist., La.
Penna. State Highway & Bridge Auth.
State of Missouri
State of Texas
Pennsylvania Turnpike Commission
Inter-American Center Auth., Fla.
New York State Thruway Auth,

Sewer rev.
6.U
Water works rev. 5.0
G.O.
15.0
' G.O.
5.1
G.O.
25.0
Rev.
19.ii
G.O.
7.2
16.0
Water rev.
G.O.
25.0
Rev.
250.0
G.O.
7.5
20.0
Rev.
30.0
G.O.
G.O.
12.5
62.0
Rev.
20.0
Rev.
50.0
. Rev.

Nov. 26
Dec. 2
Dec. 3
Dec. 3
Dec. U
Dec. 11
Dec. 11
Dec. 12
Dec. 17
Dec.
Jan. 7
Jan. 17
Winter
Winter
Winter
Winter
Winter

OTHER
•Montreal, Quebec
Pacific Great Eastern Ry. Co.
Union of South Africa

S.F. deb.
S.F. deb.
Ext. loan bds.

18.0
30.0
15.0

Dec. 12
Winter
Winter

•—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State and
local""government issues of $5 million and over.
• 2/ Includes foreign government and International Bank for Reconstruction
and Development issues.
Note.—Deletions for reasons other than sale of issues Florida Power and
Light Company's common stock issue — proceeds of less than $15 million.




H.lU

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

Date

1952 - 1956
High
Low

ii. 30(12/12/56)
2.93(3/31/5W

62
-3

u.uu
it. 25
None
. *it.29

57
itit

1957 - January
February
March
April
May
June 5
7
11
July 3
10
11
16
17
|
August 11*
September 5
6
25
October 1
15
17
2h

November 7
8
15
20
21
22

.

k.hk •

it.63

5o
58
75

U.78

87

1.57
it.77
1,65

it8
68
56

5.00
it. 80
it. 85

75
51
56

it. 78

it5

it.97
it.86 2/

63
52

it. 82
it. 65
it. 65

53
37
39

it.58(12/6/56)
3.00(3/17/51)
.

it *62
None
it .50
h .55
KltiO
5.10

70
-15
6it
it5
5it
79
106

it.80 2/
It.88 7/

6it

lt.90

71

5.10

51

5.00
It.95
5.30
5.50

39
3it
67
88

5.05 2/

it3

7h

*—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
Wrefunding at a lower coupon rate. Other issues have no such provision.