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Not for Publication DECONTROLLED AFTER SIX MONTHS
Hlt
.i

October 18, 1956
CAPITAL MARKET DEVELOPMENTS

Large public security offerings issued for new capital
during the week ending October 12 totaled $90 million for corporations and $55 million for State and local governments. The calendar for this week indicates a substantial volume of offerings.
Subscription rights expire on two stock issues with aggregate
proceeds offyhkmillion and two other stock issues totaling $56
million are scheduled for flotation. State and local government
offerings amounting to #112 million are expected. This total includes the New Jersey Highway Authority issue for $25 million which
had been originally scheduled for sale in July, but was postponed
because of market conditions in early summer. The leveling-off
in yields and improved investor reception in September has apparently brought a number of borrowers back to the market, but more
recently with the heavier volume of offerings, some of the new
issues have not moved as rapidly.
Bond yields - Changes in yields on outstanding bonds
were mixed but minor last week. Yields on corporate Baa-rated,
State and local government and U. S. Government (old series) bonds
increased, while the yields on U. S. Government (new series) obligations were stable and yields on corporate Aaa-rated bonds declined one basis point.
Stock market credit - Customer credit in the stock market (excluding U. S. Government securities) declined $29 million
during September. At the end of the month, the total outstanding
was $3,950 million. Both net debit balances and bank loans to
"others" continued to decline. (Preliminary estimates by the
New York Stock Exchange had previously indicated the probability
of some increase in debit balances, but final figures showed a
slight decline.) Borrowing by member firms of the NYSE maintaining
margin accounts, except borrowings on U. S. Government securities,
increased $23 million while customers1 net free credit balances
declined $5 million. These and other data on stock market credit
for August and September are shown in the table on the next page.




End of month
September August

Change

(Millions of dollars)
Customer credit
Excluding U. S. Govt, securities - Total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans"to others for purchasing or carrying
U. S. Govt, securities

3,950
2,782
1,168
33

3,979
2,785
1,19k
33

-29
-3
-26
0

U2

I
II

1

Broker and dealer credit
Money borrowed except on U. S. Govt, securities
On customer collateral
Money borrowed cn U. S. Govt, securities
Customers' net free credit balances

2,071
1,777
h2
867

2,0U8
1,742
38
. 872

23
35
U
-5

Stock prices - Stock prices, as measured by the SBC index
of 265 common stocks, increased 2.7 points during the week ending
September 12, closing at 277.9. Trading volume declined substantially,
to establish a new low for the year. . Daily data for this week indicate a decline in prices through 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.




EXHIBIT A

H I G H - G R A D E BOND YIELDS

S. GOVERNMENT

STATE AND LOCAL
GOVERNMENT Ada

u. s
Corporate
Aaa 1/

long-term 2/

Old series

New series

Spread between
U. S. Govt,
State and
local govt. (old series) and
Corporate 1 State and
Aaa J /
Aaa
J local Aaa

(Per cent)

1956 - High
Low

3.1*2
2.99
3.09
2.85
3.17
2.91
3.58
3.07

September lit
September 21
September 28
October 5
October 12

3.55
3.56
3.58
3.58
3.57

1953 - High
195k - High
1955 - High

(6/19)
(1/9)
(1/8)
(k/23)
(12/23)
(1/7)
(10/5)
(3/2)

3.15
2.78
2.7k
2.kk
2.9k
2.62
3.22
2.80
3.21
3.15
3.17
3.1k
3.16

(6/6)
(12/26)
(1/9)
(8/7)
(8/5)
(1/7)
(9/7)
(2/17)

n.a.

3.03
2.89
3.26
2.92
3.26
3.2k
3.23
3.21
3.21

(8/5)
(6/10)
(9/lk)
(2/3)

2.73
1.98
2.21
1.90
2.3k
2.05
2.63
2.17
2.63
2.63
2.62
2.61
2.63

(6/25)
(1/8)
(6/10)
(9/2)
(9/8)
(5/26)
(10/11)
(2/23)

.38
.19
.k3
.32
.3k
.13
.kk
.13

.8k
.30
- .61
.29
.70
.5k
.68
•k5

.3k
• kl
.kl
.kk
.kl

.58
..52
.55
.53
.53

1/ Weekly average of daily f i g u r e s . A v e r a g e term 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 1955* and those dor or callable in 10-12 years thereafter; the average
term to first call of the bonds included declined from lk years in early 1953 to
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1/k per cent bond of,1978-83.
3/ Thursday figures. Only general obligation bonds are included; average
tern is 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
Weekly

Per cent per annum

Corporate
Baa 1/

Date

State and
local govt.
Baa 2/

State and
local govt,
rev. y

(Per cent)

1956 - High
Low

3.89 (9/18)
3.50 (1/2)
3.7U (1/8)
3.UU (12/31)
3.63 (12/30)
3.L5 (1/lU)
U.16 (10/12)
3.58 (3/9)

3.79 (6/25)
2.96 (1/8)
3.32 (1/7)
2.93 (8/5)
3.26 (12/29)
3.02 (1/6)
3.62 (10/11)
3.20 (3/8)

3.27 (6/26)
2.71 (1/2)
3.00 (1/1) .
2.72 (8/13)
2.99 (12/30)
2.76 (1/7)
3.52 (10/12)
2.89 (2/2U)

September l t
i
September 21
September 28
October 5
October 12

U.05
U.09
l.2
i1
U.1U
U.16

3.60
3.61
3.60
3.58
3.62

3.50
3.U8
3.U9
3 .k9
3.52

1953 - High
195k - High
Low
1955 - High

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.
Note.—Highs and lows are for individual series and may
be on different dates for different series.




STOCK MARKET

Stock price
index 1/

trading
Common
volume 2/
(millions yields 3/
of shares) (per cent)

Stock market customer credit
Customers»
debit bal- loans to
ances h/
"others" 5/
(Millions of dollars)

1956 - High
Low

167.1
ltit.O
221.lt
156.5
270.7
217. h
295-5
257.a

August
September
September 28
October 5
October 12

290.0
278.2
269.3
275.2
277.9

1953 - High
Low
195U - High
1955 - High

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(1/Hi)
(8/3)
(1/20)

2.5
0.9
3.7
l-i
.i

.5.75
5.15
5.33
l . 20
i

-1.5
3.1
1.5

. 3.78
li. 21
3.86

1.9
2.0
2.0
2.1
1.5

' 14.02
U.2U

h.6

h.22

n.a.

2 ,Wi5
2,055
3,1,36
2,105
It,030
3,537

k,0h7
3,979

.

1,665
1,33h
2,388
1,653
2,805
2,517
2,810
2,7UO

3,979

2,785
n.a.

n.a.

n.a.

780
661;
l,0li8
716
1,2U
1,018
1,267
1,167
1,19b
r/1,168
r/1,168
1,189
n.a.

.
n.a.—Not, available. .
r/ Revised
1/ SEC index of 265 common stocks, weekly closing prices, 1939-100; converted
to lpTj-U^lOO by Federal Reserve. The conversion factor is 123;91.
2/ Averages of daily trading volume on the New York Stock Exchange.
3/ Moody's 200 common stocksj end of month figures.
End of month figures for merit) er 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 72 per cent of loans to others.
Note.—Highs and lows are for individual series and may be on different dates
for different series.




H.lU

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

1956
January
February
- March
April
May
June
July
August
September
October
November
December
1st quarter.
. 2nd quarter
1st half
3rd quarter
Three quarters
4th quarter
Year

579

704

Corporate
19gT

547
426

535

790

407
1,223

816
1,144
830

886
687

e/1,120
e/700
e/850

597
6a
670

e/850

478

1,162 ^
632

900

2,073
2,790
M63
e/2,670
e/7,533

2,165
2,052

а, 217
1,911
б,128
2,695

8,821

New capital
~mr

"19^5

State and local
19&~
"19W

404

535

312

396

635

.
.

#6
390

538

565

497
656
842

377
490
735

427
350
64l

734
748

909

376
e/215
e/350

470
249
406

649

1,003
290
604

e/625

919
#8
408

423
877

1,608

1,490
1,603 .

1,385

1,372

335

747

1,995

3,603
1,991
5,59k
1,896

3,093
e/94l
e/C,034

7,490

1,418
2,803
1,124
3,927

1,984
5,911

4n

853
2?9

261

594

2,334

3,706

1,188
4,894
1,894
6,789

Excluding finance companies 2/
1st quarter
2nd quarter
3rd quarter
4th quarter
Year

1,617
2,520
e/2,li70

1,727
1,870
1,434
2,554
7,569

1,527
1,927
• 1,911
1,792
7,158

e/ Estimated.
1/ Includes $637•2 million AT&T convertible debenture issue.
2/ Total new capital issues excluding offerings of sales and personal finance
companies.
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

1955 - September
October
November
December
1956 - January
February
March
April
May
June
July
August
September

State and
local government

328
805
221
263
95
212
278
395.
623
185 •
592
217
558

23k
716
401
227
192
444
163
157
233

Other 2/

.
V

25
50

50

to

20

164
35
184

37

Large Individual Issues Offered October 1 through 12
Type 3/

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

CORPORATE
United Aircraft Corp.
. o v pfd.stk. 31.8
Cn.
Allegheny Ludlum
Steel Corp.
Conv. deb. 16.3
Columbia Gas System, Inc.
Deb.
25.0
Southern Bell Tel.
& Tel. Co.
Deb.
60.0
Pacific Finance Corp. Deb.
15.0
Texas Eastern Trans. Corp. Pfd. stk.
15.0

1981
1981

4
4 3/4

4.00
4.70

Baa
A

1983
1971

4
4 5/8

3.90
• 4.75

Aaa

2.20-3.20
2.15-2.85
1,90-2.40
2.00-2.65

A
Aa
Aaa
Aa

STATE & LOCAL GOVERNMENT
Detroit, Michigan
State of California
Buffalo, New York
State of South Carolina




G.O.
G.O.
G.O.
G.O.

12.3
35.0
li.U
15.0

1957-81
1958-77
:
1957-71
1957-76

3.09
2.80
2.35
2.64

'i

H.llt

E-2

Large Individual Issues Offered October 1 through 12 (Cont'd)
Issuer

Type 3/

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

STATE & LOCAL GOVERNMENT
. (Cont'd)
San Bernardino Co., Calif.
G.O.
Territory of Hawaii
Kvty. rev.
Baltimore Co., Md.
G.O.

6.0
12.5
21.0

1957-76
1958-86
1959-96

2.80
3.8k
3.15

2.10-2.85 Aa
2.70-3.80, / A
2.50-3.25^ A

OTHER
None

r

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.O. denotes general obligation; Rev., revenue bondsj G.R,, general obligations additionally
secured by facilities revenues; L.L., limited liability obligations secured by
pledge of designated revenues;
h/ 1986-96 maturities not reoffered.




Exhibit F

H.lU

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

Date of
computation

805
202
215
70
176
123
380
568
198
13
*7
2U7
369
315

1955 - Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31
June 29
July 31
Aug. 31
Sept. 28

__

843
330
205
121
327
220
132
173
332
81
131
359

50

.

37
—

909
hl2
230
85
• 376
233
1,013
818
as
567
1,096
1,202
1,009

2,205
1,650
756
618
917
785
811
832
9t
il
690
726
958
1,197

50

37
-—

Forthcoming Large Offerings, as of October 12
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Long Island Lighting Co.

Conv. pfd. stk.

18,0

Georgia Pacific Corp.
Commonwealth Edison Co.
Johns-Manville Corp.

Common stk.
Pfd. stk.
Common stk.

15.9

1*0.0
25.9

Consolidated Edison Co.
National Steel Corp.
Ohio Power Co.
*Allied Stores Corp.
American Tel. & Tel. Co.

1st & ref. mtg.bds. i O O
i.
1st mtg. bds.
55.0
28.0
1st mtg. bds.
S.F. deb.
15.0
Common stk.
572.6

^Public Service Electric & Gas Co.
Seaboard Finance Co.
J. P. Stevens & Co.
Michigan Wisconsin Pipe Line Co.

1st &ref.mtg.bds.
S.F. notes
S.F. deb.
1st,mtg. bds.




50.0
15.0
28.7
25.0

October 15
(rights expire)
October 17
October 17
October 17
(rights expire)
October 2b
October 25
October 30
November 1
November 5
(rights expire)
November 15
1956
1956
1956

H.lU

F-2
Forthcoming Large Offerings, as of October 12 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
. of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Washington Co., Md.
Hagerstown, Md.
Charlotte, N. C.
State of Massachusetts
Ft. Pierce, Florida
St. Louis Bd. of Education, Mo.
New Jersey Highway AuthorityFlint, Michigan
Philadelphia, Pennsylvania
Boston, Massachusetts
Territory of Hawaii
State of Maryland
Orlando, Util. Comm., Fla.
Salt River Project & Agricultural
Improvement & Power Dist., Ariz.
State of Ohio
-xDallas, Texas
State of Connecticut
Harris Co., Texas
Chicago, 111.
Chicago Bd. of Education, 111.
Florida State Bd. of Education
Jacksonville Expressway Authority
Florida State Turnpike Authority
Memphis, Tennessee
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New York State Thruway Authority

8.0
G.O.
G.O. '
5.8
G.O.
. 5.2
G.O.
57.6
Elec.& water rev.
5.1
G.O.
.5.5
Rev.
25.0
G.O.
5.h
G.O.
. 58 .8
G.O.
5.8
12.0
G.O.
G.O.
. 8.7
Elec. & water rev.
7.5
G.O.
• L.L.
Airport rev.
Expressway rev.
G.O.
Water rev.
G.O.
G.O.
Rev.
Rev. •
Elec. rev.
Rev,
Kev.
Rev.
Rev.
. G.O.

10.0
25.0
6.5
75.0
6.0
5.0
10.0
9.3
1*2.0
185.0
135.0
65.0
62.0
227.0
20.0
50.0

Deb.

35.0

October 17
October 17
October 17
October 18
October 18
October 19
October 19
October 22
October 23
October 23
October 23
October 23
October 2k
October 2k
October 25
October 29
October 30
November 9
November 13
November l t
i
November 27
Fall
Fall
Winter
1956
1956
'
1956
1956
1956

OTHER
.-^Quebec Hydro-Electric Commission

October 30

-X-—Included in table for first time.
1/ Includes corporate and other issues of $15 million and over; State a i
rd
local*government issues of 55 million and,over.
. 2j 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/
Aa-rated offering yields A-rated offering yields
Amount abo\ e
Amount above
Actual
Actual
(per cent) seasoned yields (per cent) seasoned yields
(basis points).
(basis points)

Date
1952 average
1953 average
195h average •
1955 average
1956 - January
February
March 8
16
23
30
April U
h
n
25
May 9
16
2k
June 8
20
July 3
18
25
August 1
30
September 11
13
25
October 10

3.16
3,16
3.03
3.23
None
*3.15
3.19

1

3
5

3.37

)

13
16
3
9

18

3.77

ho

3.53
3.52

19
18

3.62
3.70

26
33

h.07
i . 20
t
L17
iuOl

52
62
58
37

3.35
3.78
3.12
3.33

12
26
-3
12

None
3.23

-5

3.35

7

3.55
3.57
3.60
3.67

25
23
26
29

3.80
3.73

32
2h

3.75
3.82

27
28

1 . 00
*

W

1U0

63

*—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.





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102