Full text of H.16 Capital Market Developments : October 24, 1956

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.

Not for Publication DECONTROLLED AFTER SIX MONTHS
October 2k, 1956

H.lU
CAPITAL MARKET DEVELOPMENTS

The volume of public security financing continues to be
substantial. Large public security offerings issued, for new capital during the week ending October 19 totaled $100 million for
. corporations and $112 million for State and local governments.
This week the volume will again be large. Two corporate bond
• issues totaling 495 million and State and local government issues
amounting to Si33 million are scheduled for sale.
Bond yields - Yields on outstanding State and local government and U. S. Government (new series) obligations increased
last week, while yields on corporate and U. S. Government (old
series) bonds remained stable. The increase in the State and local
government yields was sharp, and established a new high for the
year in each quality category. The sharp rise in municipal yields .
reflects the increased volume of new security offerings and the
"concomitant rise in dealer inventories.
Offering yields on new corporate issues have begun to
increase again after a dip in September. Consolidated Edison Company of New York's Aa-rated first and refunding mortgage bond issue
was reoffered this week at a yield of iu 13 per cent—12 basis points
above the last comparable issue, an offering made on September 25,
and only 7 points below the peak rate recorded on an issue of September 11. A similar issue of the Consolidated Edison Company marketed
in May of this year yielded 3.55 per cent. The increase of 58 basis
points during the five-month period from May to October compares
with a 25 basis point increase in yields on outstanding bonds of
the same quality rating.
Stock prices - Stock prices, as measured by the SEC index
of 265 common stocks, declined last week, closing at 27^.8 on October 19. Volume of trading continued low, averaging only 1.6 million shares a day. Prices have continued to decline slightly this
week.
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 BOND YIELDS

; CORPORATE A a a

S

, u . S. GOVERNMENT '• J \ f
\
long-lerm
lz

STATE AND LOCAL
GOVERNMENT Aoa

U. S. Govt.. long-term '<!•/
Corporate
Aaa 1/

Old series

3.1*2 (6/19)
2.99 (1/9)
3.09 (1/8)

3.15 6/6)
2.78 (12/26)
2.7k (1/9

3.17
2.91
3.58
3.07

2.9h (8/5)
2.62 (1/7
3.22 9/7)
2.80 (2/17)

3.03 (8/5)

3.15

3.2U
3.23
3.21
3.21

New series

Spread between
U. S. Govt. •
State and
local govt. (old series) and
CorporateI State and
Aaa 3/
Aaa
Ilocal Aaa

(Per cent)
1953 - High
1951* - High
1S55 - High
Low
1956 - High

September 21
September 28
October 5
October 12
October 19

2.85 (h/23) 2.hU (8/7
(12/23)
(1/7)
(10/5)
(3/2)

1

I

f:98

2.21. (6/10)

2.89 (6/10)

3.22

1/ Weekly average of daily figures.

ill,

3.26 (9/lh) .2.68 (10/18)
2.17 (2/23)
2.92 (2/3).
2.63

2.62

2.61
2.6?

2.68

.814
.30
.61
.29

.38
.19

.1*3
.32
.31*
.13
.a
.13
.la
.1*1
.a

.hi

.ia

.70

,

• 51*
.68
.1*5
.52
.55
.53
.53
.1*8

Average terra of bonds included is 25-26

years. ^
averages of daily figures. The old series includes fully taxable,
marketable 2 1/2 per cent bends due or first callable after 12 years through
September 1955, and those due or callable in 10-12 years thereafter; the average
term to first call of the bonds included declined from lit 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 l A per cent bond of 1978-83.
. „ , ,
3/ Thursday figures. Only general obligation bonds are included; average
ten

" 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

V" !

Corporate
Baa 1/

Date

. State and
local govt.
Baa 1/

State and
local govt,
rev. J/

(Per cent)
1953 - High
Low
1954 - High
Low
1955
High
Low
1956 - High
Low

3.89
3.50
3.74
3.44
3.63
3.45
4.16
3.58

September 21
September 28
October 5
October 12
October 19

4.09
4.12
4.14
4.16
4.16

(9/18)
(1/2)
(1/8)
(12/31)
(12/30)
(1/14)
(10/19)
(3/9)

3.79
2.96
3.32
2.93
3.26
3.02
3.71
3.20

(6/25)
(1/8)
(1/7)
(8/5)
(12/29)
(1/6)
(10/18)
(3/8)

3.61
3.60
3.58
3.62 .
3.71

3.27
2.71
3.00
2.72
2.99
2.76
3.56
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(10/19)
(2/24)

3.48
3.49
3.49
3.52
3.56

_ 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.
FRASER

Digitized for


STOCK M A R K E T

Date

Stock price
index 1/

Common
stock I
volume 2/
(millions yields 2 /
of shares) (per cent)

Stock market customer credit
Customers1
Total. debit bal- loans to
ances 4/ "others" £/
(Millions of dollars)

1955 - High
Low
1956 - High
Low

167.-1
144.0
221.4
156.5
270.7
217.1*
295.5
257.4

August
September
October 5
October 12
October 19

290.0
278.2
275.2
277.9
274.8

1953 - High
Low
1954 - High

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

2.5
0.9
3.7
l.lj
4.6
1.5
3.1
1.5

5.75
5.15
5.33
4.20
4.22
3.78
4.21
3.86

2,445 ' , 1,665
2,055
1,314
2,388
3,436
1,653
2,405
2,805
4,030
2,517
3,537
2,810
4,047 2,740
3,950.

780
664
1,048
746
1,241
1,018
1,267
1,167

1.9
2.0
2.1
1.5
1.6

4.02
4.24

3,979
3,950

2,785
2,782

n.a.

n.a.

1,194
1,168
1,189
1,184
n.a.

.

n.a.

n.a.—Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted
to 19u7-U9"100 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 stocks; end of month figures.
% / 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 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.lk
Corporate and State and Local Government
Security Offerings and Placements
(In mil l ions 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
kth quarter
Year

capital

Corporate^

State and local
1956" T * 1955
r

579
70k
790

535
U07
1,223

816
i,ia
830

687

e/l,120
e/700
e/850

597
6kk
670

909
335
7U7

e/^0

e/850

1,162
632
900

1,003

e/625

2,165

2,073
2,790
k,863
e/2,670
e/7,533

5k7

• 2,052

1,217
1,911
6,128
2,695
8,821

535 -

396
kll
565

377
U90
735

k27
350
6kl

73k
7k8
853

376

U70
2k9
k06

279
261
6k9

60k

919
658
k08

59k
>23
877

1,608
1,995
3,603
1,991
5,59k
1,896
7,190

1,385
l,kl8
2,803
1,12k
3,927
1,98k
5,911

1,372
2,33k
3,706
1,188
k,89k
1,89k
6,789

696

635

U78
886

kok

1*26

-

.

k97
656
81+2

290

390
.

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

1,617
2,520
e/2,U70

1,727
1,870
i,U3U
2,55k
7,569

1,527
1,927
1,911
1,792
7,158

e/ Estimated.
2/ 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.U*

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

Corporate

1935 - September
October
November
December
1956 - January
February
March
April
May
June
July
August
September

State and
local government

Other 2/

23h
716
1+01
227
192
liliU
163
157
233
463
16k
35
18U

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

25
50

50
20
37

Large Individual Issues Offered October 1 through 19
Issuer

Type 3/

Coupon
Amount I
Rating
^ o n s Maturity rate or Offering
net inter- yield
est cost
. dollars) I
6ni

CORPORATE
United Aircraft Corp.
Conv.pfd.stk.
Allegheny Ludlum
Steel Corp.
Conv. deb.
Columbia Gas System, Inc.
Deb.
Southern Bell Tel.
& Tel. Co.
Deb.
Pacific Finance Corp.
Deb.
Texas Eastern Trans. Corp. Pfd. stk.
Long"Island Lighting Co. Conv. pfd. stk.
Georgia Pacific Corp.
Common stk.
Commonwealth Edison Co.
Pfd. stk.
Johns-Manville Corp.
Common stk.




31.'
16.3
25.0

1981
1981

h
1*3/1*

Loo
1*.70

Baa
A

60.0
15.0
15.0
18.0
15.9

1983
1971

1*
1* 5/8

3,90
It. 75

Aaa

1*0.0

25.9

—

H.lU

E-2

Large Individual Issues Offered October 1 through 19 (Cont'd)
Issuer

Type 1/

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

STATE & LOCAL GOVERNMENT
Detroit, Michigan
G.O.
State of California
G.O.
Buffalo, New York
G.O.
Stai-e of South Carolina
G.O.
San Bernardina Co., Cal.
G.O.
Territory of Hawaii
Hwy. rev.
. Baltimore Co., Md.
G.O.
Washington Co., Md.
G.O.
Ilagerstown, f-Id.
G.O.
Charlotte, N. C.
G.O.
State of Massachusetts
G.O.
Ft. Pierce, Florida
Elec. &
water rev.
St. Louis Board of
• Education, Missouri
G.O.
,ew Jersey Highway Auth.
Rev.

12.3
35.0
11.U
15.0.

1957-81
1958-77
1957-71
1957-76
6 . 0
1957-76
12.5! 1958-86
21.0
1959-96
8.0
1957-81
5.8 1957-81
5.2 1958-95
57.6 1957-96

3.09
2.80
2.35
2.6k
2.80
3.81
3.15
2.98
2.99
2.99
2.93

2.20-3.20 A
2.15-2.85 Aa
1.90-2.U0 Aaa
2.00-2.65 Aa
2.10-2.85 Aa
2.70-3.80, / A
2.50-3.25^ A
2.10-3.00 Aa
2.10-3,00 A-2
2.30-3.U0 A
1.90-2.95 Aa

5.1

1959-88

tw36

3.20-^.20

5.5
25.0

1958-76
1988

3.OL
U.53

2.00-2.75
14.38

Aa
—

• 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.
'3/ In the case of State and local government securities, G.O. denotes general obli^tion; Rev., revenue bonds; 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
State and o t h e r 2/
State
and
Other 2/ Corporate local
Corporate
govt.1
-/
local govt.

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

805
202
215
70
176
123
380
568
198
k37
2h7
369
315

.

6U3
330
205
121
327
220
132
173
332
81
131
359

909
kl2
230
85
376
233

50
mm mi
——
——

1,013

37
—

818
as
567
1,096
1,202
• 1,009

——

2,205

1,650
618
917
785
811
832
9ia

50
—
—
——

690

726
958
1,197

37
—
—

Forthcoming Large Offerings, as of October 19
Issuer

Type.

Amount
Approximate date
(mill ions of offering
of dollars)

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

1st &ref. mtg.bds. ilO.O
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 2k
October 2k
October 30
November 1
November 5 :
(rights expire)
November 15
1956
1956
1956

STATE AND LOCAL GOVERNMENT
Flint, Michigan
Philadelphia, Pennsylvania
Boston, Massachusetts
Territory of Hawaii
Estate of Maryland




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

S-k

58.8
5.8
12.0
8.7

October 23
October 2k
October 2k
Octobsr 2It
October 2k

H.lit

F-2
Forthcoming Large Offerings, as of October 19 (Cont'd)
• Issuer

Type

Amount
(millions Approximate date
of dollars) of offering

STATE AND LOCAL GOVERNMENT (Cont'd)
Orlando, Util. Comm., Fla.
Elec.& water rev.
7.5
Salt River Project & Agricultural
Improvement & Power Dist., Ariz.
G.R.
10.0
Stats of Ohio
Rev.
25.0
Dallas,- Texas
Airport rev.
6.5
State of Connecticut
Expressway rev.
75.0
Harris Co., Texas
G.O.
6.0
Chicago, 111.
Water rev.
5.0
Chicago Bd. of Education, 111.
G.O.
10.0
^Cleveland, Ohio
Rev.
10.0.
Florida State Bd. of Education
• G.O.
9.3
Jacksonville Expressway Authority
Rev.
1*2.0
Florida State Turnpike Authority
Rev.
185.0
Memphis, Tennessee
Elec. rev.
135.0
Oklahoma Turnpike Authority
Rev.
65.0
Pennsylvania Turnpike Commission
Rev.
62.0
Washington State Toll Bridge Auth.
Rev.
227.0
Inter-American Center Auth., Fla.
. Rev.
20.0
New York State Thruway Authority
. G.O. .
50.0

October 25
October 25
October 26
October 29
October 30
November 9
November 13
November 111
November lb
November 27
Fall
Fall
Winter
1956
1956
1956
1956
1956

OTHER
Quebec Hydro-Electric Commission

Deb.

35.0

October 31

1/ Includes corporate and other issues of §15 million and overj 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 issue: None.