Full text of H.16 Capital Market Developments : October 31, 1956

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///v
Not for Publication DECONTROLLED AFTER SIX MONTHS
H.lU

October 31» 1956

CAPITAL MARKET DEVELOPMENTS
The volume of publicly sold security issues was substan- .
tial last week, but is expected to be much smaller this week. During the week ending October 26, corporations sold large issues totaling $95 million while State and local government offerings amounted
to ^>133 million. This week two corporate issues with aggregate proceeds of SU3 million and one State and local government issue for
$7 million are expected. The sale of another State and local issue
originally scheduled for this week—the Connecticut Turnpike 175
million bond issue—was postponed until November.
Bond yields - Bond yields have been moving upward again
after a slight leveling off during late September and early October.
Yields on all types of outstanding bonds increased sharply to new
highs for the year last week. The State and local government Aaarated and Baa-rated bond yields are now only 1 and 2 basis points,
respectively, below their 1953 hi(jis, while yields on corporate
bonds surpassed their 1953 levels in mid-August and are currently
20-30 basis points above those levels.
Offering yields on new corporate issues have also
increased further recently. Ohio Power Company's Aa-rated 30-year
first mortgage bond issue was reoffered this week to yield I n 20
per cent. This yield is 19 basis points above that for the last
comparable issue, an offering made on September 25. The same company rejected the bids for its $6 million preferred stock issue because of the existing market conditions. The high bidder for the
issue had planned to reoffer the shares to yield U.80 per cent.
Estimated November volume - Corporate security issues
during November are expected to total *>1,200 million, two-fifths
greater than the estimated October volume and almost twice the volume in November last year. Large publicly offered issues are expected to total between §650 and §700 million including the $573
million AT&T common stock offering for which subscription rights
expire early in the month..
. State and local government bond issues during November
are expected to total $325 million as compared with over &600 million for October as well as for November 1955.




I

H.lij.

— 2 —

Stock prices - Stock prices, as measured by the SEC
index of 265 common stocks, increased slightly last week, closing at 275.0 on October 26. Daily figures for the first three
days of this week indicate a decline in prices, with the drop
being particularly-sharp 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

Per cent per annum

CORPORATE A a a

GOVERNMENT

fiiTu

U.S. Govt., l o n g - t e r m 4 /
Corporate
Aaa y

Old aeries

New series

Spread between
U . S. Govt.
State and
local govt. (old a e r i e s ) a n d
Corporate!State
and
Aaa y
Aaa
[looal Aaa

(Per cent)
1953 - High
Low
1954 - High

342
2.99
3.09

(6/19)
(1/^)
(1/8)

1955 - High
Low
1956 - High

2.85 ( V 2 3 )
3.17 1S/&3
2.91 (1/7)
3.61 (10/26
3-07 (3/^)

September 28
October 5
October 12
October 19
October 2 6

3.58
3.53
3-57
3-57
3.61
y average of

3.15 (6/6)
2.78 (12/26)
2.74 (1/9)
2 . 4 4 (8/7)

%

2.62 a
3.17
3.14

3.16
3.16
3.22

2.73 (6/5)
1.98 (1/8)
2.21 (6/10)
1.90 (9/2)
3.0) (8A) 2.34 (9/8)
2.89 (6/10) 2.05 (5/26)

S:S

•I
gures.

2.62
2.61
2.63
2.63
2.72

.38
•19
.43

t

.84

.29

'H

:E

.13

•45

.14

•55
.53

s
.14
.39

•50

Average term of bonds included is 'd^-Ab

yeBr8

2 / weekly averages of daily figures. The old series includes fully taxable,
marketable 2 l/2 per cent bonds 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 1/4 per cent bond of 1978-833/ Thursday figures. Only general obligation bonds are included; average
Note.--Highs and lows are for individual series and may be on different dates
for different series.




LOWER - GRADE BOND YIELDS
Weekly

CORPORATE

LOCAL GOVT

r

i

I

STATE AND LOCAL GOVT. REVENUE

\U 11 I II 11 I II II

Corporate
Baa 1/

. Date

State andl
looal govt.
Baa y

State and
looal govt,
rev. 3/

(Per cent)
3.89 (9/18)
3.50 (1/2)
3.7k (1/8) 3 M (12Al)
3 . 6 3 (12/30)
3.45 ( l A )
4.18 (10/26)
3.58 (3/9)

1953 - High
Low
1954 " High
Low
. 1955 " High
Low
1956 - High
Low
September 28
October 5
October 12
October 19
October 26

4.12
4.14
4.16
4.16
4.13

3.79
2.96
3.32
2.93

(6/25)
(1/8)
(1/7)
(8/5)

3.26 (12/29)

3.02 (1/6)
3.77 (10/25)

. 3.20 (3/8)
3.60
3.58
3.62
3.71
3.77

3.27
2.71
3.00
2.72
2.99
2.76
3.64
2.89

(6/26)
(1/2)
(l/l)
(8/13)
(12/30)
(I/O
(10/^6)
(2/24)

3.49
3.1*9
3.52
3.56
3.64

Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bonds are
inducted; 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

L..

Stock price
index 1 /

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

Stock market customer credit
Customers 1
debit bal- loans to
ances h/ "others" 5 /

Total

(Millions of dollars)
1953 - High

167.1
lWt.0
221.lt
156.5
270.7
217.lt

(1/2)
(9/18)
(12/31) ,
t
(1/6)
(12/30) ''
(1/llt)

1956 - High
Low

257.lt (1/20)

2.5
0.9
3.7
l.lt
it.6
1.5
3.1
1.5

August
September
October 12
October 19
October 26

290.0
278.2
277.9
27lt.8
275.0

1.9
2.0
1.5
1.6
1.6

195U - High
1955 - High

295.5 (8/3)

\

5.75
5.15
5.33
It. 20
it.22
3.78
lt.21
3.86
It.02
It.2k

1,665
l,3Ht
2,388
1,653
2,805
2,517
2,610

3,950

2,71)0

780
661t
l,0lt8
7lt6
1,21)1
1,018
1,267
1,167

3,979

2,785
2,782

1,19 It
1,168
l,l81t
1,177

2,ltlt5
2,055
3,lt36
2,lt05
it,030
3,537

h,0hl

3,950

n . a . — M o t available. 1/ SEC index of 265 common stocks, weekly closing prices, 1939=100; converted
to 1967-^9=100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the Hew York Stock Exchange.
3/ Moody's 200 common stocks; end of month figures.
Iy 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.ll*

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

1956
JanuaryFebruary
March

Corporate
1 195T 1

New capital
195k

1956

State and local
"TTfSg
r ~ 19%

57 9
70k
790

#5
407
1,223

51*7
1*26
635

1*01*
696
390

535
312
#8

3#
1*11
565

816
1,11*1*
830

1*78
886
687

1*97
656
81*2

377
1*90
735

1*27
350
. 6ia

731*
71*8
653

July
August
September

e/1,120
e/700
e/850

597
6kk
670

909
335
7k7

376

1*70
21*9
1*06

279
261
61*9

October
November
December

e/850
e/1,200

1,162 ^
632
900

1,003
290
601*

3/620
i/325

919
658
1*08

591*
1*23
877

2,165
2,052
a, 217
1,911
6,128
2,695
8,821

1,608
1,995
3,603
1,991
5,591*
1,896
7,1*90

1,1*90
1,603
3,093
e/925
f/L,0l8•

1,385
l,lil8
2,803
1,12k
3,927
1,98k
•--5,911

1,372
2,33k
3,706
1,188
kt89k
1,89k
6,789

April
MayJune

1st quarter
2nd quarter
1st half
3rd quarter
Three quarters
Uth quarter
-Year

.2,073
2,790

1*,863

e/2,670
e/7,533

e/Mo

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

1,617
2,520
e/2,470

1,727
1,870
1,1*3**
2,55b
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 consumer 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)
Corporate

Month

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

234
716
.401
227
192
444
163
157
233
463
164
35
184

Other 2/

25
50
. —

"— •
50
20
—

;

37

Large Individual Issues Offered October 1 through 26
Type 3/

Issuer

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

CORPORATE
United Aircraft Corp.
Allegheny Ludlum
Steel Corp.
Columbia Gas System, Inc.
Southern Bell Tel.
& Tel. Co.
Pacific Finance Corp.
Texas Eastern Trans. Corp.
Long Island Lighting Co.
Georgia Pacific Corp.
Commonwealth Edison Co.
Johns-Manvilie Corp.
Consolidated Edison Co.
National Steel Corp.

Conv.pfd.stk.

31.8

Conv. deb.
Deb.

16.3
25.0

1981
1981

b
4 3/4

4.00
4.70

Baa
A

Deb.
Deb.
Pfd. stk.
Conv.pfd.stk.
Common stk.
Pfd. stk.
Common stk.
1st & ref..
mtg. bds.
1st mtg. bds.

60.0
15.0
15.0
18.0
15.9.
40.0
25.9

1983
1971

4
4 5/8

3.90
4.75

Aaa

40.0
55.0.

1986
1986

4 1/4
3 7/8

.4.13
3.90

Aa
Aa




—

H.lU

E-2

Large Individual Issues Offered October 1 through 26 (Cont'd)
Issuer

Type 3/

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

STATE & LOCAL GOVERNMENT
Detroit, Michigan
G.O.
12.3
State of California
G.O.
35.0
Buffalo, New York
G.O.
ll.il
State of South Carolina
G.O.
15.0
• San Bernardino Co., Cal.
G.O. .
6.0
Territory of Hawaii
Hwy. rev.
12.5
Baltimore Co., Md.
G.O.
21.0
Washington Co., Md.
G.O.
8.0
Hagerstown, Md.
G.O.
5.8
Charlotte, N. C.
G.O.
5.2.
State of Massachusetts
G.O.
57.6
Ft. Pierce, Florida
Elec. &
water rev.
5.1
St. Louis School
District, Missouri
G.O.
*5.5
New Jersey Highway Auth.
Rev.
25.0
Flint, Michigan
G.O.
5.U
Philadelphia, Pa.
G.O.
58.8
Boston, Massachusetts
G.O.
5.8
Territory of Hawaii
G.O.
12.0
State of Maryland
G.O.
8.7
Orlando, Utility
Elec. &
Commission, Fla.
water rev.
7.5
SaltHiver Project &
Agricultural Improvement & Pwr. Dist., Aziz.
G.R.
10.0
State of Ohio
Rev.
25.0

1957-81
1958-77
1957-71
1957-76
1957-76
1958-86.
1959-96
1957-81
1957-81
1958-95
1957-96

3.09
2.80
2.35
2.6U
.2.80
3.8k
3.15
2.98
2.99
2.99
2.93

2.20-3.20 A
2.15-2.85 Aa
1.90-2.1*0 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 Aa
2.30-3.1*0 A
1.90-2.95 Aa
3.20-1}.. 20 Baa

1959-88

1.36

1958-76
1988
1958-86
1958-87
1957-76
1959-76
1959-71

C/2.69
L53
3.13
2.60
3.63
2.53
3.75

2.00-2.75
• It. 38
,2.15-3.20
1.90-2.70
2.25-3.20
2.10-2.50
2.60-3.75

Aa
A
A
A
Aaa

1957-77

k.O 9

3.10-1.00

Aa

1960-87
1957-72

2,9k
2.90

2.20-3.00
2.00-3.00

A
Aa

Aa

OTHER
None
c/ Corrected.
. 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 obligation; Rev., revenue bonds; G.R., general obligations additionally
secured by facilities revenues; L.L., limited liability obligations secured trypledge 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 Issuss
Subsequent to
During month following
date shown
date shown
State and
Corporate State and Other 2/ Corporate local govt. Other 2/
local govt.

Date of
computation
1955 - Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
Hay 31
June 29
July 31
Aug. 31
Sept. 28
Oct. 31

805
202
215
70
176
123
. 380
568
198
U37
2k7
#9
315
683

813
330
205
121 .
327
220
132
173
332
81
131
359
.162

50
—

37
.

T-

909
U12
230
85
. 376
233
1,013
818
as
567
1,096
1,202
1,009
990

2,205
1,650
756
618
•917
785
811
832
9ll
690
958
1,1%
955

50
—
—

^

—

37

Forthcoming Large Offerings, as of October 26
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Ohio Power Co.
Allied Stores Corp.
American Tel. & Tel. Co.
-a-Northspan Uranium Mines, Ltd.
Public Service Electric & Gas Co.
^Sinclair Oil Corp.
Seaboard Finance Co.
J. P. Stevens & Co.
Michigan Wisconsin Pipe Line Co.
Southern New England-Telephone Co.
-it-Pacific Lighting Corp.




1st mtg. bds.
. S.F. deb.
Common stk.

28.0
15.0 .
572.6

Gen. mtg. bds.
45.0
1st &ref.mtg.bds. 50.0
Conv. sub. deb. 170.6
S.F. notes
S.F. deb.
1st mtg. bds.
Common stk.
Conv. pfd.

15.0
28.7
25.0
20.U
20.0

October 31
November 1
November 5
(rights expire)
November 9
November 15
December 3
(rights expire)
Winter
Winter
Winter
Winter
Winter

(0

H.lV

F-2
Forthcoming Large Offerings, as of October 26 (Cont'd)
Issuer

Type

Amount
date
(millions Approximate
of offering
of dollars)

STATE AND LOCAL GOVERNMENT
Dallas, Texas
-"-Los Angeles Co., Calif.
•^Trenton, New Jersey
*San Antonio, Texas
Harris Co., Texas
Chicago, 111.
^Newark, New Jersey
Chicago Bd. of Education, 111.
Cleveland, Ohio
•^State of Oregon
*Long Beach, Calif.
Florida State Bd. of Education
State of Connecticut
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New York State Thruway Authority
Jacksonville Expressway Authority
Florida State Turnpike Authority
Memphis, Tennessee
Oklahoma Turnpike Authority

Airport rev.
6.5
Elec. rev.
13.5
G.O.
• 5.3
G.O.
5.0
G.O.
6.0
; Water rev.
5.0
G.O.
12.5
G.O.
10.0
Water rev.
10.0
G.O.
5.7
G.O.
• 5.0
G.O.
9.3
Expressway rev. . 75.0
Rev.
62.0
Rev.
227.0
Rev.
20.0 .
G.O.
- 50.0
Rev. •
12.0
. Rev.
185.0
Elec. rev.
135.0
Rev.
65.0

October 29
November 8
November 8
November 8
November 9
November 13
November 13
November lb
November lU
November lit.
November 20
November 27
November
Winter
Winter
Winter
Winter
Winter
Winter
Winter
Winter

OTHER
Quebec Hydro-Electric Commission

Deb.

35.0

October 31

1/ Includes corporate and other issues of $1$ 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 issue; None.