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?//t Hot for Publlcatio^p^T,T.m AFTER SIX MOUTHS H0 lU September 12, 1957 CAPITAL MARKET DEVELOPMENTS The volume of public security financing was quite small last week, but is expected to be very large this week. During the week ending September 6, a single large corporate offering for $18 million and State and local government issues amounting to $30 million were sold. This week, large corporate issues, including expiration of subscription rights, with total proceeds of $375 million are expected. Large State and local government issues amounting to $39 million and a foreign government issue for $30 million are also scheduled for sale. Another State arid local government issue was originally scheduled for sale this week; however, the State of Ohio rejected, for technical reasons, the two bids received for its $31 million major thoroughfare bond issue on Tuesday and rescheduled it for sale in early October. Bond yields - Changes in yields on outstanding bonds were mixed, but minor last week. Yields on Baa-rated corporate bonds increased, while yields on corporate Aaa's remained stable. Yields on State and local government bonds and U. S. Government obligations declined. Stock prices - The SEC index of 265 common stocks declined last week, closing at 269.0 on September 6. The volume of trading declined, averaging l.h million shares a day during the holidayshortened week. This is the lowest activity since early 195b„ Daily figures for the first three days of the week show little change in prices .on balance. 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 U. S. Govt., long-tenn y Date Corporate Aaa 1/ Old series Spread between State and U. S. Govt, Kew series local govt. (old series) and Aaa y CorporatelState and Aaa (local Aaa (Per cent) 1953 - High Low 195li - High 1955 - High Low 1956 - High Low 1957 - High . Low August 9 August 16 August 23 August 30 September 6 3.1»2 (6/19) 3.15 (6/6) 2.99 (1/9) 2.78 (12/26) 3.09 (1/8) 2.71; (1/9) 2.65 U/23) 3.17 (12/23) M 2.91 (1/7) 3.79 (12/28) 1:3 8 $ u 3.07 (3/2) 2.80 (2/17) U.12 (9/6) 3.70 (6/21) 3.66 (h/12) 3.15 (2/8) n.a. 2.73 (6/25) n.a. 1.98 (1/8) n.a. 2.21 (6/10) n.a. 1.90 (9/2) 3.03 (8/5) 2.3ii (9/8) 2.89 (6/10) 2.05 (5/26) 3.39 (12/28)3.05 (12/27) 2.92 (2/3) 2.17 (2/23) 3.66 (8/16) 3.15 (8/29) 3.22 (2/8) 2.76 (2/21) 1.07 U.09 3.63 3.66 L.ll U.12 L.12 S 3.60 3.58 i 3.3k 3.37 3.hh 3.1*5 3.U. :8 .29 :5 ia 1 .25 1 :s\3 .29 .18 :S . 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 1955, and those due or callable in 10-12 years thereafter; the average term to first call of the bonds included declined from Hi 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/U per cent bond of 1978-83. 2/ Thursday figures. Only general obligation bonds are includedj average term is 20 years. • Note,—Highs and lows are for individual series and may be on different dates for different peries. LOWER - GRADE BOND YIELDS V Date ! Corporate Baa 1/ State and local govt, rev. y State and local govt. Baa 2/ (Per cent) 1953 - High 1957 - High Lew 3.89 (9/18) 3.50 (1/2) 3.7b (1/8) 3.Mi (12/31) 3.63 (12/30) 3.1i5 (1/lii) U.ltl (12/28) 3.58(3%) h.91 ()/6) h.k2 (U/12) 3.79 (6/25) 2.96 (1/8) 3.32 (1/7) 2.93 (8/5). 3.26 (12/29) 3.02 (1/6) U. 22 (12/27) 3.20 (3/8) U.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 August 9 August 16 August 23 August 30 September 6 It. 78 ' L82 L.84 U.87 U.91 a.ia L13 U.5i U.5i LL9 V 195U - High Low 1955 - High 1956 - High (6/26) (1/2) (1/1) (8/13) (12/30) (1/7) (12/28) (2/2it) (1A) (2/22) 1/ Weekly average of daily figures.Average terra 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. 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 of shares) (per cent Stock market customer credit Customers debit bal- loans to ances 4/ "others" SJ (Millions of dollars) 1956 - High Low 1957 - High Low 167.1 144.0 221.lt 156.5 270.7 217.4 295.5 257.U 294.6 260.3 " July August August 23 August 30 September 6 277.0 268.5 272.3 269.0 1953 - High 1951 - High Low 1955 - High (1/2) (9/18) (12/31) (1/6) (12/30) (l/lli) (8/3) (1/20) (7/12) (2/8) 292.0 2.5 0.9 3.7 1.1» 4.6 1.5 * 3.1 1.5 2.7 1.4 2.2 1.9 2.0 2.0 1.4 5.88 5.15 5.49 4.09 1.23 3.59 4.13 3.65 4.28 3.67 3.75 3.98 4.02 1/ 3.98 4.03 2,445 - 2,055 3,436 2,405 4,030 3,537 4,047 3,914 4,031 3,832 4,004 1,665 1,314 2,388 1,653 2,805 2,517 2,823 2,740 2,887 1,713 2,885 780 664 1,048 746 1,241 1,018 1,267 1,155 1,163 1,096 1,119 . 1,096 1,109 1,096 n.a.—Not available. r/ Revised. 1/ SEC index of 265 common stocks, weekly closing prices, 1939"100; converted to 19*57-1*9-100 by Federal Reserve. The conversion factor is 123.91. 2/ Averages of daily trading volume on the tiew lork Stock Exchange. 3/ Moody's 125 industrial stocks; weekly data based on Friday. 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 D. 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. exhibit D H.IU Corporate and State and local Government Security Offerings and Placements (In millions of dollars) 1957 Corporate 1 1956 . | New.capital State and local 1/ 1 1956 1 1955 1955 1957 535 407 . 1,223 " 742 573 506 hoh' 696 390 535 312 538 January February March 1,063 1,071 X.3UU 573 712 817 April May June 92U 771 1,1)89 818 1,116 841 U78 886 687 765 516 394 378 490 735 427 350 642 e/1,075 e/900 e/1,100 1,063 654 838 597 • 644 670 524 572 e/550 4o8 206 357 470 249 4o6 7U5 1,0892/ 1,088 •1,1621/ 632 900 639 347 409 919 658 408 July August September October November December __ 1st quarter ^2nd quarter 3rd ouarter 4th quarter 1st half Three quarters Year 3,h?9 3.18U S/3,075 2,102 2,805 . 2,556 2,922 2,165 2,052 1,911 2,695 1,821 1,705 e/l,646 1,490. _ 1,603 971 1,395 1,385 1,418 1,124 1,984/ 6,663 S/9,738 1,907 7,463 10,381 a,216 6,127 8,821 3,526 e/5,172 3,093 4,064 5,459 2,802 3,927 5,911 Excluding finance companies 3/ 1st 2nd 3rd 4th quarter quarter quarter quarter 3,268 2,921* e/2,775 Year 1,6 47, 2,541 "5,246 2,826 1,727 1,670 1,444 2,544 9,259 7,595 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 uovirnment loans. 2/ includes '45637.2 million aT&T convertible debenture issues. 3/ Includes ^571.5 million ATcvT common stock issues. %J Total new capital issues excluding offerings.of sales and consumer finance companies. riote.—Details may not add to totals due to rounding. . Exhibit E H.lU Large Public Security Issues for New Capital (Other than U. S. Treasury) 1/ Proceeds of Large Issues Offered (Millions of dollars) Month 1956. - August September October November December 1957 - January February March April May Corporate State and local government 217 558 366 701 1430 567 671 788 • kn #9 877 525 5# ,// July " Augu&t Other 2/ 37 35 18U 383 135 201 386 306 19)4 1+99 21*8 176 2# 357 35 100 5o 125 25 39 25 Large Individual Issues Offered September 1 through 6 Amount Coupon Type 3/ (millions Maturity rate or Offering Rating net inter- yield of dollars) est cost CORPORATE Tampa Electric Co. 1st mtg. bds. 18.0 1987 5 It.85 Aa STATE AND LOCAL GOVERNMENT Santa Monica U.S.D., Calif, G.O. Dade Co., Spec. Tax S.D. G.O. No. 1, Florida Houston, Texas Water rev. Winnebago Co. S.D. No. 205, Illinois G.O. : OTHER None 5.0 1958-77 . 3.60 9.5 1959-76/66 W o 10.0 1958-^1/67 1.59 5.5 .1958-73 3.hk 2.50-3.65 Aa 3.10-1;. 25 A 3.00-1*. 50 Baa 2.50-3.U5 Aa H.Ik - E-2 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 obligationj Rev., revenue bonds; G.R., general obligations additionally secured by facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues. H.lU Forthcoming Large Public Security Offerings for New Capital (Other than U. S. Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following date shown Date of computation C orporate|i^g^ 1956 - Aug. 31 Sept. 28 Oct. 31 Nov. 30 Dec. 31 1957 - Jan. 31 Feb. 28 Mar. 29 Apr. 30 May 31 June 28 July 31 Aug. 30 369 315 683 136 U76 591 7h0 U61 187 525 370 526 578 Other 2/ C o ^ o r a t e l i ^ ^ ^ O t h e r j / 131 he 280. 153 153 290 179 97 172 252 2k 3 Subsequent to date shown 23 100 35 25 25 25 JO 1,202 1,009 990 liftl 796 966 795 186 258 525 1415 811 8U5 958 1,197 955 979 763 6U8 631 862 396 388 198 51U 139 23 100 35 25 25 25 30 Forthcoming Large Offerings, as of September 6 Issuer Type Amount Approximate date (millions of offering of dollars) CORPORATE Westcoast Transmission Co., Ltd. Duke Power Co. El Paso Natural Gas Co. Sub. deb. S. F. deb. Conv. deb. Sept. 11 Sept. 11 Sept. 11 (rights expire) Texas Eastern Transmission 1st mtg. P. L. bds. 30.0 Sept. 11 New Jersey"Bell Telephone Co. Deb. Sept. 12 30.0 Speriy Rand Corp. S. F. deb. Sept. 12 110.0 Lehigh Portland Cement Co. S. F deb. Sept. 12 30.0 Philadelphia Electric Co. 1st & ref. mtg. bds. kO.O Sept. 13 Niagara Mohawk Power Co. Gen. mtg. bds. Sept. 17 50.0 Consolidated Natural Gas Co. Deb. Sept. 18 30.0 Pacific Power & Light Co. 1st mtg. bds. 20.0 Sept. 19 National .Cylinder Gas Co. Sub. conv. deb. Sept. 19 17.5 Consumers Power Co. 1st mtg. bds. Sept. 2k 35.0 Utah Power & Light Co. 1st mtg. bds. Sept. 25 15.0 Pacific Telephone & Telegraph Co. Common stk. Sept. 30 17.2 (rights expire) Gulf States Utilities Co. 1st mtg. bds. Oct. 1 17.0 -^Southwestern Bell Tel. Co. Deb. 100.0 Oct. 2 ^-Columbia Gas System, Inc. I Deb. Oct. It 25.0 American Telephone & Telegraph Co.- j Deb. 250.0 Oct. 29 25.0 50.0 60.0 H.Ik F-2 Forthcoming Large Offerings, as of September 6 (Cont'd) Issuer Type Amount Approximate date (millions of offering of dollars) STATE AND LOCAL GOVERNMENT G.O. Cook Co., Illinois G.O. Los Angeles, California G.O. Baltimore Co., Maryland G.O. State of Missouri Water rev. Wichita, Kansas G.O. Springfield, Massachusetts Pennsylvania Gen. State Authority Rev. G.O. Buffalo, New York Oakland Unif. Sch. Dist., Calif. G.O. Utilities rev. Colorado Springs, Colorado ^Territory of Hawaii Highway rev. Highway rev. State of Colorado *City & Co. of San Francisco, Calif. G.O. State of Ohio Highway rev. •«-Dayton, Ohio G.O. San Diego Unified Sch. Dist., Cali£ G.O. •G.O. ^Commonwealth of Massachusetts G.O. *State of California G.O. | State of Texas Utilities rev.. Jacksonville, Florida University System Bldg. Auth., Ga. Rev. Rev. Pennsylvania Turnpike Rev. Inter-American Center Auth., Fla. G.O. New York State Thruway Authority 10.0 5o.o Sept. 10 Sept. 11 Sept. 12 Sept. 17 Sept. 17 Sept. 18 Sept. 19 Sept. 19 Sept. 2h Sept. 2k Sept. 2h Sept. 27 Oct. 7 Oct. 8 Oct. 10 Oct. 15 Oct. 15 Oct. 23 1957 1957 1957 1957 1957 1957 30.0 Sept. 11 5.0 23.6 30.0 iil.8 5.2 25.0 -8.U 10.0 5.5 12.5 8.0 28.9 31.0 8.0 10.0 65.0 50.0 12.5 30.0 12.0 62.0 20.0 OTHtiR Kingdom of Belgium Ext. S. F. deb. *—Included in table for first time. 1/ Includes corporate and other issues of #15 million and over3 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: No. Hempstead School District No. 9, N.Y., $7.b million general obligation bond issue — all bids rejected. H.lU Exhibit G Yields on New and Outstanding Electric Power Bonds, Rated Aa and A 1/ Date 1952 - 1956 High Low 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 Aa-rated offering yields A-rated offering yields .Amount above Amount above Actual Actual (per cent) seasoned yields (per cent) seasoned yields (basis points) (basis points) U.30(12/12/56) 2.93(3/31/51*) 62 . - 3 u.a 11.25 None L 29 50 l*.5o U.38 2/ 65 51 4.63 57 hh - 75 I1.78 87 1*.57 It. 7 7 U.65 M3. 68 56 5.oo U.80 L85 75 51 56 li. 58 (12/6/56) 3.00(3/17/51*) 70 -15 61* 1*.62 None 1*.50 1*5 1*.60 1*.50 U.53 1*.53 1*.70 59 1*9 52 52 69 5.oo 5.25. 98 123 5.10 106 1*.80 2/ L 8 8 2/ 6U 71* U.90 71 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 this 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 refunding at a lower coupon rate. Other issues have no such provision.
@FedFRASER