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Not f o r P u b l i c a t i o n j^nwTftnT.T.m AFTER SIX M N H
OTS
H.lU

September 13, 1956
CAPITAL MARKET DEVELOPMENTS

The $25 m i l l i o n i s s u e of t h e Port of New York Authority
was the only l a r g e p u b l i c l y o f f e r e d s e c u r i t y i s s u e during the week
ending September 7. The calendar f o r t h i s week i n d i c a t e s a l a r g e
volume of f l o t a t i o n s . Corporate s e c u r i t y o f f e r i n g s a r e expected
t o t o t a l #20b m i l l i o n , comprised of e x p i i a t i o n of s u b s c r i p t i o n
r i g h t s to $60 million in convertible debentures, a common stock
i s s u e f o r §2l* million and new debt o f f e r i n g s amounting t o $120
m i l l i o n . S t a t e and l o c a l government i s s u e s t o t a l i n g $71 m i l l i o n
a r e scheduled f o r s a l e .
Bond y i e l d s - Yields on outstanding corporate bonds and
U.. S. Government o b l i g a t i o n s continued to i n c r e a s e l a s t week, while
y i e l d s on S t a t e and l o c a l bonds remained s t a b l e .
Reoffering y i e l d s on new corporate i s s u e s a l s o continued
t o r i s e . Two new Aa-rated 30-year f i r s t mortgage p u b l i c u t i l i t y
i s s u e s were r e o f f e r e d t h i s week a t y i e l d s of U.20 and I4..I7 p e r c e n t ,
some 10 b a s i s p o i n t s above t h e o f f e r i n g y i e l d on a~ s i m i l a r o f f e r i n g
i n l a t e August.
The r e c e n t Port of New. York Authority o f f e r i n g of A-rated
consolidated revenue bonds was b& p o i n t s above a comparable i s s u e
by t h e A u t h o r i t y in May of t h i s year and 70 b a s i s p o i n t s above a
comparable i s s u e i n May of 1955. The r i s e i n y i e l d s on t h e s e Autho r i t y i s s u e s over t h e i r 16-month period c l o s e l y approximates the
i n c r e a s e i n y i e l d s on comparable outstanding revenue bonds. I t
may be noted t h a t t h e underwriting s p r e a d — i . e . the d i f f e r e n c e between the r e o f f e r i n g y i e l d and t h e n e t i n t e r e s t cost—was wider f o r
the i s s u e of t h i s month and. t h a t of November of l a s t y e a r , periods
of s h a r p l y r i s i n g y i e l d s , than i t was f o r t h e i s s u e s of May 1955
and May 1956, when i n t e r e s t r a t e s were more s t a b l e .
Amount
(millions
Maturity
of d o l l a r s )
May 23, 1955
Nov. 30, 1955
May 21, 1956
Sept. 6 , 1956

30.0
16.0
30.0
25.0

1985
1983
1986
1986

Net
interest
cost
2.79
2.96
3.Ok
3.52

Yield
New i s s u e j Outstanding 1/
2.75
2.90
3.00
3.U5

1 / As measured by Dow-Jones 10 revenue bond averages.




2.77
2.92
3.0U
3.51

H.lli

Stock p r i c e s - The SEC index of 265 common stock p r i c e s
increased s l i g h t l y l a s t week, c l o s i n g a t 285.1 on September 7.
Daily f i g u r e s through Wednesday of t h i s week i n d i c a t e a sharp dec l i n e in p r i c e s , w i t h t h e d a i l y indexes back to the l a t e June l e v e l s .
More d e t a i l e d information concerning recent c a p i t a l market
developments i s presented i n the attached e x h i b i t s .

Business Finance and C a p i t a l Markets S e c t i o n ,
Division of Research and S t a t i s t i c s ,
Board of Governors of t h e Federal Reserve System.




H I G H - G R A D E B O N D YIELDS

CORPORATE A a a

GOVERNMENT: J \ j

V

"

! STATE AND LOCAL |
GOVERNMENT A o a

0 . S. Govt., long-term AJ
Date

Corporate
Aaa y

New s e r i e s

Old s e r i e s

Spread between
U. S. Govt,
State and
l o c a l govt. (old s e r i e s ) and
CorporatelState and
Aaa y
Aaa
1local Aaa

(Per cent)
3.U2 (6/19)
2.99 (1/9)

3.09 (1/8)
2.85
3.17
2.91
3.53
3.07

(h/23)
(12/23)
(1/7)
(9/7)
(3/2)

if

3.U9
3.53

2.17 (2/23)

2.7U (1/9)
2 . B (8/7)

.38
.19
.13
.32
.3k
.13
.10
.13

.8U
•30
.61
.29
.70
.5k
.68
.1*5

2.U7
2.53 .
2.59
2.62
2.62

.29
.28
.26
.28
.31

.62
.61
.62
.59
.60

c
!:?! (6/10)
c^lf
2.21

3.15 (6/6)
2.78 (12/26)
n.a.

1.90 (9/2)

2.62 (9/6)
3.09
3.1h
3.21
3.21
3.22

1 / Weekly average of d a i l y f i g u r e s .

i:iis
3.23

1:1

)

Average term of bonds included i s 25-Z&

i s E i i e i r i s B
^

1 9

§

te

b m d . are i n c h e d , a v . ^ .

™ Note?--Highs and lows are f o r individual s e r i e s and may be on d i f f e r e n t dates
for different series.




L O W E R - GRADE B O N D YIELDS
Per cent per annum

Weekly

CORPORATE B a a

STATE AND LOCAL GOVT. B a a

A

\ Mo y »
od

| W t rTl

STATE AND LOCAL GOVT. REVENUE

RKUi

Corporate
Baa y

S t a t e and
l o c a l govt.
Baa 2 /

S t a t e and
l o c a l govt.
rev. 2/

(Per c e n t )

1953 - High
Low
195k - Higi
Low
1955 - High
Low
1956 - High
Low

3.89
3.50
3.74
3-1*1*
3.63
3.1*5
4.01
3.58

August 10
August 17
August 24
August 31
September 7

3.90
3.91*
3.95
3.97
4.01

ts 1%'

3.32
2.93
3.26
3.02
3.60
3.20

3.1t6

i3.60
f

3.60

(1/7)
(8/5)
(12/29)
(1/6)
(9/6)
(3/8)

3.27
2.71
3.00
2.72
2.99
2.76
3.51
2.89

(6/26)
(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(9/7)
(2/24)

3.22
3.31
3.39
3.51
3.51

1 / Weekly average of d a i l y f i g u r e s . Average term of bonds
included i s 25-26 y e a r s .
2 / Thursday f i g u r e s . Only general o b l i g a t i o n bonds a r e
included; average terra i s 20 y e a r s .
3 / Friday f i g u r e s . Average rating of bonds included i s
between Baa and Aj Average term i s 20 y e a r s .
Note.--Highs and lows a r e f o r i n d i v i d u a l s e r i e s and may
be on d i f f e r e n t d a t e s f o r d i f f e r e n t s e r i e s .




STOCK MARKET

Stock p r i c e
index 1 /

Common
volume 2 /
(millions yields y
of shares) ( p e r cent)

Stock market customer c r e d i t
Customers'
Total debit b a l a n c e s h / "others* 5 /
( M i l l i o n s of d o l l a r s )

1953 - High
Low
195U - High
Low
1955 - High
Low
1956 - High
Low

167.1
lltlt.O
221.li
156.5
270.7
217.lt
295.5
257.lt

July
August
August 2lt
August 31
September 7

290.1
290.0
286.7
283.2
285.1

'3D

2.5
0.9
3.7
l.lt
It.6
1.5
3.1
1.6

5.75
5.15
- 5.33
It. 20
It. 22
3.78
It. 21
3.86

2,ltit5
2,055
3,136
2,105
It,030
3,537
U,0lt7
3,991

1,665
1,3114
2,388
1,653
2,805
2,517
2,810
2,7ltO

780
661t
l,0lt8
7lt6
l,2ltl
• 1,018
1,267
1,196

2.2
1.9
1.8
1.6
1.8

3.87
It. 02

It,026

2,812

l,211t
1,205
1,205
1,196

n.a.—Not available
V SEC i n d e x of 265 common s t o c k s , weekly c l o s i n g p r i c e s , 1939-100; converted
t o 19u7-tt9*100 by Federal Reserve. The conversion f a c t o r i s 1 2 3 . 9 1 .
f Averages of d a i l y trading volume on t h e New York Stock Exchange.
_J Moody's 200 common s t o c k s ; end of month f i g u r e s .
%/ End of month f i g u r e s f o r member firms of t h e New York Stock Exchange which
carry margin accounts; excludes b a l a n c e s secured by U. S. Government o b l i g a t i o n s .
J y Wednesday f i g u r e s f o r weekly r e p o r t i n g n e u t e r banks. Excludes l o a n s f o r
purchasing or c a r r y i n g U. S. Government s e c u r i t i e s a t banks i n New York and Chicago.
Weekly r e p o r t i n g banks account f o r about 72^per c e n t of l o a n s t o o t h e r s .
N o t e . - - H i g h s and lows are f o r i n d i v i d u a l s e r i e s and may be on d i f f e r e n t dates
for different series.




Exhibit D
Corporate and S t a t e and Local Government
Security O f f e r i n g s and Placements
(In m i l l i o n s of d o l l a r s )

1956
January
February
March
April
May
June
July
August
September

• New c a p i t a l
195k

1956

S t a t e and l o c a l
1 1955
1

195U
:

)396
111
565

579
;
70U
790

535
It07
1,223

5U7
U26
635

hOh
696
390

8l6
1 , 1 Uh
830

178
886
.687

U97
656
8U2

377
L90
735

U27
#0
6ia

73U
7k8
853

909
335
7U7

e/380
?215
e/350

U70
21+9
ko6

279
261
6ii9

919
658
108

59l
1*23,
877

e/1,120
e/700
e/850

October
November December
^ 1 s t quarter
w 2nd q u a r t e r
3rd q u a r t e r
Uth q u a r t e r
Year

Corporate
1 1955
1
-

597
6UU - -•
670
. 1,162^
632
900

2,073
2,790
e/2,670

2,165
2,052
1,911
2,695
8,821

1,003
290
60U
1,608
1,995
1,991
1,896
7A90

1,190
1,603
9li5

•

535
312
538

1,385
l,iil8
i,m
1,981
5,911

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

Excluding f i n a n c e companies 2 /
1st quarter
2nd q u a r t e r
3rd q u a r t e r
lith q u a r t e r
Year

1,617
c/2,520
e/2,U70

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

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

e / Estimated.
'
\
1 / Includes $637.2 m i l l i o n AT&T c o n v e r t i b l e debenture i s s u e .
Total new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and personal f i n a n c e
companies.
.
,
c / Corrected.
U o t e . — D e t a i l s may not add t o t o t a l s due to rounding.

i



H.llt

Exhibit E
Large Public Security Issues f o r New C a p i t a l
(Other than U. S. Treasury) 1 /
Proceeds of Large Issues O f f e r e d
(Millions of d o l l a r s )
Corporate

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

• S t a t e and
l o c a l government

W5
328
805
221
263
95
: 212
278
395
623
185
592
217

Month

65
2 3k
716
1*01
227
192
1M
163
157 '
233
h63
161;
35

Other 2 /

25
50

50
20
WW

37

Large I n d i v i d u a l Issues O f f e r e d Sept. 1 through 7

Issuer

Type 3 /

Amount
Coupon
(millions
r a t e or
Offering
Maturity n e t i n t e r Rating
yield
of
dollars)
e s t cost

None
STATE & LOCAL GOVERNMENT
Port of New York Autho r i t y , N. Y.

Rev.

25.0

1986

3.52

3.15

OTHER
None
1 / Includes corporate and o t h e r s e c u r i t y o f f e r i n g s of $15 m i l l i o n and over5
S t a t e and l o c a l government s e c u r i t y o f f e r i n g s of $5 m i l l i o n and over.
2 / Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction and
Development i s s u e s .
3 / In t h e case of S t a t e and l o c a l government s e c u r i t i e s , G.O. denotes general
o b l i g a t i o n ; Rev., revenue bonds; G.R., general o b l i g a t i o n s a d d i t i o n a l l y secured
by f a c i l i t i e s revenues; L . L . , l i m i t e d l i a b i l i t y o b l i g a t i o n s secured by pledge of
Digitizeddesignated revenues.
for FRASER



H.UU

Exhibit F

Forthcoming Large Public Security Offerings f o r New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation

During month following
Subsequent t o
date shown
date shown
Sta e an
S t a t e and
Corporate
^
? Other 2/ Corporate
l o c a l govt.
l o c a l Rovt.
2__

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

222
805
202
215
70
176
123
380
568
198
1:37
2b7
369

18U
813
330
205
121
327
220
132
173
332
81
131

50

37

920
909
10-2
230
85
376
2#
1,013
818
168
567
1,096
1,202

1,971
2,205
1,650
756
618
917
785
811
832
910.
690
726
c/958

50

37

Forthcoming Large O f f e r i n g s , as of September 7 ^
Type

Amount
(millions Approximate date
of o f f e r i n g
of dollars)

CORPORATE
Gulf States U t i l i t i e s Co.
General Telephone Co. of C a l i f .
Southern California Edison Co.
Northern States Power Co.
Procter & Gamble Co.
Detroit Edison Co.

1 s t mfcg. bds.
1 s t mtg. bds.
Common s t k .
1st mtg. bds.
Deb.
; Conv. deb.

Tennessee Gas Transmission Co.
Southern P a c i f i c R.R. Co.
North American Aviation, Inc.

1 s t mtg. bds.
1st mtg. bds.
Cap. s t k .

Virginia E l e c t r i c & Power Co.
New England Tel. & Tel. Co.
United A i r c r a f t Corp.
-^Columbia Gas System, Inc.
.American Tel. & Tel. Co.




0

1 s t mtg. bds.
Cap. s t k .
Conv. p f d . s t k .
Deb.
Common s t k .

15.0
20.0
21.3

15.0
70.0
59.8

50.0

35.0
1*3.5

20.0

18.9

33.1

25.0

580.0

September 11
September 12
September 12
September 13
September 13
September lU
( r i g h t s expire)
September 18
September 19
September 2k
( r i g h t s expire)
September 25
September 28
( r i g h t s expire)
October 2
( r i g h t s expire)
October
November 5
( r i g h t s expire)

H.lii

F-2
Forthcoming Large O f f e r i n g s , as of September 7 (Cont'd)
Issuer

Type

Amount
(millions Approximate date
of o f f e r i n g
of d o l l a r s )

CORPORATE (Cont'd)
j . P. Stevens & Co.
CIT F i n a n c i a l Corp.
P a c i f i c Finance Corp.
Michigan Wisconsin Pipe Line Co.
Commercial Credit Co.

S.F. deb.
Deb.
Deb.
1 s t mtg. bds.
Notes

28.7
75.0
25.0
25.0
50,0

1956
1956
1956
1956
1956

. STATE AND LOCAL GOVERNMENT
Allegheny Co. I n s t . D i s t . , Pa.
Oakland Unified School D i s t . , Cal.
New York, New York
S t a t e of Michigan
Los Angeles School D i s t s . , Cal.
^Nassau Co., New York.
^Kansas C i t y , Missouri
F l o r i d a Development Commission
J a c k s o n v i l l e Expressway Authority
Memphis, Tennessee
Washington S t a t e T o l l Bridge Auth.
F l o r i d a S t a t e Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington S t a t e T o l l Bridge Auth.
Inter-American Center A u t h . , F l a .
New Jersey Highway Authority
New York S t a t e Thruway Authority

G.O.
G.O.
. G.O.
L. L.
. G.O.
G.O.
Water r e v .
Bridge r e v .
Rev.
Elec. rev.
Rev.
Rev.
Rev,
.
Rev.
Rev.
Rev.
Rev*
G.O.

6.3
10.0
30.0
25.0
29.0
19.6
9.5
5.5
U2.0
135.0

• $.k

185.0
65.0
62.0
227.0
31.0
25.0
50.0

Septeiiiber
September
September
September
September
September
September
September
Fall
Fall
Fall
Fall
1956
1956
1956
1956
1956
1956

11
11
12
13
18
18
19
20

OTHER
None
1 / Includes corporate and o t h e r i s s u e s of $15 m i l l i o n and over; S t a t e and
l o c a l government i s s u e s of $5 m i l l i o n and over.
2/ Includes f o r e i g n government and I n t e r n a t i o n a l Bank f o r Reconstruction
and Development i s s u e s .
c / Corrected.
—




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