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Not f o r P u b l i c a t i o n

^CONTROLLED

AFTER SIX M U H
OTS

H.lii

September lii, 1959.
CAPITAL MARKET DEVELOPMENTS

The volume of new public s e c u r i t y f i n a n c i n g continues t o be
small. During t h e week ending September 11, a S t a t e of C a l i f o r n i a bond
i s s u e f o r $50 million and a long-term Federal National Mortgage Associat i o n debenture i s s u e f o r #L50 m i l l i o n were the only l a r g e o f f e r i n g s
made; no corporate i s s u e s were o f f e r e d . The calendar f o r t h i s week i n cludes one corporate i s s u e f o r $18 m i l l i o n , a l o c a l government i s s u e f o r
&13 m i l l i o n , and a f o r e i g n government o f f e r i n g f o r $18 m i l l i o n .
Bond y i e l d s - Yields i n c r e a s e d l a s t week f o r a l l c a t e g o r i e s
of outstanding bonds. The i n c r e a s e i n y i e l d s was s l i g h t f o r c o r p o r a t e ,
lower grade Sta te and l o c a l and U. S. Government o b l i g a t i o n s , but subs t a n t i a l f o r high-grade S t a t e and l o c a l government bonds. Yields a r e
c u r r e n t l y a t record highs f o r a l l c a t e g o r i e s of bonds, except those
f o r lower grade S t a t e and l o c a l government bonds, which a r e s l i g h t l y
below t h e i r early July peaks.
Stock p r i c e s - Stock p r i c e s continued t o d e c l i n e l a s t week
and t r a d i n g a c t i v i t y increased. Standard and P o o r ' s index of 500
common stocks closed a t 57.ill on September 11, 2 per cent lower than
a week e a r l i e r . Common stock p r i c e s a r e 5 p e r cent below t h e i r high
f o r the year but k p e r cent higher than a t the end of l a s t y e a r . The
volume of t r a d i n g averaged 2.9 m i l l i o n shares a day.
More d e t a i l e d information concerning r e c e n t c a p i t a l market
developments i s presented i n the a t t a c h e d e x h i b i t .

Capital Markets Section,
Division of Research and S t a t i s t i c s ,
Board of Governors of the Federal Reserve System.




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




H.Ik

Exhibit b
Tables f o r Exhibit A
High-grade tiond Yields
Spread between
U. S. Govt, and
Corporate S t a t e and
Aaa
l o c a l Aaa

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

U. S. Govt,
long-term 2/

Corporate
Aaa 1/

Date

(Per cent)
1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low
Aug. lit
Aug. 21
Aug. 28
Sept. it
Sept. 11 g /

.

2.85
4.14
ii.13
3.55
4.49
1.09

(4/23)
(9/27)
(10/10)
(5/2)
(9/11)
(1/9)

4.42
4.42
• 4.44
ii.ii?
U.i*9

2.ii5
3.76
3.8U
3.07
it. 25
3.83

(0/6)
(10/18)
(12/26)
(4/25)
(9/11)
(1/2)

4.06
4.08
4.15
4.24
4.25

1.90
3.45
3.31
2.61*
3.59
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(9/10)
(3/26)

.30
.47
.72
.34
.92
.57

.36
.34
.29
.23
.24

3.43
3.43
3.a
3.52
3.59

.30
.60
.51
.22
.39
.16

.63
.65
.71
.72
.66

Lower-grade Bond Yields
Corporate
Baa 1 /

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

1954 - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.44
5.10
4.96
4.51
5.14
4.83

2.93
4.51
4.34
3.64
4.46
3.92

Aug. 14
Aug. 21
Aug. 28
Sept. 4
Sept. 11 g /

5.09
5.09
5.11
5.13
5.14

WSate

Spread between
Aaa and Baa
S t a t e and
Corporate
l o c a l govt.

(Per cent)
(12/31)
(11/29)
(1/3)
(7/11)
(9/11)
(4/17)

4.37
4.35
4.35
4.38
4.41

(8/5)
(8/29)
(9/11)
(5/D
(7/2)
( 3/26)

.52
1.27
1.20
.77
.77
.56

.96
1.21 .
1.11
.93
.98
.82

.67
.67
.67
.66
.65

.94
.92
.91
.86
.82

g/ Preliminaiy.
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 / Weekly average of daily f i g u r e s . The s e r i e s includes bonds due or c a l l a b l e in
10 years or more.
j}/ Thursday f i g u r e s . Only general obligation bonds a r e included; average term
i s 20 y e a r s .
Note.—highs and lows a r e f o r individual s e r i e s and may be on d i f f e r e n t dates f o r
different series.




v

STOCK

MARKET

T

VOLUME

l»5t
MORTGAGE

1S
97
AND

BOND

Monthly




~T

MSI

1159

YIELDS
Per

ten

t

Exhibit D - Tables f o r Exhibit C
Stock Market
Date

Stock p r i c e
index 1 /

1959 - High
Low

1953-1958 - High
Low

54.11
22.95
60.51
54.37

July
August
Aug. 21
Aug. 28
Sept. 4
Sept. 11 j)/

Common
Trading
volume y
y i e l d s 2 / (millions
(per cent) of shares)

59.74
59.40
59.08
59.49
58.54
57.41

(12/24/58)
(9/18/53)
(7/31)
(2/6)

Stock market customer c r e d i t
Customers 1
Bank
Total debit b a l - loans to
ances 4 / "others" 5 /
(Mil]Lions of d o l l a r s )

3.30
6.25
3.08
3.34

4.9
0.9
4.3
2.1

4,492
2,055
4,721
4,527

3j285
1,314
3,388
3,253

3.12
3.13
3.16
3.13
3.18
3.24

3.2
2.4
2.4
2.1
2.3
2.9

4,648
n.a.
n.a.

3,374

n.a.
n.a.

n.a.
n.a.
n.a.

1,317
669
1,332
1,210
1,274
1,259
1,264
1,259
1,273

n.a.—Not available.
g/ Preliminary.
1 / Standard and P o o r ' s T m p o s l t e Index of 500 common s t o c k s , weekly c l o s i n g p r i c e s , 1941-43=10, Monthly d a t a
a r e a v e r a g e s of d a i l y f i g u r e s r a t h e r t h a n of F r i d a y s ' o n l y . Highs and lows a r e f o r F r i d a y s ' d a t a o n l y .
2 / Standard and P o o r ' s composite s t o c k y i e l d based on Wednesday d a t a c o n v e r t e d t o weekly c l o s i n g p r i c e s by
F e d e r a l R e s e r v e . Y i e l d s shown a r e f o r d a t e s on which p r i o e index reached i t s h i g h o r low.
3 / Average a of d a i l y t r a d i n g volume on t h e New York Stock Exoliange.
4 / End of month f i g u r e s f o r member f i r m s of t h e New York Stock Exchange which c a r r y margin a c c o u n t s ; e x c l u d e s
b a l a n c e s secured by U. S . Government o b l i g a t i o n s .
5 / Wednesday f i g u r e s f o r weekly r e p o r t i n g member banks. Excludes l o a n s f o r p u r c h a s i n g or c a r r y i n g U. S.
Government s e c u r i t i e s • P r i o r t o J u l y 1 , 1959, such l o a n s a r e excluded only a t banks i n New York and Chicago.
Weekly r e p o r t i n g hanks acco u n t f o r about 70 p e r c e n t of l o a n s t o o t h e r s . For f u r t h e r d e t a i l see B u l l e t i n .

Mortgage and Bond Yields 1/
FHA
mortgages 2/ •

Spread between new
Aaa coiporate
corporate bonds and
bonds 1/
FHA mortgages|Seasoned bonds
New 3/ |Seasoned 4/

1953-1958 - High
Low
1959 - High
Low

5.63 (11/57)
it. 56 (2/55)
5.75
5.57

L. 81 (6/57)
2.71 (3/54)
4.82
4.29

4.12 (9/57)
2.85 (4/54)
4.47
4.12

1959 - May
June
July
August

5.64

4.81

4.37
4.46
4.47
4.43

Date

5.75

4.82
4.80
4.74

1.96
.54
1.29
.83

.90
-.12
.44
.15

.83
.89
.95
n.a.

.44
.36
.33
.31

i f Neither mortgage nor bond y i e l d s t a k e i n t o a c c ount s e r v i c i n g c o s t s which a r e much h i g h e r f o r mortgages t h a n
bonds. G e n e r a l l y , bonds pay i n t e r e s t s e m i - a n n u a l l y ; m o r t g a g e s , monthly. Mortgage y i e l d s , i f computed a s e q u i v a l e n t
t o a semiannual I n t e r e s t I n v e s t m e n t , would be s l i g h t l y h i g h e r t h a n g i v e n i n t h e t a b l e .
2 / Based on FHA f i e l d - o f f i c e o p i n i o n s a b o u t average b i d p r i c e s I n t h e p r i v a t e secondary market f o r new-home
mortgages f o r Immediate d e l i v e r y . Since l a t e 1955, d a t a r e l a t e only t o 25-yeor m o r t a g e s w i t h downpayments of 10
per cent o r more, weighted by probable volume of t r a n s a c t i o n s . Y i e l d s computed by FOB, assuming 25-ycnr mortgages
a r e p a i d o f f I n 12 y e a r s . Danhed l i n n s I n d i c a t e p e r i o d s of a d j u s t m e n t t o changes I n t h e c o n t r a c t u a l i n t e r e s t r a t e .
3 / F i r s t N a t i o n a l City Bank of New York. Averages of o f f e r i n g y i e l d s of a l l new I s s u e s of p u b l i c l y - s o l d bonds
r a t e d Aoa, Aa or A by Moody's I n v e n t o r s S e r v i c e ( e x c e p t s e r i a l and c o n v e r t i b l e i s s u e s and o f f e r i n g s of n a t u r a l gas
and f o r e i g n oompunieo) weighted by s i z e of i s s u e . Y i e l d s on Aa and A i s s u e s a r e f i r s t a d j u s t e d t o a n Aaa b a s i s
by t h e spread between y i e l d s of o u t n t a m l i n * bonds i n t h e s e c a t e g o r i e s and t h o s e on A a a - r a t e d bonds. The s e r i e s r e f l e e t s crvin/7oo i n I n d u s t r i a l oomp o a l t l c n , im.'tiirity, t > p e , e t o . of new o f f e r i n g s ,
4 / b o o t y ' s I n v e s t o r a S e r v i c e . Monthly tiver*g* 9 of d a i l y d a t a . See E x h i b i t B.




H.lii

Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)

1959

Corporate 1/
1
19 58
1

81*0

728

January
February
March

899
791
871;

July
August
September

e/55d
e/775
e/650

1959

1,060
1,065
1,320

636
856
61*5

812
953
511

71*2
572
506

'•IS?
887

765
.1,153

930
. 592
980

798
895
551

765
51*6
393

1,107
51*0
1,111*

1,003
921*
973

2/51*8
e/500
e/h!5

806
1*03
651

529
581*
1*31

1*56

698
633
698

862
518
920

October
November
December
1st
2nd
3rd
I*th

quarter
quarter
quarter
quarter

1 s t half
Three q u a r t e r s
Year

2,216
eA',975

e/6^755

S t a t e and l o c a l 2/
1 195b
1 1957

1957

£

April
May
June

New ca p l t a l

3,139
2,623
2,760
2,300
5,762
8,522
10,823

.

'

1,090
789
1,076

3,as

3,Ik?
2,899
2,95b .
6,59k
9,|,93
12,W

a2,138

e/liay

" "

1,860
1,365
I*,520

1,820
1,701*

1,5a
2,029

3,521*
5,069
7,099

Excluding f i n a n c e companies hj
1st
2nd
3rd
l*th

quarter
quarter
quarter
quarter

2,011
2,1(09
eA,675

Year

2,899
2,586
2,731
2,213

3,237
2,869
2,582
2,810

10,1*29

11,518

1/ Securities and Lxohenge Commission estimates of net proceeds,
2/ Investment Bankers Association of America estimates of principal amounts,
3 / Includes #718,3 million A & convertible debenture i s s u e ,
T T
k/ Total new capital issues excluding offerings of s a l e s and consumer finance
companies.




11. Ik

Exhibit F
Other Security Offerings 1/
( I n m i l l i o n s of d o l l a r s )
Long-term
Foreigr government 2/
Federal agency 3/
1959
)
1958
I
!
1957
1959
1
1958
>- 1957

January
February
March

77
59
2

196
53

81*
1*9
30

April
May
June

56
50
1*2

139
198
120

123
1*8
1+2

July
August
September

9
5
17

28
7
30

16k

October
November
December

58
123
71*

1
*
60
1

%20

Year

992

199
175

—

190
1*28

295
563

8!

205
337
153

289

•s§

272
272
252

231
1*15
21*3

303
91*
1*59

3,910

3,271*

ii60
273

26I4

2/215

—

—

125
60

—

215 .

—

100
—

—

2,321

S t a t e and l o c a l government U/
326
1*55
11*7

72

523

507

233

1,163
251

572

Federal agency 3/
371
208
11*1*

1*30
505

675

209
161
329

1*69
501

727
365

1*37
206
330

370
512

1*51*
111*
137

1,238
255
116

359
500
1*89
I486

289

3,098

638

336

22I4

5,51*3

e / Estimated.
g / Preliminaiy.
1 / Data presented in t h i s exhibit d i f f e r from those i n Exhibit E i n t h a t r e f u n d ing i s s u e s , as w e l l as new c a p i t a l i s s u e s , are included. Long-term s e c u r i t i e s are def i n e d as those maturing i n more than one year.
2/ Includes s e c u r i t i e s o f f e r e d i n the United S t a t e s by f o r e i g n governments and
t h e i r subdivisions and by i n t e r n a t i o n a l o r g a n i z a t i o n s . Source: S e c u r i t i e s and Exchange Commission.
3 / Issues not guaranteed by the U. S. Government. Source: long-term, S e c u r i t i e s
and Exchange Commission; short-term, Federal Reserve.
h j P r i n c i p a l l y t a x and bond a n t i c i p a t i o n n o t e s , warrants or c e r t i f i c a t e s and Public
 n o t e s . In some instances PtiA n o t e s included may have a somewhat
Housing Authority
l o n g e r t e r n than one
http://fraser.stlouisfed.org/ year. Source: Bond Buyer.

Federal Reserve Bank of St. Louis

H.l4
Large Long-term Public Security I s s u e s f o r New Capital
(Other than U. S. Treasury) 1 /
Proceeds of Large I s s u e s Offered
(Millions of d o l l a r s )
Month

Corporate

1958 - August
September
October
November
December
1959 - January
February
March
April
May
June
July
August

S t a t e and
l o c a l government

209
825
259
227
305
369
340
215
359
342
284
110
363

Other 2/

109
288
172
259
229
335
551
369
563
258
635
194
263

18
209
100
79
174
35
176
20
50
60
50
98

Large I n d i v i d u a l Issues Offered September 1 through 11

Issuer

Type J /

Amount
Coupon
(millions
rate or
Offering
Maturity net i n t e r - y i e l d
of
dollars)
est cost

Rating

CORPORATE
Associates Investment Co.

Deb.

50.0

G.O.
G.O.

12.5
22.5

1979

5 1/8

5.13

STATE AND LOCAL GOVERNMENT
Los Angeles, C a l i f o r n i a
State of Connecticut
Allegheny Co.San.Dist.,Pa,
Serial
, Term
S t a t e of C a l i f o r n i a

Rev•—Ut.
Rev.-Ut.
G.O.

1960-79
1961-87

1961-81
7.5
1996/65
7.5
50.0 1961-85/80

3.88
3.73

2.75-4.00
2.60-3.75

4.24

4.01

3.00-4.00
4.30
3,00-4.00

5 l/b

5.26

OTHER
Fed. Nat. Mtg. Assoc.




Deb.

150.0

1961

Aa
Aaa

G-2
Footnotes
n.a.—Not a v a i l a b l e .
1 / Includes corporate and other 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 over;
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 §10 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 and ncn-guaranteed i s s u e s by Federal agencies.
3 / In the case of State 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 s ; Rev.-Ut., revenue o b l i g a t i o n s secured only by income from public
u t i l i t i e s ; Rev.-Q.Ut., revenue bonds secured only by revenue from q u a s i - u t i l i t i e s ;
Rev.-S.T., revenue bonds secured by revenue from s p e c i f i c taxes only; Rev.-Rent.,
revenue bonds secured s o l e l y by l e a s e payments.




Exhibit H

H.ll*

Forthcoming Large Long-term Public Security Offerings, f o r New Capital
(Other than U. S. Treasury) 1 /
Expected Proceeds from Forthcoming Large I s s u e s
Date of
computation
1958 - Aug. 29
Sept. 30
Oct. 31
Nov. 28
Dec. 31
1959 - Jan. 30
Feb. 27
Mar. 31
Apr. 30
May 29
June 30
July 31
Aug. 31

Subsequent t o
Airing month following
d a t e shown
date shown
S t a t e and
Other 2 / Q u o r a t e
Corporate
l o c a l govt.
785
113
20 1
*
301
210
270
198
396
21*6

287
165
238
198

2U1
229
261
551
292
550
254
21*7
11*6

50

$

s
675

9ilt
216
326
1*01
370
365
279
1*76
3U6
332
272
305
517

71

25

?
!

20
50

2/

683

71

m
1*81
761
517
761
500
1*06

§

1*02

25

20
50
50

Forthcoming Large O f f e r i n g s , as of September 11
Amount
Approximate date
(millions
of o f f e r i n g
of d o l l a r s )

Type
CORPORATE
Georgia Power Co.
New England Telephone & Telegraph Co.
Sylvania E l e c t r i c Products, Inc.
Southern C a l i f o r n i a Gas Co.
Hooker Chemical Corp.
Union E l e c t r i c Co.
Boston Edison Co.
Southern New England Telephone Co.
^Columbia Gas System, Inc.
American Telephone & Telegraph Co.
Commerce Oil Refining Corp.

1 s t mtg. bds.
Deb.
S.F. deb.
1st mtg. bds.
Conv. deb.

18.0
1*5.0
25.0
30.0
25.6

Com. s t k .

31.1

1 s t mtg. bds.
Com. s t k .

15.0
18.8

Deb.
Deb.
Deb., bds. & com,.

25.0
250.0 *
1*5.0

!

STATE AND LOCAL GOVERNMENT
A t l a n t a , Georgia
*Indianapolis-Marion Co., Ind.
*0range Co. Flood Cont. D i s t . , C a l i f .
Cook FRASER
Digitized for Co., I l l i n o i s



Sept. 18
Sept. 21
Sept. 22
Sept. 30
Sept. 30
( r i g h t s expire)
Sept. 30
( r i g h t s expire)
Oct. 1
Oct. 9
( r i g h t s expire)
Oct. 9
Nov. 17
1959

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

12.5
32.0
12.0
1|1*.0

-

Sept.
Sept.
Sept.
Sept.

15
20
22
22

h.lk

H-2
Forthcoming Large O f f e r i n g s , as of September 11 (Cont'd)
Type

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

STATE AND LOCAL GOVERNMENT (Cont'd)
xPort of New York Authority
Oakland Unif. Sch. D i s t . , C a l i f .
^ D e t r o i t , Michigan
-x-State of M i s s i s s i p p i
Denver, Colorado
State of I:% > Hampshire
Chesapeake Bay Ferry Commission

Rev.-Ut.
G.O.
G.O.
Rev.-Ut.
G.O.
G.O.
Rev.-Ut.

25.0
10.0
15.9
12.0
17.0
16.0
190.0

Bds.

25.0

Sept. 2h
Sept. 29
Sept. 29
Sept. 30
Oct. l h
Oct. 15
Indefinite

OTHER
Commonwealth of A u s t r a l i a

Sept. 18

*—Included i n t a b l e f o r f i r s t
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 $10 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 and non-guaranteed i s s u e s by Federal agencies.
Note.—Deletions f o r reasons o t h e r than s a l e of i s s u e : None.




H.l4

Exhibit I
Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
A-rated o f f e r i n g y i e l d s
Aa-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
( p e r cent) seasoned y i e l d s 1 ( p e r cent) seasoned y i e l d s
(basis points)
(basis points)

Date

1952 - 1958
High
Low

5.00 ( 9 / W 5 7 )
2.93 ( 3 / 3 1 / * )

1959 - Jan. 7
20
28
Feb. 18
Mar. 11
§
31
Apr. 3
15
16
29^
May 1
13
Ik
20
21
26
June k
17
26
July 9
10
15
30
Aug. 5
20

87
-3

I1.60

3k

B

123
-15

4.752/

23

4.67

18

4.85
5.06

17
13

5.13

27

4.92^/
5.10
5.10

6
24
19

5.10
5.00

19
13

S

4.43
k-k3
4.47

9
9
13

k.60

22

tt*
1

5.50 (11/7/57)
3.00 (3/17/54)

*;

4.95
1.95

38
3k

5.00
4.95

38
29

4.93

31

4.85
4.80

24
22

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage "bonds, a s reported i n Moody's Bond
Survey. Except where i n d i c a t e d , the a c t u a l y i e l d f i g u r e and.the amount above
seasoned y i e l d s a r e averages of o f f e r i n g s during t h e i n d i c a t e d period and of
t h e d i f f e r e n c e s between these new o f f e r i n g y i e l d s and y i e l d s on seasoned i s s u e s
of s i m i l a r q u a l i t y f o r the same day. Average maturity f o r t h e seasoned i s s u e s
v a r i e s from 26 t o 28 y e a r s .
2 / Provides f o r a 5-year period during which i s s u e may not be c a l l e d f o r
refunding a t a lower coupon r a t e . Monthly averages so marked include one o r
more i s s u e s with such a . p r o v i s i o n . Other i s s u e s have no such p r e v i s i o n .
2 / Provides f o r a 7 - y e a r period during which issue may n o t be c a l l e d f o r
refunding a t a lower coupon r a t e .




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