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Not for Publication
DEC0ra0LLED
AFTER SIX MONTHS
September 22, 1958
H.Ik
CAPITAL MARKET DEVELOPMENTS
The volume of new public security financing was large last week,
but is expected to be smaller this week, particularly for- corporate securities. During the week ending September 19, corporations sold large issues
totaling $250 million and State and local governments offered large issues
amounting to $97 million. Another State government offering for $13 million scheduled for sale last week was not sold as no bids were received
due to a 4 per cent interest cost limitation for the issue. This week,
only one large corporate issue for $i;0 million and State and local government issues totaling $91 million are expected. A foreign government issue
for $15 million is also scheduled for sale.
Bond yields - Yields on outstanding corporate and U. S. Government bonds continued to increase last week. Yields on State and local
government bonds, however, declined slightly; this was the first decline
since April for Aaa-rated bonds and the first since July for Baa-rated bonds.
Stock market credit. - Customer credit in the stock market (excluding that for U. S. Government securities) declined $50 million in
August, the first decline since January. Such credit totaled $4,202 million
at the end of last month; this was 18 per cent higher than when margin re- .
quirements were reduced in January. The decline in July was largely in
bank loans to "others;11 that of net debit balances was slight.
End of month
August | July
Customer credit
Excluding U. S. Government securities - total
Net debit balances
Bank loans to "others"
Net debit balances secured by U. S. Govt, securities
Bank loans to others for purchasing or carrying
U. S. Government securities
Broker and dealer credit
Money borrowed except on U. S. Government securities
On customer collateral
Money borrowed on U. S. Government securities
Customers' net free credit balances
r/ Revised.
Change
(millions of dollars)
4,202
136
r/%,252
r/3,021
1,231
149
-5
-45
48
113
-65
1,751
1,523
251
1,103
1,903
1,594
306
-152
-71
3,016
1,186
1,080
-50
-13
-55 .
+23
-
2
-
Borrowing by member firms of the NYSE maintaining margin accounts
(excluding borrowing on U. S. Government securities) declined sharply last
month. Customers1 net free credit balances continued to increase, totaling
$1,103 million at the end of the month. These and other data on stock market
credit for August^and July are shown in the table on the preceding page.
Stock prices - Stock prices and trading activity increased sharply
last week. Standard and Poor's index of 500 common stocks closed at ii9.U0
on September 19, slightly above the 1957 high and less than one per cent below the record level reached in 1956. Trading volume averaged 3.6 million
shares a day.
More detailed information concerning recent capital market developments is presented in the attached exhibits.
Capital Markets Section,
Division of Research and Statistics,
Board of Governors of the Federal Reserve System.
EXHIBIT A
HIGH-GRADE BOND YIELDS
LOWER - GRADE BOND YIELDS
AND licAL
/ \ z
Exhibit B
H.lU
Tables for Exhibit A
High-grade Bond Yields
Corporate
Aaa 1/
Date
U. S. Govt,
long-term 2/
Spread between
U. S. Govt, and
Corporate State and
Aaa
local Aaa
State and
local govt.
Aaa J/
(Per cent)
1953 - High "
'195b - Low
1957 - High
1958 - High
Low
Aug. 22
Aug; 29
Sept. 5
Sept. 12
Sept. 19 2/
r
3.U2 (6A9)
2.85 (li/23)
lt.llt (9/27)
It. 10 (9/19)
3.55 (5/2)
3.19 (6/5)
2.73 (6/25)
2.15 (8/6)
1.90 (9/2)
3.76 (10/18)
3.U5 (8/29)
3.76(9/19) . 3.31 (9/11)
2.6U (5/1)
3.07 (U/25)
.38
.30
.60
.51
.22
.83
.30
.17
.62
-3U
3.89
3.9U
lt.03
U.07
3.62 _
3.67
3.72
3.75
3.76
.27
.27
.31
.32
.3k
.50
.{t5
k.10
3.12
3.22
3.29
3.31
3.28
•h3
.Wt
.lt8
Lower-grade Bond Yields
Date
Corporate
Baa 1/
State and
local govt.
Baa y
Spread between
Aaa and Baa
State and
Corporate
local govt.
. (Per cent)
1953
195b
1957
1958
- High
- Low
- High
- High
Low
Aug. 22
Aug. 29
Sept. 5
Sept. 12
Sept. 19 0/
3.89 (9/18)
3.Wt (12/31)
5.10 (11/29)
li.96 (1/3)
It. 51 (7/11)
U.71
•h.7h
It. 80
it. 86
lt.88
3.79 (6/25)
2.93 (8/5)
U.Sl (8/2?)
U.3U (9/11)
3.6I1 (5/1)
• U.IO
li.21
ii.31
li.3li
li.32
.69
.52
1.27
1.28
.77
1.21
.96
1.21
1.11
.98
.82
.60
.77
.79
.78
.98
.99
1.02
1.03
. l.Olt
1/ Weekly average of daily figures. Average terra of bonds included is 25-26 years.
2/ Weekly average of daily figures. The series includes bonds due or callable in
10 years or more.
2/ Thursday figures. Only general obligations bonds are included; average tern
is 20 years.
Note.—Highs and lows are for individual series and may be on different dates for
different series.
STOCK
MARKET
Million! of Dollar*
V
I
STOCK MARKET CREDIT
Million!
Exhibit D
Table for Exhibit C
Stock Market
Date
Stock price
index 1/
Trading
Common
Stock market customer credit
volume 2/
stock
Customers
Bank
(millions yields V
Total debit bal- loans to
of shares) (per cent)
ances h/ "others" 5/
(Millions of dollars)
1953 - High
Low
1951* - High
Low
1955 - High
Low
1956 - High
Low
1957. - High
Low
1958 - High
Low
. July
An mist
26.5U
22.95
35.98
2U.93
1*5.89
15.96
Sept. 5
Sept. 12
Sept. 19 o/
s
(1/2)
2.5
(9/18) 0.9
(12/31)
(1/8)
(12/9)
35.28 (1/1U) 1.5
1*9.6U (8/3)
3.1
1*3.22 (1/20) 1.5
1*9.08 (7/12) U.2
39.1*8 (12/20) 1.1*
li9.W) (9/19) 3.8
hO.37 (1/10)
1.7
W.^3
Lp.xo
3-2
5.38
6.25
1*.32
5.82
2,1*55
&
2,ll05
1*.08
k,oy>
3.82
3,537
U,0li?
3,9Ut
1*.1*1
l*.3l*
3.6;.
3.97
3.78
3.76
3.71-
1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
'AM
S
2,1*82
-ffl;
It, 202
'
780
66U
1,018.
71*6
•i,2ia
1,018
1,163
1,051*
1,317
1,051
1,231
1,106
1.191
1.192
n.a.—Not available.
g/ Preliminary.
'
r/ Revised.
1/ Standard and Poor's composite index of 500 common stocks, weekly closing
prices, 19ijl-li3=10. Monthly data are averages of daily figures rather than of
Fridays' only. Highs and lows are for Friday's data only.
2/ Averages of daily trading volume on the New York Stock Exchange.
2/ Standard and Poor's composite stock yield based on Wednesday data converted to weekly closing prices by Federal Reserve... Yields shown are for dates
on which price index reached its high or low.
h/ End of month figures for member firms of the New York Stock Exchange which
cany margin accounts; excludes balances secured by U. S. Government obligations.
%/ 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 70 per cent of loans to others.
For further detail see Bulletin.
Note.—Highs and lows are for individual series and may be oh different dates
for different series.
Exhibit B
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In millions of dollars)
1958
January
February
March
,,|y
April
May
June
i,na
600
881
July
August
September
%
e/1,200
October
November
December
1st
2nd
3rd
l*th
quarter
quarter
quarter
quarter
1st half
Three quarters
Tear
New capital
Corporate 1/
State and local 2/
1
1956
1958
1
1956
1957
1
1957
9
1,060
1,065
1,320
573
712
817
765
l,li53
818
1,11*6
81*1
1,003
921*
973
1,063 .
651*
838
1,090
789
1,076
.Jgy
1,088
3,135
2,622
e/2,801
3,1*1*5
3,11*9
2,899
2,951
5,757
e/8,558
6,59b
9,U93
12,1*1*7
1*01*
696
390
.
s
393
378
1*90
735
529
581*
1*31
1*08
206
357
698
633
698
639
31*7
1*09
2,276
2,227
e/1,621
1,820
1,701*
1,51*1*
2,029
1,1*90
1,603
971
1,395
e/6,12l*
3,521*
5,069
7,099
3,093
1*,061*
5,1*59
798
878
551
639
B/382
e/600
Ifd
2,102
2,922
10,381*
M
'&
812
71*2
Excluding finance companies
1st
2nd
3rd
Lth
quarter
quarter
quarter
quarter
2,89k
2,583
e/2,751
Year
3,237
2,889
2,582
2,810
1,61*7
2,51*1
2,21*6
2,826
11,518
9,260
1/ Securities and Exchange Commission estimates of net proceeds.
2/ 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 Government loans.
3/ Includes $718.3 million AT&T convertible debenture issue.
6/ Includes $571.5 million AT&T common stock issue.
1/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Exhibit F
H.lli
Other Security Offerings 1/
(In millions of dollars)
Long-term
Federal agency
Foreign government 2/
1%W
I 1957
I 19^6
1957
ZSSE
January
February
March
196
53
81*
1*9
30
"a
April
May
June
139
198
120
123
50
37
he
1*2
95
July
August
September
28
7
30
2
39
October
November
December
60
•Year
1,163
251
72
523
125
April
May
. June
July
August
September
233
1*60
273
i*t*
5
21
100
507
300
572
lil
26U
fi/286
October
November
December
Year
~~
169
Federal agency 3/
371
208
Hili
205
337
153
§
329
272
272
252
195
207
179
601
159
12
29U
328
11*8
3,27k
2,706
125
109
215
1*
196
357
249
60
60
1
326
W
161*
Short-term
State and local government h/
January
February
March
E
209
161
638
130
505
336
1*69
501
221*
370
512
1,238
s
-
5,51*3 '
380
220
283
s
260
222
1*25
273
1*07
222
128
3,1*57
e/ Estimated.
p/ Preliminary.
1/ Data presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-tem securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States by foreign governments and
their subdivisions and by international organizations. Source: Securities and Exchange Commission.
Jjj Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commissionj short-term, Federal Reserve.
Principally tax and bond anticipation notes, warrants or certificates and Public
Digitized
forAuthority
FRASERnotes. In some instances PHA notes included may have a somewhat
Housing
longer term than one year. Source: Bond Buyer.
http://fraser.stlouisfed.org/
Federal Reserve Bank of St. Louis
Exhibit G
H.Ik
Large Long-term Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Corporate
Month
1957 - August
September
October
November
December
1958 - January
February
March
April
May
State and
local government
2#
133
393
3kk
kOk
klO
553
182
300
505
195
275
109
526
537
571
1x20
399
318
605
1,093
725
356
281
771
209
July
August
Other 2/
2U5
15k
1,357
266
653
16U
86
la
Large Individual Issues Offered September 1 through 19
Issuer
Type 3/
Amount
Coupon
Offering
(millions
Rating
Maturity
net inter- yield
of
est cost
dollars)
CORPORATE
Standard Oil Co. of Calif.
Texas' Eastern Transm. Co.
Sears Roebuck & Co.
Tenn. Gas Transm. Co.
Standard Oil Co. of Indians
S.F. deb.
1st mtg-.p.l.btis.
S.F. deb.
1st mtg.p.l.bds.
Deb.
150.0 1983
35.0 1978
350-0 1983
5o.o 1979
200.0 1983
k 3/0
55/8
k 3/k
5 3/8
k 1/2
k.kO
5.71
1.75
5.38
li.57
Aaa
Baa
Aa
A
Aa
STATE AND LOCAL GOVERNMENT
State of Delaware
Indiana State Office Bldg.
Comm.
State of Connecticut
San Diego U.S.P., Calif.
Los Angeles Co. Flood
Dist., California
Colleges of the State of
Texas
G.O.
Rev.-Rent.
' G.O.
G.O.
17.0 1959-78
3.26 1.50-3.50
Aa
Aa
30.0 1963-88/70 li.?3 3.00-1.25
.w-j.^u. . Aaa
20.0 1959-88
3.2k 1.60-3.50,
10.0 1961-80 3.61 2.25-3.85=/ A
Rev.-Ut.
30.0 1959-83
3.68
1.75-3.75
Aa
Rev.—S.T.
12.ii 1959-66
3.00 1.90-2.90
Aa
H.lU
G-2
Large individual Issues Offered September 1 through 19 (Cont'd)
Issuer
Type J/
Coupon
Amount
Offering
'millions Maturity rate or
yield
net interof
est cost
dollars)
Rating
STATE AND LOCAL GOVERNMENT
~~
(Cont'd)
.State of Oregon
State of Ohio
Puerto Rico Industrial
Development Co.
- . G.O.
Rev.-S.T.
20.0
30.0
1963-70
1959-72
Rev.
15.0
1959-78
3.00
3.38
2.25-3.15
1.60-3.U5
Aa
Aa
OTHER
None
n.a.—Not available.
]yIncludes corporate and other security offerings of $15 million and over;
State and local government security offerings of #10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
3/ In the case of State and local government securities, G.O. denotes general
obligations; Rev.-Ut., revenue obligations secured only by income from public utilities; Rev.-Q.Ut., revenue bonds secured only by revenue of quasi-utilities; Rev.-S.T.
revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenue bonds
secured solely by lease payments.
k/ Is of 1980 not reoffered.
H.U*
Exhibit H
Forthcoming Large Long-term Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large Issues
Date of
computation
1957 - July 31
Aug. 30
Sept. 30
Oct. 31
Nov. 29
Dec. 31
1958 - Jan. 31
Feb. 28
Mar. 31
Apr. 30
Hay 29
June 30
July 31
Aug. 29
During month following
date shown
State and Other 2/
Corporate
local govt.
526
578
576
158
383
378
1*98
1,123
555
356
266
768
161
785
218
183
33U
339
363
315
370
13k
298
193
177
225
55
21*1
Subsequent to
date shown
State and
Corporate
Other 2/
local govt.
30
30
18
150
110
150
36
811
81*5
61*7
815
1,193
1,161
1,378
1,208
670
561
1*61*.
1,01*8
381
911*
1*71
379
551
51*3
558
561*
1*87
31*1
330
1*93
208
235
125
1*35
30
15
1*5
63
165
110
150
36
Forthcoming Large Offerings, as of September 19
Type
Amount
(millions Approximate date
of offering
of dollars)
Consumers Power Go.
Universal-Cyclops Steel Corp.
*Idaho Power Co.
Public Service Co. of Indiana
1st rate. bds.
S.F. deb.
lst'mtg. bds.
Pfd. stk.
l*o.o
^-American Cement Corp.
Peoples Gas Light ^and Coke Co.
S.F. deb.
Cap. stk.
20.0
Consumers Power Co.
Montana Power Co.
'Commerce Oil Refining Corp.
Martin Co.
15.0
15.0
2 W
17.0
Pfd. stk.
15.0
1st mtg. bds.
20.0
Deb., bds. & common 1*5-0
S.F. deb.
25.0
Sept. 2ij.
Sept. 30
Oct. 5
Oct. 6
(rights expire)
Oct. 9
Oct. 20
(rights expire)
1958
1958
1958
1958
STATE AND LOCAL "GOVERNMENT
Commonwealth of Massachusetts
State of Washington
Chicago, Illinois
^Boston, Massachusetts
G.O.
Rev.-S. T.
G.O.
G.O.
61.0
10.0
20.0
21*. 7
Sept. 21*
Sept. 21*
Sept. 25
Oct. 7
H.lU
-
H-2
Forthcoming Large Offerings, as of September 19 (Cont'd)
Type
Amount
Approximate date
(millions
of offering
of dollars)
STATE AND LOCAL GOVERNMENT (Cont'd)
*Metro. Wtr. Dist. of So. California
Florida State Board of Education
Chesapeake Bay Ferry Comm.
^-Detroit-Metro. Expressway
State of California
Rev.-Ut.
Rev.
Rev.-Ut.
Rev.-Ut.
G.O.
18.0
12.5
lWl.0
35.0
50.0
Oct. Ill
Oct.
Oct.
Nov. 15
Dec, 3
Bds.
15.0
Sept. 25
OTHER
Kingdom of Norway
. ->—Included in tabel for first ;ime.
1/ Includes corporate and other issues of $15 million and over; State and
local government issues of $10 million and over.
2/ Includes foreign government and International Bank for Reconstruction and
Development issues and non-guaranteed issues by Federal agencies.
Note—Deletions for reasons other than sale of issue: None.
Exhibit I
Yields on New and Outstanding
Electric Power Bonds, Rated Aa and A 1/
Aa-rated offering yields
A-rated offering yields
Amount above
Amount above
Actual
seasoned yields
Actual
seasoned yields
(per cent) (basis points) (Tier cent) (basis points)
Date
1952 - 1957
High
Low
1958 - January
February
March U
5
6
12
19
21
25
April 1
2
17
23
29
May 7
13
15
16
20
21
22
28
June 10
17
25
July 2
9
•8
5.00(8/11/57)
2.93(3/31/51*)
87
-3
-8
22
*3.60
3.892/
W5
U.22
li.00
a. 00
aa
50
28
26
a. 05
3.98
a.oo
31
23
25
3.75
5
3.90
'
21
3.85
3.85
16
16
3.85
3.82
3.95
17
12
2a
I
a.oo
25
1
fc:±8
s8
5.50(11/7/5:7)
3.00(3/l7/5a)
3.962/
a.07
a.25
a.07
123
-15
3
9
6
-7
3.98
a.oa
a.oo
11
3
a.07
a.35
a
32
a. 00
3.95
-1
-6
3.98^
1
a.35S/
31
*—Single observation, not an average.
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 the 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. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.
@FedFRASER