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Not for Publication DECONTROLLED AFTER SIX MONTHS

H.lU

September 5, 1956
CAPITAL MARKET DEVELOPMENTS

The volume of large publicly offered securities was quite
small during the week ending August 31. Rights expired on a $19
million corporate debenture issue and a local government offering
. for $12 million was sold. This week, the $25 million issue of the
Port of New York Authority is the only large offering scheduled.
Bond yields - Yields on outstanding corporate and State
local bonds continued to increase last week while yields on
- U. S. Government obligations remained stable.
; and

Offering yields on new issues continue to increase. On
August 30, Tampa Electric Company's Aa-rated 30-year first mortgage
-bond issue for $10 million was reoffered at U.O? per cent, a yield
52 basis points above that on similar outstanding securities. Last
week's offering was 37 basis points higher than the reoffering yield
on a similar new offering on July 25.
Estimated September volume - Corporate security issues
during September are expected to total $850 million, one-fifth larger
than the estimated August volume and one-fourth greater than the volume in September last year. Included in the total are expected large
public issues totaling between §350 and $1*00 million. A substantial
volume in take-downs of private placements is also expected.
State and local governments are expected to offer $350
million of bonds during September. This would be a substantial,
increase from the volume of around $200 million floated in August,
but would be somewhat below last September's volume.
Stock prices - Stock prices,as measured by the SEC index
of 265 common stocks, continued to decline last week, closing at
283.2 on August 31. Daily indexes indicate sharp increases in
prices through Wednesday of this week, with trading volume picking
up from the low levels of last week.
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
weekly
.

CORPORATE A a a

GOVERNMENT J \ )

STATE AND LOCAL
GOVERNMENT A a a

U. S. Govt.. long-term ij
Corporate
Aaa \J

Old series

New series

State and
local govt.

"2/

Spread between
U. S. Govt.
fold series) and
CorporateIState and
Aaa
Ilocal Aaa

(Per cent)
1953 - High
Low
195k - High
Law
1955 - High
Low
1956 - High
Low
August 3

253-8'
August 2h
August 31
y

2.73 (6/25)

l . 9 ($)' 2l78 (12/26)
'9
n.a.
3.03 (8/5)

2.89 (6/10)

i S f f l

i& m

3.19

3.06
3.09
3.1k
3.21
3.21

I

'

'3.23 (8/31)
2.92 (2/3)

2.17 (2/23)
2.U5

3

2.17

3.23
3.23

Week' y average of daily figures.

•i

.19
.1*3
.32
.31
.13
.10
.13

.30
.61
.29
.70
•5U
.68
US

.29
.29
.28
.26
.28

.62
.61
.62
.59

.61

W
Average term of bonds included is 25-: ~

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 througi

pgr
11 1/2 years in early 1956. The new series is comprised of the 3 per cent bond
of 1995 and the 3 1 A per cent bend of 1978-83.
. , „ ^
y Thursday figures. Only general obligation bends are included; average
Note.--Highs and lows are for individual series and may be on different dates
for different series.




EXHIBIT B

L O W E R - G R A D E BOND YIELDS
Weekly

Per cent per annum

W-

Corporate
Baa y

State and
local govt.

3*a 2/

State and
local govt.
rev. 1/

(Per cent)

3.27 (6/26)

1953 - High
Low
1954 - High
Low
1955 - High
Low
1956 - High
Low

3.89 (9A8)
3.50 (1/2)
3.74 (1/8)
3.44 (12/31)
3.63 (12/30)
3.45 (1/14)
3.97 (8/31)
3.58 (3/9)

3.20 (3/8)

2.71
3.00
2.72
2.99
2.76
3.51
2.89

August
August
August
Augus t
August

3.85
3.90
3.94
3.95
3.97

3.42
3.46
3.54
3.57
3.60

3.31
3.39
3.51

3
10
17
24
31

3.79 (6/25)

2.96 (1/8)

3.32 (1/7)
2.93 (8/5)
3.26 (12/29)

3.02 (1/6)

3.60 (8/30)

(1/2)
(1/1)
(8/13)
(12/30)
(1/7)
(8/31)
(2/24)

3.16

3.22

1/ Weekly average of daily figures. Average term of bonds
included is 25-26 years.
2/ Thursday figures. Only general obligation bends are
included; average term is 20 years.
2 / Friday figures. Average rating of bends 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

' Date

Stock price
index 1/

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

Stock market cust<>mer credit
Customers'
Bank
debit bal- loans to
ances 4/ "others" 5/

Total

(Millions of dollars)
167.1 (1/2)

lMt.O (9/18)

221.U
156.5
270.7
217.4
295.5
257.4

(12/31)
(1/6)
(12/30)
(1M)
(8/3)
(1/20)

290.1
290.0
291. U
286.7
283.2

2.5
0.9
3.7
1.4
4,6
1.5
3.1
1.6

' 5.75
5.15
5.33
L. 20
It. 22
3.78
L. 21
3.86

2,445
2,055
3,1*36
2,405
It,030
3,537
4,047
3,991

1,665
1,31k
2,388
1,653
2,805
2,517
2,810
2,7W

780
664
1,018
7W
1,211
1,018
1,267
1,200

2.2
1.9
1.8
1.8
1.6

3.87

1,026
n.a.

2,812

1,214
1,205
1,200
1,205

n.a.—Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted .
to 19&7-49=100 by Federal Reserve. The conversion factor la 123.91.
2/ Averages of daily trading volume on the New York Stock Exchange.
~%J Moody's 200 conmon stocks; end of month figures.
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.
j>/ 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.




H.lU

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

1954

1956

535
107.
1,223

5k 7
426
6#

404
696
390

816
1,1 44
830

478
886
687

497
656
842

e/1,120
a/700
e/850

597
644
670

909
335
747

1956
January
February
March
April '
May
June
July
August
September

579
704
790

October
November
December
1st quarter
2nd quarter
3rd quarter
4th quarter
Year

New capital

Corporate
1 1955
1

1,162 ^
632
900
2,073
2,790
e/2,670

1,608
1,995
1,991
1,896
7,490

535
312
538

396
411
565

377
490
735

427
350
641

734
748
853

e/380
. e/215
e/350

470
249
406

279
261
649

919
658
.408

594
423
877

1,003
290
6o4

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

State and local
1 1955
1 1954

1,490
1,603
945

•

1,385
1,418
1,124
1,984.
5,911

1,372
2,334
1,188
1,894
6,789

Excluding finance companies 2/
1st quarter
2nd quarter
3rd quarter
4th quarter
Year

1,617
2,459
e/2,470

1,727
1,870
2,554
7,569

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

1/ Includes $637.2 million AT&T convertible debenture issue.
2 / Total new capital issues excluding offerings of sales and personal finance
,
companies.
Note.—Details may not add to totals due to rounding.




1
/
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)
Month

Corporate

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

10
|5
328
805
221
263
95
212
278
395
623
185
592
217

July
August

State and
local government

Other 2/
__

, 65
, 231
716
iiOl
227
192
1M
163
157
233
1*63

25
50

50
20 '

= l6h

35

37 '

Large Individual Issues Offered During August
Issuer

Type 3/

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

CORPORATE
El Paso Natural Gas Co.
Pfd. stk.
Consumers Power Co.
1st mtg.bds.
Pacific Tel. & Tel. Co.
Deb.
Minneapolis-Honeywell Co. S.F. deb.
Associates Investment Co.
Deb.
Mack Trucks, Inc.
S.F. deb.

25.0
W.O
78.0
25.0
30.0
19.1

\1986
1988
1976
1976
1968

h
a
3
h
5

3/8
3A
1/2
1/2

3.94
li.23
3.79
L38
5.27

Aaa
Aa
Aa
Ba

STATE & LOCAL GOVERNMENT
Suffolk Co., New York
State of Delaware,
Yonkers, New York
Chicago, 111., Park Dist.

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

2.95
2,6k
3.29
3.15

2.00-3.00
2.00-2.65
2.30-3.25
2.35-3.15

A
Aa .
A
A

36.5 •1957-86 h-h 1/8
:

3.60-U.U0

A

9.3
7.0
6.U
12.0

1957-81
1957-76
1957-76
1958-76

OTHER
Metropolitan Toronto




- Deb.

H.lli

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 obligation; Rev., revenue bonds; G.R., general obligations additionally secured by facilities revenues; L.L., limited liability obligations secured by pledge of designated revenues. '




Exhibit F

H.llt

Forthcoming Large Public Security Offerings for New Capital
(Other than U. S. Treasury) 1/
Expected Proceeds from Forthcoming Large issues
Subsequent to
During month following
date shown .
date shown
State and
State and
Corporate
Other 2/
Other 2/ Corporate

Date of
computation

local govt,

local govt.

222
805
202
215

1955 - Aug. 31
Sept. 30
Oct. 31
Nov. 30
Dec. 30
1956 - Jan. 31
Feb. 29
Mar. 30
Apr. 30
May 31
June 30
July 31
Aug. 31

176
123
380
568
198
U37
2U7
369

iBk

8U3
330
205
121
327
220
132
173
:

3

|

131

5o

37

920
909
ti2
t.
230
85
376
233
1,013
818
W18
567
1,096
1,202

1,971
2,205
1,650
756
618
917
785
811
832
91a
690
726
997

50

37

Forthcoming Large Offerings, as of August 31
Issuer

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Gulf States Utilities Co.
General Telephone Co. of Calif.
Northern States Power Co.
Procter & Gamble Co.
Detroit Edison Co.

15.0

1st! mtg. bds.
1st mtg. bds.
1st mtg. bds.
Deb.
Conv. deb.

70.0
59.8

^Tennessee Gas Transmission Co.
Southern Pacific R.R. Co.
North American Aviation, Inc.

1st mtg. bds.
1st mtg. bds.
Cap. stk.

35.0
Uo.o

Virginia Electric & Power Co.
New England Tel. & Tel. Co.

1st mtg. bds.
Cap. stk.

18.9

Common stk.
Conv. pfd. stk.

25.0
33.1

Conv. deb.

16.U

Common stk.

580.0

Southern California Edison
^United Aircraft Corp.
•^Allegheny Ludlum Steel Corp.
^American Tel. & Tel. Co.




20.0

15.0

50.0

20.0

September 10
September 11
September 12
September 13
September 1U
(rights expire)
September 18
September 19
September 2k
(rights expire)
September 25
September 28
(rights expire)
September
October 2
(rights expire)
October 3
(rights expire)
November 5
(rights expire)

H.lU

F-2
Forthcoming Large Offerings, as of August 31 (Cont'd)
Issuer

Type

. Amount
(millions Approximate date
of dollars) of offering

CORPORATE (Cont'd)
J. P. Stevens & Co.
CIT-Financial Corp.
Pacific Finance Corp.
Michigan Wisconsin Pipe Line Co.
Commercial Credit Co.

S.F. deb.
Deb.
Deb.
1st mtg. bds.
.Notes

28.7
75.0
25.0
25.0
50.0

G.O.
G.O.
G.O.
G.O.
L.L.
G.O.
Bridge rev.
Rev.
Elec. rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
Rev.
G.O.

25.0
6.3
10.0
30.0
25.0
29.0
5.5
1*2.0
135.0
5.U
185.0
65.0
62.0
227.0 31.0
25.0
50.0

1956
1956
1956
1956
1956

STATE AND LOCAL GOVERNMENT
Port of New York Auth., N. Y.
Allegheny Co. Inst. Dist., Pa.
• Oakland Unified School Dist., Cal.
*New York, New York
*State of Michigan
. Los Angeles School Dists., Cal.
^Florida Development Commission
Jacksonville Expressway Authority
Memphis, Tennessee
Washington State Toll Bridge Auth.
Florida State Turnpike Authority
Oklahoma Turnpike Authority
Pennsylvania Turnpike Commission
Washington State Toll Bridge Auth.
Inter-American Center Auth., Fla.
New Jersey Highway Authority
New York State Thruway Authority
•

September
September
September
September
September
September
September
Fall
Fall
Fall
Fall
1956
1956
1956
1956
1956
- 1956

6
11
11
12
13
18
20

OTHER

None
*—Included in table for first ime.
1/ Includes corporate and other issues of $15 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.




H.Ik

Exhibit G
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
Actual
seasoned yields
(per cent) seasoned yields (per cent) (basis points)
(basis points)

Date

1952 average
1953 average
1951* average
1955 average

3.16
3.^6
3.03
. 3.23

13
16
3
9

1956 - January
February
March 8
16
23
30
April k

None
*3.15
3.19

3
5

3.37

18

3.77

ho

3.53
3.52

19
18

•

k

11
25

May 9
16
2k

June 8
20
July 3
18
25
August 1
30

3.62
3.70

26
33

I- 07.
t.

52

3.35
3.78
3.12
3.33

12
26
-3
12

None
3.23

-5

3.35

7

3.55
3.57
3.60
3.67

25
23
26
29

3.80
3.73

2k

3.75
3.82
LOO

32

,

27
28
U3

*—Single observation, not an average.
1/ Covers only 30-ryear 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. The number of new issues included in the
monthly averages varies from 2 to 4 except for October 19$k when 6 A-rated
issues were included. Average maturity for the seasoned issues varies from 26
to 28 years.




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