Full text of H.16 Capital Market Developments : September 5, 1957

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Not for Publication DECONTBOM) A m R SIX MONTHS
H.ll*
.

•

:

:.

.

'

September 5> 1957
. I

CAPITAL MARKET DEVELOPMENTS
(Including Quarterly Review
of Corporate Security Financing)
Large publicly offered securities sold during the week
ending August 30 totaled $120 million for corporations and $5U
million for State and local governments. The calendar for this
holiday-shortened week includes a single corporate offering for $18
million and State and local government issues totaling $37 million.
Bond yields - Changes in yields on outstanding bonds were
mixed, but minor last week. Yields on corporate and Aaa-rated State
and local government bonds increased, while.yields on State and local
government Baa's and U. S. Government (new series) obligations remained stable and yields on U. S. Government (old series) bonds
declined.
Stock prices - Stock prices, as measured by the SEC index of
265 common stocks declined 3.8 points last week, closing at 272.3 on
August 30. Daily figures through Wednesday of this week indicate
some further decline in prices, on. balance.
Corporate Security Offerings
in the Second Quarter, 1957
Net proceeds for new capital
Corporations sold $3.2 billion of security issues to obtain
new capital during the second quarter of 1957f a s "shown in Table 1.
This volume of offerings is below the record volume in first quarter
this year, but lli per cent above the total for the second quarter of
1956. Most major industrial groups showed an increase in the volume
of issues as compared with the corresponding period of 1956.
Electric, gas and water utilities were the most important
group of issuers, offering securities with proceeds of $1,135.million
— . over 30 per cent greater than last year. Issue by this group of
public utilities accounted for over one-third of all offerings in the
second quarter of 1957.




Table 1

H.l4

Corporate Security Offerings for New Capital
by Type of Business of Issuer
Second Quarter
' ' ,
(Net proceeds in millions of dollars)
1957

1956

1955
2,052

All corporate offerings

3,184 . 2,805

Manufacturing
Nonelectrical machinery
Motor vehicles and equipment
Primary nonf errous metals
Primary iron and steel
Petroleum and refining
Fabricated metals products
Electrical machinery
Chemicals
Stone, clay and glass
Lumber and wood products
Paper
^
Foods
Textiles and apparel
Printing
Other 1/

hoii

35
33
31
\ - 30
22
20
16
163

Electric, gas & water utilities

1954

1953

1,995

2,578

1^007
51
" 14
2
20
139
27
325
28
83
34
108
45
21
14
96

628
39
18
23
207
22
3
28
10
34
6
18
23
1
3
193

_547
103
3
122
15
. 10
18
31
70
48
1
45
48
2
7
24

1,135

" 853

669

940

919

262

106

68

74

57

Railroad

98

83

35

27

62

Other transportation

98

111

92

91

89

Commercial and other

88

65

77

59

47

Mining

48 .

99

118

134

69

481

363
152
181

122
"57
55

666
557
79

Communication

309
Hi;
91
77.
48
46
kO

Financial and real estate
375
Sales and consumer finance cos.
250
Other
. 115

217

668
2?
5
11
10
212

)

)

n.a.—Not separately available.
1/ Includes. small volume of foreign issues not further classified in
the. manufacturing group.
.
Note,—Details may not add to totals due to rounding.
Source.—Securities and Exchange Commission and Federal Reserve.




21
218
8
53
14
5
3
80

New capital offerings by manufacturing companies totaled
Si,075 million in the second quarter, slightly larger than last year
and significantly greater than the volume in the,second quarter of
other recent years. Motor vehicles and equipment and nonelectrical
-machinery groups showed the biggest increases — both in dollars and
percentage. Much of the increase in financing by these groups reflects
a take-down on a private placement made in 1956 by the Ford Motor
Company and a large stock issue by the International Business Machines
Corporation. Electrical machinery, petroleum refining, and paper
. manufacturers were the only sub-groups registering a significant decline from the "second quarter last year in the volume of securities
sold. New offerings by these groups had been unusually large last
year.
' ,
Financial and real estate companies, with total net proceeds
of $375 million, ranked third in importance* However, this year's
total is about one-fifth less than the volume a year earlier. Security
financing by banks "was smaller, but offerings by sales and consumer
finance companies were about the,same as last year.
Communication companies with a volume of $265 million showed
the largest percentage increase of any of the major industrial groups.
Railroads and commercial.and other corporations were other groups
showing an increase. The only groups in addition to financial and
real estate companies showing a decline were mining and other transportation companies.
\
Total gross proceeds
Gross proceeds from corporate offerings, which includes refunding issues and costs of flotation,were $3.3 billion during the
second quarter of 1957, 11 per cent greater than last year. Refunding
issues totaled only about $60 million, as compared to over $100 million
in 1956 and over $300 million in 1955.
Public issues, which totaled $2.3 billion during the second
quarter, were one-fifth greater than last year, while private placements were six per cent less. Representing 70 per cent of total
security offerings, public issues were a larger proportion of total
security financing than in most recent years.
Debt financing was relatively less important than in 1956,
although the total dollar amount of issues sold publicly and privately placed was higher. Common stock volume increased substantially,




- 4 (largly as a result of the IBM issue) thereby accounting for a larger
proportion of the corporate total. Preferred stock financing showed
little change from last year. The volume of financing through convertible bonds declined, with the total about half as large as in the
second quarter of 1956.

Total Corporate Security Offerings by Type of Issue
Second Quarter .
(Gross proceeds in millions of dollars) .
Type of issue

1957

1956

1955

195k

1953

Total corporate offerings

3,305

2,989

2,i|13

2,531

2,695

Type of offering
Public
Private

2,321
981

1,938
1,051

1,667
7li6

1,603
928

1,812
883

Type of security
Bonds and notes
Public
Private

2,liL2
1,456
- 957

2,311
1,296
1,015

1,643
948
6#

1,860
879

2,100
1,237
863

Preferred stock

137

1I16

208

370

150

Common stock

756

532

562

302

bhS

Note.--Details may not add to totals due to rounding.
Source.--Securities and Exchange Commission.
More detailed infoimation 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 Board.




HIGH-GRADE

BOND YIELDS

CORPORATE

\ U . S . GOVERNMENT
STATE A N D LOCAL
GOVERNMENT

U. S. Govt.. long-term j j
Old series

New series

State and
local govt

Spread between
U. S. Govt.
old series) and
Corporate [State and
local Aaa

(Per cent)
1953 - High
Low
195b - High
1955 - High
Low
1956 - High
Low

3.U2
2.99
3.09
2.85
3.17
2.91

(6/19)
(1/9)
(1/8)
(lt/23)
(12/23)
(1/7) v

n.a.
• n.a.
n.a.
n.a.

3.15 (6/6)

2.78 (12/26)
2.7U
2.UU
2.91
2.62

(1/9)
(8/7
(8/5)
(1/7)

2.73
1.98
2.21
1.90

(6/25)
(1/8)
(6/10)
(9/2

.25

.30
.61
.29
.70
•5U
.68
.32
.1*9
.15

.11
.U5
.U3
.U9
.52

.39
.28
.29
.18
.15

.19
• U3
.32

• 3h
.13

.hh

3.79 (12/28)

.13

3.07 (3/2)

3

1957 - High
Low

: « t O T >

.A

1
liEESiWIE' •
August
August
August
August
August
y

2
9
16
23
30

h.oS

h.07

3.6U
3.62 -

It. 09
lull

3.62

lt.12

3.60

Weekly average of daily figures.

°f 19 $
tCrm

3.66

3

SS
I'S
3.45

Average term of bonds included is 25-26

- 1 — . »»=«.

Note?--Highs and lows are for individual series and may be on different dates

for different peries.




EXHIBIT B'

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

)

Corporate
Baa 1/

State and
local govt,
rev. ]/

State and
local govt.
Baa 2/
(Per cent)

1953 - High
195U - H i g h
1955 - H i g h

3.89 (9/18)
3.50 (1/2)

3.7!* (1/8)

3.^.(12/31)
3.63 (12/30)
3.15 (1/lit)

3.79 (6/25)

2.96 (1/8)

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

3.02 (1/6)„

3.27 (6/26)
2.71 (1/2)

3.00 (1/1)

2.72 (8/13)

2.99 (12/30)

2.76 (1/7)

1956 - High

h M (12/28)

h.22 (12/27)

1957 - High
low

1I.87 (8/30)

U.'ll (8^29)
3.90 (2/21)

I3.70: ?(2/22)
OT

•August
August
August
August
August

lt.76
U.78

U.30

\.l£L

y

h.6k
4.8?

U.U3
U.51
U.51

2
9
16
23
30

3.58 (3/9)

(tyl2)

U.82

'

3.98 (12/28)

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 year's.
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

Bate

Stock price

, Trading
Common
Volume 2/
(millions
yields J/
of shares) (per cent

Stock market customer credit
Customers1
debit bal- loans to
ances h/ "others" 5/

Total

(Millions of dollars)
1953 - High
1951* - High
1955 - High
1956 - High
1957 - High
Low
July
August
August 16
August 23
August 30

167.1
lhh.0
221.U
156.5
270.7
217.a
295.5
257.U
29U.6
260.3

(1/2)
(9/18)
(12/31)
(1/6)
(12/30)
(l/llt)
(8/3)
(1/20) i
(7/12)
(2/8)

292.0

277.0
275.8

268.5
272.3

.

2.5
0.9
3.7
1.1*
1.6
1.5
3.1
1.5
2.7
1.6
2.2
1.9.
1.8
2.0
2.0

•

5.88
5.15
5.1*9
14.09
It. 23
3.59
U.13
3.65
lt.28

3.67

2,lili5
2,055
3,136
2,105
1,030
3,537
l*,0l*7.
3,91h
U,031
3,832

1,665
1,311*
2,388
1,653
2,805
2,517
2,823
2,71*0
2,887
1,713

1,109

3.75

l*,ooU

2,885

1,119

3.95
li.02
It. 01

n.a.

n.a.

780
66L
1,018
71*6
1,214
1,018
1,267
1,155
1,163

l!li3
1,109

n.a.—Not available.
1/ SEC index of 265 common stocks, weekly closing prices, 1939*100; converted
to 19u7-li9"100 by Federal Reserve. The conversion factor is 123.91.
2/ Averages of daily trading volume on the &ew lork Stock Exchange.
3/ Moody's 125 industrial stocks; weekly data based on Friday.
y End of month figures for member firms of the New York Stock Exchange which
cariy margin accounts; excludes balances secured by U. S. Government obligations.
5/ 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 72 per cent of loans to others.
Mote.—Highs and lows are for individual series and may be on different dates
for different series.




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

1957
January
February
March
April
May
June
July
August
September

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

Corporate
1956
|'

New Capital
1955

1957

State,and local
1 1956
| 1955

1,063
1,071

573
712
817

535
1*07
1,223

685
566
1*99

696

390

535
312
538

921*
771

818
1,116
81*1

1*78
886
687

762
528
e/380

378
1*90
735

1*27
350
61*2

e/1,075
e/8#
e/1,100

1,063
651*

597
61*1*
670

e/l*80
e/550
e/550

376
199
333

1*70
21*9
1*06

61*5
311
1*26

919
658
1*08

1,3a

1,W9

.October
November
December .
1st
2nd
3rd
l*th

1

838

1,088

1,1621/
6#
900

2,102
2,805
2,556
2,922

2,165
2,052
1,911
2,695

1,750
e/1,670
^/1,580

1,1*90
1,603
908
1,382

1,385
1,1*18
1,121*
1,981*

14,907
7,1.63
10,381*

1*,216
6,127
8,821

e/3,120

3,093
1*,001
5,383

2,803
3,927
5,911

7U5 ..

1,0892/

3,1*79
3,l61i
e/3,025
6,663

e/9,688

1*01*

e/5,000

Excluding finance companies
1st quarter
2nd quarter
3rd quarter
l*th quarter

3,268
2,92U
e/2,725

Year

1,61*7
2,51*1
2,21*6
2,826
9,259

1,727
1,870.

.1,1*1*1*

2,551*
7,595

e/Estimated.
1/ Includes $637.2 million AT&T convertible debenture issues.
2/ Includes &571.5 million AT&T common stock issues.
2/ Total new capital issues excluding offerings of sales and consumer finance
companies.
Note.—Details may not add to totals due to rounding.




[.lli

Exhibit £

Large Public Security Issues for New Capital
(Other than U. S. Treasury) 1/
Proceeds of Large Issues Offered
(Millions of dollars)
Month

1956 - July
August
September
0ctober
November
December
1957 - January
February
March
April
May
June
|
July

Corporate

State and
local government

592
217
558
386
701
1*30
567
671.
788
U77
329
877
525

161*
35
181*
383
135
201
386
306
19U
1*99
21*8
176
265

-

;

Other 2/

37
35
100
50
125
25
39
25

Large Individual Issues Offered during August
Issuer

Type J/

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

CORPORATE
Minneapolis-Honeywell
Regulator Company
Associates Investment Co.
General Motors Acceptance
Corporation
Northern States Power Co.
J. Ray McDeimott & Co.
Atlantic Refining Co. .
Pacific Tel. & Tel. Co.
Thompson Prods., Inc.
Southern Calif. Edison
Company
Public Serv. Elec. and
Gas Company

Common stk.
Deb.

28.2
50.0

Deb.
100.0
1st mtg. bds. 18.0
Conv. sub.deb. 20.0
Conv. sub.deb. 100.0
Deb.
90.0
Conv.sub. deb. 19.7
1st & ref.
mtg. bds.
iiO.O
1st & ref
mtg. bds.
60.0




1977

5 1/1*

5.25

1977
1987
1982
1987
1980 1982

5
5
5
1* 1/2
5 1/8
1* 7/8

5.20
5.00 .
5.oo
1^.50
1.95
li.88

1982

1* 7/8

1*. 80

Aa

1987

1* 7/8

l*.8l

Aa

——

Aaa
Ba
A
Aa
Baa,

v

111

fir 2
Large Individual Issues Offered during August.(Cont'd)

Issuer

Type 3/

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

STATE AND LOCAL GOVERNMENT
G.R.
State of- Connecticut
Du Page Co. H.S.D. No. 8
G.O.
California
Sacramento Unif. S.D.,
G.O.
California
Chicago, Illinois
G.O.
Los Angeles City School
G.O.
Dists., California
G.O.
New York, New York
Tampa, Florida
Utilities rev,
G.O.
Dade Co., Florida
G.O.
Nassau Co., New Yoric
G.O.
State of Massachusetts
Rev.
-Kansas Turnpike Auth.
Omaha Pub.Pwr. Dist., Neb, Elec. rev.
*1 Jose, California
G.O.
~uate of South Carolina
G.O.
State of Rhode. Island
G.O.
State of Delaware
G.O.
West Hartfo rd, Conn.
G.O.
Chicago Board of Educ., ILL G.O.
G.O.
Honolulu, Hawaii

35.0 1963-97/65 3.61

2.80-3.65 Aaa

7.9 1958-76

it. 23

2.80-/4.25 A

7.0 1959-82
39.6 1959-76

3.19
3.8b

2.50-3.55 Aa
2.85-3.85 A

3.97
3.77
li.6o
14.50
ii.19
3.6U

2.80-3, 90
2.75-3, 80
3.00-14, 60
3.10-U.50
2.75-14, 20
2.140-3,,65
3.00-14.,30
3.OO-I4.00
2.60-3.65
2.140-3.
2.60-3.
2.I4O-3.

M.O
lio.o
6.3
7.5

21.0
19.0

1958-82
1958-72
1958-86/67
1959-78
1958-86
1958-77

19.5 1961-97/67 a . 6 1
8.0 1959-87
ii.01
5.0 1958-77
3.63
6.0 1958-77
3.36
"6.7 1958-82
3.77
21.3 1958-77
3.31
6.6 1958-77
3.54
15.0 1959-76
3.61+
11.5 1959-87/67 U.39

2.I4O-3.

2.80-3.

3.OO-I4

Aa
A
A
A
Aa
Aa
Aa
Aa
Aa
A
Aa
Aa
A
A

OTHER

1/ Includes corporate and other security offerings of #15 million and over;
State arid locail 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.ll*

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

Date of
computation
1956 - Aug. 31
Sept. 28
Oct. 31
Nov. 30
Dec. 31
1957 - Jan. 31
Feb. 28
Mar. 29
Apr. 30
May 31
28
July 31
Aug. 30

*

369
315
683
1*36
1*76
591
7h0
I46I

187
525
370
526
578

131
359
162
I18

280
153
153
290
179
97
172
252
2l*3

__

23
100
.'35
25
25
25
30

1,202
1,009
990
1*81
796
966

. 795
1*86
2#
525
1*15
811
81*5

9#
1,197
955
979
763
61*8
631
862
396
388
1*98
5iU
1*39

__

23
100
35
25
25
25
30

Forthcoming Large Offerings, as of August 30
Issuer

Type

Amount
Approximate date
(millions
of offering
of. dollars)

CORPORATE
Tampa Electric Co.
Westcoast Transmission Co., Ltd.
Duke Power Co.
El Paso Natural Gas Co.
New Jersey Bell Telephone Co.
Sperry Rand Corp.
Lehigh Portland Cement Co.
Texas Eastern Transmission
Philadelphia Electric Co.
^Niagara Mohawk Power Co.
Consolidated Natural Gas" Co.
Pacific Power & Light Co.
^National Cylinder Gas Co.
Consumers Power Co.
Utah Power & Light Co.
Pacific Telephone & Telegraph Co.
®Julf States Utilities Co.
American Telephone & Telegraph Co.




1st mtg. bds.
Sub. deb.
S. F. deb.
Conv. deb.

Sept. 6
Sept. 11
Sept. 11
60.0
Sept. 11
(rights expire)
Deb.
Sept. 12
30.0
S. F. deb.
Sept. 12
110.0
S. F. deb.
Sept. 12
30.0
1st mtg. P. L. bds. 30.0
Sept. 12
1st & ref.
mtg. bds.
1*0.0
Sept. 13
Gen. mtg. bds.
Sept. 17
50.0
Deb. .
Sept. 18
30.0
1st mtg. bds.
20.0
Sept. 19
Sub. conv. deb.
Sept. 19
17.5
1st mtg. bds.
Sept. 2k
35*0
1st mtg. bds.
15,0
Sept. 15
Common stk.
Sept. 30
17.2
(rights expire)
1st mtg. bds.
Oct. 1
17.0
Deb.
250.0
Oct. 29
18.0
25.0
50.0

H.lU
Forthcoming Large Offerings, as of August 30 (Cont'd)
Issuer

Type

Amount
Approximate date
(millions
of dollars) of offering

STATE AND LOCAL GOVERNMENT
Santa Monica Unif. Sch. Dist.,Calif.
Dade Co., Spec. Tax S.D. No.l, Fla.
Houston, Texas
Winnebago Co. S.D. No. 205# HI.
No. Hempstead Sch. Dist. No. 9, N.Y.
State of Ohio
Cook Co., Illinois
Los Angeles., California
Baltimore Co., Maryland
State of Missouri
Wichita, Kansas
^Springfield, Massachusetts
Pennsylvania Gen. State Authority
Buffalo, New York
Oakland Unif. Sch. Dist., Calif.
•^Colorado Springs, Colorado
State of Colorado
'an Diego Unified Sch. Dist., Calif,
utate of Texas
Jacksonville,- Florida
University System Bldg. Auth., Ga.
Pennsylvania Turnpike
Inter-American Center Auth., Fla.
New York State Thruway Authority

G.O.
G.O.
Water rev.
G.O.
G.O.
Highway rev.
G.O.
G.O.
G.O.
G.O.
Water rev.
G.O.
Rev.
' G.O.
G.O.
Utilities rev.
Highway, rev.
G.O.
G.O.^
Utilities rev.
. Rev.
Rev.
Rev.
G.O,

f:S

62.0
20.0
5o.o

Sept. 3
Sept. U
Sept. h
Sept. 5
Sept. 5
Sept. 10
Sept. 10
Sept. 11
Sept. 12
Sept. 17
Sept. 17
Sept. 18
Sept. 19
Sept. 19
Sept. 2h
Sept. 2h
Sept. 27
Oct. 15
1957
1957
1957
1957
1957
1957

30.0

Sept. 12

10.0

5.5
7.k

31.0
11.3
5.0

23.6
30.0
la. a
5.2

25.0

8.1
10.0

5.5

8.0
10.0
12.5
30.0

12.0

OTHER
Kingdom of Belgium

Exti S. F. deb.

—Included in table for first time.
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.
Note.—Deletions for reasons other than sale.of issue: None.