Full text of H.16 Capital Market Developments : September 8, 1958

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Not for Publication

DECONTROLLED AFTER SIX MONTHS

H.lU

September 8, 1958.
CAPITAL MARKET DEVELOPMENTS

Only two large security issues for new capital were publicly
offered during the holiday-shortened week ending September 5. Standard
Oil Company of California sold a $150 million debenture issue (which
had been originally scheduled for sale in late June) and the State of
Delaware sold a £L7 million general obligation bond issue. This week,
two large corporate issues with aggregate proceeds of $385 million are
expected. (This includes a $350 million debenture,issue of Sears, '
Roebuck and Company.) State and local government issues, totaling
$60 million,are also scheduled for sale.
Bond yields - Yields continued to increase last week for
all types of outstanding bonds. Yields for all categories, except
lower-grade corporate bonds, are the highest since November 1957.
Corporate Baa-rated bond yields are still below the early January
level.
Stock prices - Common stock prices increased last week.
Standard and Poor's index of 500 common stocks closed at ltf.97~on
September 5> only .21 points below the August 1958 high. The volume
of trading continued to increase, averaging 2.9 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.




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




CORPORATE Aoo

STATE AND LOCAL
GOVERNMENT Aoo

/*>
-I —JSTATE AND LOCAL GOVT. Boo,

H.lli

Exhibit B
Tables for Exhibit A
High-grade Bond Yields

Date

u. S. Govt,
long-term 2/

Corporate
Aaa 1/

Spread between
U. S. Govt, and
Corporate State and
local Aaa

State and
local govt.
Aaa y

(Per cent)
1953
195U
1957
1958

-

High
Low
High
High
Low

Aug. 8
Aug. 15
Aug. 22
Aug. 29
Sept. 5 2/

3.k2
2.85
U.llt
4.03
3.55

(6/19)
(V23)
(9/27)
(9/5)
(5/2)

3.19
2.15
3.76
3.72
3.07

(6/5)
(8/6)
(10/18)
(9/5)
(1/25)

2.91
3.0U
3.12
3.22
3.29

3.53
3.61
3.62
3.67
3.72

3.77
3.83
3.89
3.9k
ii.03

2.73
1.90
3.15
3.29
2.6k

(6/25)
(9/2)
(8/29)
(9/h)
(5/1)

.

.38
.30
.60
.51
.22

.83
.30
.U7
.62
.3b

.21*
.22
.27
.27
.31

.62
.57
.50
.U5
.U3

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
19$h
1957
1958

-

High
Low
High
High
Low

Aug. 8
Aug. 15
Aug. 22
Aug. 29
Sept. 5 2/

3.89
3M
5.10
U.96
L51
U.60
li.66
L71
h.lk
U.80

(9/18)
(12/31)
(11/29)
(1/3)
(7/11)

3.79 (6/25)

3.92
14.03
1.10
4.21
it. 31

.69
.52
1.27
1.28
.77

1.21
.96
1.21
1.11
.98

.83
.83
.82
.80
.77

1.01
.99
.98
.99
1.02

2/ Preliminary.
~
1/ Weekly average of daily figures. Average term 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 term
is 20 years.
Note.—highs and lows are for individual series and may be on different dates for
different series.




STOCK MARKET




Exhibit D
Table for Exhibit C
Stock Market

Date

Stock price
index 3/

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

Stock market customer credit
Customers'
Bank
debit bal- loans to
ances 4/ "others" 5/

Total

(Millions of dollars)
1953 - High
Low
1954 - High
Low
1955 - High
Low
1 9 # - High
Low
1957 - High
Low
1958 - High
Low
JulyAugust
Aug. 22
Aug. 29
Sept. 5

26.54
22.95
35.98
21.93
15.89
35.28
49.64

(1/2)
(9/18) '
(12/31)
(1/8)
(12/9)
(1/14)
(8/3)

13.22 (1/20)
1*9.08 (7/12)

2.5
0.9

i:4
4.6
1.5
3.1
1.5
4.2

1:8
4.32

5.82
4.08

2,455
2,1(05

4.34

U,030
3,537
U.0U7
3,91k

tn

1'$

4.41

3.82

39.18 (12/20)
48.05 (8/8)
10.37 (1/10)

1.4
3.8
1.7

tit

45.98
47.70
47.73
47.75
47.97

3.2
3.0
2.5
2.7
2.9

3.97
3.78
3.77
3.77
3.76

4,251
3,554
4,251

1,665
1,314

2,388

1,653
2,805
2,517
2,823
2,740
2,887

2,482
3.020
2,487

3,020

780
664
1,048
746
1,241

1,018
1,267
1,155
1,163
1,054
1,317
1,051
1,231

1,186
1,184

1,186

n.a.—Not available.
g/ Preliminary.
"
.
1/ Standard and Poor's composite index of $00 common stocks, weekly closing
prices, 194l-43"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.
4/ End of month figures for member firms of the New York Stock Exchange which carzy 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 on different dates
for different series.




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

1958

New capital
Corporate 1/
State and local 2/
1
1956
1
1956
1957
1958
1
1957

January
February
March

l j & /

1,060
1,065
1,320

573
712
.817

812
953
511

7k2
572
506

kOk
696
390

April
May
June

i,na '
600
881

765
l,ii53

818
l,lk6
8kl

798
878
551

765
5k6
393

378
k90
735

1,063
65k
838

639
E/382
e/600

529
58k
k31

k08
-206
357

698
633
698

639
3k7
k09

2,276
2,227
e/1,621

1,820
1,70k
l,5kk
2,029

l,k90
1,603
971
1,395

a,503
e/6,12k

3,52k
5,069
7,099

3,093
k,06k
5,k59

July
August
September

723

e/lA50
e/500
e/1,200

October
November
December
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

1st half
Three quarters
Year

1,003
92k
973

'

!>

1,090
789
1,076

1,088

3,135
2,622
e/2,850

3,kk5
3,119
2,899
2,95k

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

5,757
e/8,607

6,59k
9,k9 3
12,kk7

k,907
7,163
, 10.38k

.

Excluding finance companies
1st
2nd
3rd
kth

quarter
quarter
quarter
quarter

2,89k
2,583
e/2,800

Year

3,237
2,889
2,582
2,810
11,518

I,6k7 '
2,5kl
2,2k6
2,826
9,260

I

e/ Estimated.
__
1/ Securities and Exchange Commission estimates of net proceeds.
2/ Data through June 19$6 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.
U/ Includes $$71.5 million AT&T common stock issue.
ijy Total new capital issues excluding offerings of sales and consumer finance
companies.




H.ll*

Exhibit F
Other Security Offerings 1/
(In millions of dollars)
Long-term
Foreign government 2/
Federal agency 3/
1958
1
1956
1
1957
1958
1
1957
1

January
February
March

196
53

April
May

139198
120

81*
149
30

37

123
1*8
1*2

50

8

28
7
30

2
39

October
November
December

1*
60
1

1*1*
5
21

507

72

523

125

95

July
August
September

Year

1,163
251

__

—

• —

1956

—

60

—

109
215

—

__

—

100

300

Short-term
State and local government h/

—

—

572

169

Federal agency 3/

January
February
March

233
1*60
273

326
1*55
11*7

196
357
21*9

371
208
11*1*

638
1*30
505

380
220
283

April
May
June

357
35U
261*

205
337
153

125
252
176

209
161
329

336
1*69
501

323
31h
260

fi/286

272
272
252

195 .
207
179

601

221*
370
512

222
1*25
273

303
9h
159

29l*
328
11*8

1,238
255 •
116

1*07
222
128

3,271*

2,706

July
August
September
October
November
December
Year

'

60

5,51*3

3,1*57

e/ Estimated.
p/ Preliminary.
1/ E&ta presented in this exhibit differ from those in Exhibit E in that refunding issues, as well as new capital issues, are included. Long-term securities are defined as those maturing in more than one year.
2/ Includes securities offered in the United States ty foreign governments and
their subdivisions and -by international organizations. Sources Securities and Exchange Commission.
i / Issues not guaranteed by the U. S. Government. Source: long-term, Securities
and Exchange Commission; short-term, Federal Reserve.
h/ Principally tax and bond anticipation notes, warrants or certificates and Public
Housing Autho f y notes. In some instances PHA notes included may have a somewhat

longer
term t;
one year. Source: Bond buyer.



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)

Month

Corporate

1957 - August
September
October
November
December
1958"- January
February
March
April
May
June
July
August

State and
local government

266
133
393
3a
l*ol*
1*10
553
182
300
505
' 195
275
109

526
537
571*
1*20
399
318
605.
1,093
725
356
281
771
209

Other 2/

2^5
.

I51i

1,357
266
653
161*
86
la
—

Large Individual Issues Offered September 1 through 5

Issuer

Type y

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

Rating

CORPORATE
Standard Oil Coi of Calif.

S.F. deb.

150.0

1983

17.0

1959-78

1*3/8

1*.1*0

Aaa

STATE AND LOCAL GOVERNMENT
State of Delaware
OTHER
None




G.O.

3.26

1.50-3-50

Aa

H.lli

G-2

1/ Includes 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 ty Federal agencies.
2/ 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
revenue bonds secured by revenue from specific taxes only; Rev.-Rent., revenue
bonds secured solely by lease payments.




H.Ik
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

Subsequent to
. date shown

During month following
date shown

Corporate

Corporate | J ^ ^ | o t h e r 2 /

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

526
578
576
1*58
383
378
U98
1,123
555
356
266
768
161
785 .

218
183
33U
339
363
31*5
370
131
298
193
177
225
55
21*1

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
3ltl
330
1*93
208
235
125
1*35

—

30
15
1*5
63
165
110
150
36
—

Forthcoming Large Offerings, as of September 5
Issuer

T

Type

Amount
Approximate date
(millions
of offering
of dollars)

CORPORATE
Texas Eastern Trans. Co.
Sears Roebuck & Co.
Standard. Oil Co. of Indiana
^Consumers Power Co.
^Consumers Power Co.
Tennessee Gas Trans. Co.
Public Service Co. of Indiana
Universal-Cyclops Steel Corp.
Montana Power Co.
Commerce Oil Refining Corp.
Martin Co.

1st mtg. p. 1. bds. 35.0
S. F. deb.
350.0
Deb.
200.0
1st mtg. bds.
35.0
Pfd. stk.
15.0
1st mtg. p. 1. bds. 50.0
Pfd. stk.
21*. 3
S. F. dab.
1st mtg. bds.
Deb., bds. & common
S. F. deb.

15.0
20.0
1*5.0
25.0

Sept. 11
Sept. 11
Sept. 18
Sept. 2l*
Sept. 2l*
Sept.
Oct. 6
(rights expire)
1958
1958
1958
1958

STATE AND LOCAL GOVERNMENT
Indiana State Office Bldg. Comm.
State of Connecticut
San Diego Uhlf. Sch. Dist., Calif.




Rev.-Rent.
G.O.
G.O.

30.0
20.0

10.0

Sept. 9
Sept. 9
Sept. 10

H„lii

H-2
Forthcoming Large Offerings, as of September 5 (Cont'd)

Type

Amount
Approximate date
(millions
of offering
of dollars)

STATE AND LOCAL GOVERNMENT (Cont'd)
^Colleges of the State of Texas
Florida State Board of Education
Los Angeles Co. Flood Dist., Calif.
State of Oregon
State of Ohio
Commonwealth of Massachusetts
State of Washington
Chesapeake Bay Ferry Comm.
State of California

^Kingdom of Norway

Rev.
Rev. •
Rev.=Ut.
GoO.
Rev.-S, T.
G„0.
Rev.—S. T.
Rev.-Ut.
GoO.

17.1
. 12.5
30.0
20.0
30.0
61.0
10.0
lUU.o
5o.o

. Eds.

15.0

Sept. 16
Sept. 16
Sept. 16
Sept. 17
Sept. 18.
Sept. 2b
Sept. 2k
Oct.
Dec. 3

Oct,

-a—Included in table for first time.
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.




H.lU

Exhibit I
Yields on New and Outstanding '
Electric Power Bonds, Rated Aa and A l/
Aa-rated offering yields
A-rated oJPferine yields
Amount above
Amount above
Actual
seasoned yields
Actual
seasoned yields
(per cent) (basis points) (per cent) (basis points)

Date

1952 - 1957
High
Low
1958 - January
February
March it
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
18
23

5.00(8/11/57)
2.93(3/31/51)
*3.60
3.892/

i
i
|

87
-3
-8
22

U.15
U.22
U.00
U.00

UU
50
28
26

U.05
3.98
it .00

31
23
25

3.75

5

3.90

21

3.85
3.85

16
16

3.85
3.82
3.95

17
12
2U

WOO

25

1-18

29

5.50(11/7/57)
3.00(3/17/51)

123
-15

3.962/
lt.07
it. 25

3
9
6

it. 07

-7

3.98

5

it.0it
U.00

11
3

U.07
U.35

U
32

U.00
3.95

-1
-6

3.98^/

1

U.35^/

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 lov;er coupon rate. Monthly averages so marked include one or more
issues with such a provision. Other issues have no such provision.