Full text of H.16 Capital Market Developments : September 8, 1959

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riot f o r P u b l i c a t i o n

DECOHTROLLED AFTER SIX MOUTHS

H.lU

September 8, 1959CAPITAL HARM DEVELOPMENTS

The, volume of l a r g e p u b l i c s e c u r i t y f i n a n c i n g f o r new c a p i t a l
was moderate d u r i n g t h e week a i d i n g September li, and i s e x p e c t e d t o be
even a i a l l e r d u r i n g t h i s h o l i d a y - s h o r t e n e d week. L a s t week, one c o r p o r a t e i s s u e f o r S50 m i l l i o n and t h r e e S t a t e and l o c a l government i s s u e s
w i t h t o t a l p r o c e e d s of- $ 0 m i l l i o n were s o l d . The c a l e n d a r f o r t h i s
week i n c l u d e s o n l y a §50 m i l l i o n C a l i f o r n i a e d u c a t i o n bond i s s u e 5 no
l a r g e c o r p o r a t e i s s u e s a r e e x p e c t e d t o be s o l d .
Another S t a t e and l o c a l government i s s u e — a $190 m i l l i o n
i s s u e of t h e Chesapeake Bay F e r r y Commission — h a d been e x p e c t e d t o
be s o l d t h r o u g h n e g o t i a t i o n t h i s week; t h e s a l e has been p o s t p o n e d
i n d e f i n i t e l y , however. The e s t i m a t e d volume of S t a t e and l o c a l g o v e r n ment bond s a l e s f o r September h a s b e e n reduced t o $1/75 m i l l i o n ,
l a r g e l y r e f l e c t i n g t h i s postponement.
Bond y i e l d s - Y i e l d s 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 o u t s t a n d i n g b o n d s , w i t h t h o s e f o r U. S. Government and l o w e r g r a d e
c o r p o r a t e bonds r e a c h i n g new h i g h s .
FNMA s e c o n d a r y market o p e r a t i o n s - A d d i t i o n a l p r e s s u r e s on
r e s i d e n t i a l mortgage m a r k e t s a r e s u g g e s t e d by r e c e n t secondary market
o p e r a t i o n s of t h e F e d e r a l N a t i o n a l Mortgage A s s o c i a t i o n . I n July
o f f e r i n g s t o FNMA and FNMft p u r c h a s e s i n c r e a s e d a g a i n , and r e a c h e d t h e
h i g h e s t l e v e l s i n over a y e a r . Of $287 m i l l i o n i n FNMA s e c o n d a r y market
p u r c h a s e s of F e d e r a l l y - u n d e r w r i t t e n m o r t g a g e s d u r i n g t h e f i r s t seven
months of 1959TFHA-insured mortgages r e p r e s e n t e d f o u r - f i f t h s of t h e
t o t a l and VA-guaranteed mortgages o n e - f i f t h . These p r o p o r t i o n s c o n t r a s t
s h a r p l y w i t h t h o s e which p r e v a i l e d i n t h e f i r s t seven months of 1956
o r of 1957, when VA-guaranteed mortgages r e p r e s e n t e d f o u r - f i f t h s of
t o t a l FNMA secondary market p u r c h a s e s .
Stock p r i c e s - Stock p r i c e s d e c l i n e d l a s t week t o t h e l o w e s t
l e v e l s i n c e l a t e J u n e . S t a n d a r d and P o o r ' s i n d e x of 500 common s t o c k s
c l o s e d a t 5 8 . 5 b on September i;. T r a d i n g a c t i v i t y i n c r e a s e d s l i g h t l y ,
a v e r a g i n g 2 . 3 m i l l i o n s h a r e s a day.
More d e t a i l e d i n f o r m a t i o n c o n c e r n i n g r e c e n t c a p i t a l market
developments i s p r e s e n t e d i n t h e a t t a c h e d e x h i b i t s .
C a p i t a l Markets S e c t i o n ,
D i v i s i o n of R e s e a r c h a n d S t a t i s t i c s ,
Board of Governors of t h e F e d e r a l Reserve System.




HIGH-GRADE

LOWER-GRADE

BOND

BOND

YIELDS

YIELDS




J

H.lU

Exhibit b
Tables l o r E x h i b i t A
h i g h - g r a d e Bond Yields

Date

U. S. Govt,
long-term 2j

Corporate
Aaa 1 j

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 y

( P e r cent)
19514 - Low
1957 - High
1958 - High
Low
1959 - High
Low

2.85
it.lit
U.13
3.55
it.it8
it. 09

Aug. 7
Aug. lit
Aug. 21
Aug. "28
Sept . k 2/

it.it3
U.it2
it.it2
it. a
h.h?

(a/23)
(9/27)
(10/10)
(5/2)
(7/10)
(1/9)

2.15
3.76
3.8U
3.07
h.2h
3.83

(8/6)
(10/18)
(12/26)
(V25)
(9A)
(1/2)

it. 08
it. 06
it. 08
it. 15
it.2it

1.90
3.U5
3.31
2.6U
3.5it
3.06

(9/2)
(8/29)
(9/11)
(5/1)
(7/2)
(3/26)

3.a
3.U3
3.U3
3.itii
3.52

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

.30
.U7
.72
• 3U
.92
.57

.35
.36
.31
.29
.23

.6it
.63
.65
.71
.72

Lower-grade Bond Yields

Date

Corporate
Baa 1 /

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

Spread between
Aaa and Baa
S t a t e and
Corporate
local govt.

(Per c e n t )
195it - Low
1957 - High
1958 - High
Low
1959 - High
Low

3.Lit
5.10
ii.96
it. 51
5.13
it.83

Aug. 7
Aug. lit
Aug. 21
Aug. 28
S e p t . It 2 /

5.08
5.09
5.09
5.11
5.13

(12/31)
(11/29)
(1/3)
(7/11)
(9/10
(it/17)

2.93(8/5)
it. 51 (8/29)
it.3b ( 9 / 1 1 )
3.61t (5/1)
U.it6 ( 7 / 2 )
3.92 ( 3 / 2 6 )
it. 37
it.37
it. 35
it. 35
it.38

.52
1.27
1.28
.77
.77
.56

.96
1.21
1.11
.93
.98
.86

.65
.67
.67
.67
.66

.93
.9it
.92
.91
.86

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 d a i l y f i g u r e s . The s e r i e s i n c l u d e s bonds due or c a l l a b l e i n
10 y e a r s or more
2 / Thursday f i g u r e s . Only g e n e r a l o b l i g a t i o n bonds a r e included3 average term
i s 20 y e a r s .
Note.—highs and lows a r e f o r i n d i v i d u a l series and may be on d i f f e r e n t d a t e s f o r
different series.




STOCK

MARKET

STOCK MA1KIT CEIDIT
Chjnje m Merits

— —

-

1

FEDERAL

NATIONAL

SECONDARY

MARKET

MORTGAGE

ASSOCIATION

OPERATIONS

0FFE1INGS

r
i, JM/
f,

S..IS

\ M .

v

mtHASB




/ / //

V "

- —

Exhibit D - Tables l o r Exhibit C
S t o c k Market
Stock p r i c e
index 1 /

1 9 5 3 - 1 9 5 8 - High
Low
1959 - High
Low

51*. l i
22.95
60.51
51*. 37

July
August
Aug. l i t
Aug. 21
A u g . 28
S e p t . 1* 2 /

59.71*
5?.1*0
59.29
59.08
59.1*9
58.51*

Trading
Common
volume y
stock
(
m
illions
yields 2/
[per c e n t )

(l2/2l*/58)
(-9/18/53)
(7/31)
(2/6)

Stock market customer c r e d i t
Customers1
Bank
debit bal- loans to
"others" 5/
( M i l ] Lions of d o l l a r s )

Total

3.30
6.25
3.08
3.31*

1*.9
0.9
1*.3
2.1

1*,1*92
2,055
1**721
1*,527

3,285
1,311*
3,388
3,253

3.12
3.13
3.1a
3.16
3.23
3.18

3.2
2.1*
2.8
2.1*
2.1
2.3

1*,61*8

3,371*
n.a.
n.a.
n.a.
n.a^
n.a.

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

1,317
669
1,332
1,210
1,271*
1J261*
1,261*
1,259
n.a.

n.a.—Hot a v a i l a b l e .
g/ Preliminary.
1 / Standard and P o o r ' s T o p o a i 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 data
are averages of d a l l y f i g u r e s r a t h e r than of Fridays 1 only. Highs and lows a r e f o r F r i d a y s ' d a t a only.
2 / Standard and P o o r ' s composite stock y i e l d based on Wednesday d a t a converted t o weekly c l o s i n g p r i c e s by
Federal Reserve. Y i e l d s shown are f o r d a l e s on which p r i c e index reached i t s high or low.
3 / Averages of d a i l y t r a d i n g volume on the New York Stock Exchange.
4 / End of month f i g u r e s f o r member f i r m s of the New York Stock Exchange which carry margin accounts; excludes
balsnosa 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 loans for purchasing 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 loans a r e excluded only a t banks In New York and Chicago.
'Weekly r e p o r t i n g banks account f o r about 70 per oent of loan# 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 .

F e d e r a l N a t i o n a l Mortgage A s s o c i a t i o n Secondary M a r k e t O p e r a t i o n s 1 /

Date

E s t i m a t e d O f f e r i n g s t o FNmA
Standby
Immediate
Total
p u r c l i a s e commitment

l\ircliaaos
by
mima.

Sales
by
FNMA

(Millions of dollars)
1958 - J u l y
Aug.
Sept.
Oct.
Nov.
Dec.
1959 - J a n .
Feb.
Mar.
Apr.
May
June
July

9.6
10.1
23.8
57.3
1*0.7
39.7
37.7
i*i*.i*
52.1*
57.8

80.6

8ii.lt
109.5

9.1
9.3
22.0
1*9.6
39.2
35.3
U.2
1*9.8
50.1
73.4
76.6
92.5

.5
.7
1.8
7.7
1.5
h.k
3.8
3.2
2.6
7.7
7.2
7.8
17.1 .

8.1*
7.0
6.0
10.8
20.0
33.2
33.7
27.6
36.5
39.6
38.3
1*9.1*
62.3

1*5.9
15.5
7.9
.8
1.1
.9
.3
.8
1.0
1.1
.6
.3

^ a dn oj llllvvrer r „„
. A\ys.
. A otnndby commitment t
e r i o t l n * mort R n,.M which the no 1 l o r murt
t o r l l l „. " ^ h i n .45
t r a c t r o l o t o a to proponed nicrtRnRoa, on hcuslnn not yot under eoniitructlon, "hioh the s e l l e r mint
u.molly d e l i v e r within ono ynor.
Purelmncn Include thooe under both Immediate punch*** and etandby
commitment c o n t r a c t " . Data evclixle PIMA a c t i v i t y under Special Assistance and Management and
L i q u i d a t i n g Programo.




Exhibit E
Long-term Corporate and State and Local Government
Security Offerings and Placements
(In m i l l i o n s of dollars)

1959

Corporate 1 /
1958
1
1

January
February
March

840
745
631

April
May
June
July
August
September

quarter
quarter
quarter
quarter

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

S t a t e and locral 2 /
1950
1
1957
. 1

1957

1959

728
857 v
1,553^

1,060
1,065
1,320

636
856
645

812
953
511

742
572
506

899
791
87k

1,1W
597
887

931
765
1,453

930
. 592
980

798
895
551

765
546
393

e/550
e/775
e/650

1,107
510
1,114

1,003
924
973

2/548
e/500
e/475

806
403
651

529
584
431

456
474
435

698
633
698

2,138
. 2,501
e/1,523

2,276
2,21,4
1,860
1,365

1,820
1,704
1,544
2,029

,4,639
e/6,162

4,520
6,380
7,746

3,524
5,069
7,099

862
518
920

October
November
December
1st
2nd
3rd
4th

New ca p i t a l

2,216
. 2,56k
e/1,975

3,139
2,623
2,760
2,300

. 4,780
e/6,755

5,762
8,522
10,823

.

'

1,090
78 9
1,076
3,445
3,149
2,899
2,954.
6,594
9,493
12,447

Excluding f i n a n c e companies jj/
1st
2nd
3rd
4th

quarter
quarter
quarter
quarter

2*011
2,h09
e/1,675

Year

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

3,237
2,889
2,582
2,610

10,429

11,518

'

1 / S e c u r i t i e s and Exchange Commission estimates of net proceeds.
2 / Investment Bankers Association of America estimates of p r i n c i p a l amounts.
3 / Includes *718.3 m i l l i o n AT&T convertible debenture i s s u e .
£ / Total new c a p i t a l i s s u e s excluding o f f e r i n g s of s a l e s and consumer finance
companies.




Exhibit F

H.lU

Other S e c u r i t y O f f e r i n g s 1 /
( I n m i l l i o n s of d o l l a r s )
Long-term
F o r e i p n government 2 /
F e d e r a l agency 3/
1958
I
1957
1957
1959
1
1959
1
1958
1
January
February
March

77
59
2

1#
53

April
May

56
50
1*2

139
198
120

81*
1*9
30
U

J
1*2

199

1,163
251

72

523

125

175
—

60

July
August
September

9
5
17

28
7
30

161|

October
November
December

58
123
71*

1*
60
1

220

Year

992

215

2,321

507

Short-1
S t a t e and l o c a l government h /

S

January
February
March

190
1*28
2 95

April
May
July
August
September

o/2l*5
::

October
November
December
Year

100
572

F e d e r a l agency 3 /

lj.60
273

326
1*55
11*7

359
500
1*89

371
208
ll*l*

638
1*30
505

357
35!*
26k

205
337
153

486
675
289

209
161
329

336
1*69
501

289
123
369

272
272
252

727
365

1*37
206
330

221*
370
512

231
1*15
213

x
,i
b$9

1*51*
111*
137

1,238
255
116

3,910

3,27k

3,098

'

5,51*3

e/ Estimated.
g/ Preliminary.
1 / Data p r e s e n t e d i n t h i s e x h i b i t d i f f e r from t h o s e i n E x h i b i t E i n t h a t r e f u n d i n g i s s u e s , a s w e l l as new c a p i t a l i s s u e s , a r e i n c l u d e d . Long-term s e c u r i t i e s a r e d e f i n e d a s t h o s e m a t u r i n g i n more t h a n one y e a r .
^
2 / I n c l u d e s s e c u r i t i e s o f f e r e d i n t h e United S t a t e s by f o r e i g n governments and
t h e i r s u b d i v i s i o n s 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 . S o u r c e : S e c u r i t i e s and Exchange Commission.
3 / I s s u e s n o t g u a r a n t e e d by t h e U. S. Government. Source: l o n g - t e r m , S e c u r i t i e s
and Exchange Commission^ s h o r t - t e r m , F e d e r a l R e s e r v e .
h / 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 , w a r r a n t s o r c e r t i f i c a t e s and P u b l i c
A u t h o r i t y n o t e s . I n some i n s t a n c e s RWl n o t e s i n c l u d e d may have a somewhat
DigitizedHousing
for FRASER
l o n g e r term t h a n one y e a r . Source: Bond Buyer.



Exhibit G

H.14

Large Long-term Public Security I s s u e s f o r New Capital
(Other than U, S. Treasury) %/
Proceeds of Large I s s u e s Offered
( M i l l i o n s of d o l l a r s )
Corporate

Month

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

State 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 Individual I s s u e s Offered September 1 through 4

Issuer

Type J /

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

CORPORATE
Deb.

50.0

G.O.

0.0.

12.5
22.5

1960-79
1961-87

Rev.-Ut.
Rev.-Ut.

7.5
7.5

1961-81
1996/65

A s s o c i a t e s Investment Co.

1979

5 1/8

5.13

STATE AND LOCAL GOVERNMENT
Los Angeles, California
State of Connecticut
Allegheny Co.San.Diet.,Pa,
Serial
Term
OTHER
None




3.88
3.73
4.24

2.75-4.00
2.60-3.75
3.00-4.00
4.30

Rating

H.lii

G-2
Footnotes

n.a.—Not available.
1 / I n c l u d e s c o i p o r a t e and o t h e r s e c u r i t y o f f e r i n g s o f *15 m i l l i o n and o v e r ;
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 o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n
and Development i s s u e s a n d n o n - g u a r a n t e e d i s s u e s by F e d e r a l a g e n c i e s .
3 / I n t h e c a s e of S t a t e a n d l o c a l government s e c u r i t i e s , G.O. d e n o t e s g e n e r a l
o b l i g a t i o n s ; R e v . - U t . , revenue o b l i g a t i o n s s e c u r e d o n l y b y income from p u b l i c
u t i l i t i e s ; R e v . - Q . U t . , revenue bonds s e c u r e d o n l y by r e v e n u e from q u a s i - u t i l i t i e s ;
R e v . - S . T . , revenue bonds s e c u r e d by revenue f r o m s p e c i f i c t a x e s o n l y ; R e v . - R e n t . ,
revenue bonds s e c u r e d s o l e l y by l e a s e payments.




H.Ik

Exhibit H
Forthcoming Large Long-terra Public Security Offerings, f o r Hew Capital
(Other than U. S. Treasury) \ /
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

During month f o l l o w i n g
Subsequent t o
date shown
date shown
State and
Corporate
Other 2 / Coiporate
g ^ J o t h e r 2/
l o c a l govt.
785
113
20k
301
210
270
198
396
2U6
287
165
238
198

21*
295
258
229
261
551
292
550
251*
21*7
11*6
356
385

911*
216
326
1*01
370
365
279
1*76
31*6
332
272
305
517

71
75
1*5
20

?°
50
25

1*35
521*
675
683
515
856
1*81
761
517
761
500
1*06
1*02

71
75
1*5
20
50
50
25

Forthcoming Large Offerings, as of September 1*
Type

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

CORPOi&TE
Geofgia Power Co.
New England Telephone & Telegraph Co
*S[ylvania E l e c t r i c Products, Inc.
Southern California Gas Co.
Hooker Chemical Corp.
Union E l e c t r i c Co.
•Boston Edison Co.
Southern New England Telephone Co.
American Telephone & Telegraph Co.
Commerce Oil Refining Corp.

1 s t mtg. bds.
Deb.
S . F . deb.
1 s t mtg. bds.
Conv. deb.
Com. s t k .
1 s t mtg. bds.
Com. s t k .
Deb.
Deb., bds. & com.

18.0

Sept. 18
Sept. 21
25.0 Sept. 22
30.0 Sept. 30
25.0 - Sept. 30
( r i g h t s expire)
30.0 Sept. 30
( r i g h t s expire)
15.0 Oct. 1
2l*.2
Oct. 9
( r i g h t s expire)
Nov. 17
250.0
1*5.0
1959
1*5.0

STATE AND LOCAL GOVERNMENT
State of California
A t l a n t a , Georgia
Cook Co., I l l i n o i s
Oakland Unif. Sch. Disk., C a l i f .
Denver, Colorado




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

50.0
12.5

i*i*.o

10.0

17.0

Sept. 10
Sept. 15
Sept. 22
Sept. 29
Oct. lU

H.lii

H-2
Forthcoming Large O f f e r i n g s , a s of September h ( C o n t ' d )
Issuer

Type

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

STATE AKD LOCAL GOVLRNHEnT ( C o n t ' d ) ,
-«-State of New Hampshire
Chesapeake Bay F e r r y Commission

G.O.
Rev.-Ut.

16.0
190.0

Oct. 1 5
Indefinite

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

Bds.

25.0

S e p t . 18

-^---Included i n t a b l e f o r f i r s t t i m e .
1 / I n c l u d e s c o r p o r a t e and o t h e r i s s u e s of $15 m i l l i o n and o v e r ; 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 o v e r .
2 / I n c l u d e s 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 R e c o n s t r u c t i o n
and Development i s s u e s and n o n - g u a r a n t e e d i s s u e s by F e d e r a l a g e n c i e s .
N o t e . — D e l e t i o n s f o r r e a s o n s o t h e r t h a n s a l e of i s s u e : none.




H.llt
Yields on New and Outstanding
E l e c t r i c Power Bonds, Rated Aa and A 1 /
Date

1 9 # - 1958
High
Low
1959 - Jan. 7
20
28
Feb. 18
Mar. 11
26
31
Apr. 3
15
16
29
May 1
13
14
20
21
26
June 4
17
26
July 9
10
15
30
Aug. 5
20

Aa-rated o f f e r i n g y i e l d s
A-rated o f f e r i n g y i e l d s
Amount above
Amount above
Actual
Actual
(per cent) seasoned y i e l d s (per cent) seasoned y i e l d s
(basis points)
(basis points)
5.00 (9/14/57)
2.93 (3/31/51*)

B

87
-3

4.60

&

4.43
4.43
4.47

11
9
9
13

4.60

4.95
ii-95

5.00

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.oo

19
13

4

22
21
7

332

4.95

38
29

4.93

31

4.85

24
22

4.80

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

*—Single observation, not an average.
1 / Covers only 30-year f i r s t mortgage 'bonds, as reported i n Moody's Bond
Survey. Except where indicated, the actual y i e l d f i g u r e and the amount above
seasoned y i e l d s are averages of offerings during the indicated period and of
the differences between these new offering y i e l d s and y i e l d s on seasoned issues
of similar quality f o r the same day. Average maturity for the seasoned i s s u e s
varies from 26 to 28 years.
2 / Provides f o r a 5-year period during which issue 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 or
more i s s u e s with such a.provision. Other i s s u e s have no such provision.
3 / Provides for a 7-year period during which issue may not be c a l l e d f o r
refunding at a lower coupon rate.
y