WOOTBOLLED AFTER SIX MONTHS CAPITAL IIARKET DEVELOR5ENTS

Transcription

1 Business Finance and Capital Markets Section, Division of Research and Statistics, Board of Governors of the Federal Reserve System. Digitized for FRASER Not for Publication H.Ik WOOTBOLLED AFTER SIX MONTHS September 29, 1955 CAPITAL IIARKET DEVELOR5ENTS Large public security offerings issued for new capital during the week ending September 23 totaled 82 million dollars for corporations and 60 million for State-and local governments, State and local governments expect to float 106 million dollars of large "issues thisirreek including a 6? million dol3ar Richmond-Petersburg Turnpike offering, One corporate preferred stock offering of 35 million-dollars is scheduled. Most of the large issues floated last week and the first part of this week were, well received by investors* As a result, dealers have continued to maintain low inventories. Bond yields - Aaa State and local government outstanding bond yields dropped five basis points during the week ending September 23. Yields on corporate Aaa and U e S. Government long-term bonds did not change. Corporate Baa and State and local government revenue bond yields decreased moderately while State and local government Baa. bond yields remained steady. A sharp drop in Treasury obligation yields occurred on Monday, of this week with a further decline on Tuesday according to daily figures. There was little change in corporate yields during the same period. As shown in Exhibit G, the yield on a newly-offered 30-year first mortgage electric power bond with Aa-rating was ten basis points above yields on similarly-rated outstanding bonds of somewhat shorter maturity. The spread for this issue the first of this rating to be offered since June is just slightly above the average for the months of 1955 in which there have been new offerings. Stock prices - The SEC index of 265 common stocks rose to a new high of during the we el: ending September 23. On Monday of this week prices declined sharply for the industrial averages, it was the largest drop in absolute terms in one day since Percentagewise, however, the 6.5Zt per cent decline in the Dow-Jones industrials was somewhat smaller.than it had been in either May 19^0 or October Transactions.on the New York Stock Exchange totaled 7,720 million shares, the greatest volume since July 21, Prices regained more than two-fifths of Monday's loss in the next two days on trading volume lower than on Monday but still heavy.

2 EXHIBIT A HIGH-GRADE BOND YIELDS W.mkly Date Corporate Aaa 1/ U. S. Govt, long-term 2/ State and local govt., Aaa 3/ (Per cent) Spread between U. S. Govt, and Corporate State and local Aaa High 3.03 (1A) 2.79 (12/27) 2.00 (10/23) (2/15) 2.56 (5/17) 1.65 (5/1) High 3.12 (6/19) 3.15 (6/6) 2.73 (6/25) Low 2.99 (1/9) 2.78 (12/26) 1.98 (1/8) High 3.09 (1/8) /9) (6/10) Low 2.85 (4/23) 2.a (8/7) 1.90 (9/2) High 3.lit (9/9) 2.94 (8/5) 2.34 (9/8) Low 2.91 (1/7) 2.62 (1/7) 2.05 (5/26)..13,54 August September September September September / Weekly average of daily figures. Average term of bends included is years. 2/ Weekly average of daily figures; old series. Average term to first call of bonds included is years. 2/ Thursday figures. Only general obligation bonds are included; average term is 20 years. Note. Highs and lows are far individual series and may be on different dates for different series. Digitized for FRASER

3 -GRADE BOND YIELDS Per cent per CORPORATE Baa V ' V STATE AND LOCAL GOVT. REVENUE Date Corporate Baa y State and local govt. Baa 2/ (Per cent) State and local govt, rev. 3/ High 3.63 (1/ (10/23) 2.69 (12/19) Low 3.18 (5/16) 2.U8 (1/17) ' 2.27 (4/25) Hi#i 3.89 (9/18) 3.79 (6/25) 3.27 (6/26) 3.50 (1/2) 2.96(1/8) (1/2) 195k - High 3.71 (1/8) 3.32 (1/7) 3.00 (1/1) Low 3.a (12/31) 2.93 (8/5) 2.72 (8/13) High 3.59 (9/16) 3.25(9/22) 2.95 (9/2) Low 3.15 (1M) 3.02 (1/6) 2.76 (1/7) August September September September September / Weekly average of daily figures. Average, term of bonds included is years; 2/ Thursday figures. Only general obligation bonds are included; average term is 20 years. 3/ Friday figures. Average rating of bonds 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. Digitized for FRASER

4 ,954 Date Stock price Trading volume 2/ Common Stock market customer credit Customers' (millions yields 3/ Total debit balances loans to of shares) (per cent) A/ "others" 21 (Millions of dollars) High (12/26) ,986 1, ' (10/21*) l,80lt. l,2ltl High (1/2) ,Ut5, 1, LCTT lwwo (9/18) ,055 1,31U 66k 195k - High 221.li (12/31) ,lt36 2,388 l,0lt (1/6) ijt ' It.20 2,lt05 1,653 7lt Hi#i (9/23) It.6 It.22 3,911 2,73lt 1,177 Low 217.lt (1M) ,537 2,517, 1,018 July It ,911 2,73lt 1,177 August 25U ,865 2,710 1,155 September It 1,157 September lt 2.6 1,167 September It n.a. n.a. Not available. 1/ SEC index of 26$ common stocks, weekly closing prices, ; converted to 19^7-^9-100 by Federal Reserve. The conversion factor is / Averages of daily trading volume cn the New York Stock Exchange. 3/ Uooc^y's 200 common stocks; end of month figures. %J End of month figures fcr member firms of the New York Stock Exchange which carry margin accounts; excludes balances secured by U. S. Government obligations. Wednesday figures for weekly reporting member banks. Excludes all loans for purchasing or carrying U. S. Governments for 1952; since 1953 only these loans at banks in New York and Chicago are excluded. 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.

5 January February March April May June Exhibit D Corporate and State and Local Government Security Offerings and Placements " (In millions of dollars)- Netv capital Corporate State and loyal k ~ 1955 I 1954 J , July August September # October November December 1st quarter 2nd quarter 3rd quarter 4th quarter Year 1st quarter 2nd quarter 3rd quarter 4 th quarter Year 2,2ii3 2,09k 6/1,905 1, ,608 ' 1,995 1,991 1,896 7, , ? 1/ 1,438 ^ 1,912 2,578 8,495 Excludin g finance companies 2/ 1,791,1,912 e/l,455 1,527 1,927 1,911 1,792 7,158 1,669 1,991. 1,223 2,3W^ 7, e/460 5/235 6/390 1,385 1,418 e/l, Itil ,372 2,334 1,188 1,894 6, ^ ,176 1,412 1,253 1,636 5,477 e/ Estimated. 1/ Includes million dollar AT&T debenture issue. 2/ Total new capital issues excluding offerings of sales and personal finance companies, 'Notes Details may not add to totals due to rounding. S Digitized for FRASER

6 Hoik Exhibit E Large Fab He Security Issues for New Capital (Other than U.S. Treasury) 1/ Proceeds o'f Large Issues Offered (Millions, of dollars) Month Corporate State and local government Other 2/ 19A 19# - August September October November December ' January February March April May June July August 75 36U b ' % 750 'All lto5 86 w ? 3hl U Large Individual Issues Offered September 1 through 23 Issuer Type 3/ CORPORATE Amount ' Coupon (millions rate or Offering of Maturity net interest yield dollars! cost Rating Utah Power & Light 1st mtg.bds , 3 5/ A Term. Gas Transmission 1st mtg. PL / A Tenn. Gas Transmission Common stk GIT Financial Deb /8: 3.75 Ohio Pcrjer Co. 1st mtg. bds /8 " 3.32 Aa Columbia Gas System, Inc. Public Service Elec.& Gas Deb. Pfd. stk. i-ooo _3 5/ A STATE & LOCAL GOVERNMENT State of Delaware G.O * Aa Essex County, New Jersey G.O Aa Middlesex Co. Sewerage Authority, N. J. Rev Buffalo, New York GoO Aaa Volusia Co,, Florida G.R : Baa

7 E.Ik E-2 Large Individual Issues Offered September 1 through 23 (Cont'd) Issuer Type 3/ 33ME AID LOCAL GOVERNMENT. (Cont'd) Amount Coupon (millions rate or Offering of Maturity net interest yield dollars) cost Rating Detroit, Michigan G.O A Los Angeles, California Rev ' Aa State of NeiT Mexico L.L Aa Chicago Regional Port i District, Illinois Rev. 2U n ca. It.00 OTHER None - 1/ Includes corporate and other security offerings of 15 million dollars"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; and, L.L. limited liability obligations secured by pledge of designated revenues. r/ Revised.

8 H.ll* Exhibit F Date of computation Forthcoming Large Public Security Offerings for New Capital (Other than U. S«Treasury) 1/ Expected Proceeds from Forthcoming Large Issues During month following date shown Corporate! Subsequent to i date sham 1 State and I local govt. Other 2/ jcorporate I State and 1 local govt. Other 2/ 195k - Aug U ,876 Sept hi k 2,158 Oct , Nov. 30 9k *6 2, Dec. 31 I ,1hk Jan k22 1,961 Feb k 1,395 1,978 Mar ,009 Apr. 29 lt l,uul 1,917 May ,861 June hh 830 1,8U5 July ' ".1,135 2,018 Aug ,971 ± Forthcoming Large Offerings, as of September 23 Issuer Type Amount (millions of dollars) Approximate de.be of offering CORPORATE Kaiser Aluminum & Chemical Public Service Electric and Gas American Telephone and Telegraph Southern Bell Telephone and Telegraph Long Island Lighting New York State Electric and Gas *Mew England Telephone & Telegraph ^ Southern Co. Southern California Gas Pacific Gas and Electric Freedom Insurance Company Pfd. stock Deb. Conv. deb. Deb. 1st mtg. bds. 1st mtg. bds. Deb. Common stock Bonds Pfd. stock Common stock i5.o * September 28. October October 13 October 17 October 26 October November 15 November 22 November November 1955 STATE AND LOCAL GOVERNMENT Warren Township, Michigan Baltimore County, Maryland Sedgwick County, Kansas Richmond-Petersburg Turnpike Auth. G.O. G»0. G.O. Rev September 27 September 28 September 28 September 28

9 H.lfc F-2 Forthcoming Large Offerings, as of September 23 (Cont'd) Issuer i STATE AND LOCAL GOVERNMENT (Cont'd) Type Amount (millions of dollars) Approximate date of offering Indianapolis, Indiana G.O. 6.6 October h Cook County, Illinois iio.o October 10 ttstate of Tennessee 8.6 October 10 ^Montgomery Co., California 7.0 October. 11 Orleans Parish, Louisiana 6.0 October 13 Philadelphia, Pennsylvania 39.9 October 18 ^Public Housing Authorities October 26 Texas Turnpike Company Rev October Illinois Turnpike Authority Rev. lioo.o October State of California 60.0 November 2 Territory of Hawaii 7.5 November 16 "Connecticut Expressway Rev Inter-American CenterJhith., Fla. -r Rev. 2^ Michigan Turnpike Authority Rev State of Louisiana California Toll Bridge Authority Rev Louisiana Turnpike Conmission Rev California Toll Bridge Authority Rev. 2* Nerr York State Thruway Authority G.R Oklahoma Turnpike Authority Rev. 11* Washington State Toll Bridge Auth. Rev None OTHER 1/ Includes corporate and other issues of 15 million dollars and over; State and local government issues of 5 million and over. 2/ Includes foreign government and International Bank for Reconstruction and Development issues. n.a. Not available. * Included in table for first time.

10 Exhibit G Yields on New and Outstanding Electric Powor Bonds, Rated Aa and A 1/ Date Aa-rated offering yiolds A-rated offering yields Actual Amount above Actual Amount above (per cent) seasoned yields (per cent) seasoned yieldn (basis points) (basis points) 1952 average average w $h average $k - January * February * March * April May 3.00 b June * July None * August None September * October November None None December None January * None February *3.lU 7 * March * Hi April None May * lb June * * July None None August September li * 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. The number of new issues included in the monthly averages varies from 2 to it except for October 19%k when 6 issues were included. Average maturity for the seasoned issues varies from 26 to 28 years.