Treasury Bills Oversubscription Hits 272% as Yields Ease at Nigerian Auction

Investors rushed to the Nigerian Treasury Bills primary market on Wednesday, pushing total subscriptions to a staggering N4.28 trillion against an initial offer of N1.15 trillion—a bid-to-offer ratio of 272%. The Debt Management Office (DMO) ultimately allotted N1.91 trillion across all three tenors, highlighting persistent liquidity in the financial system and a continued appetite for short-term sovereign instruments.

The 364-day Treasury Bill, which had the largest offer of N800 billion, was the standout in the auction, drawing overwhelming subscriptions of N4.07 trillion. The DMO allotted N1.71 trillion on this tenor, signaling strong investor preference for longer-dated bills amid expectations of moderating yields and potential gains from extended maturity periods.

Shorter-dated bills also saw significant activity, though less dramatic. The 91-day bill, offered at N150 billion, received bids totaling N112.01 billion, with N105.05 billion finally allotted. Meanwhile, the 182-day tenor recorded subscriptions of N93.75 billion against a N200 billion offer, with N93.41 billion allotted, reflecting steady, albeit more selective, investor interest.

Yields moderated across most tenors, reflecting aggressive bidding at the long end of the curve. The 91-day bill rate dipped slightly by four basis points to 15.80% from 15.84% in the previous auction, while the 364-day rate fell sharply by 109 basis points to 15.90% from 16.99%. The 182-day rate remained steady at 16.65%, underscoring the market’s focus on long-term returns.

Investor demand intensity was also evident in the wide range of bids. For the 364-day bill, rates ranged from 15.00% to as high as 23.50%, while the 182-day and 91-day bills recorded ranges of 14.80%-20.00% and 14.88%-18.03%, respectively, highlighting the competitive nature of Nigeria’s treasury bill market and the confidence investors place in sovereign instruments.

source: leadership