Treasury Bills Offer Get 272% Over-subscription as Yields Ease at Auction

The Debt Management Office attracted strong investor appetite at Wednesday’s Nigerian Treasury Bills primary market auction, as total subscriptions surged to N4.28 trillion against an offer of N1.15 trillion, reflecting a bid to offer of 270 per cent.
Despite the elevated demand, the DMO allotted N1.91 trillion across the three tenors, translating to a bid to cover ratio of 2.2 times, underscoring sustained liquidity in the financial system and continued interest in short term sovereign instruments.

A breakdown of the results shows that the 364-day bill, which had the largest offer size of N800 billion, drew overwhelming demand of N4.07 trillion. The DMO eventually allotted N1.71 trillion on the tenor, significantly higher than the initial offer, indicating strong investor preference for longer dated bills amid expectations of moderating yields.

The 91-day bill, offered at N150 billion, attracted subscriptions of N112.01 billion, with N105.05 billion allotted. Similarly, the 182-day tenor recorded subscriptions of N93.75 billion against an offer of N200 billion, while N93.41 billion was allotted.
Stop rates moderated on two of the three tenors. The 91-day bill declined by four basis points to 15.80 per cent from 15.84 per cent at the previous auction. More notably, the 364-day bill fell sharply by 109 basis points to 15.90 per cent from 16.99 per cent previously, reflecting aggressive bidding at the long end of the curve. The 182-day tenor was left unchanged at 16.65 per cent.

The range of bids submitted by investors further highlights the intensity of demand. On the 364-day bill, bids ranged from 15.00 per cent to as high as 23.50 per cent, while the 182-day and 91-day instruments recorded bid ranges of 14.80 per cent to 20.00 per cent and 14.88 per cent to 18.03 per cent respectively.