Nigeria: CBN Ups Treasury Bills Offer to ₦550bn Amid Declining Investor Demand

The Central Bank of Nigeria (CBN) has raised the total offer at its latest Treasury Bills (T-Bills) Primary Market Auction to ₦550 billion, marking a significant increase from ₦400 billion in the previous auction. The offer spanned across the 91-day, 182-day, and 364-day tenors.

Despite the higher offer, investor appetite softened, as total subscriptions fell by 29.45% to ₦1.01 trillion. Nonetheless, the CBN allotted ₦598.33 billion, exceeding its target by 8.79%, according to analysts at Meristem.

Stop rates remained unchanged for the shorter-dated instruments, with the 91-day and 182-day bills holding at 18.00%and 18.50% respectively. The 364-day tenor recorded a slight increase to 19.63%, reflecting cautious optimism among investors.

The longer-dated 364-day bill remained the most attractive to market participants, drawing ₦956.88 billion in bids, which accounted for nearly 88% of total subscriptions.

In the secondary market, Treasury bill yields edged lower as investors who missed out at the primary auction sought opportunities. The average yield dipped by 10 basis points week-on-week to 20.97%, down from 21.07%.

On a tenor-specific basis:

• Short-term bills saw a marginal yield drop of 4 basis points,

• Mid- to long-term papers experienced mixed movements,

  • 6-month: -3bps,

  • 9-month: -48bps (strong investor activity noted),

  • 12-month: -7bps.

Additionally, the CBN conducted an Open Market Operations (OMO) auction during the week, offering ₦500 billionacross 315-day and 329-day maturities. The auction drew robust interest, with ₦773.74 billion in total bids. The apex bank eventually allotted ₦756.74 billion, with stop rates set at 22.65% and 22.72% respectively.

In the local bonds market, yields on benchmark instruments such as APR-33s, JUN-35s, and JUL-37s edged down by 3 basis points, leading to a slight decline in the average bond yield to 19.04%, from 19.07% in the previous week.

The Eurobond segment also posted gains, buoyed by broad-based buying interest—except for the NOV-27 issuance, which saw a marginal yield increase of 3 basis points. Significant yield drops were recorded in:

• NOV-25: -43bps,

• MAR-29: -30bps,

• JUN-31: -27bps.

Consequently, the average Eurobond yield fell by 18 basis points, settling at 10.12%, down from 10.30% week-on-week.