CBN allots N673bn as investors favour one-year T-bills

Central Bank of Nigeria building. Photo: CBN

Investors overwhelmingly favoured Nigeria’s one-year Treasury bills at the November 11, 2026 auction, committing N1.08 trillion to the 364-day instrument as demand for shorter-dated securities remained weak.

The one-year bill attracted N1.079tn in subscriptions, almost 180 per cent of the N600bn offered by the Central Bank of Nigeria, accounting for about 96.2 per cent of total bids across the three maturities.

In contrast, investors submitted only N19.18bn for the 91-day instrument and N23.02bn for the 182-day bill, against N100bn offered for each tenor.

The distribution of bids highlights investors’ willingness to lock their funds away for 12 months rather than settle for shorter investment periods, particularly as the yield premium on the one-year instrument remained relatively small.

Data from the auction conducted by the CBN on behalf of the Debt Management Office showed that total subscriptions reached approximately N1.12tn, while actual allotments stood at N713.31bn against the N800bn offered.

The 364-day instrument received N672.91bn in allotments, exceeding its initial N600bn offer by N72.91bn. The 91-day and 182-day bills received N18.12bn and N22.28bn, respectively.

Consequently, the one-year security accounted for approximately 94.3 per cent of total allotments, further demonstrating the concentration of investor demand in the longest available tenor.

The preference for the 364-day bill came despite relatively narrow differences in stop rates across the three instruments.

The CBN maintained the stop rate on the 91-day bill at 15.40 per cent and the 182-day instrument at 15.79 per cent. However, the rate on the 364-day bill increased by nine basis points to 15.89 per cent from 15.80 per cent at the previous auction.

This means investors earned just 49 basis points more by choosing the one-year bill over the 91-day instrument and 10 basis points more than the six-month security.

The marginal difference suggests that investors were prepared to commit their funds for an additional six to nine months without demanding a significantly higher return.

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The auction also followed the DMO’s offer of N800bn across the three maturities, with the one-year instrument accounting for 75 per cent of the advertised amount.

The CBN eventually allotted N713.31bn, leaving N86.69bn of the offer unallotted.

The latest auction extends a pattern of concentrated demand for longer-dated T-bills in recent months.

At the 4 November auction, investors submitted N1.994tn in bids for the 364-day instrument, while the 91-day and 182-day bills attracted N25.01bn and N25.83bn, respectively.

The one-year security accounted for approximately 96 per cent of total subscriptions at that auction, despite the CBN maintaining stop rates at 15.40 per cent, 15.79 per cent and 15.80 per cent across the three maturities.

Developments in the secondary market also present a mixed picture for investors comparing new T-bills with existing securities.

As of 11 November, the 91-day T-bill’s secondary-market yield stood at 17.40 per cent, two percentage points above its primary market stop rate of 15.40 per cent.

The 182-day stop rate was 21 basis points below its corresponding secondary market yield, while the 364-day stop rate was 19 basis points above its secondary-market equivalent.

These differences suggest that investors may also be weighing the relative returns available in the primary and secondary markets when making investment decisions.

For the Federal Government, the concentration of demand in the one-year instrument provides an opportunity to raise substantial funds without significantly increasing borrowing costs across the yield curve.

For investors, however, the continued preference for the 364-day bill reflects the attraction of securing a relatively higher return for a longer period, particularly when the additional yield comes with only a marginal difference from the shorter tenors.