CBN to Auction N570 billion Worth of Nigerian Treasury Bills
The Central Bank of Nigeria (CBN) will begin its final quarter treasury bills auction on Wednesday, details from the auction calendar revealed.
The CBN will open N570 billion worth of Treasury bills for subscription to investors across standard maturities. The first auction offers in the fourth quarter are expected to be oversubscribed as demand for naira assets continues to court investors’ attention.
The huge subscription level and rejection provide signals into market expectations on Wednesday, fixed income market analysts told MarketForces Africa in a phone call.
The total offer size of ₦570 billion that will be floated is split across three maturities 91 days, 182 days and 364 days to maturities.
The breakdown showed that the CBN will open N100 billion worth of Nigerian Treasury bills with 91 days to expiration for subscription. At the belly, the CBN will invite investors to subscribe to its 182-daymaturity bill worth N120 billion.
Opportunity will also be given to investors to subscribe to Nigerian Treasury bills with 364 days maturity worth N350 billion.
Demand is expected to outpace the total amount in offer at the main auction, but analysts are anticipating reduced spot rates across maturity – to reflect the recent monetary easing.
Detail from the last auction in Sept revealed that the CBN floated N290 billion in Treasury bills, and subscription came at N1.479 trillion. Total allotment to investors settled at N345.1 billion with broad-based spot rates cuts.
Nigerian Treasury bills with 91 days maturity was priced at 15%, down from 15.32%, and 182 days bills was sold at 15.30% discount rate, down from 15.50% while one year bills was 16.78%, down from 17.69%.
The CBN’s return to the OMO market after a month’s hiatus triggered a notable compression in stop rates, according to AAG Capital Limited. With yields already trending lower in the secondary market, the investment firm anticipates the midweek treasury bills auction to close with further moderation in stop rates, particularly on the 1Y bill.
DMO Allots Nigerian Bonds to Investors at 16.20% Marginal Rate
