Spot Rate on Nigerian Treasury Bill With 1-Year Tenor Rises 5bps
The spot rate on Nigerian Treasury bills with a 364-day tenor rose by 5 basis points to 15.90%, according to auction results showing that the Central Bank of Nigeria (CBN) raised 26% of the total bids submitted by investors.
MarketForces Africa reported that on behalf of the monetary authority, the Debt Management Office (DMO) auctioned N450 billion worth of Nigerian Treasury bills in the primary market on Wednesday.
There were signs of investor apathy, reflected in underwhelming subscription levels compared with past records and market expectations.
Three offers were made to investors across standard tenors: 91-day, 182-day and 364-day Treasury bills. The auction attracted N1.032 trillion in total subscription from investors seeking risk-free positioning in the fixed-income naira asset.
However, across the tenors, N269 billion in Nigerian Treasury bills was allotted to investors, representing 26% of the aggregate subscription, as investors seek higher returns.
The breakdown revealed that more than 95% of the total amount submitted in bids was channelled into Nigerian Treasury bills with a one-year tenor.
The Central Bank sold N269 billion in Treasury bills across the standard tenors to investors at the auction, representing 26% of the total subscription.
Nigerian treasury bills with a 91-day maturity, worth N19.52 billion, were sold to investors at a spot rate of 15.50%, the same return as in the previous auction.
Treasury bills with 182 days to maturity, totalling N29.54 billion, were allotted at 15.80%, below the N19.51 billion subscription and the N50 billion offered.
Despite N982.21 billion in bids received for a N350 billion offer, the authority raised N220 billion from 364-day treasury bills at the auction, pushing the spot rate up by 5bps to 15.90%.
