FG Treasury Bills Oversubscribed by N3.1 Trillion

The Federal Government of Nigeria, through the Central Bank of Nigeria (CBN), has released the results of its Treasury Bills (T-Bills) auction conducted on February 5, 2025. The auction, which featured three tenors—91-day, 182-day, and 364-day—witnessed significant investor interest, particularly in the one-year instrument, where subscriptions exceeded N3.1 trillion.

In the 91-day Treasury Bills category, N50 billion was offered, but subscriptions amounted to N42.37 billion, with an allotment of N31.94 billion. The bid range was between 17.00% and 22.00%, and the stop rate was set at 18%, with a maturity date of May 8, 2025.

For the 182-day Treasury Bills, the government offered N120 billion; however, the subscription level reached only N19.52 billion, and N18.69 billion was allotted. The bid range varied from 17.50% to 22.00%, while the stop rate was 18.5%. These bills will mature on August 7, 2025.

The 364-day Treasury Bills attracted the highest interest, with an initial offer of N500 billion, but subscriptions soared to N3.16 trillion. The total allotment for this category stood at N619.36 billion. Investors submitted bids ranging from 19.89% to 24.30%, with a stop rate of 20% and a maturity date of February 5, 2026.

The total subscription across all tenors reached N3.22 trillion, while the total allotment was N670 billion. The auction results highlight a strong preference among investors for longer-term securities, particularly the 364-day bills, which offer higher yields.

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Investor interest in short-term tenors was comparatively lower, with the 91-day and 182-day bills recording subscription shortfalls. The competitive stop rates of 18%, 18.5%, and 20% indicate a tight liquidity environment, with investors demanding higher returns.

The CBN’s decision to allocate N619.36 billion to the one-year bills reflects a strategic move to attract liquidity for government financing while maintaining balance in the market. The strong demand for longer-tenured instruments suggests that investors are looking to secure higher yields amid expectations of future monetary policy adjustments.

With inflation concerns and tight monetary conditions persisting, the appeal of risk-free government securities remains strong. The government appears willing to offer higher returns to attract investors, particularly for longer-term instruments, a trend that may influence future bond yields and liquidity in the fixed-income market. Institutional investors are expected to continue favoring Treasury Bills as a hedge against inflation and a stable investment option amid Nigeria’s economic uncertainties.

The CBN previously issued N2.2 trillion in maturing Nigerian Treasury Bills (NTBs) in the fourth quarter of 2024 as part of a broader strategy to manage liquidity, support the financial market, and sustain economic stability.