FG Treasury Bills attract over N3.1 trillion in subscriptions in February auction 

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 a strong investor appetite, particularly for the one-year instrument, which saw subscriptions surpassing N3.1 trillion.

Auction Breakdown and Results 

91-Day Treasury Bills

• Offer: N50 billion
• Subscription: N42.37 billion
• Allotment: N31.94 billion
• Range of bids: 17.00% – 22.00%
• Stop rate: 18%
• Maturity date: May 8, 2025

182-Day Treasury Bills 

• Offer: N120 billion
• Subscription: N19.52 billion
• Allotment: N18.69 billion
• Range of bids: 17.50% – 22.00%
• Stop rate: 18.5%
• Maturity date: August 7, 2025

364-Day Treasury Bills 

• Offer: N500 billion
• Subscription: N3.16 trillion
• Allotment: N619.36 billion
• Range of bids: 19.89% – 24.30%
• Stop rate: 20%
• Maturity date: February 5, 2026

Total subscription is N3,218,032,117,000. The total allotment is N670,000,000,000.

Key Takeaways from the Auction 

1. Surging Demand for 364-Day Bills: Investors showed overwhelming interest in the one-year instrument, with subscriptions exceeding N3.1 trillion against the N500 billion offered. This reflects the preference for higher-yielding, longer-tenured securities amidst current market conditions.
2. Lower Subscription for Shorter Tenors: The 91-day and 182-day bills saw lower-than-offered subscription levels, with the 182-day instrument recording a significant shortfall, attracting just N19.52 billion out of the N120 billion offered.
3. Competitive Rates: The stop rates for the three tenors settled at 18%, 18.5%, and 20%, respectively, reflecting the tight liquidity conditions and investor demand for higher returns.
4. Government’s Liquidity Management Strategy: The CBN’s allocation of N619.36 billion for the 364-day bills indicates a strategic effort to attract liquidity for government financing while balancing market interest rates.

Market Implications 

• The results of this auction suggest that investors are leaning toward longer-tenured instruments to lock in higher yields, given expectations of future monetary policy adjustments.
• With inflation concerns and tight monetary conditions persisting, the demand for risk-free government securities remains robust.
• Additionally, the stop rates indicate that the government is willing to pay a premium to attract investors, particularly for the 364-day bills. This trend could influence future bond yields and impact overall liquidity in the fixed-income market.
• Investors, particularly institutional players, may continue to favor Treasury Bills as a hedge against inflation and a relatively risk-free investment option in Nigeria’s volatile economic landscape.

More insights 

The CBN issued N2.2 trillion worth of maturing Nigerian Treasury Bills (NTBs) in the fourth quarter of 2024.

The re-issuance program is part of the government’s ongoing efforts to manage liquidity, sustain the financial market, and maintain economic stability.