CBN secures N1.47 trillion in subs for 364-day Treasury Bills @22.6% stop rate 

On January 6, the CBN announced plans to issue Treasury Bills with tenors of 91, 182, and 364 days, set for auction on January 8, 2025.

They offered N50 billion for the 91-day bills, N80 billion for the 182-day bills, and N385 billion for the 364-day bills.

In light of this, the subscription results revealed N22.94 billion for the 91-day bills, N20.81 billion for the 182-day bills, and a staggering N1.47 trillion for the 364-day bills. 

Bids ranged from 17-28% for the 91-day bill (stop-out rate: 18%), 18-20% for the 182-day bill (stop-out rate: 18.5%), and 22-28% for the 364-day bill (stop-out rate: 22.62%). 

Before the auction, it was announced that investors could acquire each bond unit for N1,000, with a minimum subscription of N5,000 in increments of N1,000, up to a maximum of N50 million.

Maturity dates for the Treasury Bills were set as follows: April 10, 2025, for the 91-day bills, July 10, 2025, for the 182-day bills, and January 8, 2026, for the 364-day bills. 

The allotment date for all three Treasury Bills is January 9, 2024, with allocations of N21.30 billion for the 91-day bills, N20.48 billion for the 182-day bills, and N473.20 billion for the 364-day bills.

On January 10, 2024, the Central Bank of Nigeria raised N149.4 billion through Treasury Bills. The 91-day bills accounted for N2.78 billion, the 182-day bills for N94.33 billion, and the 364-day bills for N52.29 billion.

This heightened interest in longer-term securities is happening against the backdrop of rising interest rates.

In November, the Central Bank of Nigeria raised its Monetary Policy Rate by 25 basis points from 27.25 percent to 27.50 percent as part of efforts to combat inflation, which stood at 33.88 percent in the month.

Prior to that, the Monetary Policy Committee implemented six consecutive interest rate hikes to address inflationary pressures and stabilize the economy.

This has driven investors toward high-yield government instruments like Treasury Bills as a hedge against inflation.