The Debt Management Office (DMO) has rejected approximately 74% of N1.032 trillion total subscriptions for the October 14 Nigerian Treasury Bills (NTBs) auctions and accepted only N269.06 billion, representing about 26.07% of the bids received by it on the offer.
Available data on NTBs auction results from the Central Bank of Nigeria (CBN), which conducted the auction on behalf of the Federal Government, and analysis by the Financial Markets Dealers Association (FMDA), showed that for the 364-day treasury bill, DMO allotted N220 billion of the N982.21 billion subscribed, as the stop rate surged by five basis points to 15.90% from 15.85%, its first increase since August.
In the October NTBs’ auction, the apex bank offered N450 billion across three tenors, compared with the N900 billion it offered at the October 7 auction, while total subscriptions for the October 14 auction reached N1.032 trillion, allotments stood at N269.06 billion, approximately 40% below the advertised offer.
According to the released report by the CBN, demand at the auction was concentrated in the 364-day Treasury bill, which attracted 95.15% of total subscriptions.
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The data showed that investors submitted N982.21 billion in bids for the one-year debt instrument compared to the advertised offer of N350 billion. However, the DMO allotted only N220 billion, representing approximately 22.4% of subscriptions and 62.9% of the amount offered.
While the 364-day bill attracted subscriptions equivalent to 2.81 times its N350 billion offer, with the stop rate increasing to 15.90%, the 182-day bill received N30.10 billion in bids against N50 billion offered, with N29.54 billion allotted at an unchanged 15.80%, and the 91-day bill attracted N19.91 billion against N50 billion offered, with N19.52 billion allotted at an unchanged 15.50%.
The CBN report on the NTB auction reflected that the total subscriptions were 2.29 times the N450 billion offer, compared with 1.97 times at the October 7 auction with approximately N763 billion in bids was not allotted.
The bids for the 364-day bill ranged from 15.00% to 18.18%, placing the accepted stop rate 228 basis points below the highest bid
Commenting on the auction’s report, the FMDA described the restricted allotment by the DMO as a strategy to resist upward pressure on borrowing rates even when the Office did not give reasons why individual bids were rejected.
