Primary Market Watch: Treasury Bills

Post Auction Analysis – 15 July 2026 

The Central Bank of Nigeria (CBN), on behalf of the Federal Government, conducted its Treasury bills auction on 15 July 2026, the second in the month of July, offering N600 billion across the three standard maturities. The auction recorded exceptionally strong demand for the 364-day Treasury bill, with investor appetite reaching its highest level since March 2026. Reflecting the robust demand, the DMO allotted N1.19 trillion, almost 99% above the initial offer size. 

Market Backdrop 

Ahead of the auction, secondary market Treasury bill yields remained elevated, with the average benchmark yield rising to 18.66% from 18.42% at the previous auction. While yields at the short end moderated marginally, the 9-month and 12-month benchmark yields increased to 20.25% and 20.65%, respectively, highlighting sustained investor preference for higher-yielding longer-dated instruments. 

Source: CBN, FMDA 

Auction Outcome 

Investor demand remained overwhelmingly concentrated on the 364-day bill, which attracted subscriptions of N2.87 trillion against N400 billion offered, translating to a bid-to-cover ratio of 7.18x. This represents the strongest demand for the one-year Treasury bill since March 2026 and compares with 3.71x recorded at the previous auction (8/7/2026). The DMO allotted N1.06 trillion for the tenor, significantly above the initial offer amount. 

Demand for the shorter tenors remained relatively weak. The 91-day bill recorded subscriptions of N94.96 billion against N100 billion offered, resulting in a bid-to-cover ratio of 0.95x, while the 182-day bill attracted N68.03 billion in subscriptions, translating to a bid-to-cover ratio of 0.68x. 

Despite the exceptionally strong demand, the 364-day stop rate declined marginally to 17.66% from 17.70% at the previous auction, suggesting that increased investor participation enabled the DMO to fund at a slightly lower cost. The stop rates for the 91-day and 182-day bills remained unchanged at 16.30% and 16.50%, respectively. 

FMDA View 

• Investor preference remains firmly skewed towards the 364-day Treasury bill, as market participants continue to lock in attractive yields at the longer end of the curve.  

• The 7.18x bid-to-cover ratio, the highest since March 2026, underscores the depth of demand for one-year government securities despite the reduction in the auction size.  

• The marginal decline in the 364-day stop rate, despite record demand, suggests improving investor confidence and indicates that the DMO was able to secure funding at a slightly lower cost.  

• The continued weakness in demand for the 91-day and 182-day bills highlights investors’ preference to extend duration amid expectations that yields will remain relatively attractive.  

• The substantial over-allotment by the DMO reinforces its willingness to accommodate strong market demand while meeting the Federal Government’s short-term financing requirements.