DMO Rebuffs N763bn Investor Bids, Limits NTB Allotment to N269bn as One-Year Rate Inches to 15.90%

In a strategic bid to curb debt servicing costs and resist investor pressure for higher yields, the Debt Management Office (DMO) rejected approximately 74 per cent of total investor bids at the October 14 Nigerian Treasury Bills (NTBs) auction, allotting just N269.06 billion out of the N1.032 trillion subscribed.

The restricted allotment came despite total bids surpassing the Central Bank of Nigeria’s (CBN) N450 billion advertised offer by more than 2.29 times. Investors exhibited overwhelming appetite for the 364-day instrument, which cornered 95.15 per cent of all subscriptions with N982.21 billion in demand against an initial offer of N350 billion.

However, the debt office maintained a disciplined borrowing posture, allocating only N220 billion to the one-year paper. In doing so, the DMO allowed the 364-day stop rate to edge up by five basis points to 15.90 per cent from 15.85 per cent—marking its first upward tick since an aggressive downward slide began in August.

According to auction data published by the CBN and market commentary from the Financial Markets Dealers Association (FMDA), submitted bids for the one-year bill stretched as wide as 15.00 per cent to 18.18 per cent. By capping the stop rate at 15.90 per cent, the authorities left over N763 billion in bids unallotted, shutting out institutional investors seeking yields well above the clearing benchmark.

Across the shorter tenors, the DMO allotted N19.52 billion of the N19.91 billion bid for the 91-day paper at an unchanged stop rate of 15.50 per cent, while the 182-day tenor absorbed N29.54 billion out of N30.10 billion in bids at a steady 15.80 per cent.

Market analysts at FMDA noted that despite system liquidity expanding to N6.30 trillion following substantial Open Market Operations (OMO) repayments, the DMO opted for restrained sovereign borrowing to avoid validating aggressive secondary-market yield expectations, signalling a firm stance against elevated government borrowing costs.