CBN Offers ₦450bn in Treasury Bills as Nigeria Opens Second Q4 Auction
The CBN offers ₦450bn in Treasury bills at Nigeria’s second Q4 auction
The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), is offering ₦450 billion in Nigerian Treasury Bills (NTBs) at the primary market auction scheduled for Wednesday, October 14, 2026. The offer marks the second Treasury bill auction of the fourth quarter, with the one-year instrument accounting for ₦350 billion, or 77.78% of the total.
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The auction comprises ₦50 billion each in 91-day and 182-day bills, alongside ₦350 billion in 364-day bills. Settlement is scheduled for Thursday, October 15, according to the auction circular.
The sale comes as the Federal Government continues its domestic debt issuance programme for the final quarter of 2026, with investors monitoring yields, market liquidity and the government's borrowing requirements.
One-Year Treasury Bills Dominate the Offer
The allocation at the October 14 auction maintains the government's preference for longer-dated Treasury bills.
The 364-day instrument accounts for more than three-quarters of the ₦450 billion offer, while the 91-day and 182-day bills each represent 11.11%.
The allocation reflects the structure of the broader fourth-quarter issuance programme, which places substantial emphasis on one-year securities.
Investors use Treasury bills to invest funds for specified periods while earning returns determined through the auction process. The instruments also provide the government with a means of raising short-term financing and refinancing maturing obligations.
The auction results will determine the amount ultimately allotted to investors and the applicable stop rates across the three tenors.
Treasury Bill Offer Exceeds Upcoming Maturities
The ₦450 billion offer is substantially higher than the ₦80.84 billion in Treasury bills scheduled to mature at settlement on October 15.
If the DMO allots the full advertised amount, the difference between the new issuance and maturing bills would amount to approximately ₦369.16 billion. This would represent a net withdrawal of liquidity from the financial system through the transaction, before accounting for other market operations.
However, the final effect will depend on the actual allotment. The DMO can allocate an amount that differs from the initial offer, as previous auctions have demonstrated.
At the first Treasury bill auction of the fourth quarter on October 7, the DMO allotted ₦968.47 billion against an advertised offer of ₦900 billion. With ₦705.73 billion in bills maturing at settlement, the transaction implied a net liquidity withdrawal of ₦262.74 billion.
The October 14 auction will provide another indication of the government's appetite for domestic financing and the capacity of investors to absorb new securities.
Investors Show Strong Preference for One-Year Bills
Demand for the 364-day Treasury bill remained strong at the October 7 auction, when investors submitted ₦1.683 trillion in bids against an advertised offer of ₦700 billion.
The DMO allotted ₦885.00 billion to the one-year instrument, while its stop rate declined to 15.85% from 15.89% at the preceding auction.
The shorter-dated instruments attracted comparatively weaker demand. The 91-day bill received subscriptions of ₦39.42 billion against an offer of ₦100 billion, while the 182-day bill attracted ₦46.87 billion against the same offer amount.
The results highlight investors' preference for the one-year instrument despite its longer holding period. The yield available, expectations about future interest rates and the need to secure returns on naira-denominated investments can all influence demand across different maturities.
For the October 14 auction, investors will watch whether demand for the 364-day bill remains strong and whether its stop rate continues to decline or reverses direction.
Nigeria Plans ₦5.40tn in Treasury Bill Offers for Q4
The Federal Government plans to offer ₦5.40 trillion in Treasury bills between October and December 2026, according to the fourth-quarter issuance calendar.
The programme allocates ₦4.10 trillion to 364-day bills, representing 75.93% of planned issuance. The 91-day and 182-day instruments each account for ₦650 billion.
The calendar schedules three auctions in October: ₦900 billion on October 7, ₦450 billion on October 14 and ₦800 billion on October 28. Total planned offers for the month amount to ₦2.15 trillion.
The programme provides for approximately ₦5.429 trillion in maturities during the quarter. Consequently, the planned issuance is slightly below the amount scheduled to mature, suggesting that the Treasury bill programme is broadly structured around refinancing existing obligations rather than substantially increasing net borrowing through this instrument.
However, actual issuance may differ from the calendar because final allotments depend on auction outcomes and funding decisions.
The Treasury bill programme also represents only one part of the government's domestic financing activities. Federal Government bonds and other financing instruments contribute to the broader borrowing position.
Treasury Bill Yields Remain in Focus
The latest auction comes after the CBN's September decision to reduce the Monetary Policy Rate by 350 basis points, from 26.5% to 23%.
Treasury bill yields do not automatically move in line with the policy rate. Auction outcomes also reflect market liquidity, investor demand, inflation expectations and the volume of government securities available.
At the October 7 auction, the 364-day stop rate fell to 15.85%, extending a downward trend from its third-quarter peak of 17.70%, recorded on July 8.
The October 14 results will show whether this movement continues into the fourth quarter. Strong demand could support lower stop rates, while changes in liquidity conditions or investor expectations could put upward pressure on yields.
For investors, the auction offers an opportunity to assess returns available on short-term government securities. For the government, the results will help determine the cost of raising funds through Treasury bills.
Auction Results to Shape the Next Market Outlook
The October 14 sale is an important test of demand for government securities at the start of the fourth quarter. With ₦350 billion allocated to one-year bills, the distribution of subscriptions and final allotments will be central to understanding investor appetite.
The results will also provide a clearer picture of the direction of Treasury bill yields following the recent decline in the one-year stop rate.
As the government continues to refinance maturing obligations, the balance between auction demand, borrowing costs and financial-system liquidity will remain important to Nigeria's fixed-income market through the final months of 2026.
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