CBN’s N132.56 billion T-bills auction records oversubscription by 327% 

The Treasury Bills Auction of the Central Bank of Nigeria (CBN) held last Wednesday was oversubscribed. The apex bank recorded N433.06 billion during the auction. T-bills worth N132.56 billion was provided across the 91-day, 182-day and 364-day tenors at the primary auction.

The Central Bank had offered N28.02 billion for the 91-day tenor and recorded a total subscription of N72.44 billion, making it an oversubscription of N44.42 billion. The 182-day tenor did great also as the N10.62 billion offered was over-subscribed by N39.06 billion, receiving a total subscription of N49.68 billion.

Meanwhile, the highest subscription among the treasury bills was the 364-day tenor which experienced a total subscription of N433.50 billion from an offering of N93.92 billion.

The treasury bills were auctioned in a Dutch auction, which is a public offering auction structure, where the price of the offering is set after taking in all bids to determine the highest price at which the total offering can be sold. Investors place a bid for the amount they are willing to buy in terms of quantity and price.

The following were reportedly the successful bid rates, with 90day tenor doing 9.2500 and 9.4999 for the 91-day tenor; 10.3000 and 10.4500 for the 182-day tenor; 10.5000 and 11.5000 for the 364-day tenor. The Central bank’s marginal rates stood at 9.4999, 10.45 and 11.5 for the 91-day, 182-day and 364-day tenors, while the true yield stood at 9.7304, 11.0244 and 12.9897.

However, the Central Bank reserved the right to reject bids and the allotment letters and payment for successful bids were reportedly issued last Thursday. The Central Bank of Nigeria had processed all money market dealers’ bids through the CBN s4 web interface as at 11 am on Wednesday, October 30.

Recap: The last Central bank T-bills auctions in September also recorded over-subscription, with N3 billion for the 91-day tenor which recorded a total subscription of N4.45 billion making an oversubscription of N1.45 billion. The 182-day tenor performed well also as the N8.38 billion offered was over-subscribed by N3.97 billion, receiving a total subscription of N12.36 billion, while the highest subscription among the Treasury Bills was the 364-day tenor which reportedly experienced a total subscription of N359.96 billion.