CBN Offers N900bn Treasury Bills at First Q4 2026 Auction

The Central Bank of Nigeria (CBN), acting on behalf of the Debt Management Office (DMO), will offer N900 billion worth of Nigerian Treasury Bills (NTBs) at the first auction of the fourth quarter of 2026, with the one-year instrument accounting for more than three-quarters of the total offer.

According to the auction notice, the sale is scheduled for Wednesday, October 7, 2026, while settlement is expected on Thursday, October 8.

The offering comprises N100 billion in 91-day bills, N100 billion in 182-day bills and N700 billion in 364-day Treasury bills.

The 364-day instrument therefore represents approximately 77.8 per cent of the total amount on offer, while the 91-day and 182-day bills each account for about 11.1 per cent.

The CBN said the indicative NTB issuance calendar for the fourth quarter would be released in due course.

The quarterly calendar is expected to provide details of planned NTB offerings, maturities, auction dates and settlement dates for the period.

The October 7 auction comes as investors continue to show strong appetite for longer-dated Nigerian Treasury Bills, particularly the 364-day instrument, amid a sustained decline in fixed-income yields.

At the previous NTB auction on September 23, investors submitted N4.23 trillion in bids across the three tenors, with demand heavily concentrated on the one-year bill.

The 364-day instrument attracted N4.09 trillion in subscriptions, accounting for approximately 97 per cent of total demand at that auction.

The CBN subsequently allotted N497.59 billion across the three tenors, while the stop rate on the 364-day bill declined by 73 basis points to 15.89 per cent.

The 91-day and 182-day bills attracted weaker demand, with subscription levels of 0.55 times and 0.82 times their respective offer sizes. Their stop rates declined to 15.50 per cent and 15.80 per cent respectively.

The 364-day stop rate has now fallen by 146 basis points across four consecutive auctions from 16.84 per cent recorded on September 2.

It is also 181 basis points below the third-quarter peak of 17.70 per cent recorded on July 8.

The decline in Treasury bill yields has occurred against the backdrop of changing monetary policy conditions following the Monetary Policy Committee’s decision to cut the Monetary Policy Rate by 350 basis points to 23 per cent.

With the one-year NTB stop rate currently at 15.89 per cent, market participants will be watching the October auction for evidence of whether the downward trend in short-term government borrowing costs will continue into the fourth quarter.

The auction notice did not specify the stop rates, bid limits or submission deadline, meaning the final pricing will be determined by market demand and the outcome of the auction.

The latest auction also follows an active third quarter for the domestic Treasury bill market.

The DMO allotted approximately N8.14 trillion through eight NTB auctions during the third quarter, exceeding its N5.8 trillion target for the period by about 40.34 per cent.

The strong performance was largely driven by investor demand for longer-dated instruments, particularly the 364-day bill, as banks, institutional investors and other market participants sought relatively attractive fixed-income opportunities.

Liquidity conditions entering the October auction also appear supportive of demand for government securities.

Investors submitted N12.14 trillion in bids at the final two September Open Market Operations (OMO) auctions against N3.4 trillion offered by the CBN, reflecting substantial appetite for short-term government securities even as yields declined.

Banks also had more than N4.6 trillion placed at the CBN’s Standing Deposit Facility as of October 2, indicating significant liquidity remained within the banking system.

The N900 billion NTB offer therefore provides additional investment capacity for institutions seeking short-term government securities, with particular attention expected on the N700 billion one-year instrument.

The auction notice does not indicate whether the authorities will allot more than the advertised N700 billion on the 364-day tenor.

The amount of Treasury bills maturing around the October 7 auction was also not specified in the available notice, making it difficult to determine the immediate net liquidity impact of the transaction.

Market attention will consequently centre on the level of subscriptions, the eventual allotment and whether the 364-day stop rate falls below the current 15.89 per cent.

The outcome will provide an early indication of the direction of Treasury bill yields and investor appetite in Nigeria’s fixed-income market during the fourth quarter of 2026.