Short-term maturities struggle amid weak demand as investors chase higher yields on long-tenor T-Bills
The Debt Management Office (DMO) has successfully concluded its Nigerian Treasury Bills (NT-Bills) auction for December 3, 2025, raising a total of N709.621 billion across the three maturities on offer, with the 364-day bill emerging as the clear favourite among investors.
The auction, held on Wednesday, featured a combined offer of N700 billion, divided into N100 billion for the 91-day paper, N150 billion for the 182-day tenor, and N450 billion for the 364-day bill.
However, demand was sharply uneven across the maturities.
Both the 91-day and 182-day instruments were undersubscribed, attracting total bids of N44.17 billion and N33.38 billion respectively. The DMO allotted N42.80 billion for the 91-day and N30.36 billion for the 182-day paper.
364-Day Bill Drives Auction Performance
In contrast, sentiment was overwhelmingly strong for the one-year tenor.
The 364-day bill drew a massive N697.29 billion in subscriptions,155% of the amount offered, reinforcing investor preference for longer-term, higher-yield instruments.
To compensate for the weak interest in shorter tenors, the DMO allotted N636.46 billion to the 364-day maturity, accounting for nearly 90% of the total auction proceeds.
Auction Breakdown
Total Allotment (All Tenors): N709,621,595,000
364-Day:
- Offer: N450,000,000,000
- Subscription: N697,290,308,000 (155% of offer)
- Allotment: N636,460,307,000 (≈91.3% of bids)
- Stop Rate: 17.50% (up from 16.04%)
91-Day:
- Offer: N100,000,000,000
- Subscription: N44,172,314,000 (44.2% of offer)
- Allotment: N42,804,311,000
- Stop Rate: 15.30% (unchanged)
182-Day:
- Offer: N150,000,000,000
- Subscription: N33,376,977,000 (22.3% of offer)
- Allotment: N30,356,977,000
- Stop Rate: 15.50% (unchanged)
Why Investors Rushed to the 364-Day Paper
The one-year tenor posted the most notable price movement in this round, with the stop rate rising sharply to 17.50%, up 1.46 percentage points from the previous auction.
According to Ayodeji Ebo, CEO of Optimus by Afrinvest, the effective yield on the paper stands at roughly 21.21%, positioning it as one of the most attractive risk-free instruments in today’s fixed-income market.
Ebo noted via his official X handle that even after factoring in the mandatory 10% withholding tax, the net yield still sits close to 19%, giving investors a rare opportunity to lock in elevated returns as the year winds down.
Meanwhile, the shorter tenors, 91-day and 182-day, cleared at unchanged stop rates of 15.30% and 15.50%, reflecting more tempered investor appetite.
Portfolio Strategy Context
For fixed-income investors prioritising high yields and longer-term certainty, the 364-day T-Bill stands out with its combination of:
- strong oversubscription,
- large allotment space, and
- significantly higher effective returns.
On the other hand, those seeking liquidity or reduced duration risk may prefer the 91-day or 182-day maturities, though the yields remain comparatively lower.
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