Nigeria’s Debt Management Office (DMO) successfully raised N709.621 billion at its primary auction of Treasury Bills held on December 3, 2025, exceeding the initial offer of N700 billion as investors piled heavily into the one-year paper.
The auction featured the usual three maturities: N100 billion of 91-day bills, N150 billion of 182-day bills, and N450 billion of 364-day bills. Demand was sharply skewed toward the longest tenor, reflecting investors’ preference for locking in higher yields amid persistent inflation and monetary tightening expectations.
The 364-day bill attracted bids totaling N697.29 billion — more than 155% of the amount offered — forcing the DMO to allot N636.46 billion, or nearly 90% of the entire auction proceeds. In contrast, the shorter tenors were heavily undersubscribed. Subscriptions for the 91-day and 182-day papers stood at just N44.17 billion and N33.38 billion respectively, resulting in allotments of N42.80 billion and N30.36 billion.
Key Auction Outcomes
– **364-day bill**: Stop rate rose to 17.50% (from 16.04% at the November auction), implying a gross yield of approximately 21.21% according to market calculations.
– **91-day bill**: Stop rate unchanged at 15.30%
– **182-day bill**: Stop rate unchanged at 15.50%
The 146-basis-point increase in the one-year stop rate marks the sharpest single-auction jump in recent months and pushes the effective after-tax yield close to 19% even after the statutory 10% withholding tax.
Market analysts described the outcome as a clear signal that fixed-income investors are positioning defensively ahead of anticipated further policy rate hikes by the Central Bank of Nigeria.
“The oversubscription of the 364-day paper and the significant yield increase confirm that investors are willing to extend duration to capture elevated risk-free returns before the interest-rate cycle potentially peaks,” said Dr. Ayodeji Ebo, Managing Director at Optimus by Afrinvest. “At current levels, the one-year T-bill remains one of the most compelling opportunities in the fixed-income space.”
The muted interest in the 91-day and 182-day tenors suggests many liquidity-sensitive investors — including money market funds and corporate treasuries — are staying on the sidelines or rolling over existing short-dated holdings rather than committing fresh funds at relatively lower yields.
With Nigeria’s headline inflation still above 30% and the Monetary Policy Committee widely expected to maintain a hawkish stance, the latest T-bills auction reinforces the ongoing yield re-pricing across the naira fixed-income curve. Investors now await the next primary market auction and any signals from the CBN on the trajectory of the Monetary Policy Rate in early 2026.
