CBN Cuts Treasury Bill Yields As Investors Pour In Cash


Nigeria lowered the yields it offered at a treasury bill auction on Wednesday to raise 130 billion naira ($425.3 million) after investors submitted bids four times in excess of the amount it wanted to sell, traders said on Thursday.

The Debt Management Office (DMO) sold 129.77 billion naira in 91-day, 182-day and 364-day bills at the auction but received bids totalling 526.36 billion naira.

Traders said the DMO sold the one-year paper at 15.72 percent to fetch 106 billion naira, lower than 17 percent it paid at the last auction. It also reduced the rate it paid for the 182-day bill to 15.49 percent.

Investors bid as much as 18 percent for one-year debt and as low as the 13.25 percent it paid for the three-month note.

“Investors want to lock in yields given that rates are going down,” one trader said, adding that the DMO was reducing cost to mirror the falling inflation rate.

The DMO has said it wanted to lower how much it pays to issue bonds at home and switch to offshore debt to cut its funding costs.

The debt office is planning a series of eurobonds, part of which it intends to use to repay some of its local treasury bill holding already worth 2.7 trillion naira ($8.8 bln).

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