Bid Rejections: Nigeria Allots 26% of Treasury Bill Demand as One-Year Rate Rises to 15.90%Bid Rejections: Nigeria Allots 26% of Treasury Bill Demand as One-Year Rate Rises to 15.90%
Key Highlights
- Nigeria's 14 October Treasury bill auction drew bids of KSh 100.87B ($776.52M), but the Debt Management Office allotted only KSh 26.30B ($202.45M), about 26.07% of the total.
- The 364-day stop rate rose 5 basis points to 15.90% from 15.85%, its first increase since August, while the 182-day and 91-day rates held at 15.80% and 15.50%.
- Kenya's latest auction cleared its one-year bill at 9.04% and its three-month bill at 8.75%, far below Nigeria's rates.
Nigeria's Debt Management Office (DMO) rejected about 74% of the bids at its 14 October Treasury bill auction, allotting KSh 26.30B ($202.45M) against bids of KSh 100.87B ($776.52M) and lifting the one-year rate to 15.90%.
The result matters for investors across Africa because it shows a government taking less money than the market offered rather than paying the higher rates bidders wanted. The 364-day stop rate rose 5 basis points from 15.85%, its first increase since August, according to Nairametrics analysis of Central Bank of Nigeria (CBN) results.
How the auction split by tenor
The CBN offered ₦450B (KSh 44.00B, $338.60M) across three tenors on behalf of the government, half the ₦900B (KSh 87.98B, $677.20M) offered on 7 October. Bids were 2.29 times the offer, up from 1.97 times a week earlier. Allotments were about 40% below the advertised offer.
The one-year bill took almost all of the demand. Bidders offered KSh 96.00B ($739.00M) against an offer of KSh 34.22B ($263.20M), and the DMO allotted KSh 21.50B ($165.50M) at 15.90%. Bids ranged from 15.00% to 18.18%, so the stop rate was 228 basis points below the highest bid.
Demand for shorter bills was weak. The 182-day bill drew bids of KSh 2.94B ($22.60M) against an offer of KSh 4.89B ($37.60M) and was allotted at an unchanged 15.80%. The 91-day bill drew KSh 1.95B ($14.90M) against the same offer and was allotted at an unchanged 15.50%.
What the rejections signal
The auction results did not explain why individual bids were rejected, according to the report. Analysts at FMDA read the restricted one-year allotment as an effort to resist upward pressure on borrowing rates, and said the DMO moderated borrowing without accepting substantially higher rates.
The wide bid range reflects a gap between the rates investors wanted and the rates the government was willing to accept, with market data published by FMDQ showing secondary-market yields near 17.86%.
Total subscriptions fell about 42% between 7 October and 14 October. Allotments still exceeded the KSh 7.90B ($6.10M) of bills maturing, a net increase of about KSh 18.40B ($14.20M) in outstanding face value.
How Kenya compares
As Mwenendo earlier reported, Kenya's bills drew KSh 68.50B in bids with the three-month rate at 8.75% and the one-year rate at 9.04%. Nigeria pays roughly six percentage points more on a one-year bill, a gap that reflects higher inflation and a different monetary stance.
Mwenendo earlier reported that Nigeria's inflation slowed to 14.63% in September, so a one-year bill at 15.90% still offers a small positive real return. Whether the DMO keeps rationing one-year supply will show at the next auction.
In Summary
- Who ran the auction?
- The Central Bank of Nigeria for the Federal Government, with the DMO deciding allotments.
- What happened?
- About 74% of bids were rejected and the 364-day stop rate rose to 15.90% from 15.85%.
- When was the auction?
- 14 October 2026.
- Where is the market?
- Nigeria's primary Treasury bill market.
- Why does it matter?
- The government took less than investors offered rather than pay higher rates.
- How does Kenya compare?
- Kenya's one-year bill cleared at 9.04% and its three-month bill at 8.75%.