DMO sells N2.42tr T-bills in September as demand hits 386.74% oversubscription

The Debt Management Office sold Treasury Bills worth N2.42 trillion in September 2026, up 8.95 per cent from N2.22 trillion in August, as demand for Federal Government short-term debt remained strong.

Data from FMDQ Securities Exchange released at the weekend showed September sales valued at N2,417.48 billion rose by N198.55 billion from N2,218.93 billion in the preceding month. T-bills were oversubscribed by 386.74 per cent, meaning investor bids substantially exceeded the securities available for allocation.

The increase highlighted the continued importance of T-bills in the Federal Government’s domestic borrowing programme. The instruments provide short-term financing for the government while offering investors sovereign-backed securities.

One-year bills lead demand

T-bills are short-term debt instruments issued at a discount and redeemed at face value on maturity. They are offered in 91-day, 182-day and 364-day tenors. The DMO issues them through periodic auctions where investors submit bids, and the amount allotted depends on the auction outcome and government issuance decisions. Bids can be much higher than the amount eventually sold.

Investors including banks, asset managers, pension-related investment funds and other eligible participants use the instruments to invest funds over short periods. The September increase came as investors showed strong interest in T-bills, particularly the 364-day instrument, which attracted the bulk of subscriptions at individual auctions during the month.

Auction results

At the September 2 auction, investors submitted bids totalling about N3.35 trillion against an offer of N700 billion across the three tenors. The DMO allotted N865.71 billion, while the stop rate on the 364-day bill declined to 16.84 per cent from 17.15 per cent at the previous auction.

The pattern continued at the September 9 auction, when subscriptions reached approximately N2.64 trillion against N750 billion offered. The DMO allotted N1.05 trillion, while the stop rate on the one-year bill fell further to 16.62 per cent.

At the September 23 auction, demand rose to N4.23 trillion against an offer of N500 billion, while the DMO allotted N497.59 billion. The stop rate on the 364-day bill fell to 15.89 per cent after the CBN cut the Monetary Policy Rate by 350 basis points to 23 per cent from 26.5 per cent.

Liquidity and yields

The auction results showed strong demand persisted even as government short-term borrowing rates declined. The figures also highlighted investors preference for one-year T-bills over shorter tenors at the auctions.

Operators attributed the strong demand partly to improved liquidity in the financial system. The Financial Markets Dealers Association in its September 23 T-bills auction review said higher demand, improved system liquidity and the reduction in the CBN policy rate supported the decline in T-bills.

The association noted that total subscriptions had risen to N4.23 trillion from N2.64 trillion at the preceding auction, while the average secondary-market yield fell to 18.46 per cent on September 22 from 18.82 per cent on September 9.