Nigeria T-Bill Yields Decline to 14-Month Low on Subscription

Nigerian Treasury yields declined to the lowest in 14 months after investors bid for more than three times the total 127.97 billion naira ($814 million) sold.

The Central Bank of Nigeria sold 32.488 billion naira of 91-day bills at a yield of 11.95 percent, the Abuja-based central bank said today in an e-mailed statement, the lowest since the Sept. 29, 2011 sale. The bank also sold 24.155 billion naira of 182-day debt at 11.98 percent and 71.326 billion naira of 364-day bills at 11.98 percent. Bids totaled 391.7 billion naira, the highest since Sept. 20.

“Local and offshore investors are attracted to the bills by high yields that are equally positive relative to the inflation rate,” Tunde Ladipo, chief executive officer of Lagos-based Valuechain Investment Ltd., said by phone.

The regulator held its benchmark interest rate at a record high of 12 percent to check inflation and stabilize the local currency, it said Nov. 20. Inflation, which accelerated for the first time in four months to 11.7 percent in October on widespread flooding of farms, is still above the bank’s target of less than 10 percent.

Central bank Governor Lamido Sanusi lifted a requirement last year for foreign investors to hold local-currency debt for at least one year to attract capital. The country’s financial system has speculative investments valued at about $10 billion, Governor Lamido Sanusi said at a conference yesterday.

Barclays will add Nigeria to its local-currency government bond index in March, it said Nov. 6. JPMorgan Chase & Co. added the West African nation’s bonds to its benchmark emerging-market index series in October. The yield on 16.39 percent naira debt due January 2022 fell eight basis points to 12.10 percent, according to yesterday’s prices compiled on the Financial Markets Dealers Association website.

Nigeria also sold 26.447 billion naira of 91-day securities at a yield of 11.97 percent, 23.152 billion naira of 182-day debt at 11.98 percent and 42.5 billion naira of 364-day bills at a 11.98 percent yield to non-competitive bidders.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Dulue Mbachu at dmbachu@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.