Insurance Australia Group (IAG) has completed the bookbuild for its convertible preference share offer.

The insurer has allocated $350 million convertible preference shares on a firm basis to brokers and institutional investors, but the final offer size will depend on the number of applications it receives.

IAG CFO Nick Hawkins says he is pleased with the response from investors to the offer, which opened on March 27 and will close on April 19.

Convertible preference shares are fully paid, non-cumulative preference shares and their margin has been set at 4% per annum.

The shares will convert into ordinary IAG shares on 1 May 2019, unless converted or redeemed earlier.

IAG says the convertible preference share issue forms part of its “active approach to capital management”, and the shares will qualify as being eligible for inclusion as Tier 1 Capital under APRA’s current prudential standards.