IAG has priced its $350 million subordinated debt issue, paying investors interest quarterly at a floating rate equal to the three-month bank bill swap rate plus a margin of 2.1% a year.

The subordinated debt qualifies as Tier 2 capital under the Australian Prudential Regulation Authority’s capital adequacy framework for general insurers.

The subordinated medium-term notes will be issued on Thursday and are rated BBB by S&P Global.