IAG has more than doubled the size of its New Zealand bond offering, due to strong demand.

The insurer will issue $NZ325 million ($247 million) of unsecured subordinated bonds, after saying earlier this month that it would offer $NZ150 million ($114 million) in bonds with the option of taking oversubscriptions for another $NZ100 million ($76 million).

The bonds will pay a minimum annual interest rate of 7.5% until 15 December 2016, based on the higher of 7.5% or a margin of 3.78% per annum plus the benchmark rate on December 13 this year. They mature in 2036.