The offer had been touted as for $300 million of $1 debt securities and up to $100 million of oversubscriptions. Brent Sheather, of Private Asset Management, said he was not surprised the bank had managed to get the full $400 million.

The 6.65% interest rate applies until a potential call date on June 15, 2019. Interest will be paid quarterly, in arrears.

Sheather said: “Banks are doing it all over the world, there’s huge demand for subordinated debt.”

The FMA had warned that the offer was complex and would not suit many investors.

“People have short memories,” Sheather said. “They look at the 6.6% and compared it to 4.5% or 5% and think it’s good value and good for it. Whether that’s sensible or not, I don’t know.”

He said if investors were going to have a portfolio of equities, it was incumbent on advisers to ensure that their portfolio of bonds was low risk.  “These might have a place in a portfolio that was very heavily into bonds but it’s difficult to see much of a place in a portfolio with lots of equities. It’s really doubling up.”

He said it had been shown that the Government was ready to guarantee bank deposits, but not subordinated bank debt.  “I doubt many purchases would have thought it through that way. Your 10-year Westpac bond yielding 5% has a guarantee implied but the subordinated debt at 6.6$ doesn’t. If people were confronted with that information, they might not think 6.6% was such a good option.”