Fortescue Metals Group (ASX: FMG) announced on Thursday that it doubled its bond offerings to $2 billion from $1 billion. The amount raised will be used to pay for expansion plans.

The doubling of the bond offer is due to strong support from the international funding markets. FMG Chief Financial Officer Stephen Pearce disclosed that due to the extraordinary reception the bond offer received in the U.S. market, the offer was five times oversubscribed.

The firm expects settlement date of the senior unsecured notes to be on or about March 19, 2012, subject to customary closing conditions.

Fortescue aims to boost its current production of 155 million tonnes yearly and to purchase mining equipment. It would still come in two tranches.

The first would be $1 billion with a 6 per cent yearly interest and period of 5 year with a non-call period of 3 years. The second is for another $1 billion with a 6.875 per cent per annum interest rate and 10 years term with a non-call period of 5 years.

The firm said its $8.4-billion expansion cost is expected to be funded by a mix of bank or bond debt, cash on hand and cash flow from operations depending on several factors including the price of iron ore.

Fortescue is the third largest iron ore producer in Australia after Rio Tinto and BHP Billiton.

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