American International Group Inc has received strong demand for the mega IPO of its Asian life insurance business, AIA Group Ltd, with the offer covered more than five times in the first week, sources with direct knowledge of the matter told Reuters.

AIG is aiming to raise up to $20.5 billion, including a rare upsize option, by listing AIA on the Hong Kong stock exchange. The offer was launched on Tuesday and the strong early demand is attributed to attractive pricing, with some fund managers describing the valuation as appealing, according to a term sheet obtained by Reuters earlier this

week.

AIG is raising funds to pay back some of the financial aid it received from the U.S. government during the financial crisis.

Sources also said that AIG is highly likely to exercise the upsize option given the robust demand for the offer. The sources were not authorised to speak to media about the IPO.

AIG is offering 5.9 billion shares in an indicative range of HK$18.38-19.68 each, to raise up to $14.96 billion under the basic offer, a term sheet obtained by Reuters earlier this week showed. An AIA spokeswoman declined to comment.