Israel's Mizrahi-Tefahot Bank said on Wednesday it expects to raise 1.2 billion shekels ($344.9 million) in a bond offering to institutional investors and the public.

Mizrahi-Tefahot, Israel's largest mortgage lender, said it is offering a new series of bonds with a 5.5 year maturity and a yield of 2.77 percent.

Demand at the institutional stage reached 3 billion shekels from dozens of groups, and the public phase will be on Thursday, Israel's fourth-largest bank said, adding that the bonds were rated "AA+."

It will be Mizrahi-Tefahot's second bond offering this year, bringing the total to 2.8 billion shekels.