Boat builder Austal says it has raised $US225 million in a bond issue to fund the expansion of its US manufacturing facility in Mobile Alabama.

The expansion is to support the production of Austal's Independence Class Littoral Combat Ships under a 10-ship block buy contract for the US Navy that was awarded in December last year.

Austal chief executive Andrew Bellamy said the bond issue would fully fund Austal's US manufacturing facility expansion via a very inexpensive and long term source of funds.