Progress Software talks $350 million six-year convertible notes at 3.5%-4%, up 25%-30%

By Abigail W. Adams

Portland, Me., Feb. 26 – Progress Software Corp. plans to price $350 million of six-year convertible notes after the market close on Tuesday with price talk for a coupon of 3.5% to 4% and an initial conversion premium of 25% to 30%, according to a market source.

J.P. Morgan Securities LLC (lead left), BofA Securities Inc., Citigroup Global Markets Inc. and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $52.5 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They are putable upon a fundamental change.

There is dividend protection above 17.5 cents a quarter.

In connection with the offering, the company will enter into capped call transactions.

Proceeds will be used to cover the cost of the call spread, to repay outstanding amounts under its term loan, to repurchase up to $25 million of common stock in privately negotiated transactions with the initial purchasers of the notes and for general corporate purposes.

Progress Software is a Burlington, Mass.-based enterprise software company.

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