Tetra Tech talks $500 million five-year convertible notes to yield 2.125%-2.625%, up 22.5%-27.5%

By Abigail W. Adams

Portland, Me., Aug. 17 – Tetra Tech Inc. plans to price $500 million of five-year convertible notes after the market close on Thursday with price talk for a coupon of 2.125% to 2.625% and an initial conversion premium of 22.5% to 27.5%.

BofA Securities Inc. and Wells Fargo Securities LLC are bookrunners for the Rule 144A offering, which carries a greenshoe of $75 million.

The notes will be settled in cash up to the principal amount with any remaining amounts to be settled in cash, shares or a combination of both.

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 and repay up to $234 million outstanding under its senior secured term loan due 2027.

Remaining proceeds will be used to repay a portion of the $500 million outstanding under its senior secured term loan due 2026.

Tetra Tech is a Pasadena, Calif.-based consulting and engineering services provider.

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