Tyler Technologies to price $1.6 billion convertible notes in five- and seven-year tranches

By Abigail W. Adams

Portland, Me., March 3 – Tyler Technologies Inc. plans to price $1.6 billion of convertible notes in five- and seven-year tranches after the market close on Thursday, according to a market source.

The deal consists of a $1 billion tranche of five-year notes with talk for a fixed coupon of 0% and an initial conversion premium of 32.5% to 37.5%.

The deal also consists of a $600 million tranche of seven-year notes with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 32.5% to 37.5%.

Goldman Sachs & Co. LLC, Wells Fargo Securities LLC and Barclays are active bookrunners for the Rule 144A offering.

The five-year notes carry a greenshoe of $150 million. They are non-callable until March 15, 2024 and then subject to a 130% hurdle.

The seven-year notes carry a greenshoe of $90 million. They are non-callable until March 17, 2025 and then subject to a 130% hurdle.

The notes are putable upon a fundamental change. There is takeover and dividend protection.

Proceeds will be used to fund the acquisition of NIC Inc. If the acquisition is not consummated, proceeds will be used for general corporate purposes.

Tyler Technologies is a Plano, Tex.-based software and technology service provider to the public sector.

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