Altair Engineering talks $175 million five-year convertible notes to yield 0.25%-0.5%, up 30%-35%

By Abigail W. Adams

Portland, Me., June 4 – Altair Engineering Inc. plans to price $175 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.25% to 0.5% and an initial conversion premium of 30% to 35%, according to a market source.

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and RBC Capital Markets, LLC are joint bookrunners for the registered offering, which carries a greenshoe of $26.25 million.

The notes are non-callable until June 6, 2022 and then subject to a 130% hurdle. They are putable upon a fundamental change.

The notes are contingently convertible until Dec. 1, 2023 subject to a 130% trigger.

Proceeds will be used to repay outstanding debt under its revolving credit facility, which had $14.8 million outstanding as of March 31, 2019.

Remaining proceeds will be used for acquisitions or investments in complementary businesses, general corporate purposes, including building an addition to its corporate headquarters, and sales and marketing activity.

Altair Engineering is a Troy, Mich.-based global technology company providing software and cloud solutions.

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