Pegasystems talks $450 million five-year convertible notes to yield 0.75%-1.25%, up 32.5%-37.5%

By Abigail W. Adams

Portland, Me., Feb. 18 – Pegasystems Inc. plans to price $450 million of five-year convertible notes after the market close on Wednesday with price talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 32.5% to 37.5%, according to a market source.

Goldman Sachs & Co. LLC, BofA Securities Inc., J.P. Morgan Securities LLC (active) and Barclays are bookrunners for the Rule 144A offering, which carries a greenshoe of 67.5% million.

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

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

Proceeds will be used to cover the cost of the call spread, for working capital and for general corporate purposes, which may include the purchase of common stock and acquisition or investment in complementary companies or technologies.

Pegasystems is a Cambridge, Mass.-based software company.

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