Pegasystems ups five-year convertibles to $525 million, tightens talk to 0.75%-1% yield, up 37.5%

By Abigail W. Adams

Portland, Me., Feb. 19 – Pegasystems Inc. upsized its planned offering of five-year convertible notes to $525 million and tightened talk to a yield of 0.75% to 1% and an initial conversion premium of 37.5%, which is slated to price after the market close on Wednesday, according to a market source.

The greenshoe was also upsized to $75 million.

Initial price talk was for a coupon of 0.75% to 1.25% and an initial conversion premium of 32.5% to 37.5%.

The initial size of the offering was $450 million with a greenshoe of $67.5 million.

Goldman Sachs & Co. LLC, BofA Securities Inc., J.P. Morgan Securities LLC (active) and Barclays are bookrunners for the Rule 144A offering.

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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