TYL · Tyler Technologies, Inc.

Tyler Technologies executed an opportunistic capital raise through an upsized private offering of $1.25 billion in 0.50% convertible senior notes due 2031, targeting qualified institutional buyers under Rule 144A. The low coupon rate of 0.50% payable semi-annually reflects favorable market conditions, with settlement set for May 14, 2026. Key investor protections include conversion rights starting under certain events before April 15, 2031 and anytime thereafter until maturity, settled in cash up to principal with potential shares, at a 30% premium to the May 11 closing price. Redemption is possible after July 20, 2029 if stock price exceeds 130% of conversion price, and fundamental change repurchase rights apply. The overallotment option enhances flexibility up to $1.4375 billion total. Proceeds allocation prioritizes $162.8 million for capped calls (cap at ~$655.77/share, 110% premium) to mitigate dilution and excess cash payments on conversion, $320.7 million for immediate repurchase of 1,026,900 shares via private transactions, bolstering EPS and signaling confidence in valuation, with remainder for general purposes. Concurrent repurchases and hedging by counterparties may influence stock dynamics, potentially supporting price amid conversion risks.