BURLINGTON, Mass. - Progress Software (NASDAQ:PRGS) Corporation (NASDAQ: PRGS), a provider of enterprise software products, announced its intention to offer $350 million of Convertible Senior Notes due 2030 to qualified institutional buyers, subject to market conditions. The company also plans to grant initial purchasers an option to buy an additional $52.5 million in Notes to cover overallotments.
The Notes, set to mature on March 1, 2030, unless converted, redeemed, or repurchased earlier, will be senior unsecured obligations of Progress. The terms, including the interest rate and initial conversion rate, will be determined at the offering's pricing.
The net proceeds from the offering are earmarked for several uses: repaying amounts outstanding under Progress's term loan credit facility, funding capped call transactions, repurchasing up to $25 million of its common stock, and for general corporate purposes, which may include repaying other debts.
Concurrently with the pricing of the Notes, Progress intends to enter into capped call transactions with certain initial purchasers or their affiliates. These transactions are expected to reduce potential dilution upon conversion of the Notes and offset potential cash payments above the principal amount, subject to a cap.
The capped call transactions might affect the market price of Progress’s common stock and the Notes, especially if the initial purchasers exercise their overallotment option, prompting additional capped call transactions. The option counterparties or their affiliates may engage in various transactions that could increase or decrease the market price of Progress's common stock or the Notes.
The offering and sale of the Notes will be made to qualified institutional buyers under Rule 144A of the Securities Act. Neither the Notes nor any shares of common stock that may be issued upon their conversion have been registered under the Securities Act or any state securities laws, and they may not be offered or sold in the U.S. absent registration or an exemption from registration requirements.
This announcement is not an offer to sell or a solicitation to buy the Notes or any shares of common stock issuable upon their conversion. The information is based on a press release statement from Progress Software Corporation.
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