Tibco Software to price $500 million 20-year convertibles to yield 2.25%-2.75%, up 47.5%-52.5%

By Rebecca Melvin

New York, April 16 - Tibco Software Inc. launched an offering of $500 million of 20-year convertibles after the market close Monday, which was expected to price after the market close Tuesday, according to market sources.

Price talk on the deal was for a coupon of 2.25% to 2.75% with an initial conversion premium of 47.5% to 52.5%.

The Rule 144A offering has a $75 million greenshoe and is being sold by active bookrunners Morgan Stanley & Co. Inc. and J.P. Morgan Securities LLC and passive bookrunners Citigroup Global Markets Inc. and Bank of America Merrill Lynch.

The bonds are non-callable for five years with puts in years five, 10 and 15. They have takeover and dividend protection.

Proceeds will be used to repurchase up to $150 million of common stock in transactions negotiated with institutional investors, and about $150 million will be used to repay outstanding debt under its revolving credit facility.

The balance of proceeds will be used for general corporate purposes, including working capital and capital expenditures and potential acquisitions and other strategic transactions.

Palo Alto, Calif.-based Tibco is a business software and services company.

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