Tyler Technologies Inc. (NYSE: TYL) priced an offering of $1.25 billion in convertible senior notes due 2031, the company announced. The offering was increased from the previously announced $1 billion.

The notes carry a 0.50% annual interest rate and will mature on July 15, 2031. The initial conversion rate is 2.4634 shares of common stock per $1,000 principal amount of notes, representing a conversion price of approximately $405.94 per share. This reflects a 30% premium over Tyler's closing stock price of $312.27 on May 11.

Tyler estimates net proceeds of approximately $1.22 billion after deducting discounts and expenses. The company plans to use $162.8 million for capped call transactions, $320.7 million to repurchase 1,026,900 shares of common stock, and the remainder for general corporate purposes.

The capped call transactions are designed to reduce potential dilution from note conversions. The cap price is initially set at approximately $655.77 per share, representing a 110% premium over the May 11 closing price.

Initial purchasers received an option to buy an additional $187.5 million of notes within 13 days of issuance. The offering is scheduled to settle on May 14, subject to closing conditions.

The notes will be convertible under certain conditions before April 15, 2031, and at the holder's option from April 15, 2031 until maturity. Tyler may redeem the notes after July 20, 2029 under specified conditions.

The offering was conducted as a private placement to qualified institutional buyers under Rule 144A of the Securities Act.