Tyler Technologies Inc. (NYSE: TYL) completed the sale of $1.44 billion in convertible senior notes due 2031, the company announced. The offering was increased from an initial amount after underwriters exercised their option to purchase an additional $187.5 million in principal amount.

The notes carry a 0.50% annual interest rate and mature on July 15, 2031. The initial conversion price was set at approximately $405.94 per share, representing a 30% premium above Tyler's stock price of $312.27 on May 11.

Tyler entered into capped call transactions that increase the effective conversion price to approximately $655.77 per share, representing a 110% premium above the May 11 stock price. These transactions are designed to reduce potential dilution to existing shareholders.

The company received net proceeds of approximately $1.41 billion after deducting fees and expenses. Tyler used $187.2 million to fund the capped call transactions and $320.7 million to repurchase 1,026,900 shares of common stock. The remaining proceeds will be used for general corporate purposes.

"This capital raise provides financial flexibility, allowing Tyler to further execute on our $1 billion share repurchase authorization and pursue long-term growth initiatives," said Lynn Moore, Tyler's president and chief executive officer. Moore noted that the company has repurchased approximately 2.1 million shares for about $667 million year to date.

The notes were sold in a private offering to qualified institutional buyers under Rule 144A. Tyler will settle note conversions either entirely in cash or through a combination of cash and shares, with cash payments required up to the principal amount of converted notes.