SS&C Proposes $1.0 Billion Convertible Notes Offering Due 2031
Key Facts
SS&C Technologies announced on November 4 that it intends to offer $1.0 billion in aggregate principal amount of senior convertible notes due 2031 in a private placement, subject to market conditions and other factors. The proposed issuance is part of a plan to refinance the company’s $2 billion of notes due in September 2027. The company said net proceeds would be used to pay the costs of transactions to hedge potential dilution, then to repurchase up to $100.0 million of shares. The remainder, together with amounts borrowed under the credit facilities, would be allocated to redeem the 2027 notes. The structure thus combines a long-term debt issuance, share repurchases and amended credit arrangements.
The proposed notes are senior, unsecured general obligations and will pay interest semiannually. The company has not set the interest rate or initial conversion rate; it said final terms, including those two items, would be determined when the notes are priced. Upon conversion, the company may elect to deliver cash, common shares or a combination of the two. This means the effect of conversion on the share count or cash payments will depend on terms that had not been finalized at the time of the announcement. The company also intends to enter into transactions to hedge potential dilution, which it said are generally expected to reduce dilution from any conversion or offset some cash payments in excess of the notes’ principal, subject to a cap.
The offering gives initial purchasers the option to buy additional notes with an aggregate principal amount of up to $150.0 million. Settlement would take place during a 13-day period beginning on, and including, the day the notes are first issued. If the option is exercised in full, the aggregate principal amount of notes offered would exceed the announced base amount, but the company did not say that the option would be exercised. The transaction remains subject to market conditions and other factors, while details of the interest and conversion terms remained tied to the pricing process. Accordingly, the proceeds and final terms of the offering were unresolved at the time of the announcement.
The announcement coincides with broader moves involving the credit facilities. On November 2, SS&C said it had allocated $240.0 million of incremental term loans under the “A-9” facility and $400.0 million of revolving credit commitments to lenders. It also launched a $500.0 million “B-8” incremental term loan tranche and said the maturity of the “A” facility and the revolving facility was expected to be extended to November 2031. The company estimated that transactions under the credit agreement would close in the fourth quarter of 2026, subject to market conditions and other factors and completion of final documentation. It added that there was no assurance they would be completed.
In its November 4 announcement, the company said it had not yet entered into definitive documentation for any of the proposed refinancing transactions and could not guarantee their completion. It said the notes offering was not conditional on completion of those transactions, separating the issuance from the credit-facility amendments even as both are linked to its plan for addressing the 2027 maturity. At the end of September, the company reported cash and cash equivalents of $525.4 million, against total debt of $7,483.5 million. Net leverage under the credit agreement was 2.63 times earnings before interest, taxes, depreciation and amortization. These figures provide context for the scale of the proposed refinancing and the weight of debt on the balance sheet, without changing the announced terms for using the offering proceeds.
In the nine months ended September 30, 2026, SS&C generated cash flow from operating activities of $1,216.3 million, up 10.4% from the same period in 2025. For the third quarter, revenue under generally accepted accounting principles was $1,690.0 million, up 7.8% from $1,568.0 million a year earlier. Net income, however, fell 5.3% to $198.9 million, compared with $210.0 million in the third quarter of 2025. Chief Executive Bill Stone said organic revenue growth was 5.2% for the quarter and adjusted earnings before interest, taxes, depreciation and amortization of $674.8 million set a quarterly record. He added that the company remained on track to meet its full-year targets.
For 2026, the company expects adjusted revenue of between $6,736 million and $6,776 million, and cash flow from operating activities of between $1,717 million and $1,817 million. The next step in the notes offering is pricing, which will determine the interest rate, initial conversion rate and other terms. The credit-facility transactions, according to the November 2 announcement, remain targeted to close in the fourth quarter of 2026, but depend on completion of documentation and market conditions. The company did not give final confirmation in the offering announcement that the refinancing would be completed. It also left the option to issue additional notes with the initial purchasers during the specified period after the first issuance.