Tyler Technologies (TYL) said Monday that it plans to offer $1 billion of convertible senior notes due 2031 in a private offering.

Initial purchasers will be granted a 13-day option to buy up to an additional $150 million of notes, the company said.

Proceeds of the offering will be used to fund capped call transactions designed to reduce potential dilution from note conversions, Tyler said.

In addition, up to $350 million of the proceeds will be used to repurchase shares through privately negotiated transactions under its existing buyback program, with remaining proceeds used for general corporate purposes, the company said.

Tyler shares were 2% higher in premarket trading.