Knight-Swift Transportation Holdings Inc. (NYSE: KNX) announced it intends to offer $1 billion in convertible senior notes due 2031 through a private placement to qualified institutional buyers. The company also plans to grant initial purchasers an option to buy an additional $150 million of the notes within 13 days of issuance.

The notes will be senior unsecured obligations that accrue interest payable semiannually. Upon conversion, Knight-Swift will pay cash up to the principal amount and may deliver cash, common stock, or a combination of both for any remainder, at the company's discretion.

Knight-Swift expects to use net proceeds to pay for capped call transactions, repay its entire $300 million term loan due 2027, and repay $400 million of its $700 million term loan due 2030. Any remaining proceeds would go toward repaying portions of its revolving credit line. If purchasers exercise the additional notes option, proceeds would fund more capped call transactions and additional debt repayment.

The company plans to enter into capped call transactions with initial purchasers or affiliates to reduce potential dilution from note conversions. These transactions may affect Knight-Swift's stock price as counterparties establish hedging positions through stock purchases or derivative transactions.

The notes and any shares issuable upon conversion will not be registered under the Securities Act of 1933 and may only be sold to qualified buyers under applicable exemptions.

Knight-Swift operates one of North America's largest freight transportation networks, providing truckload, less-than-truckload, intermodal and logistics services across the United States and Mexico.