(RTTNews) - Knight-Swift Transportation Holdings Inc. (KNX) on Wednesday announced that it has priced $1.3 billion of 1.00% Convertible Senior Notes due 2031 in a private placement, upsized from previous offering $1.0 billion.
The notes are senior unsecured obligations maturing November 15, 2031, with 1.00 percent annual interest payable semiannually on May 15 and November 15, beginning November 15, 2026.
The freight transportation company also granted the initial purchasers a 13-day option to buy up to an additional $200.0 million of the notes. The sale of the notes to the initial purchasers is expected to close on May 8.
Net proceeds are expected to be about $1.27 billion, or $1.46 billion if the option is fully exercised.
Knight-Swift plans to use the funds to pay about $92.8 million for capped call transactions, and to repay all $300 million outstanding under its term loan due 2027, $400 million of the $700 million term loan due 2030, and a portion of its revolving credit facility.
Additional proceeds from any option exercise will fund more capped calls and further debt repayment.
The notes are convertible at the holder's option in certain circumstances at an initial rate of 12.4835 shares per $1,000 principal amount, equal to a conversion price of about $80.11 per share. That reflects a 30 premium to Knight-Swift's May 5 closing price of $61.62.
Upon conversion, the company will pay cash up to the principal amount and, for any excess, may settle in cash, shares, or a combination at its election.
Knight-Swift may not redeem the notes before May 21, 2029, and after that date may redeem them only if its stock trades at least 130 percent of the conversion price for 20 days in a 30-day period.
In pre market activity on the NYSE, shares of Knight-Swift were losing 2.60 percent, trading at $60.00, after closing Tuesday's regular trading 0.84 percent lower.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
