Honeywell has announced the pricing of a major senior notes offering totaling approximately $16 billion in connection with the planned spin-off of Honeywell Aerospace Inc.. The bond issuance will support the financial restructuring required for the separation and provide capital for the aerospace unit before it becomes an independent company.
Details of the Senior Notes Offering
Honeywell Aerospace priced a multi-tranche private offering consisting of nine different series of senior notes with maturities ranging from 2028 to 2066.
The offering includes:
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$1.25 billion in 3.900% senior notes due 2028
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$1.25 billion in 4.000% senior notes due 2029
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$500 million in floating-rate notes due 2029 linked to SOFR
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$2 billion in 4.300% notes due 2031
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$1.75 billion in 4.600% notes due 2033
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$3.25 billion in 4.950% notes due 2036
Additional long-term exchange notes were also priced:
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$1 billion due 2046
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$3.5 billion due 2056
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$1.5 billion due 2066
The transaction is expected to close around March 16, 2026, subject to customary conditions.
Financing the Aerospace Spin-Off
The proceeds from the new money notes will primarily fund a cash distribution from Honeywell Aerospace to Honeywell ahead of the spin-off. The capital will also cover transaction costs related to the separation, revolving credit facilities, and other corporate expenses.
The exchange notes will initially be issued to Honeywell and then transferred to investment banks—including Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, and BofA Securities, Inc.—to settle certain obligations tied to a previously established credit facility. Honeywell Aerospace will not receive cash proceeds from these exchange notes.
Structure of the Debt and Guarantees
The newly issued bonds will be senior unsecured obligations of Honeywell Aerospace. Until the spin-off is completed, Honeywell will guarantee the notes on a senior unsecured basis.
Once the separation is finalized, Honeywell will automatically be released from these guarantees, allowing Honeywell Aerospace to operate independently with its own financial structure.
Strategic Importance of the Separation
The spin-off is part of Honeywell’s broader strategy to streamline its portfolio and allow each business to pursue more focused growth strategies. Honeywell Aerospace is a major tier-1 supplier in the global aerospace and defense sector, providing systems and technologies that support aircraft production, maintenance, and operations across commercial aviation, defense, space, and business aviation markets.
Its product portfolio spans electronic systems, engines and power systems, and aircraft control systems, serving aircraft manufacturers, government agencies, and defense contractors worldwide.
Outlook
The bond offering represents a critical step in preparing Honeywell Aerospace for life as an independent entity. By establishing its capital structure ahead of the separation, the company aims to ensure financial flexibility and operational stability once the spin-off is completed.
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