Honeywell aerospace unit prices $16 billion debt offering for spin-off

Honeywell Aerospace Inc. priced a $16 billion senior notes offering in connection with parent company Honeywell International Inc.'s (NASDAQ: HON) planned spin-off of the aerospace unit.

The offering includes $10 billion in new money notes and $6 billion in exchange notes. The new money notes comprise six tranches with maturities ranging from 2028 to 2036 and interest rates between 3.900% and 4.950%. The exchange notes include three tranches maturing between 2046 and 2066 with rates from 5.622% to 5.852%.

Aerospace will use proceeds from the new money notes to make a cash distribution to Honeywell before the spin-off and to pay related fees and expenses. The company will not receive proceeds from the exchange notes, which will be transferred to Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and BofA Securities Inc. to satisfy certain debt obligations.

The notes will be senior unsecured obligations guaranteed by Honeywell until the spin-off is completed. Upon completion of the spin-off, Honeywell will be released from guarantee obligations. The offering is expected to close on or about March 16, 2026.

Honeywell Aerospace operates as a tier-1 aerospace and defense supplier providing systems and technologies for commercial air transport, defense and space, and business aviation markets. The unit's portfolio includes electronic solutions, engines and power systems, and control systems.

The notes are being offered through a private placement to qualified institutional buyers and non-U.S. persons under Securities Act exemptions.

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