Honeywell Aerospace Inc. priced a $16 billion senior notes offering on March 10 2026. The notes are issued in nine maturities ranging from 2028 to 2066, with coupon rates between 3.9% and 5.852%. The offering includes 3.9% notes due 2028, 4.0% notes due 2029, 4.3% notes due 2031, 4.6% notes due 2033, 4.95% notes due 2036, 5.622% notes due 2046, 5.732% notes due 2056, 5.852% notes due 2066, and a 5.622% floating‑rate note due 2029.
The $16 billion is split into $10 billion of “new money” notes and $6 billion of “exchange” notes. The new money notes will fund a cash distribution to Honeywell and cover spin‑off expenses, while the exchange notes will retire existing debt. In addition, Honeywell Aerospace secured $4 billion in credit facilities to support the separation.
Proceeds from the new money notes will be used to pay a cash distribution to Honeywell, cover the costs of the planned spin‑off, and support general corporate purposes. The notes are senior unsecured and guaranteed by Honeywell until the spin‑off is completed, after which the guarantees will be released.
The spin‑off is expected in the third quarter of 2026 and will be tax‑free for Honeywell shareholders. The new standalone company will operate in three segments—Electronic Solutions, Engines & Power Systems, and Control Systems—allowing each entity to pursue distinct strategic priorities and optimize its capital structure.
Vimal Kapur, Honeywell’s chairman and CEO, noted that the company finished 2025 with record backlog and strong results, and that the financing supports the separation and positions the new aerospace company for growth. He highlighted progress on portfolio optimization and the completion of the Solstice Advanced Materials spin‑off.
Barclays raised its price target for Honeywell to $275, citing favorable stand‑up costs for the aerospace spin‑off. Market sentiment was positive, reflecting optimism about the separation and Honeywell’s strong 2025 performance.
S&P Global assigned a BBB+ issuer credit rating to Honeywell Aerospace with a positive outlook, indicating expectations of leverage improvement after the spin‑off.
The aerospace and defense sector is benefiting from a recovery in commercial aviation and increased global defense spending, providing a supportive environment for the new standalone aerospace company.
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