Honeywell announces $16bn in debt issuance from Aerospace unit before spin-off

Multi-industry technology company Honeywell said it plans to issue $16bn in new debt via nine tranches of senior notes through its Aerospace division before spinning it off into a standalone company Honeywell Aerospace.

The company said that of the total $16bn, nearly $10bn will be sold to investors for cash. A major chunk of this will go to Honeywell as dividend. The remaining $6bn, in exchange notes will be used to settle Honeywell’s existing debt with Goldman Sachs, Morgan Stanley and BofA affiliates. The banks will swap Honeywell IOUs with that of Aerospace.

Honeywell said that the funds will be used to finance the separation. 

Maturities on the new notes will range from 2028 to 2066 with tranches dated for short, medium and long-rated timelines. The interest on the shortest (two-year maturity for 2028) will be 3.9% while those on the longest (40-year maturity for 2066) at 5.85%.

The offering is expected to close on March 16, 2026.

Honeywell will guarantee the bonds until the spin-off is complete. Once the spin-off is completed, the debt guarantee will fall onto Honeywell Aerospace. The bond offering is not contingent upon the spin-off completing.

The notes will be exclusively marketed to qualified institutional buyers and would not be available to retail investors.

The spin-off is expected to be completed in the third quarter of 2026.

Honeywell Aerospace is an aerospace supplier of mission critical systems and technologies that enable business aviation and other aviation markets. The company’s portfolio of offerings includes electronic solutions, engines & power systems and control systems.