Honeywell Aerospace Independence Countdown, Plans to Issue $16 Billion Investment-Grade Bonds

Honeywell Aerospace has launched its first U.S. investment-grade bond issuance, targeting a size of up to $16 billion to fund its planned business spin-off. According to sources, the bond issuance will be divided into as many as nine tranches, with maturities ranging from two to 40 years. The initial price guidance for the longest-term bonds is set at a spread of up to 1.35 percentage points above the corresponding U.S. Treasury yields.

It is understood that Honeywell International (HON.US), the parent company, disclosed its private placement plan last week, which is expected to become one of the largest U.S. investment-grade deals in 2026. A fixed-income investor conference call was held on Monday.

Underwriters forecast that this week’s investment-grade bond issuance will reach approximately $60 billion, further expanding from the $50.6 billion supply in early March. Although primary market activity had been subdued due to geopolitical tensions sparked by the Iran conflict—no high-grade bond trades occurred on the past two Mondays—market signs of recovery have emerged this week.

Honeywell officially announced its strategic plan to split into three independent companies in February 2025, driven by activist investors. The plan involves consolidating its extensive business portfolio into three publicly listed companies focused on automation, aerospace, and energy transition.

Among them, Solstice Advanced Materials (SOLS.US) completed its spin-off in October of the same year; the aerospace division plans to complete its separation in Q3 2026, supported by a $4 billion revolving credit facility to fund its independent operations. In terms of credit ratings, Fitch assigns Honeywell Aerospace an A- rating, Moody’s gives it an A3, and S&P Global Ratings rates it BBB+.

The bond issuance is managed by a syndicate of underwriters including Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo. Notably, Honeywell announced last week the launch of a bond buyback program, aiming to repurchase up to $3.75 billion of U.S. dollar bonds and €1.25 billion (approximately $1.45 billion) of euro notes.

Driven by positive news of strategic restructuring, Honeywell has been active in the capital markets. To date, the company’s stock has risen nearly 22.8% in 2026, with a total market capitalization remaining at a high of $151.5 billion.