#United States #Charlotte #Honeywell #spin-off #Solstice

Honeywell Announces Senior Notes Offering for Solstice Advanced Materials

Honeywell International Inc. (NASDAQ: HON), a global leader in integrated technology and advanced materials, has officially announced the pricing of a significant senior notes offering by its upcoming spinoff, Solstice Advanced Materials Inc. This announcement marks a crucial step in Honeywell's planned spin-off of Solstice, aiming to establish it as an independent entity focused on innovative materials solutions.

In this private offering, Solstice has priced the senior notes at an aggregate principal amount of $1 billion, with a maturity date set for September 30, 2033. These notes will be issued at par and will accrue interest at an appealing rate of 5.625% per annum. Interest payments are to be made semi-annually, starting March 31, 2026. The offering is expected to close around September 30, 2025, depending on the fulfillment of standard closing conditions.

The revenues generated from this notes offering will be allocated in various ways to support Solstice’s new financial structure and operational independence post spin-off. A portion will be utilized to make a distribution back to Honeywell, covering associated fees, costs, and expenses linked to the new Senior Credit Facilities that Solstice is expected to secure. These new financial arrangements will include a first-lien term B loan facility and a revolving credit facility, designed to solidify Solstice's financial position upon launching its operations as a stand-alone company.

The proceeds will sit in escrow until specific criteria related to the spin-off are met. If these conditions are not satisfied by March 31, 2026, there is a provision for the notes to be redeemed at face value plus accrued interest, ensuring the investors' security. The senior notes will carry an unsecured obligation status, also guaranteed by Solstice's domestic subsidiaries that will support the senior secured credit facilities.

The liquidity and strategic planning surrounding the spin-off are essential as Solstice Advanced Materials prepares to make its mark in the industry as a leading provider of cutting-edge materials, such as refrigerants and semiconductor materials, alongside healthcare packaging solutions. The company operates across various domains, emphasizing its dual segments: Refrigerants Applied Solutions and Electronic Specialty Materials, both of which cater to growing market demands.

Honeywell's visibility into the future trends has positioned them strategically within key megatrends—automation, aviation, and energy transition—providing a solid foundation for both Honeywell and Solstice. By unlocking value through this spin-off, Honeywell enhances its core operational focus while allowing Solstice to pursue its innovative projects independently.

As the date of the spin-off approaches, industry observers will closely monitor Solstice's development, particularly how it capitalizes on emerging opportunities within advanced materials market segments. With Honeywell’s background and resources backing it, Solstice looks poised for success in delivering quality products that meet evolving environmental and technological needs.

For investors, the current fine-tuning of financial arrangements underscores Honeywell and Solstice’s commitment to ensuring a smooth transition into separate operational frameworks. The potential for further growth and innovation remains high, as both entities adapt to a rapidly changing industrial landscape.

About Solstice

Solstice Advanced Materials is dedicated to delivering superior materials solutions globally. With expertise in refrigerants and semiconductor materials, the company is recognized for its commitment to innovation and quality across its operational sectors.

About Honeywell

As an integrated operating company, Honeywell continuously serves diverse industries by providing advanced solutions through its various segments, including aerospace, automation, and energy and sustainability. Their commitment to excellence supports partnerships aimed at overcoming complex challenges faced globally.

In summary, this latest advancement in pricing of Solstice’s senior notes is not just a financial maneuver; it showcases Honeywell's strategic foresight in harnessing value through robust financial planning, setting the stage for a successful transition to a focused and innovative Solstice Advanced Materials entity.