HONEYWELL ANNOUNCES PRICING OF SOLSTICE ADVANCED MATERIALS' OFFERING OF SENIOR NOTES IN CONNECTION WITH PLANNED SPIN-OFF

Rhea-AI Summary

Honeywell (NASDAQ: HON) announced the pricing of $1 billion senior notes offering by Solstice Advanced Materials, in connection with its planned spin-off. The notes, due 2033, will carry a 5.625% interest rate payable semi-annually, with the offering expected to close around September 30, 2025.

The proceeds will be held in escrow until the spin-off conditions are met, with Solstice planning to use the funds, along with borrowings from a senior secured loan facility, to make a distribution to Honeywell and cover transaction expenses. If spin-off conditions aren't met by March 31, 2026, the notes will be redeemed at 100% principal plus accrued interest.

Positive

• None.

Negative

• Additional debt burden for Solstice with semi-annual interest payments
• Complex financing structure with multiple credit facilities
• Risk of notes redemption if spin-off conditions not met by March 2026

Insights

Corporate Finance Specialist

Honeywell's Solstice spin-off advances with $1B debt offering at 5.625%, creating financial structure for the new entity before Q4 2025 completion.

Honeywell's planned spin-off of Solstice Advanced Materials has reached a critical milestone with Solstice pricing $1 billion of senior notes due 2033. These unsecured notes carry a 5.625% interest rate and will be part of the financial foundation for the soon-to-be-independent entity.

The debt structure reveals important aspects of the spin-off strategy. Solstice is establishing a complete capital structure including these notes, a secured term loan, and revolving credit facilities. This comprehensive approach indicates Honeywell is positioning Solstice as a fully operational standalone company rather than a capital-light entity.

The planned cash distribution back to Honeywell is significant as it allows the parent company to extract value immediately rather than waiting for potential dividend streams over time. This suggests Honeywell is optimizing its balance sheet while giving Solstice sufficient financial resources for independence.

The escrow mechanism until March 2026 provides important protection for note investors, creating a clear deadline for spin-off completion with an automatic redemption feature if the transaction stalls. The 5.625% yield reflects current market conditions and investors' assessment of Solstice's standalone credit profile.

For Honeywell shareholders, this represents continued execution of the company's portfolio optimization strategy, allowing management to focus on core businesses while potentially unlocking shareholder value through the creation of a specialized materials company with its own growth trajectory and capital allocation priorities.

CHARLOTTE, N.C., Sept. 16, 2025 /PRNewswire/ -- Honeywell (NASDAQ: HON) today announced that, in connection with the previously announced spin-off (the "Spin-Off") of Solstice Advanced Materials Inc. ("Solstice") from Honeywell, Solstice has priced a private offering of $1 billion aggregate principal amount of senior notes due 2033 (the "Notes"). The Notes will be issued at par, bear interest at a rate of 5.625% per annum, payable semi-annually in arrears on March 31 and September 30 of each year, beginning on March 31, 2026, and mature on September 30, 2033. The Notes offering is expected to close on or about September 30, 2025, subject to customary closing conditions.

In connection with the Spin-Off, which is expected to be completed in the fourth quarter of 2025, Solstice expects to enter into a senior secured first-lien term B loan facility, a senior secured first-lien revolving credit facility, and one or more uncommitted letter of credit facilities (collectively, the "Senior Credit Facilities"). Solstice intends to use a portion of the gross proceeds of the Notes, together with borrowings under the senior secured first-lien term B loan facility, to make a distribution to Honeywell in connection with the Spin-Off and to pay fees, costs and expenses in connection with the Senior Credit Facilities and the Notes offering. Solstice intends to use the remaining proceeds, after payment of transaction expenses, if any, for general corporate purposes. The proceeds from the Notes offering will be held in escrow until satisfaction of the conditions precedent to the Spin-Off and certain other escrow release conditions. If such conditions are not met by March 31, 2026, the Notes will be redeemed at 100% of principal plus accrued interest.

The Notes will be senior unsecured obligations of Solstice and guaranteed on an unsecured senior basis by each of Solstice's existing and future domestic subsidiaries that guarantees the new senior secured credit facilities.

The Notes and related guarantees have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except in transactions exempt from, or not subject to, the registration requirements of the Securities Act. Accordingly, the Notes and related guarantees are being offered and sold only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Any offers of the Notes or related guarantees will be made only by means of a private offering memorandum.

About Solstice

Solstice Advanced Materials is a global, differentiated advanced materials company and a leading global provider of refrigerants, semiconductor materials, protective fibers and healthcare packaging. The company operates through two segments, reported as Refrigerants & Applied Solutions and Electronic & Specialty Materials. Solstice's business is recognized as an industry innovator as well as a technology and quality leader, supported by some of the industry's most well-known brands.

About Honeywell

Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends – automation, the future of aviation and energy transition – underpinned by our Honeywell Accelerator operating system and Honeywell Forge IoT platform. As a trusted partner, we help organizations solve the world's toughest, most complex challenges, providing actionable solutions and innovations through our Aerospace Technologies, Industrial Automation, Building Automation and Energy and Sustainability Solutions business segments that help make the world smarter, safer, as well as more secure and sustainable.

Forward-Looking Statements and Other Disclaimers

We describe many of the trends and other factors that drive our business and future results in this release. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes, or anticipates will or may occur in the future. They are based on management's assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments, and other relevant factors, many of which are difficult to predict and outside of our control. They are not guarantees of future performance, and actual results, developments and business decisions may differ significantly from those envisaged by our forward-looking statements, including with respect to any changes in or abandonment of the proposed Spin-Off, offering of the Notes or the Senior Credit Facilities. We do not undertake to update or revise any of our forward-looking statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties, including ongoing macroeconomic and geopolitical risks, such as changes in or application of trade and tax laws and policies, including the impacts of tariffs and other trade barriers and restrictions, lower GDP growth or recession in the U.S. or globally, supply chain disruptions, capital markets volatility, inflation, and certain regional conflicts, that can affect our performance in both the near- and long-term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this release can or will be achieved. These forward-looking statements should be considered in light of the information included in this release, our Form 10-K, Solstice's Form 10 Registration Statement, as amended, and other filings with the SEC. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.

Contacts:
Media	Investor Relations
Stacey Jones	Sean Meakim
(980) 378-6258	(704) 627-6200
Stacey.Jones@honeywell.com	Sean.Meakim@honeywell.com

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SOURCE Honeywell

FAQ

What is the size and interest rate of Solstice Advanced Materials' senior notes offering from Honeywell (NASDAQ: HON)?

Solstice Advanced Materials priced $1 billion in senior notes with a 5.625% interest rate, payable semi-annually, maturing in 2033.

When is Honeywell's Solstice Advanced Materials spin-off expected to complete?

The spin-off is expected to be completed in the fourth quarter of 2025.

How will Solstice use the proceeds from the senior notes offering?

Solstice will use the proceeds, along with term loan borrowings, to make a distribution to Honeywell, pay transaction fees, and for general corporate purposes.

What happens if Honeywell's spin-off conditions for Solstice are not met?

If spin-off conditions are not met by March 31, 2026, the notes will be redeemed at 100% of principal plus accrued interest.

Who can purchase the Solstice Advanced Materials senior notes?

The notes are being offered only to qualified institutional buyers under Rule 144A and to non-U.S. persons under Regulation S of the Securities Act.