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Investing.com -- S&P Global Ratings has assigned an ’A’ issue-level rating to Honeywell International Inc (NASDAQ:HON).’s $6 billion delayed draw term loan. The rating agency also placed the term loan on CreditWatch with negative implications, a move that aligns with the existing issuer credit rating on the company.
Honeywell plans to use the proceeds from the issuance, when funded, for general corporate purposes. This comes as the company prepares to separate into three distinct entities: Automation, Aerospace, and Solstice Advanced Materials. This split was previously announced by the company.
S&P Global Ratings has also kept all other ratings on Honeywell, including the ’A’ issuer credit rating, on CreditWatch with negative implications. The agency anticipates that the planned separation will diminish Honeywell’s overall scale and diversification.
The capitalization of each new entity will hinge on a variety of financial policy decisions and capital market conditions at the time of financing. Both Honeywell’s automation and aerospace businesses seem to possess the scale and profitability of several investment-grade peers. Consequently, the final rating outcomes will largely depend on the capitalization decisions made.
S&P Global Ratings expects to provide an update on this CreditWatch status once it gains more insight into the structure of the transactions through 2026.
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