8-KFinancial EventsOther EventsExhibits & Filings

HONEYWELL INTERNATIONAL INC 8-K Report, Financial Obligation (Aug 19, 2020)

Filed August 19, 2020For Securities:HONHONIV

Summary

Honeywell International Inc. (HON) filed an 8-K on August 18, 2020, detailing significant financial transactions. The company completed a public offering of $3 billion in senior notes, comprising $2.5 billion in fixed-rate notes due 2022 with a 0.483% coupon and $0.5 billion in floating-rate notes due 2022. This issuance was made under an existing shelf registration statement. Concurrently, Honeywell announced its intent to fully prepay its $3 billion Delayed Draw Term Loan, effective August 20, 2020. This action will extinguish all outstanding borrowings and commitments under that agreement. These moves indicate proactive debt management by the company, replacing existing debt with new, lower-cost fixed-rate financing and eliminating a significant credit facility.

Key Highlights

  • 1Completed a $3 billion public offering of senior notes due 2022.
  • 2The offering includes $2.5 billion in 0.483% fixed-rate senior notes.
  • 3The offering also includes $0.5 billion in floating-rate senior notes.
  • 4These notes were issued under Honeywell's existing Form S-3 shelf registration statement.
  • 5Announced full prepayment of a $3 billion Delayed Draw Term Loan, effective August 20, 2020.
  • 6Upon prepayment, there will be no outstanding borrowings or remaining commitments under the Delayed Draw Term Loan Agreement.

Frequently Asked Questions

Honeywell is likely refinancing its debt. The issuance of lower-cost fixed-rate notes replaces higher-cost or less favorable debt obligations and provides flexibility. Prepaying the term loan eliminates interest payments and frees up credit capacity.

The company issued $2.5 billion of 0.483% Senior Notes due 2022 and $0.5 billion of Floating Rate Senior Notes due 2022. The total aggregate principal amount of the offering is $3 billion.

A shelf registration statement allows a company to pre-register securities it plans to issue in the future. This makes the process of issuing new debt more efficient and faster when market conditions are favorable, as they likely were in this instance.

The prepayment effectively cancels the $3 billion term loan facility. This means Honeywell will no longer have any outstanding debt under this specific agreement, nor any future borrowing capacity or commitment obligations related to it.