Honeywell calls $894.34 million 5.3% notes, $660.21 million 5% notes

By Angela McDaniels

Tacoma, Wash., Nov. 1 – Honeywell International Inc. will redeem on Dec. 1 all of its 5.3% senior notes due 2017, 5.3% senior notes due 2018 and 5% senior notes due 2019 that were not tendered in its tender offer, according to a company news release.

In total, the company will redeem $254,679,000 of 2017 notes, $639,656,000 of 2018 notes and $660,206,000 of 2019 notes.

The make-whole premium redemption price will be equal to the greater of par and the sum of the present values of the remaining scheduled payments of principal and interest on the notes discounted to the redemption date, on a semiannual basis, at a rate equal to the sum of the applicable Treasury rate plus 15 basis points with respect to the 2017 notes, 25 bps with respect to the 2018 notes and 35 bps with respect to the 2019 notes.

The Treasury rate will be calculated on the third business day preceding the redemption date.

Holders will also receive accrued interest to but excluding the redemption date.

Honeywell will fund the redemption with a portion of the proceeds from its $4.5 billion offering of senior notes (A2/A/A) in four tranches, which settled Oct. 31.

Tender offer

As previously reported, the company received and accepted tenders for $145,321,000 of the 2017 notes, $260,344,000 of the 2018 notes and $239,794,000 of the 2019 notes.

An additional $49,000 of 2017 notes, $305,000 of 2018 notes and $70,000 of 2019 notes were tendered under the guaranteed delivery procedures.

The tender began on Oct. 24 and ended at 5 p.m. ET on Oct. 31.

For each $1,000 principal amount, the company will pay $1,017.55 for the 2017 notes, $1,056.67 for the 2018 notes due 2018 and $1,083.96 for the 2019 notes.

Pricing was set at 11 a.m. ET on Oct. 31 using a reference Treasury plus a spread.

For the 2017 notes, the benchmark is the 0.75% Treasury due March 15, 2017, the spread is 15 bps and the reference yield is 0.422%.

For the 2018 notes, the benchmark is the 0.75% Treasury due Feb. 28, 2018, the spread is 25 bps and the reference yield is 0.759%.

For the 2019 notes, the benchmark is the 0.75% Treasury due Feb. 15, 2019, the spread is 35 bps and the reference yield is 0.916%.

Honeywell will also pay accrued interest up to but excluding the settlement date, which was expected to be Nov. 1, or Nov. 3 for notes tendered under guaranteed delivery procedures.

The financing condition of the tender offer has been met.

Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955), J.P. Morgan Securities LLC (866 834-4666 or 212 834-8553), Morgan Stanley & Co. LLC (212 761-1057 or 800 624-1808) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) were the dealer managers. Global Bondholder Services Corp. (212 430-3774, 866 470-4300 or www.gbsc-usa.com/Honeywell/) was the tender agent and information agent.

Honeywell is a Morris Plains, N.J.-based technology and manufacturing company.

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