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Honeywell International Inc. (HON - Free Report) , on Sep 21, announced that two subsidiaries of Garrett Motion Inc. — Garrett Borrowing LLC and Garrett LX I S.à r.l. — have priced an offering of €350 million worth of senior notes due to mature on Oct 15, 2026. This offering is anticipated to close on Sep 27, 2018.
It’s worth mentioning here that the senior notes offering have been made in relation to the spin-off of Garrett from Honeywell.
Inside the Headlines
Notes have been priced at 100% of the principal amount and carry a coupon rate of 5.125%. These instruments will be guaranteed by the company and its subsidiaries, both foreign and domestic.
The value of notes offered is €100 million short of the previously decided amount. As noted by the company, Garrett intends on using funds that are expected to be raised through this offering as well as that from its new credit facility to repay debts to Honeywell or its subsidiary. The repayment to Honeywell or its subsidiary will likely total $1.6 billion. Additionally, funds will also be used for expenses related to the notes offering and credit facility.
Honeywell and Garrett Motion
Honeywell, in October 2017, communicated about plans to spin-off Global Distribution and Transportation Systems businesses. In June 2018, the company decided that the spun-off transportation business would be known as Garrett Motion Inc.
Finally, in September 2018, Honeywell declared that it would distribute one share of Garrett Motion shares for every ten shares of Honeywell. The distribution will take place on Oct 1, 2018. All shareholders of record till Sep 18 have been considered eligible for this distribution. Garrett Motion will start trading on the NYSE from Oct 1, under the ticker symbol ‘GTX’.
Zacks Rank & Stocks to Consider
With a market capitalization of $124.3 billion, Honeywell presently carries a Zacks Rank #3 (Hold). The company stands to gain from solid demand for its products, improved productivity and commercial excellence. However, It currently faces headwinds from rising costs and expenses.
Over the past three months, Honeywell’s shares have yielded 16.2% return, outperforming 8.6% increase recorded by the industry.
Furthermore, the stock’s earnings estimates are currently pegged at $8.15 for 2018 and $8.89 for 2019, reflecting growth of 0.1% and 0.3% from respective 60-day-ago tallies. However, earnings estimates for the third quarter of 2018 have declined 0.5% to $1.98.
In the past 60 days, earnings estimates on these three stocks improved for the current year and the next. Further, earnings surprise for the last quarter was a positive 22.48% for Federal Signal, 6.33% for ITT and 43.35% for Hitachi.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Honeywell's Garrett Subsidiaries Price Senior Notes Offering
Honeywell International Inc. (HON - Free Report) , on Sep 21, announced that two subsidiaries of Garrett Motion Inc. — Garrett Borrowing LLC and Garrett LX I S.à r.l. — have priced an offering of €350 million worth of senior notes due to mature on Oct 15, 2026. This offering is anticipated to close on Sep 27, 2018.
It’s worth mentioning here that the senior notes offering have been made in relation to the spin-off of Garrett from Honeywell.
Inside the Headlines
Notes have been priced at 100% of the principal amount and carry a coupon rate of 5.125%. These instruments will be guaranteed by the company and its subsidiaries, both foreign and domestic.
The value of notes offered is €100 million short of the previously decided amount. As noted by the company, Garrett intends on using funds that are expected to be raised through this offering as well as that from its new credit facility to repay debts to Honeywell or its subsidiary. The repayment to Honeywell or its subsidiary will likely total $1.6 billion. Additionally, funds will also be used for expenses related to the notes offering and credit facility.
Honeywell and Garrett Motion
Honeywell, in October 2017, communicated about plans to spin-off Global Distribution and Transportation Systems businesses. In June 2018, the company decided that the spun-off transportation business would be known as Garrett Motion Inc.
Finally, in September 2018, Honeywell declared that it would distribute one share of Garrett Motion shares for every ten shares of Honeywell. The distribution will take place on Oct 1, 2018. All shareholders of record till Sep 18 have been considered eligible for this distribution. Garrett Motion will start trading on the NYSE from Oct 1, under the ticker symbol ‘GTX’.
Zacks Rank & Stocks to Consider
With a market capitalization of $124.3 billion, Honeywell presently carries a Zacks Rank #3 (Hold). The company stands to gain from solid demand for its products, improved productivity and commercial excellence. However, It currently faces headwinds from rising costs and expenses.
Over the past three months, Honeywell’s shares have yielded 16.2% return, outperforming 8.6% increase recorded by the industry.
Furthermore, the stock’s earnings estimates are currently pegged at $8.15 for 2018 and $8.89 for 2019, reflecting growth of 0.1% and 0.3% from respective 60-day-ago tallies. However, earnings estimates for the third quarter of 2018 have declined 0.5% to $1.98.
Honeywell International Inc. Price and Consensus
Honeywell International Inc. Price and Consensus | Honeywell International Inc. Quote
Some better-ranked stocks in the industry are Federal Signal Corporation (FSS - Free Report) , ITT Inc. (ITT - Free Report) and Hitachi Ltd. (HTHIY - Free Report) . While Federal Signal sports a Zacks Rank #1 (Strong Buy), both ITT and Hitachi carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates on these three stocks improved for the current year and the next. Further, earnings surprise for the last quarter was a positive 22.48% for Federal Signal, 6.33% for ITT and 43.35% for Hitachi.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>