Honeywell's Solstice Unit Raises $2 Billion Ahead of Spinoff

Honeywell's Solstice Advanced Materials is set to raise $2 billion in a junk-bond and leveraged-loan sale to fund a distribution to Honeywell and general corporate purposes. The deal is part of Honeywell's spinoff of Solstice, which is expected to be completed in Q4. The sale comes amid brisk leveraged finance activity, with 12 junk bond deals hitting the market this week. Goldman Sachs and JPMorgan Chase are leading the bond and loan offerings, respectively.

JPMorgan Chase has announced plans to reduce the influence of major bond issuers in its emerging-market index, a move that will re-route investment from countries like China and India towards smaller nations. This adjustment involves lowering the issuer cap to 9% by 2026, aiming to balance regional exposure and boost index yield.

The change will affect the largest bond sellers in emerging markets, including Indonesia, Mexico, Malaysia, China, and India. Smaller nations such as Thailand, Poland, South Africa, and Brazil are expected to benefit from this shift. According to a client notice seen by Bloomberg, JPMorgan will gradually lower the issuer cap on its GBI-EM Global Diversified index in the first half of 2026, with the implementation to be phased over several months JPMorgan to trim China, India share in EM bond index^[1].

JPMorgan's decision to lower the issuer cap comes amidst a period of brisk leveraged finance activity. This week alone, 12 junk bond deals have hit the market. The bank's index is the main benchmark for developing-nation debt funds, and changes to its composition can significantly impact global investment flows. The bank had been soliciting feedback from clients on such a change earlier this year.

Honeywell's Solstice Advanced Materials is set to raise $2 billion in a junk-bond and leveraged-loan sale to fund a distribution to Honeywell and general corporate purposes. This deal is part of Honeywell's spinoff of Solstice, expected to be completed in Q4. Goldman Sachs and JPMorgan Chase are leading the bond and loan offerings, respectively.

The reduction in the issuer cap is a strategic move aimed at diversifying investment and enhancing the headline index yield. By decreasing the concentration risk, JPMorgan seeks to provide investors with a more balanced exposure to emerging markets.