Please ensure Javascript is enabled for purposes of website accessibility

Honeywell Expands N95 Face Mask Production, Seeks $5 Billion Loan

By Neha Chamaria - Mar 24, 2020 at 3:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

While helping the Government tackle the coronavirus crisis, Honeywell is also bracing itself for tougher days.

Honeywell International (HON 0.65%) is ramping up production of N95 masks in the U.S. and may hire 500 workers in response to the COVID-19 coronavirus pandemic that has led to a shortage of the particulate-filtering respirator mask across the globe. Honeywell is among the few world-renowned N95 mask makers, along with larger manufacturers like 3M that are maxing out mask production.

Last week, Vice President Mike Pence announced that recently enacted legislation would allow these companies to begin selling millions of more masks immediately, without fearing any liability.

Meanwhile, Honeywell is seeking to raise a term loan of nearly $5 billion as it prepares for a challenging business environment, according to a report from Bloomberg.

Honeywell's plans to maintain financial resilience amid COVID-19

In February, Honeywell announced plans to expand production of the N95 masks at multiple facilities across the globe. Its masks and other industrial parts and safety products are available through retailers across the U.S. and Europe as well as key e-commerce portals in China, including and Alibaba's

An N95 Mask.

Image source: Getty Images.

Pence said Honeywell could boost production by nearly 120 million masks per year. Accordingly, Honeywell is now setting up a new mask production line at its factory in Smithfield, Rhode Island, which otherwise manufactures products like UVEX safety glasses and industrial face shields.

For this new production line, Honeywell will hire at least 500 workers at its Smithfield facility.

At the same time, Honeywell is looking to raise a term loan of $5 billion to "strengthen" its financial position during these uncertain times, as Bloomberg reports. Fears of a recession loom large, and many companies are tapping additional funds to build up resilience for the near future.

Honeywell's high investment-grade rating should come in handy now, as it should enable the company to raise funds without much fanfare. A high rating, which reflects manageable debt levels and the company's ability to repay, allows companies easier access to funds. The grounding of Boeing 737 MAX is already hurting Honeywell's aerospace business, so any funds that it can raise now is a step in the right direction to maintain its financial fortitude if things turn for the worse.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Honeywell International Inc. Stock Quote
Honeywell International Inc.
$173.21 (0.65%) $1.12
3M Company Stock Quote
3M Company
$129.84 (0.49%) $0.63, Inc. Stock Quote, Inc.
$61.76 (-4.59%) $-2.97
Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
$119.12 (-0.84%) $-1.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.