CIT Group (CIT)

HenryTo · Posted: Tue Jul 01, 2008 10:04 am Post subject: CIT Group (CIT)

CIT sells its home lending operations to Lone Star Funds - receiving $1.5 billion in the process and getting rid of its manufactured housing portfolio:

http://www.marketwatch.com/news/story/cit-rallies-exit-mortgage-business/story.aspx?guid=%7BABAC58E1%2D0C14%2D41C0%2DBD4B%2DC87A1CD71D99%7D&siteid=yhoof

rffrydr · Posted: Sun Nov 01, 2009 9:01 am Post subject:

Goldman getting paid to reduce its exposure....gotta luv it!

They are agreeing not to pull this debt afterwards, but really...they should have just been stuck with it.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Fri Oct 30, 2009 10:48 pm Post subject:

Goldman makes its money as usual, but the effect of a CIT bankruptcy filing is now turning into a very uncertain situation for small to middle market businesses who rely on the company for financing:

http://online.wsj.com/article/SB125694692565719939.html?mod=article-outset-box

HenryTo · Posted: Sun Oct 04, 2009 8:18 pm Post subject:

Two years ago, this wouldn't have been seen as a problem. Goldman has tried working around all its "conflicts of interest" issues for the last couple of decades so it could expand its lines of business - but all of these are now coming home to roost. Look for more regulations in the CDS market over the next couple of years:

http://www.ft.com/cms/s/0/a5dcac30-b10f-11de-b06b-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1

HenryTo · Posted: Thu Oct 01, 2009 9:14 pm Post subject:

This is probably the end of the road for CIT equity shareholders:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aZaRqA5crtTY

HenryTo · Posted: Tue Sep 29, 2009 9:10 pm Post subject:

Wasn't this inevitable?
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CIT's future in question ahead of lender meeting
(AP) – 1 hour ago

CHARLOTTE, N.C. — CIT Group Inc.'s shares soared Tuesday on a report that hedge fund manager John Paulson is considering merging the troubled finance company with failed mortgage lender IndyMac Federal Bank. But they plunged after-hours as a separate report said CIT is preparing a debt swap offer that could wipe out taxpayers' investment or could file for bankruptcy protection.

CIT Group, one of the nation's largest lenders to small and midsize businesses, spent the summer trying to stave off a potential collapse amid mounting loan losses and rising funding costs. It has been devastated by the downturn in the credit markets and is attempting to restructure its operations to remain in business. CIT in the past relied heavily on cheap, short-term debt to fund its operations — a type of funding that essentially evaporated during the peak of the credit crisis last year.

The financial firm, which received $2.3 billion in federal bailout aid last fall, received a $3 billion emergency loan in July from some of its largest bondholders and completed a debt repurchase program in August to help ease its cash crunch.

A story in the New York Post early Tuesday, citing people familiar with the matter, said a merger plan has been discussed among a number of CIT creditors, including Paulson, but is not part of any formal discussions between CIT and IndyMac. The plan, however, was one of several being considered ahead of a meeting Thursday of CIT's bondholders to discuss restructuring plans, the newspaper said.

Paulson, and his hedge-fund firm Paulson & Co., was part of the consortium that bought IndyMac from the Federal Deposit Insurance Corp. earlier this year, after the big California lender failed in July 2008. The Post said the plan would help IndyMac diversify its portfolio from mortgages to commercial loans.

The news sent shares of the New York-based company soaring nearly 32 percent to close the regular session at $2.20. That's up sharply from the 31-cent trough the stock reached in July, but still about a quarter of shares' value a year ago.

However, after the market closed, The Wall Street Journal reported online that CIT is preparing a debt swap offer that would wipe away 30 percent to 40 percent of its more than $30 billion in debt and give control to its bondholders, according to an unnamed person familiar with the situation. Such a scenario could mean that taxpayers would recover only a small amount of their $2.3 billion TARP investment, according to sources.

If enough bondholders didn't agree to such a plan, the paper said CIT could choose to enter Chapter 11 bankruptcy protection and reorganize its operations in court. In aftermarket electronic trading, CIT shares tumbled 60 cents, or 27.3 percent, to $1.60.

A spokesman for CIT Group declined to comment on both the Post and Journal reports.

HenryTo · Posted: Wed Jul 22, 2009 1:53 am Post subject:

PIMCO makes out like a bandit on this little financing deal:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiJwhWb4QleU

rffrydr · Posted: Mon Jul 20, 2009 7:29 am Post subject:

PIMCO turns hedge-fund.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Mon Jul 20, 2009 12:51 am Post subject:

CIT gets a reprieve. This should immediately help reliquify small businesses across the US (and Australia) and should provide a tailwind for the financial markets for at least the next couple of weeks:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aUj438Nq1P5E

rffrydr · Posted: Sat Jul 18, 2009 11:09 pm Post subject:

Factoring is Shadow Banking. If CIT is eagerly swallowed this will play directly into my prediction that banks move heavily into trade finance. JPM's interest is complicated by they're being the FED's private arm:

http://media.bloomberg.com/bb/avfile/News/Surveillance/vBGf8SFbnnaI.mp3

http://media.bloomberg.com/bb/avfile/News/First_Word/vrFT6qGqII2Q.mp3
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Sat Jul 18, 2009 10:57 pm Post subject:

JPM said to be buyer.

This looks more and more like someone else's opportunity rather than market systemic risk.
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Fri Jul 17, 2009 8:10 pm Post subject:

Too many variables for the "rescue" to go wrong - but could surprise given the $30bn of unencumbered assets:

http://www.ft.com/cms/s/0/856f2f30-7303-11de-ad98-00144feabdc0.html

rffrydr · Posted: Thu Jul 16, 2009 11:09 pm Post subject:

The ol' debt-for-equity razzle dazzle may not apply here:

http://www.marketwatch.com/story/some-cit-debt-holders-consider-rescue-financing?siteid=rss&rss=1
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Today is the Tomorrow you worried about Yesterday!

HenryTo · Posted: Thu Jul 16, 2009 10:26 am Post subject:

PE buyout firms with stronger lender relationships with CIT:

http://www.pehub.com/44770/if-cit-goes-down-these-companies-may-be-hurting/

HenryTo · Posted: Wed Jul 15, 2009 6:02 pm Post subject:

Looks like a bankruptcy filing is now imminent:
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CIT talks fall apart, bankruptcy looms
On Wednesday July 15, 2009, 7:15 pm EDT

WASHINGTON/NEW YORK (Reuters) - CIT Group Inc (NYSE:CIT - News), a major lender to small- and mid-sized U.S. businesses, said on Wednesday that bailout talks with the government had ended, a development that heightened the chances the company would file for bankruptcy.

"Discussions with government agencies have ceased," CIT said in a statement. "There is no appreciable likelihood of additional government support being provided over the near term."

CIT said its management, directors and advisers were evaluating alternatives.

The announcement followed last-ditch talks in which the Treasury Department had expressed concern about a worsening liquidity crunch at New York-based CIT, and indications that government aid would not put the lender on a path to recovery.

Treasury, in a later statement, said the government needed to keep the threshold high for exceptional aid to individual companies, adding that the United States had a powerful set of financing mechanisms to help restart overall credit markets.

Founded more than a century ago, CIT's problems mushroomed in recent years in the wake of Chief Executive Jeffrey Peek's decision to expand into potentially highly profitable but riskier areas such as subprime mortgages and student loans.

If it were to go bankrupt, it would join Lehman Brothers Holdings Inc (Other OTC:LEHMQ.PK - News) and Washington Mutual Inc (Other OTC:WAMUQ.PK - News) among large U.S. financial services companies to collapse since the credit crisis accelerated last September.

It would also show the possible limits of Washington's willingness to rescue companies, after multiple bailouts for much larger companies such as American International Group Inc (NYSE:AIG - News) and Citigroup Inc (NYSE:C - News).

"At least in the eyes of the Fed and the eyes of the Treasury, we've turned the corner, such that the systemic kinds of risks facing the economy may be well past," said Mike Knebel, a portfolio manager at Ferguson Wellman Capital Management in Portland, Oregon, which recently sold CIT bonds.

Trading in CIT shares was halted on Wednesday afternoon, with the shares last trading at $1.65, up 4 cents.

Standard & Poor's 500 stock futures were down 0.4 percent after-hours.

TARP MONEY NOT ENOUGH

CIT sought help even after it became a bank holding company in December so it could draw $2.33 billion of taxpayer money from the government's Troubled Asset Relief Program (TARP).

Treasury had been considering an aid package that included a temporary loan to give CIT room to strengthen its balance sheet by raising additional capital through debt or equity, a person familiar with the matter had said.

Other options had been access to Fed's discount window, as well as asset transfers, the person said. The person requested anonymity because the talks were private.

CIT's travails were a vexing problem for the Obama administration, which had proposed that Congress give the government the authority to unwind large, troubled financial firms in an orderly fashion.

Because regulators do not have that power yet, they had to decide whether to bail out a company whose collapse, while significant, would by itself likely not pose a "systemic" risk to the financial system.

Treasury has also been supportive of the Federal Deposit Insurance Corp granting CIT access to its government debt guarantee program, the person familiar said.

Asset transfers to CIT's banking unit would have required approval from regulators such as the FDIC, which is already heavy pressure to handle dozens if not hundreds of expected bank failures in the next couple of years.

The FDIC had also been reluctant to allow CIT to join other financial companies in issuing government-guaranteed debt under an existing program, believing that such options are designed for healthy institutions.

"Not all firms have to be saved and the government has to draw the line at some point," said James Barth, an economist at the Milken Institute.

"I don't think it's going to be a catastrophe or become another Lehman Brothers, given the FDIC's apparent concern about the quality of the assets."

An FDIC spokesman declined to comment.

CONGRESS, INDUSTRY GROUPS CONCERNED

While CIT has shed from some of its riskier businesses, it still faced too much debt, including some $10 billion coming due in the year ending March 31, 2010.

Barney Frank, chairman of the House Financial Services Committee, said earlier on Wednesday he hoped the government could come up with a structured aid package for CIT.

"If CIT doesn't get structured help, then it will have a very negative effect, I'm told, on small businesses around the country," he said in an interview with Reuters.

Indeed, industry groups such as the National Retail Federation had argued that CIT's tentacles extended too far throughout the country to allow failure.

Steve Bartlett, chief executive of the Financial Services Roundtable, said 10,000 small businesses could be choked off from needed funds if CIT were allowed to collapse.

"This one is crystal clear," Bartlett said in an interview.

HenryTo · Posted: Wed Jul 15, 2009 10:38 am Post subject:

A CIT rescue is still on the table based on the current CDS "odds.":
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Costs fall to insure debt of U.S. lender CIT
Wed Jul 15, 2009 6:49pm IST
NEW YORK, July 15 (Reuters) - The cost to insure the debt of U.S. lender CIT Group Inc (CIT.N: Quote, Profile, Research) fell early on Wednesday.

CIT's credit default swaps slipped to about 34 percent as an upfront cost, from 40 percent late on Tuesday, according to Phoenix Partners Group data. (Reporting by John Parry; Editing by Theodore d'Afflisio)