Folks in the oil patch are wondering what's going to become of CIT Energy, a unit of troubled CIT Group Inc. (NYSE:CIT).
CIT Energy finances a lot of deals and projects in the energy sector. Last summer, it was the lead arranger of a $50 million secured credit facility to support Austin Ventures' purchase of Delta Rigging & Tools, a Lake Jackson, Texas, provider of hoists, winches, wire rope, rigging and other lifting products and services to the industry. The previous year it underwrote a $17 million financing privately held Houston explorer Layline Petroleum LLC needed to close the acquisition of four gas fields from Energy Quest after one of its investors pulled out. And this past February, CIT Energy provided a three-year revolving credit facility of $25 million to publicly traded Northern Oil & Gas Inc. of Wayzata, Minn., after it acquired a lot of property and needed development funding.
Northern Oil CFO Ryan Gilbertson said CIT has continued to fund its needs, including a draw Friday. "If they become unable to fund us, we anticipate there are several other lenders ready to take their place," he said.
CIT didn't respond to requests for comment. But CIT Energy has a sizable team in Houston, including president Peter Gaw, the former head of energy at ABN Amro who joined the bank just last year. A spokesman for J.P. Morgan Chase & Co. (NYSE:JPM) -- no slouch in the deal funding department -- told The New York Times that if CIT couldn't continue lending to borrowers, it would see it as an opportunity for expansion. Maybe bondholders will save CIT -- and CIT Energy -- in the end. -
Claire Poole
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