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CIT Group Inc. emerged from a prepacked bankruptcy on Dec. 10, 2009. The company said the prepack would reduce debt by about
$10.5 billion, enhancing its capital ratios and hastening a return to
profitability.2010
Apr. 30: CIT Group Inc. announces that it sold its 50% interest in its CIT Business Credit Canada Inc. joint venture to partner CIBC World Markets Inc. Terms were not disclosed. CIT also says it paid an additional $1.5 billion of its first-lien credit facility. The lender has now repaid 30% of its first-lien debt; $5.25 billion remains outstanding. - Thomas Zadvydas
Feb. 9: As expected, CIT Group Inc. said it will not repay the $2.3 billion it borrowed under the U.S. Treasury's Troubled Asset Relief Program in December 2008. - Michael Rudnick
Feb. 8: Commercial lender CIT Group Inc., which exited bankruptcy in December, has named former Merrill Lynch & Co. chief executive John Thain as its chairman and chief executive. - Peter Moreira
Senior writer Michael Rudnick reacted to the news, writing:
In hiring John Thain as its new CEO, mid-market lender CIT Group Inc. has landed a much needed capital-raiser and dealmaker. For his part, the one-time Goldman, Sachs & Co. executive gets the chance to rehab a reputation muddied at the end of his stint running Merrill Lynch & Co., and to apply the turnaround skills he exhibited at Merrill and at the New York Stock Exchange, which he successfully repositioned earlier in the decade.
Jan. 20: CIT Group Inc.
has named board member Peter Tobin as interim CEO until it finds a
permanent replacement for Jeffrey Peek, who resigned as chairman and
CEO on Jan. 15. - Michael Rudnick
Jan 12: CIT Group Inc. has completed the post-bankruptcy overhaul of its board with the Tuesday, Jan. 12, announcement that it has named three new directors: Gerald Rosenfeld, deputy chairman of asset manager and adviser Rothschild North America, Anthony Terracciano, chairman of Sallie Mae, and Laura Unger, a private consultant and a former commissioner of the Securities and Exchange Commission. - Michael Rudnick
2009
Sept. 4: CIT gives Peek another year as CEO: Intent on leaving the dance with the "guy who brung ya," beleaguered
commercial lender CIT Group Inc. (NYSE:CIT) gave its CEO, Jeffrey Peek,
a one-year contract extension as he tries to keep the company out of
Chapter 11. Peek will remain CEO until at least Sept. 2, 2010,
the company said in a regulatory filing that modifies tax
reimbursements and Peek's use of corporate aircraft. - George White
Aug. 13: CIT to submit survival plan to N.Y. Fed: Evidently the Federal Reserve is tired of the CIT Group Inc. (NYSE:CIT) deathwatch and is taking a larger hand in deciding if the troubled middle-market lender will stay solvent. With its ability to stay out of Chapter 11 constantly in doubt, CIT said Thursday that it will spell out its survival plan in detail to the New York Federal Reserve within the next 15 days. The news sent CIT's shares up as much as 15% in Thursday afternoon trading.- George White
Aug. 11: CIT falling on bankruptcy fears: Shares of CIT Group Inc. (NYSE:CIT) are down nearly 15% in midafternoon trading as the company warned it may file for bankruptcy and postponed its filing of its second-quarter earnings, according to Reuters. - Gerald MagpilyJuly 23: CIT's weakness to strengthen Rosenthal, Sterling?: Bloomberg says Rosenthal & Rosenthal Inc. and Sterling Bancorp are receiving additional phone calls for their factoring business from former CIT clients. CIT's factoring business is no chump change, which has grown to $42 billion in 2008. - Gerald Magpily
July 23: Doubts deepen over CIT rescue plan: The lenders who offered CIT Group Inc.
a lifeline this week through a $3 billion loan appear to have
positioned themselves to take control of the company if it files for
bankruptcy protection -- a possibility that sources said is beginning to
look increasingly likely. - Vipal Monga
July 22: CIT's saviors make out like bandits: Thanks to onerous terms of the rescue package, the middle market lenders -- Baupost Group, Capital Research and Management Co., Centerbridge Partners LP, Pacific Investment Management Co. LLC, Oaktree Capital Management LP and Silver Point Capital LP -- made an instant $100 million on an investment analysts say is almost risk free, according to Bloomberg. - George White
July 21: Despite rescue, CIT remains on critical list: While CIT Group Inc.'s dramatic rescue may have kept it from an immediate bankruptcy filing, emerging details of the $3 billion financing suggest to some key constituents that the company may simply have delayed the inevitable. Indeed, there are some indications that the rescue loan itself makes things only more difficult for CIT in the medium term. - Vipal Monga
July 20: CIT gets $3B loan from bondholders: CIT Group Inc.
bondholders agreed Monday to provide the company with a $3 billion
bridge loan to help the lender avoid a bankruptcy filing, according to
a source. The company's board has approved the deal, but the
announcement was delayed to allow time for document preparation. The
source said no material issues were holding up the pact. - Vipal Monga July 20: Monroe Credit sees opportunity in CIT trouble: One company's woes sometimes spells opportunity for others. Just ask Monroe Capital LLC. The
Chicago-based specialty finance and merchant banking firm is launching
a new advisory practice, Monroe Credit Advisors LLC, to help
middle-market companies with their financing needs as the landscape for
middle-market lending has narrowed with financial institutions such as
CIT Group Inc.(NYSE:CIT) struggling to survive. - Gerald Magpily July 17: What's to become of CIT Energy?:
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. CIT didn't
respond to requests for comment. But CIT Energy has a
sizable team in Houston. 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 July 17: Could J.P. Morgan acquire CIT's assets?: On a conference call Thursday, CEO Jamie Dimon of J.P. Morgan Chase
& Co. (NYSE:JPM) said the primary effect of CIT going belly-up
would be immaterial to J.P. Morgan's P&L. I half-jokingly suggested
this was because his bank would either inherit a lot of CIT's business
or cherry-pick through its choice assets, offsetting whatever other
exposure J.P. Morgan might have to the commercial lender. - Nathaniel Baker July 17: The CIT-small business thread to become bare: There has been a slew of media reports regarding the possible CIT Group
Inc. (NYSE:CIT) bankruptcy filing and how deep of an impact it would have on a
variety of industries. And yet the message from the Obama administration seems to be that CIT is just too small to save. - Jamie Mason July 17: The middle market and the lessons of CIT: Short of a miracle, CIT Group Inc. (NYSE:CIT) seems headed for
bankruptcy, a case apparently of too-small-to-save. The CIT situation,
however, points to a number of aspects of our current situation that,
like CIT itself, get relatively little general coverage. First, CIT is
about the middle market, that vast swath of companies that
electioneering politicians routinely bow down to as the heartland of
American capitalism, but mostly just ignore (it's not even what
agriculture used to be: a potent and coherent lobbying opportunity).
Second, CIT is about a collection of lending practices, generally
gathered under the term asset-backed lending, which are suited to
middle-market operations but which are generally arcane.- Robert Teitelman July 17: CIT crisis may put NHL on thin ice: Many small and midsize businesses have been watching the
government's negotiations with CIT Group Inc. (NYSE:CIT) closely, but
one not-so-small concern is likely keeping abreast of the situation as
well: the National Hockey League. According to a report
in Canadian newspaper The Globe and Mail, CIT is a key lender to
several NHL teams, including the Ottawa Senators, Montreal Canadiens,
New Jersey Devils and Nashville Predators. - John Blakeley July 16: Markets brace for CIT fallout: With a bailout of CIT Group Inc. (NYSE:CIT) looking like it's not going
to happen, investors braced much of Thursday for the impact that a
bankruptcy filing by the lender might have. The run on the bank
continued Thursday as the company's clients rushed to max out their
credit lines before it's too late, while lenders stayed wary of
extending credit to CIT for fear of a Chapter 11 filing, worsening
CIT's financial situation throughout the day. - George White July 16: J.P. Morgan's Dimon on CIT bankruptcy: So Jamie Dimon says J.P. Morgan Chase & Co. (NYSE:JPM) won't take much of a hit if and when CIT Group Inc. (NYSE:CIT) files for bankruptcy -- an event that could happen as early as Friday. "We
have exposure to CIT, secured and unsecured, but I'm telling you, the
primary effect on [J.P. Morgan's] P&L would not be material to us,"
J.P. Morgan's chairman and CEO said on a Thursday morning conference call. - Nathaniel Baker July 15: Should CIT bondholders run for it?: When it comes to the bonds of struggling lender CIT Group Inc. (NYSE:CIT), the message from CreditSights Inc. is to flee before it's too late. In
a report released Tuesday, the credit research firm warned that even a
bailout from the government wouldn't be enough to keep the floundering
firm afloat, according to Bloomberg.- George White July 15: CIT inches closer toward bankruptcy: The company in a press release said its "board of directors and
management, in consultation with its advisors, are evaluating
alternatives." But its options seem limited. Bankruptcy is a strong
likelihood for the company, which confirmed last weekend it hired
bankruptcy specialist Skadden Arps Slate Meagher & Flom LLP.
Finding a buyer to swoop up CIT is unlikely since the company has
reportedly more than $7.4 billion due in the first quarter of 2010. - Gerald Magpily July 14: Is CIT another Lehman?: The potential demise of CIT Group Inc.,
one of the largest lenders to small and medium-sized enterprises in the
U.S., would deal a serious blow to middle-market M&A. But just how
serious is a matter of some debate. An informal survey of middle-market
dealmakers by The Deal found differing views on the gravity of such an
event, though there was some consensus that CIT's role in middle-market M&A would not be easy to fill. "In many respects, letting CIT fail is the middle-market equivalent of
letting Lehman fail," said Hector Cuellar, president of Costa Mesa,
Calif.-based investment McGladrey Capital Markets LLC. In financing
middle-market deals, "CIT has been the big player for many years," and
removing it would be sure to put a major damper on M&A activity. - Nathaniel E. Baker July 14: CIT shares rise as talks intensify: Shares
of CIT Group Inc. (NYSE:CIT) soared in Europe on Tuesday on reports
that the New York corporate lender was ramping up its discussions with
regulators on guaranteeing a bond issue before existing debt comes due.
The company's shares trading in Germany rose 21.5% to €1.20 ($1.68) at
9 a.m. ET, while the stock advanced in New York morning trading. CIT
shares on the New York Stock Exchange on Monday closed down 18 cents,
or 11.8%, to $1.35 on fears that the company may soon enter a liquidity
crisis. The shares were up over 10% late Tuesday morning. - Peter Moreira July 13: Specter of bankruptcy raised as CIT's options narrow: CIT Group Inc., yet to gain access the Federal Deposit Insurance Corp.'s
Temporary Liquidity Guarantee Program, is running out of options to
cover 2010 debt maturities as well as more than $5 billion in unfunded
commitments which could be drawn down by its borrowers. - Michael Rudnick and Peter Moreira July 13: CIT plus Skadden doesn't equal Ch. 11, right now: When a company in dire straights hires a bankruptcy specialist such
as Skadden Arps Slate Meagher & Flom LLP, does it mean it's filing
for Chapter 11? For CIT Group Inc. (NYSE:CIT), apparently not. Media
reports surfaced this weekend that CIT has hired Skadden, but the
lender to small and medium-sized businesses does not want to elaborate
about retaining the law firm. - Gerald Magpily July 10: CIT, a bomb waiting to explode: Uncle Sam may not open his wallet via the Temporary Liquidity Guarantee
Program to CIT Group Inc. (NYSE:CIT). And that could spell trouble for
the commercial lender, which owes more than $10 billion of maturing
debt through 2010 and could force the newly converted bank to raise
capital through a possible stock offering to convince the government to
give it the needed funds. - Gerald Magpily April 27: CIT may need more capital: Struggling midmarket lender CIT Group Inc. may be forced to sell assets as declining capital levels threaten its bank status, analysts said. Ratings agencies Moody's Investors Service and Fitch Ratings Ltd. slashed CIT debt to junk status on April 24 following CIT's dismal earnings results last week. - Michael Rudnick Nov. 4: Scrutiny sought of latest appeal to Treasury: The Treasury should weigh carefully whether to expand its $700 billion
rescue package to include nonbank lenders like GE Capital or CIT Group
Inc., say commercial bankers. These types of lenders have asked
Treasury to consider capital investments along the lines already in the
works for banks and insurers. Nonbank commercial lenders do not collect
deposits but do compete with banks for corporate borrowers. - Bill McConnell
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