CIT Arranges Deal and Avoids Bankruptcy
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From Bloomberg, CIT Arranges $3 Billion in Financing from Bondholders:
CIT Group Inc. reached a deal with bondholders for $3 billion in financing to avoid bankruptcy and restructure out of court, the Wall Street Journal reported.
CIT may need as much as $6 billion to avoid filing for bankruptcy protection after the U.S. wouldn’t give the firm a second bailout, according to CreditSights Inc. A failure of CIT, which has almost $76 billion in assets, would be the biggest bank collapse by that measure since regulators seized Washington Mutual Inc. in September.
Looks like CIT is safe for now. It will be interesting to see what the terms are- I doubt they are conducive to the health of CIT in the long run. No matter what happens, it’s very telling that CIT Group got stiffed by the government. Not that I agree in principle to bailouts, but I think it’s pretty clear who the favored institutions are at this point.
More on this topic
(What's this?)
CIT Rescue Shows Credit Isn’t Dead
(Investment U, 7/20/09)
Is CIT Group "Too Big To Fail'?
(Wealth Daily, 7/14/09)
Update: CIT Reaches Tentative Deal With Bondholders
(The Value at Risk, 7/17/09)
