No bailout for CIT as talks with government end
Filed under: Company News
Update: CNBC reports that CIT Group is trying to raise up to $3 billion from private investors to avoid a Chapter 11 bankruptcy filing.Middle-market commercial lender CIT Group (CIT) has been told it won't be getting a government bailout anytime soon, the company said in a statement this evening.
"There is no appreciable likelihood of additional government support being provided over the near term," CIT disclosed in a press release. The lender, which last weekend hired a law firm specializing in corporate bankruptcies, said it's "evaluating alternatives."
CIT has been battling a severe cash shortage and faces a billion-dollar debt payment next month. Unable to sell bonds, it had been lobbying the Federal Deposit Insurance Corporation for approval to participate in a program that guarantees bank debt. Evidently the FDIC turned CIT down.
Analysts at Standard & Poor's warned earlier this week that losing out on further government assistance could doom CIT to bankruptcy.
Groups representing industries in which CIT lends tried to make a case today for additional bailout funds for the company, which already received $2.33 billion under the U.S. Treasury Department's Troubled Asset Relief Program.
The American Apparel and Footwear Association, which represents clothing suppliers, said in a statement that a CIT bankruptcy would have a "crippling impact" on manufacturers.
In a note to clients last week, Kathleen Shanley, an analyst with corporate bond research firm Gimme Credit, said CIT wasn't likely to be seen by regulators as so interconnected that it had to be saved.
"We don't view CIT as meeting the 'too big to fail' test, especially since there is a long list of other troubled banks
awaiting regulatory attention, some with more insured deposits at risk than at CIT," Shanley wrote.
David Hendler, a bond analyst with research firm CreditSights, in a note to clients estimated that CIT's lending supports just 1 percent of U.S. manufacturing and retail businesses.
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Reader Comments (Page 1 of 2)
7-15-2009 @ 8:32PM
jim jab712 said...
When the chairman of G.E.can sit right next to the
President of the United States, it was all over for
CIT. To bad.
JAB4
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7-16-2009 @ 6:17AM
MyKisa said...
...follow that money trail
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7-15-2009 @ 10:58PM
Cliff said...
I'm no financial genuis, but I have enough common sense not to invest in failing, mismanaged, greedy companies. If they continue the way they are going with their stimulis packages, we're going to wind up like Zimbabwe. With all the financial genuises out there, why didn't he get some input for the best way out of this mess. You can't stimulate the economy with people using their credit cards. Credit is a major factor to why we're in this mess. Shut down all the tax programs and tax everyones paycheck or income at 10% and you'll see the economy pick back up again. This would mean no more taxes on utilities, no state income taxes, no fuel taxes, no more tax returns, etc., etc. The Gov. would get plenty of money to do their thing (after we put the right people in there). People would have plenty of money to keep the economy going and they would barely even have the need for any kind of credit. Anyone capable of working that doesn't, won't get to eat. But this seems to make too much sense. Why does everything have to be so difficult. GREED
http://New-World-Order.itrustgodonly.com/ --
http://death-camps.itrustgodonly.com/The-Obama-Deception/
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7-16-2009 @ 9:02AM
Jerry said...
Cliff; You are right on the money with your flat rate tax. Credit cards should be avoided at all costs. Term limits should be applied to Congress. Too many stay too long.
7-15-2009 @ 11:02PM
Charles Carter said...
Wait till the fallout from this hits the unemployment rolls. Over 15 million unemployed now. Many of those lost their health insurance. Obama didn't consider that, did he?
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7-16-2009 @ 12:38AM
JERRY said...
OUR COMMUNIST LEADERSHIP IS REALLY CONCERNED THAT IT WON'T GET IT'S HEALTH CARE PACKAGE WITH IT'S BUILT INENEFITS TO MURDER MORE BABIES SO THEY ARE BACKING OFF TO TRY AND APPEASE THE GREATLY OVERBURDONED TAXPAYERS
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7-16-2009 @ 1:06AM
philemon said...
I think the top mangers of cti should still get their bonus,it hard to find top managment like that,we need more at the top like them GM ,etc
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7-16-2009 @ 10:06AM
craig said...
What's the matter, No government officials have any money in this bank? Is that why they are'nt getting bailed out?
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7-16-2009 @ 6:28AM
dave said...
who wants obamas government tell you how to running your finance he cant even run acorn
Reply
7-16-2009 @ 8:04AM
Bob said...
So how big were the management raises at CIT this year, And how much last year? How much stock in CIT has their management dumped or sold short?
Reply
7-16-2009 @ 8:23AM
Andy said...
No bail is a good thing. It brings to ones mind, was this intended by the bankers who received the tarp and bailout money, to corner and monopolize the industry. Eliminating the competition. Yes they are crooks and very good at scheming.
Reply
7-16-2009 @ 8:27AM
mary said...
tell the frud banks to shut the hell up they are liers and they will keep taking our tax money i hope they all got to bankruptcy for what they did to us ppl everything happened because of what they did and they want more money for tax payers i hope they burn in hell
Reply
7-16-2009 @ 8:44AM
Jan Forysiak said...
Who cares, I am living over 18 years in this country and worked for 2 years for $2.68 an hour and I don't ask for help! God Bless America. Jan
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7-16-2009 @ 8:54AM
richard said...
The government cannot keep bailing out these large companies and ignoring the taxpayers and the small businesses by creating more debt for the future. Eventually, the debt comes due and the government has to find the money to pay off these debts. More government equals more debt and more debt equals more taxes. The threat of a socialist or communist society in America is increasing with every spending bill and bailout of the large companies in this nation. Let CIT fail, go into bankruptcy, and let the court system figure out whether they can survive. That is what most reasonable companies do to survive or sell off their assets.
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7-16-2009 @ 9:19AM
farn said...
welcome to "The United Socialists States of Mexico"
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7-16-2009 @ 10:14AM
Scott said...
Please let them go bankrupt. It may stink in the short term, but we will all be better in the long term. Propping up a failing company is like putting a dying cancer patient on a ventilator. It just prolongs the inevitable!
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7-16-2009 @ 10:23AM
dominic said...
I was rejected by citibank for a platinum card because I didn't have a balance(debt.), on several other charge cards which I thought was a good thing????
After reading this current report, I'm glad I didn't get a credit card cause it would have been a waste of going through the motions. Thanks for doing me a favor, citibank.
Reply
7-16-2009 @ 11:27AM
stew said...
citibank and CIT are two different companies. one has nothing to do with the other.
7-16-2009 @ 10:52AM
Charles Carter said...
It is patently obvious that Democrats are just professional politicians and have very little business acumen.
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7-16-2009 @ 11:37AM
Tom said...
Oh, to have that business genius Bush back again.