CIT Amends Restructuring Plan
NEW YORK--(BUSINESS WIRE)--October 17, 2009--
CIT Group Inc. (NYSE: CIT), a leading provider of financing to
small businesses and middle market companies, today announced that
it has amended its restructuring plan to further build bondholder
support. The amendments have been approved by CIT's Board of
Directors and the Steering Committee of CIT's bondholders.
On October 1, 2009, CIT commenced a series of offers to exchange
certain outstanding series of notes and concurrently began a
solicitation for votes for a voluntary prepackaged plan of
reorganization. Successful completion of either the exchange offers
or plan of reorganization will generate significant capital and
provide multi-year liquidity through the material reduction of
CIT's outstanding debt.
"Over the last two weeks, we have continued to work
constructively with the Steering Committee and believe that these
amendments will further build bondholder support for our
restructuring plan," said Jeffrey M. Peek, Chairman and CEO.
"Through the completion of the exchange offers or an expedited
in-court restructuring process, we will reduce the uncertainty
around our business and further maximize the value of our
franchise. Either approach is intended to ensure that CIT becomes a
well-capitalized bank holding company that will serve as a source
of strength for CIT Bank as we implement our new bank-centric
funding model."
Amended Terms of the Restructuring Plan
The amended terms of the restructuring plan include, among
others:
-- A comprehensive cash sweep mechanism to accelerate the repayment of the
new notes;
-- The shortening of maturities by six months for all new notes and junior
credit facilities;
-- An increased amount of equity offered to subordinated debt holders
reflecting agreements with holders of the majority of its senior and
subordinated debt;
-- The inclusion of the notes maturing after 2018 that had previously not
been solicited as part of the exchange offer or plan of reorganization;
-- An increase in the coupon on Series B Notes, to 9% from 7%, being issued
by CIT Delaware Funding; and
-- Provided preferred stock holders contingent value rights in the plan of
reorganization, and modified the allocation of common stock in the
recapitalization after the exchange offers, as part of an agreement with
the United States Department of Treasury.
The exchange offers expire at 11:59 pm, New York City time, on
Thursday, October 29, 2009, with the exception of the additional
notes maturing after 2018 for which there is an early acceptance
date of October 29, 2009 and expiration date of November 13, 2009.
Tendered securities may be validly withdrawn at any time prior to
the expiration or early acceptance date.
NYSE Approval
On October 14, 2009, the New York Stock Exchange (the "NYSE")
accepted CIT's application of the financial viability exception to
the NYSE's shareholder approval policy in connection with the
issuance of the New Preferred Stock should the Offers be
consummated. The Audit Committee of the Company's Board of
Directors has approved the use of this exception.
For Additional Information
The Company is filing an 8-K containing the amended Offering
Memorandum, Disclosure Statement and Solicitation of Acceptances of
a Prepackaged Plan of Reorganization with the Securities and
Exchange Commission. Further information about the Company, its
restructuring plan, including the amended offering memorandum, will
be available at www.cit.com.
The Information Agent for the Offer is D.F. King & Co.
Financial Balloting Group, LLC is serving as Exchange Agent for the
Exchange Offers and Voting Agent for the Plan of Reorganization.
Retail holders of notes with questions regarding the voting and
exchange process should contact the information agent at (800)
758-5880 or +1 (212) 269-5550. Banks and brokers with questions
regarding the voting and exchange process should contact the
exchange and voting agent at +1 (646) 282-1888. BofA Merrill Lynch
and Citigroup Global Markets are acting as financial advisors to
the Company for purposes of this transaction.
Evercore Partners, Morgan Stanley and FTI Consulting are the
Company's financial advisors and Skadden, Arps, Slate, Meagher
& Flom LLP and Sullivan & Cromwell LLP are legal counsel in
connection with the restructuring plan.
Individuals interested in receiving future updates on CIT via
e-mail can register at http://newsalerts.cit.com.
About CIT
CIT (NYSE: CIT) is a bank holding company with more than $60
billion in finance and leasing assets that provides financial
products and advisory services to small and middle market
businesses. Operating in more than 50 countries across 30
industries, CIT provides an unparalleled combination of
relationship, intellectual and financial capital to its customers
worldwide. CIT maintains leadership positions in small business and
middle market lending, retail finance, aerospace, equipment and
rail leasing, and vendor finance. Founded in 1908 and headquartered
in New York City, CIT is a member of the Fortune 500.
www.cit.com.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of applicable federal securities laws that are based
upon our current expectations and assumptions concerning future
events, which are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those
anticipated. The words "expect," "anticipate," "estimate,"
"forecast," "initiative," "objective," "plan," "goal," "project,"
"outlook," "priorities," "target," "intend," "evaluate," "pursue,"
"commence," "seek," "may," "would," "could," "should," "believe,"
"potential," "continue," or the negative of any of those words or
similar expressions is intended to identify forward-looking
statements. All statements contained in this press release, other
than statements of historical fact, including without limitation,
statements about our plans, strategies, prospects and expectations
regarding future events and our financial performance, are
forward-looking statements that involve certain risks and
uncertainties. While these statements represent our current
judgment on what the future may hold, and we believe these
judgments are reasonable, these statements are not guarantees of
any events or financial results, and our actual results may differ
materially. Important factors that could cause our actual results
to be materially different from our expectations include, among
others, CIT may need to seek protection under the US Bankruptcy
Code, even if the tender offer is consummated, the risk that the $3
billion loan facility does not provide the liquidity that CIT is
seeking due to material negative changes to CIT's liquidity from
draw down of loans by customers, the risk that CIT is unsuccessful
in its efforts to effectuate a comprehensive restructuring of its
liabilities, in which case CIT may be forced to seek bankruptcy
relief. Accordingly, you should not place undue reliance on the
forward-looking statements contained in this press release. These
forward-looking statements speak only as of the date on which the
statements were made. CIT undertakes no obligation to update
publicly or otherwise revise any forward-looking statements, except
where expressly required by law.
CONTACT: CIT MEDIA RELATIONS:
C. Curtis Ritter, 212-461-7711
Director of External
Communications & Media Relations
Curt.Ritter@cit.com
or
CIT INVESTOR
RELATIONS:
Ken Brause, 1-866-54CITIR (542-4847)
Executive Vice
President
investor.relations@cit.com
SOURCE: CIT Group Inc.
Copyright Business Wire 2009