Game Over CIT
CIT Announces That Discussions with Government Agencies Have Ceased
NEW YORK--(BUSINESS WIRE)--CIT
Group Inc. (NYSE: CIT), a leading provider of financing to small
businesses and middle market companies, today announced that it has been
advised that there is no appreciable likelihood of additional government
support being provided over the near term.
The Company’s Board of Directors and management, in consultation with
its advisors, are evaluating alternatives.
Finally one not too big to fail (not surprisingly, the one who services Main Street). How many billion in CDS was Goldman long CIT? Due to the lack of a 80% unionized workforce, Obama will not hold a press conference on how Steve Rattner will get the company out of chapter in 30-45 days.
And here is the summary assessment compliments of Egan-Jones:
Synopsis: No help - " no appreciable likelihood " of US support near term is a massive blow to all CIT stakeholders. Unfortunately, given CIT's distressed state, there are no other likely capital providers. Calls might be made to large sophisticated investors such as Buffett but success is unlikely. Liquidity will be pressed and we would not be surprised by a filing in the near future. CIT reported weak March 2009 results with operating income sliding from a $2M loss last year to a $453M loss this year. Interest income fell by $174M and provisions rose by a stunning $288M. Over the past two years CIT's shares have fallen from $60 to merely $1.53 providing a market cap of just $637M vs. $60B of debt. The short term debt will suffer along with all other debt.