Icahn Discloses Plans For CIT
CIT is now certain to file for bankruptcy over the weekend, after it was unable to obtain the requsite number of consents for its exchange offer. The only question is whether or not the bankruptcy will be a pre-packaged, in which bondholders will accept specific haircuts or if it will be a free fall Chapter 11, which would likely promptly devolve into a Chapter 7 liquidation, if creditors are unable to come to a non-blocking agreement. In an odd development today the firm announced that it had chosen Icahn to provide an incremental $1 billion DIP for when the company does file. By doing so, the BOD and the executive committee basically kissed their jobs goodbye: Icahn has been vocal and extremely critical of everyone at the fancy-lobbied firm at 505 Fifth.
With the new priming financing, Icahn will further lower his cost basis, and raise his weighted average holdings in the firm's capital structure. Icahn has already stated that he is the largest holder of company bonds, which has as of yet been unconfirmed. We expect one of the affidavits to be filed promptly at Bowling Green on Sunday to confirm or deny this claim.
In the meantime, the below interview by Fox Business News with Icahn should bring some clarity for the plans that the corporate raider has for this most recent conquest. One only hopes that this most recent venture will be more successful than Federal Mogul which likely cost Icahn several years of his life, and not to mention a few hundred million.
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on Fri, 10/30/2009 - 19:49
#115771
This is bullish for CIT, right?
on Fri, 10/30/2009 - 19:56
#115776
Bye bye jobs. This is pretty major no more loans to small business.
on Fri, 10/30/2009 - 20:10
#115781
If anyone thinks this is going to be a happy happy ending, well, smoke some for me. This WILL result in funding snafus for mid-level retailers attempting to function going into the Thanksgiving weekend and WILL result in a series of CDO and CDS defaults that creates major issues for several regional banks. Watch the action in those banks already reporting very weak results in the last 7 days who primarily operate in the Southeast and Mid-Atlantic states. CIT's Sunday afternoon BK also will cause some major problems for the functioning of many regional and individual restaurants creating new CRE issues in January.
Icahn may think he's bailed out his own bacon but just remember what a wonderful job he did with WCI.
I'm just sayin.....
on Fri, 10/30/2009 - 20:23
#115795
thank you.
I'd love to hear more about the cds matters in regards the regionals.
Thank you for the update on this TD and ZH.
on Fri, 10/30/2009 - 21:09
#115825
ah yes the good ol' days
http://www.marketwatch.com/story/wci-shares-rise-after-builder-hires-gol...
http://www.naplesnews.com/news/2005/nov/02/ndn_developer_wci_states_prof...
http://media.naplesnews.com/media/img/photos/2008/01/16/Starky_t607.jpg
on Fri, 10/30/2009 - 21:32
#115840
you gotta wonder what the political strategy / end game is in all of this. With everyones' favorite uncle Wilbur sounding the alarms earlier today and this CIT soap opera at its 'stay tuned moment', the administration does not need a meltdown right now, or does it?
It is reasonable to surmise that every political (and therefore economic) decision made will relate to the midterms yet the 2big2fail banksters would like nothing better than a culling of the regional herd and at the same time a main street mini bailout to deflect some of the heat and cover some of their PCBs.
So, was today's market cliff dive a coincidence along with uncle Wilbur's musings and the I mans about face or a setup for a Sunday rescue mission? (or more importantly a precursor to 'stimulus' 2.0)
on Sat, 10/31/2009 - 03:43
#115967
The end game?
Rymes with Bold.
When the paper money wealth illusion collapses what will be left?
GOT GOLD SUCKAS!
on Fri, 10/30/2009 - 20:11
#115783
Is Icahn knowingly drunk in this interview? He sounds like he's got his frat bro telling him what to say.
on Fri, 10/30/2009 - 20:12
#115785
"Icahn will further lower his cost basis, and raise his weighted average holdings in the firm's capital structure."
a/k/a "doubling down"
Only the future will tell whether that was a good move.
on Fri, 10/30/2009 - 20:52
#115810
sounds like scared and desperate man
on Fri, 10/30/2009 - 21:10
#115826
FDIC just seized 9 banks owned by Chicago based holding company FBOP: http://www.chicagotribune.com/business/chi-fbop-seize-oct30,0,502486.story
But this is the hilarious part:
"The closing of $4.7 billion-asset Park National occurred the same day that its community development arm, Park National Bank Initiatives, received $50 million from Treasury Secretary Timothy Geithner in a ceremony in Chicago."
The Bair vs. Geithner hate-a-thon was just taken to an amazing new level. ROFLMAO x 100.
on Fri, 10/30/2009 - 21:30
#115841
+1
on Fri, 10/30/2009 - 21:15
#115827
Cit sez: Icahn has bailout??
Could he be the trigger man? There goes the economy:
http://www.youtube.com/watch?v=vhX1bqXO_3A
on Sat, 10/31/2009 - 06:56
#116020
on Sat, 10/31/2009 - 08:08
#116034
Cheeky, you little Bastard, where DO you get this stuff?
on Sat, 10/31/2009 - 09:30
#116062
I thought I was original. Thanks Cheeky!
on Fri, 10/30/2009 - 21:12
#115828
9 BANKS tonight, wow!
on Sat, 10/31/2009 - 08:07
#116017
Fireworks at 9.
Come early and secure a great seat for the event of a lifetime.
on Fri, 10/30/2009 - 21:42
#115849
Why does America need CIT again? They must have great rates or great customer service or something.
Can't (won't?) other banks loan small businesses money?
On a scale of one to TBTF, what are CITs chances of getting Gov. cash?
on Fri, 10/30/2009 - 22:58
#115890
I ran a small business that used CIT for years. I'm trying not to gleefully dance on their grave. Total a$$holes.
on Sat, 10/31/2009 - 05:00
#115983
CIT is carrying a mass of businesses that are struggling. Keeping CIT on life support is a way to keep non-viable businesses on life support. If a business on the CIT loanbook was cash-flow positive, they would be able to secure financing independent of CIT.
An earlier poster mentioned a CIT bankruptcy as triggering defaults -> bank stress. Not disagreeing. I would only add that junk bonds are where the brawl is going to take place.
on Fri, 10/30/2009 - 22:37
#115880
Didn't Goldman buy CDS on CIT?
on Fri, 10/30/2009 - 23:14
#115898
Timmy won't let CIT fail. We're all being set up for the MOABT (mother of all bear traps).
on Sat, 10/31/2009 - 06:56
#116019
Hoorray for the gutter-rat Icahn. Carl, enjoy the nice, fresh, steaming pile of CIT you landed!
on Sat, 10/31/2009 - 09:37
#116065
This is what happens when one gets to be 70 years old and has no hobbies.
on Sat, 10/31/2009 - 10:15
#116076
It has to be a prepackaged deal. Otherwise the GS deal would be thrown out. Would of taken them weeks of dealing to get this set up. Glad I am not a conspiracy nut..haha
-Spanish Inquisition
on Sat, 10/31/2009 - 11:01
#116095
Once again Cramster the Uncanny creates an exit point and a shorting opportunity for his hedge fund buddies, they better give him some front running payola on the SHORT side this time though because the market looks like it could tank
He just loves the "little guy"
POS should be in ATTICA!!
on Sat, 10/31/2009 - 11:41
#116114
As we all know, CIT finances about 2,000 suppliers that in turn service some 300,000 retailers.
Only a free fall, Chapter 7, would spell immediate doom. In the long term this will drag out as long as the paper money lasts. After all, if paper money drags out the inevitable and the end game produces the same result, why not drag it all out to the bitter end?
I'd like to know more about the 2,000 suppliers, but I'm not willing to pay for it. For anyone interested, this site seems to have some data but I can't verify it or it's accuracy; although the chart on the right of the home page showing a steep decline in deliveries is a good tease:
http://panjiva.com/The-Cit-Group/1827255
After all, all this bankruptcy activity is just to get out from under all the "existing" debt and will do nothing to address the broken business model or the bottom-up destruction of this falling knife that is the economy.
on Sat, 10/31/2009 - 15:45
#116210
CIT has over $3trillion in net notional CDS outstanding. Who has written these and who is their counterparty? Does anybody know if this will trigger a Lehman like event soon?
http://markit.com/cds/most_liquid/index.html