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CIT Group Makes One More Bid to Avoid Bankruptcy

Posted By admin || 28-Jul-2009

According to an article in the Bloomberg, commercial lender CIT Group Inc., is pulling no punches to avoid bankruptcy; but may need to file anyway. The struggling commercial lender said that it is trying to avoid bankruptcy with a debt tender offer to bondholders which would include a $3 billion loan and $1 billion in floating-rate notes.

The article said:

"Even if the bond tender succeeds, "the risk that the $3 billion loan facility doesn't provide the liquidity the company is seeking" and it can't restructure its liabilities, may force CIT to seek bankruptcy protection, the company said today."

A bankruptcy of CIT Group could send shockwaves through the commercial lending industry and the businesses that depend on the company for capital and liquidity may find it hard to survive. This company is over 100 years, having weathered the Great Depression and the real estate downturn of the 1980's, CIT Group is facing a new kind of storm that may finally send it to bankruptcy.

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