"The company and the steering committee of bondholders will now work on drawing up a number of debt-swap offers designed to alleviate CIT’s debt burden and further shore up the company’s cash position. The deal suggests that the appetite for risk is increasing in the private sector, analysts said. It could also provide a framework for other financial rescues if Washington turns off the bailout spigot"
Oh, no, HERE WE GO AGAIN, America?
Related: Slow Saturday Special: The CIT Scam
Municipal Bond Milking
"CIT gets $3b bailout from its bondholders; Deal is to ensure that smaller firms can still get credit" by Stevenson Jacobs and Daniel Wagner, Associated Press | July 21, 2009
NEW YORK - Commercial lender CIT Group Inc. confirmed late yesterday that it has secured a $3 billion bailout from its bondholders, saving the company from filing for bankruptcy protection.
It was a new twist in the financial crisis: A major bank on the verge of a last-minute rescue; only this time the bailout is not coming from the government. The deal marks the first time in the current banking crisis that private investors are stepping in to save a big financial firm without federal help or oversight.
Yeah, self-serving scum like Barney Frank, right?
CIT said the rescue includes a $3 billion secured term loan with a 2 1/2-year maturity, which will ensure that its small and midsized business customers continue to have access to credit. Term loan proceeds of $2 billion are committed and available immediately, with an additional $1 billion expected to be committed and available within 10 days. The lender is also moving to immediately restructure its debt to provide additional liquidity and further strengthen its capital position....
The company and the steering committee of bondholders will now work on drawing up a number of debt-swap offers designed to alleviate CIT’s debt burden and further shore up the company’s cash position. The deal suggests that the appetite for risk is increasing in the private sector, analysts said. It could also provide a framework for other financial rescues if Washington turns off the bailout spigot.
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