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Bankruptcy May Yet Be In CIT’s Future

Published 1 Min Read

Commercial lender CIT Group warned that it may have to file for bankruptcy even if its cash tender offer for notes due in August goes through.

The company sought help from U.S. government regulators and failed to get it, but earlier this week it did get a reprieve from its existing debt holders. On Thursday, CIT said in documents filed with the Securities and Exchange Commission — an amendment to a July 20 supplement —that, “even if the tender offer is consummated, [there is ] the risk that the $3 billion loan facility does not provide the liquidity that the company is seeking due to material negative changes to the company’s liquidity from draw down of loans by customers, the risk that the company is unsuccessful in its efforts to effectuate a comprehensive restructuring of its liabilities, in which case the company may be forced to seek bankruptcy relief.”

At midday Friday, CIT shares were changing hands at 86 cents each, up a penny from their opening level and down from a session’s high of 97 cents in above average trading volume.

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