Editor’s Note: This will be interesting to see how this plays out. What makes no sense to me is how the Fed will bail out other business finance companies but then deny CIT. I am noticing a trend whenever its a “largest independent” insert your own noun gets into trouble, you will not get help from the government. Its really shows who has connection in Washington and who does not. This is the biggest thing I have against government intervention in the markets. If you must use tax-payer money to support private institutions, please do it blanket or not at all, I don’t like seeing non-industry players determine who the “winners and losers” will be. .02
News (Reuters):
CIT Group Inc has clinched $3 billion of emergency financing from bondholders, keeping the struggling lender out of bankruptcy, a person close to the matter said.
The rescue from several big bondholders including Pacific Investment Management Co has been approved by CIT’s board and could be announced on Monday, the source said.
A rescue could allow more time for the 101-year-old lender to small and mid-sized businesses to restructure its debt, and preserve the ability of thousands of businesses to obtain cash needed for day-to-day operations.
Yet several analysts and bankers said it might only delay a bankruptcy filing, in light of skittishness among CIT customers and the New York-based company’s inability to readily tap capital markets.
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