Former Merrill Lynch CEO John Thain appointed CIT chief
Editor’s Note: This is good news for CIT, they really needed strong leadership to turn around the large independent business lender. Mr. Thain will have a large task at hand as well. CIT has a large amount of outstanding debt and they are not getting TARP assistance in the commercial paper market. He is looking for a 2-3 year turn around for the firm. If he can pull that off he will really be back on top of his game as a premier financial CEO. Good luck John.
The former chief executive of Merrill Lynch, John Thain, has been appointed as the new boss of US lender CIT Group, which recently emerged from bankruptcy.
CIT Group Will Provide $1 Billion to Trade-Finance Unit
Wall St. Journal, New York – Ailing business lender CIT Group Inc., which recently signed a $3 billion financing deal with its largest bondholders, will provide $1 billion of that money to a unit that gives cash advances and credit to manufacturers and retailers, it told some customers on Friday.
In a memo addressed to “clients and industry associates,” the unit, called CIT Trade Finance, said the provision of $1 billion by its parent, CIT Group, reflects its “commitment to support” the unit and its clients.
CIT clinches $3 billion bondholder rescue to fend off bankruptcy
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.
CIT in talks with U.S. government for access to bailout funds
Editor’s Note: CIT has been followed by us for some time. They have been in trouble for quite some time. I believe they should get access on the grounds that GE’s financing unit has gotten some assistance as well. CIT provides secured business financing and in this environment that segment of the market has been hit hard and it is getting increasingly harder for small and medium size businesses that were quite viable in a normal economic environment to get funding to bridge the gap until we have a real recovery. It would be a sad state of affairs if this funding became even harder to come by and more businesses would go out of business because of this unique situation. I don’t support government bailouts but if we are going to do it, then we better make sure we help the small guys along with the large corporations.
News (Reuters):
CIT Group Inc. said it is in active talks with the U.S. government to gain access to a key lending program, as the commercial lender’s stock fell to a record low on Friday on concerns that it would be excluded.