No ‘Get Out of Jail Free’ Card for CIT

Green shoots? Stop the madness.

Despite all the disguises and shams perpetrated on the American taxpayers to this point, the simple fact is our economy is awash in excessive debt. The inability to refinance debt will be with us for a while. No company is more reflective of this dynamic than CIT.

Who and what is CIT? You should take the time to quickly study this company because it may very well be the linchpin that drops and causes the next leg down in our economy. Are they too big to fail?

From the CIT corporate web site:

CIT (NYSE: CIT) is a bank holding company with more than $60 billion in finance and leasing assets. For more than 100 years, CIT has provided lending, advisory, and leasing services to small and middle market businesses guided by unparalleled industry expertise and focus. Headquartered in New York City, CIT is a Fortune 500 company and member of the S&P 500.

CIT operates CIT Bank, a full service Utah state bank, which is regulated by the Utah Department of Financial Institutions and the FDIC.

Deep industry expertise

Operating in more than 50 countries, we have deep expertise across 30 industries. Our areas of expertise are:

Corporate Finance is a top 10 lead arranger for small and middle market level loans (less than $150 million) with more than 3,000 customers. Businesses include Commercial & Industrial, Communications, Media & Entertainment, Energy, Healthcare, Investment Banking Services, and Small Business Lending.

Trade Finance is a leading factoring company in the U.S. with customers in the U.S., Canada, Europe and Asia. CIT factoring services provides funding to thousands of small manufacturers which, in turn, sell to small and large retailers that also rely upon CIT for the flow of goods into their stores.

Transportation Finance is the third largest rail car leasing firm in the U.S. with more than 116,000 railcars and the third largest in aircraft financing worldwide with over 100 commercial airline customers and more than 300 business air customers.

Vendor Finance is the #1 independent leasing company in the U.S. serving more than 500,000 commercial end customers ranging from small businesses to Fortune 500 companies. It maintains customer relationships with a variety of marquee technology and office equipment companies providing trusted business equipment leasing.

Commitment to small business and the middle market for more than 100 years

Since 1908, CIT has driven success by delivering three types of capital to clients. We believe that the combination of relationship capital + intellectual capital + financial capital can yield infinite possibilities for our customers.

Relationship Capital: Our employees and the long-term partnerships they have created with thousands of clients are our biggest asset.

Intellectual Capital: We understand that it takes more than money to help our clients grow and prosper. Our knowledge and ideas, combined with relationship and financial capital ensures client success.

Financial Capital: The funding we provide is critical to our clients’ success.

CIT does have CIT Bank in Utah. Can CIT utilize that vehicle to get government funding or government backstops on debt financings much like Hartford Financial, Lincoln Financial, GMAC, and GE Capital? As of now, CIT has not received a “get out of jail free” card. As Bloomberg reports, FDIC Said to Withhold CIT Debt Guarantees Due to Risk.

If CIT were to fail, there would be a significant ripple effect across our economy. There is no sugarcoating that reality. The fact of the matter is, these are not new developments for CIT. Their reality is simply a function of the timing of the maturities of their debt. They have plenty of company.

Where do you draw the line?

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

Visit: Sense On Cents

Be the first to comment

Leave a Reply

Your email address will not be published.