CIT Group Inc. (CIT) bondholders are holding calls today to discuss whether to convert some of their claims for equity, news service Bloomberg reported on its web site, citing a person familiar with the situation.
Pacific Investment Management Co., [PIMCO] CIT’s largest bondholder based on regulatory filings, plans to host a call, and debt owners are considering hiring financial and legal advisers, said the person…
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“CIT indicated that it needs at least $2 billion of rescue financing in the next 24 hours or it would likely file,” CreditSights analysts… wrote in a report. “We believe the figure is in the range of $4 to $6 billion plus, making outside capital sources shy away.”
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If bondholders are able to swap as much as $6 billion, that may reopen talks with the U.S. government for a bailout package, Jeffrey Werbalowsky, [CEO] of Houlihan Lokey Howard & Zukin, said on another call offering his firm’s services to creditors…
The debt-for-equity swaps, which brings together debtor, creditor and capital investor, will provide CIT Group with much-needed investment and reduce, if only slightly, the lender’s staggering debt burdens without harming what’s left of its creditworthiness.
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