July 25, 2009
CIT amends terms of crucial tender offer
Ailing U.S. lender CIT Group has amended the terms of a cash tender offer for $1 billion in bonds it needs to avoid bankruptcy, documents indicate.
In a regulatory filing Friday, CIT said it is upping the early-delivery payment per $1,000 principal amount of the floating-rate notes due Aug. 17 by $50, a move it hopes will spur bondholders to act sooner rather than later as it faces a looming bankruptcy, The Wall Street Journal reported.If the tender offer is successfully completed, CIT and its bondholders
do not intend for the company to seek relief under the U.S. Bankruptcy Code but rather to pursue restructuring efforts through other means.CIT said in the filing.
The Journal said CIT is asking investors to swap those Aug. 17 bonds for 82.5 cents on the dollar before July 31, while those tendering after that date will get 77.5 cents on the dollar.
An unnamed person familiar with the situation told the newspaper it is highly unlikely CIT will lower the minimum participation requirement for the tender.