PIMCO- CIT´s largest bondholder hosting call to discuss debt swap

Discussion in 'Wall St. News' started by ASusilovic, Jul 16, 2009.

  1. uly 16 (Bloomberg) -- CIT Group Inc. bondholders are holding calls today to discuss whether to swap some of their claims for equity to reduce the 101-year-old lender’s indebtedness, according to a person familiar with the situation.

    Pacific Investment Management Co., 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, who declined to be identified because the discussions are private. The company hasn’t proposed an exchange offer.

    CIT is running short of cash and may need as much as $6 billion to avoid filing for bankruptcy protection, after the U.S. wouldn’t give the firm a second bailout, CreditSights Inc. analysts said. CIT, which has reported $3 billion of losses in the last eight quarters, received $2.33 billion in funds from the U.S. Treasury in December and hasn’t been given access to the Federal Deposit Insurance Corp.’s debt-guarantee program.

    “CIT indicated that it needs at least $2 billion of rescue financing in the next 24 hours or it would likely file,” CreditSights analysts Adam Steer, David Hendler and Pri De Silva wrote in a report. “We believe the figure is in the range of $4 to $6 billion plus, making outside capital sources shy away.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a0dL0goEffLM