CIT trades on, for now
CIT, in the US, and so CIT Australia, get to trade on thanks to the willingness of select investors to fund the company for a few more weeks, and with a view to a longer term rescue.
Existing bondholders will swap some debt for equity and will reinvest in new, longer term and more expensive debt of the company, according to a report by Dow Jones. Around US$2 billion in new funding will be made available immediately and then a further US$1 billion soon.
However, CIT did not confirm any of the Sunday (US time) reporting on the plan overnight.
In Australia, the local business has around $900 million in assets. Of this, $300 million is funded through a medium-term note program, while the remainder of the assets were funded by the US parent, either through loans or equity.
CIT is, or was, a primary supplier of vendor finance to Dell for its computer sales and also to Honda for cars, bikes and other equipment.
The finance company otherwise has retail and point of sale relationships with a diverse group of businesses.