Obbligazioni societarie CIT Group, SLM, GMAC e le finanziarie USA che (forse) si salveranno diventando banche

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Sul FOL era stato aperto un 3D interessante in cui si seguiva l'andamento di questa società e dei suoi titoli, insieme con Giveme5, Researcher, Methos, TheLondoner ed altri ancora.

Non ho mai avuto bond CIT Group, per cui il mio monitoraggio è stato clandestino fin da principio, secondo gli standard attualmente in voga da quelle parti (per cui solo chi ha dei bond è deputato a parlarne) ma le ragioni per cui seguivo erano essenzialmente due, ossia: 1) la situazione distressed in cui versavano i bond di una maggiori finanziarie USA poteva costituire un'occasione di investimento ?; ma soprattutto 2) cosa vogliono fare gli USA delle loro enormi finanziarie erogatrici di loans di ogni sorta, quale ruolo vogliono riservare loro in futuro ? Le salveranno, non le salveranno, come le salveranno ...

Alcune risposte sono venute a queste domande, altre ancora mancano e non è affatto certo il come andranno a finire le cose...

Il tutto si riflette nei corsi dei bond (qui sotto, esemplificativamente, il 4,25% 2011 XS0201605192)

OnVista: Anleihenanalyse - C.I.T. GROUP INC. EO-MEDIUM-TERM NOTES 2004(11) - Snapshot

Ma anche in quelli dell'equity

CIT: Technical Analysis for CIT GROUP INC (DEL) - Yahoo! Finance

Vedrò quindi qui di recuperare i materiali più interessanti postati sul FOL e di continuare ad aggiornare la situazione... un commento di S&P nei giorni scorsi all'ennesimo downgrade mi sembra interessante e lo riproporrò al termine del recupero di materiali dal FOL...

Tenete conto che il rating di CIT è passato da A/stable a fine gennaio 2008 al BBB-/negative attuale...

 

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17 gennaio 2008, una Bloomberg di inquadramento postata da Giveme5

CIT Posts Loss on Mortgages, Will Cut 5% of Workforce (Update5)

By David Mildenberg

Jan. 17 (Bloomberg) -- CIT Group Inc., the largest independent commercial finance company in the U.S., reported a fourth-quarter loss because of bad home mortgages and the declining value of its student-loan business.

The $123.2 million loss before preferred dividends, or 69 cents a share, compares with a profit of $266.8 million, or $1.31 a share, a year earlier, the New York-based company said today in a statement. The full-year loss was $81 million, or 58 cents a share, compared with a profit of $1.05 billion in 2006.

Chief Executive Officer Jeffrey Peek stopped originating home mortgages last year to focus on providing loans and advisory services to mid-sized companies. CIT will cut its workforce this year by 5 percent, or about 330 jobs, Peek said today on a conference call.

``We are doing our best to put our home lending behind us,'' Peek said. ``We will retreat to our core.''

The company reduced the workforce by 4.4 percent in the fourth quarter with the sale of a leasing business and ended the year with about 6,700 employees. It will record a $50 million pretax charge in the first quarter for severance and related costs.

CIT fell $1.96, or 8.5 percent, to $21.15 at 4:18 p.m. in New York Stock Exchange composite trading. The shares have dropped 63 percent in the past 12 months.

Past Due

The lender said it had $1.03 billion in home loans on which payments were late by 60 days or more as of Dec. 31, or 9.9 percent of its total unpaid balance. That compares with $538.8 million, or 4.9 percent, a year ago. The highest delinquency rates were in Florida and California, Chief Financial Officer Joseph Leone said on the call.

The student-loan unit, whose practices drew a state investigation, recorded a writedown of $313 million in the quarter. CIT may be preparing to sell the unit, according to Sameer Gokhale, an analyst at KBW Inc. in New York.

CIT raised its reserve for expected loan losses sixfold, to $385.5 million, from the third quarter. Most of the increase was due to a $250 million reserve for home loans because of ``further deterioration in the home lending market.''

Total loan volume, excluding home lending, declined 11 percent to $8.7 billion, with lower student lending offsetting increased commercial activity.

Peek said he expects U.S. economic growth to slow to about 1 percent this year, while avoiding a recession. Credit losses, loans CIT doesn't expect to fully recover, may increase to as much as 0.7 percent of total financings, from about 0.4 percent in 2007, he said.

New Offices

New offices in Ireland and China helped meet the goal of having 25 percent of CIT's assets in faster-growing economies outside the U.S. by the end of 2007, Peek said.

The company had a $268 million pretax gain from the sale of units, including a share of a joint venture with Dell Inc. that provides credit to the Round Rock, Texas-based computer maker's customers.

New York Attorney General Andrew Cuomo has subpoenaed CIT's Student Loan Xpress, among other lenders, over the practice of mailing fake checks or false rebates on loans to entice students to call. Cuomo said in October that such practices may violate state consumer-protection laws and the anti-inducement provisions of the federal Higher Education Act.

In May, Cuomo sued the Dell joint venture, alleging that the companies engaged in deceptive practices such as promising ``no interest'' loans, and then denying about 85 percent of all applicants. Customers were then offered interest rates higher than 16 percent, according to the complaint. Dell has said its practices were ``fair and appropriate.''

Dell, the world's second-biggest personal-computer maker, agreed to buy CIT's 30 percent stake in the venture for $306 million last month.

 

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28 gennaio 2008, postavo un commento ad una rating Action di Moody's e scrivevo qualche riga di inquadramento dell'emittente e dei suoi problemi, rispondendo ad un forumista che chiedeva info su CIT Group

La società è primaria negli USA nel proprio settore, che è quello dei finanziamenti: mutui, prestiti agli studenti (indispensabili in paesi come gli USA, in cui l'università costa), credito al consumo.

Il problema è quello del valore di questi asset (i crediti generati dalle attività di finanziamento) sia in considerazione di una loro qualità intrinseca che potrebbe essere inferiore rispetto a quella nota al mercato, sia soprattutto delle prospettive dell'economia USA, giacché una recessione di una qualche durata incrementerebbe non poco il livello dei mancati ripagamenti dei debiti contratti dai clienti di CIT, così incidendo sulle fondamenta patrimoniali e dunque le garanzie per gli obbligazionisti.

Altro problema è l'approvvigionamento di liquidità, che per società come CIT è indispensabile per poter fare il proprio lavoro, ovvero prestare soldi.

Le fonti di approvvigionamento principali sono due: il sistema bancario e la cartolarizzazione dei crediti. Ora, il sistema bancario è in difficoltà per ragioni sue (chi legge qui il 3D sulle grandi banche USA può facilmente conoscere la situazione corrente) e riluttante a prestare soldi su impieghi percepiti "a rischio" e il meccanismo della cartolizzazione è guardato con diffidenza dai potenziali investitori, in considerazione delle pesanti perdite generate da questo tipo di investimento (capitolo CDOs e SIV).

Quindi per entrambe l'accesso è più problematico che in passato.

Potrebbero essere state commesse irregolarità nella stima del valore dei crediti da parte di CIT ?

Chi di noi potrebbe darti risposte sicure ? Ad oggi sembrerebbe di no.

La società sembra comportarsi correttamente da un punto contabile, avendo da ultimo fatto accantonamenti in previsioni di possibile perdite future ed avendo proceduto alla cancellazione di goodwill contabilizzato a fronte dell'acquisto di una società del settore del prestito agli studenti.

Le agencies (S&P, Moody's e Fitch) che restano il punto di riferimento della valutazione della qualità degli emittenti obbligazionari hanno ridotto l'outlook sui ratings proprio in considerazione di un possibile deterioramento del mercato del credito e di una contestuale crescita dei costi di approvvigionamento di liquidità..

Moody's cuts outlook on CIT Group

NEW YORK (AP) - Moody's Investors Service on Monday lowered the ratingsoutlook for financial services firm CIT Group Inc., saying the company's profitscould be severely pressured in upcoming quarters.

Moody's cut the outlook to "negative" from "stable."

The ratings service said CIT's profitability has already been pressuredrecently by heightened competition and capital availability on transactionpricing, investments in sales staff and technology upgrades and business
integration costs from acquisitions.

Moody's said the company is now susceptible to increasing credit charges and higher funding costs. Furthermore, the company's decision to establish a loss reserve of $300 million points to its exposure to "further mortgage deterioration."

"As a consequence of general market conditions and its difficulties in the mortgage finance arena, CIT's cost of borrowing to support all of its activitieshas increased and shown greater volatility, putting future returns at risk,"Moody's said.

Moody's also affirmed the company's long-term "A2," or investment grade, credit rating and its "Prime-1" short-term rating.

 

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20 marzo 2008: CIT escuteva le linee di credito bancarie, classica misura da emittente in grave crisi di liquidità. Le quotazioni dei bond crollavano ed il bond indicato nel primo post passava in bid ask 45 - 65.

Prima grande finanziaria USA in allarme rosso ...

CIT hammered as it draws down credit line

By Greg Morcroft, MarketWatch
Last update: 4:09 p.m. EDT March 20, 2008

NEW YORK (MarketWatch) -- Shares of CIT Group fell by 17% Thursday as the commercial finance firm was forced to draw down all of a $7.3 billion credit line to pay off debt maturing this year that it could not refinance in the short-term lending market.

CIT usually finances its business by borrowing in short-term markets like commercial paper, but as the credit crisis bites and lenders are refusing to accept most types of asset-backed securities, CIT has been forced to go to backup credit lines.

CIT shares fell 17% to $9.63. The shares are off 81% from a year ago.
"Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies," said Chief Executive Jeffrey M. Peek.

The funds will also be used to provide financing to its core commercial franchises, according to CIT.

Those businesses, which provide financing and leasing capital for consumers and companies, is about the worst spot to be in right now, as lenders are loathe to lend money.

CIT is also involved in vendor, equipment and commercial finance products; home lending; small-business lending; student loans; structured financing; and commercial real estat. It also engages in mergers-and-acquisitions and management advisory services.

CIT will continue to actively seek additional funds and explore and execute on the sale of non-strategic assets and business lines, it said.

Standard & Poor's said Thursday that CIT's decision to draw down funds would not affect its credit rating or outlook. The ratings agency had cut CIT's counterparty credit ratings one notch to A-/A-2 and assigned a negative outlook Monday.

S&P said it would closely monitor the situation

 

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20 marzo 2008. Altri dettagli sull'operazione

CIT Group on liquidity action conf call summary (9.63 -2.01) -Update-

CIT says their drawing of $7.3 bln has nothing to do with their commercial franchise business... says their operations remain solid. Co says this was not their preferred path, but they decided was best for the co long-term. Co says they are maximizing their operating flexibility in their uncertain capital market environment. Also the co will evaluate the sale of assets and various business lines as the co realized they need to run a smaller co. Co says they will now focus on their commercial business. Their tangible ratio was above their target at year end of 8.5%. On the bank draw, the co has the option to draw from of 40 banks of so, and ultimately drew of four separate facilities drawing over $7 bln. $2.1 bln is due Oct 2009, $2.1 bln due April 2009, $2.1 bln due April 2010, and $1 bln due in Dec 2011. Their cost for their $7.3 bln will be LIBOR plus 50, and the cost can't exceed LIBOR plus 100. The proceeds will be used to pay off commercial paper and other obligations. With their forecasted asset levels, these proceeds should satisfy their needs through the balance of the year. The co currently is working on shrinking the balance sheet, and will look at accelerating their asset sales, which will be in the multi-billion dollar range. The co says a strong debt rating is key, and single A rating is their goal over time. Repayment plans include a strategic funding partner to provide ongoing funding sources. On the timing on the funding partners, the co said they have gotten close with one potential partner in preliminary discussions, but the environment backed them away from that. The asset roll of the payments they have and certain asset sales, including equipment finance, and including the draw, the co sees they will meet the maturities for all of 2008 through that combination. Co says they do not have the opportunity to go the fed window. CB outstanding has come down recently, and is $2 bln or less... says they have had further CP maturities today and yesterday

 

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20 marzo 2008: in italiano, stavolta...

MUTUI: CIT A CACCIA LIQUIDITA',VERSO VENDITA ASSET 7 MLD DLR
di ANSA
-
(ANSA) - ROMA, 21 MAR - Cit Group, il maggior gruppo indipendente dei finanziamenti commerciali negli Usa, tenta di ridimensionare le preoccupazioni per la propria crisi di liquidità e punta a vendere asset per circa 7 miliardi di dollari. Il gruppo - che ha riportato nei mesi scorsi perdite miliardarie per la crisi del credito ipotecario e ha chiuso la divisione specializzata nel segmento dei mutui suprime - ha appena fatto ricorso ai 7,3 miliardi di dollari della propria linea di credito di emergenza per far fronte alle difficoltà di liquidità e ha fatto sapere che intende cedere una serie di attività entro il primo trimestre. Il gruppo ha assicurato che dispone di liquidità sufficiente almeno per il 2008 dopo che ieri, alla borsa di New York, il titolo ha accusato il più forte ribasso degli ultimi sei anni. Gli ultimi sviluppi di Cit - riferisce l'agenzia Bloomberg - dimostrano che per ora gli sforzi della Federal Reserve per allentare la stretta del credito non stanno dando i risultati sperati, tanto che il numero uno di Cit, Jeffrey Peek, ha dichiarato ieri che il "protrarsi del deterioramento" del mercato potrebbe spingere la società a trovare un partner strategico in grado di garantire i finanziamenti necessari.(ANSA).

 

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Il 25 marzo 2008, postavo questo commento...

Da seguire l'evoluzione della situazione di CIT... l'utilizzo contestuale di tutte le linee di credito attuato da CIT - come anche nota la Reuters - è l'estrema ratio per le aziende in difficoltà a trovare finanziatori, stando a significare che non c'è altra maniera per tirare avanti senza dover chiedere protezione nei confronti dei creditori.

Di norma o si trovano soluzioni estreme nel tempo che si guadagna disponendo della liquidità proveniente dalle linee di credito impiegate, oppure in fondo alla strada c'è il default.

CIT ha dapprima fatto sapere di avere fra i 5 ed i 7 mld USD di asset non core cedibili, una soluzione invero difficilmente praticabile. Questa soluzione resta comunque ad oggi perseguita da CIT, che è alla ricerca di acquirenti.

Ha poi informato di essere alla ricerca di funding presso istituzioni bancarie di oltreoceano (non USA, quindi).

Adesso dichiara di essere anche alla ricerca di una soluzione che la porti a vendersi per un prezzo stracciato ad un acquirente finanziariamente solido, seppure questa appaia come la soluzione piu' radicale alle difficoltà attuali.

In tale ipotesi gli azionisti (CIT è quotata a WS) pagheranno un prezzo senz'altro salatissimo, e c'è da vedere se basterà, visto che mentre è lecito attendersi che le banche siano aiutate in tutti i modi (lo stiamo vedendo in tutti i paesi occidentali) per le finanziarie sembra improbabile che ciò accada.

CIT hopes to avoid selling itself, but may have to

Reuters, Monday March 24 2008 By Dan Wilchins
NEW YORK, March 24 (Reuters) - Commercial finance company CIT Group Inc will likely try to avoid selling itself because its market valuation is so low, but if market conditions continue to deteriorate, it may have little choice.

And if shedding assets and forming a joint venture with a bank proves difficult enough, the company may have to sell itself at a fire-sale price, following the paths of Bear Stearns Cos and Countrywide Financial Corp.

"If the company can survive without selling themselves, they will do everything they can to avoid it," said James Ellman, president at Seacliff Capital in San Francisco.

CIT is having trouble financing operations as bond markets become increasingly closed to finance companies. The company said on Thursday it had drawn down all of its $7.3 billion of bank lines to fund itself, a move often seen as a sign of desperation.

At the end of a conference call on Thursday, an analyst asked CIT Chief Executive Jeff Peek if drawing down bank lines was a sign the company was going to sell itself soon. CIT has been rumored to be looking for a buyer for years.

Peek responded: "(W)e are all about shareholder value and that's probably about as far as we can go on that topic."

That seemed to leave the door open for the company putting itself on the block, but selling at current valuations would be painful. CIT's shares closed at $13.03 on Monday, up 35 percent but less than half their tangible book value of $28.42.

If CIT was reluctant to sell itself when its shares were over $55 in 2007, it is not clear why it would sell itself when its shares are in the low teens, analysts said.

CIT said it is working on at least two efforts to shore up its financing. First, it is looking for a partner that could fund loans and leases.

The company is also looking at selling off assets outside of its main business, which it hopes will generate $5 billion to $7 billion of proceeds.

TOUGH PLAN

Both finding a partner and selling off assets would help, but will be hard to do now, a banker said.

CIT's Peek said the company had conversations with several banks about partnering and was close to a deal with one potential partner, but "the environment backed away a little bit."

Overseas banks, which The Wall Street Journal reported are talking with CIT, are unlikely to want to make a commercial finance company their beachhead in the United States, a banker said. Few U.S. banks are interested in ramping up their loan books as the economy slows.

General Electric Co has top triple-A credit ratings, which could put it in a position to buy weaker rivals, analysts said. But the company is also likely to avoid acquisitions that could negatively affect its funding costs, the banker said.

A GE spokesman could not be reached immediately on Monday for comment on CIT.

And selling loans and leases at a good price in this environment is difficult, even if the assets are performing well, the banker added. If CIT sells assets below their book value, its capital levels will suffer.

"Speculators don't quite understand the magnitude of the difficulties that companies like CIT still face," said Bo Brownstein, an analyst at Cambiar Investors in Denver.

If CIT has to sell itself, it will hardly be the first financial institution in that predicament. Bear Stearns Co Inc faced a run on the bank earlier this month and agreed to sell itself to JPMorgan Chase & Co at a fraction of its book value.

JPMorgan upped its bid on Monday to around $10 a share from around $2, but that is little comfort for investors who bought at well above $100 last year.
And Countrywide Financial Corp agreed in January to sell itself to Bank of America Corp in a deal widely seen as designed to prevent Countrywide from collapsing. (Additional reporting by Scott Malone in Boston; Editing by Andre Grenon)

 

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Il 20 maggio 2008, Giveme5 postava questo commento... a due mesi dai fatti, in effetti CIT era riuscita a rifinanziarsi...

Tiro su questo thread, ci sono news su CIT, mi pare che valga la pena di seguire.
Il bond XS0201605192 ha recuperato il pauroso 50 (!) di fine Marzo, ora quota 75, rende cioè oltre il 14% (lordo) ........


CIT to Raise Up to $12 Billion From Sales, Financing (Update1)
By Joyce Moullakis

May 20 (Bloomberg) -- CIT Group Inc., the commercial lender trying to escape a cash squeeze, won't be a ``serial issuer'' of new shares and will seek as much as $12 billion through asset sales and financing, Chief Executive Officer Jeffrey Peek said.

``We have adequate cash that takes us into 2009,'' Peek told investors and analysts at a conference in London today. ``We have plenty of capacity to evaluate our options, and we are not in a position where we have to respond to fire-sale alternatives.''

New York-based CIT plans to cut expenses by $100 million this year as it sheds more than 1,000 jobs in the first half and reviews spending, Peek said. He already has drawn down $7.3 billion of emergency credit lines, sold $5 billion in assets, raised $1 billion by selling shares and cut the company's dividend by 60 percent to quell concern about CIT's solvency.

The firm seeks to raise $8 billion to $12 billion primarily through asset sales and secured financing, Peel said. ``This assumes that the unsecured market stays pretty unattractive for companies like CIT.''

CIT has been approached by private equity firms, which have their own funding constraints, Peek said. ``Most of them have their own issues,'' he said

CIT is evaluating offers for its rail-car leasing unit valued at more than $4 billion. CIT has received ``preliminary'' interest that suggests a sale may raise $3.5 billion, Peek said. The company said last month it lost $249.7 million before preferred dividends in the first quarter.

 

[Imark]

20 maggio 2008 ... Commentavo che si trattava di una lotta contro il tempo

Prima i miliardi USD da raccogliere tramite asset sales erano fra i 5 ed i 7, ora sono diventati 12, sempre in virtù di asset sales oltre che secured financing, dopo che hanno già venduto asset per 5 mld USD...

Cosa si può dire...

 

[Imark]

20 maggio 2008: Giveme5 poneva a se stesso, prima ancora che a me, la domanda giusta...

Il deteriorarsi della loro posizione finanziaria potrebbe essere avvertito come criticità sistemica in USA ?

Sono insomma da considerarsi del club dei "too big to fail" ?
O non la salverebbero ad ogni costo e sono quindi seri candidati al Char.11 ?

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La mia replica: in quei giorni si parlava delle sorti di GMAC (è lei la finanziaria a rating B alla quale si accenna nel messaggio...)

Temo che alla fine del credit crunch, il concetto di "too big to fail" dovrà essere rivisto...

Ps. non so cosa succederà: hanno rating molto alto, ma la qualità dei loro crediti è dubbia... non ricordo in che misura abbiano svalutato, ma certo le banche, se non si fidano a prestarsi i soldi fra loro, ancor meno paiono fidarsi a prestare soldi a chi "rivende" il credito...

Il punto è che se è in difficoltà una finanziaria a rating A, una a rating B che cosa deve fare ? salvo pregare, si intende...