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

[Imark]

passato il momento di panico, magari il "mercato" funziona...

Here’s a dirty little secret for you. The market actually works and we don’t need to bail out everyone. I guess that’s two secrets.
Remember how the imminent demise of CIT was going to tank small businesses from sea to shining sea? The usual suspects were in full Armageddon mode with predictions that if we let CIT go down it could wreak havoc on the economy. Smaller companies that relied on CIT would topple like dominoes, after all, the company counted over 1 million of these precious darlings as customers, or so they alleged with nary a statistic to back up their assertions.
Well guess what happened on the way to the party? CIT has been left to fend for itself and it looks very much as if the company’s customers are adapting very well, thank you. The WSJ’s Deal JournMeal notes a Foresight Analytics report that indicates CIT has fallen from the number one lender to small businesses to number 16. Looks like those small businessmen and women aren’t complete dolts. They smell smoke and figure they’ll move along before the fire.
Even more less surprising is that other lenders smelled the opportunity and have been picking up market share at CIT’s expense. From smaller players like Live Oak Banking to big guys like Wells Fargo (WFC) a lot of lenders have aggressively picked off CIT’s customers. Isn’t creative destruction wonderful?
The lessons seem obvious. Rarely is the economy as imperiled by the demise of a firm as the failed executives of that firm would like you to believe. Never is the damage going to be as extreme as those in the political class who have been bought and paid for by that failing firm would suggest. The probability that competitors will step in and limit the collateral damage is extremely high.
Refreshing, isn’t it, that a company can fail or come close, the system is allowed to work through the issues on its own and, Lordy, the sun comes up in the morning. Now that we’re out of crisis mode can we just keep this in mind and maybe let the economy separate the winners and losers.

http://seekingalpha.com/article/155410-cit-lessons-learned

Personalmente, non avevo mai avuto dubbi al riguardo ... d'altronde, il debito dovrà necessariamente contrarsi negli anni a venire, e la sua erogazione tornerà ad essere centrale nell'attività bancaria, prima o poi (non oggi: troppi default all'orizzonte... diciamo a partire dalla fase terminale del deleverage) mentre le finanziarie credo verranno marginalizzate...

 

[paologorgo]

CIT Group (CIT): Q2 EPS of -$4.30 vs. consensus of -$1.53, the ninth quarterly loss in a row. Loan loss provisions more than tripled Y/Y to $588.5M. Net charge-offs rose to 2.81% from 2.41% the previous quarter.

CIT Group (CIT): Ratio of total capital to risk-weighted assets fell 'slightly below' the 13% required by regulators, which CIT says may cause the Fed or FDIC to take enforcement actions, leading to a "material adverse effect on its business" and possible bankruptcy. (CIT's 10-Q quarterly report (.pdf))

da Seeking Alpha.

 

[Imark]

E' molto probabile che quello appena visto sia solo il primo di una serie di distressed exchanges sul debito di CIT, secondo Fitch, sempre che basti.

In effetti...

Fitch Downgrades CIT's IDR to 'RD' Following Completion of Tender Offer

17 Aug 2009 3:14 PM (EDT)

Fitch Ratings-New York-17 August 2009: Fitch Ratings has downgraded CIT Group Inc.'s (CIT) Issuer Default Rating (IDR) to Restricted Default (RD) from 'C' following completion of the company's bond tender offer, which covered the purchase of 59.81% of the company's $1 billion floating rate senior secured notes.The purchase is considered a Coercive Debt Exchange (CDE) and consistent with Fitch's CDE criteria. Specifically, bondholders that validly tendered will receive a reduction in principal and, absent completion of the offer, there would have existed a very high probability that CIT would file for bankruptcy.

Despite completion of the offer, Fitch believes CIT's liquidity issues remain acute with bankruptcy still a potential outcome.

Fitch also believes that, as part of the company's broader recapitalization plan, additional CDEs are forthcoming.

Since the company's future prospects remain uncertain, Fitch does not anticipate raising CIT's IDR in the near term. The issue level ratings of CIT and the ratings of CIT Bank and CIT's non U.S. subsidiaries are unaffected by today's action.

....

 

[Imark]

SLM, altra situazione critica, con rating che scendono verso livelli ai quali diviene assai arduo rifinanziare il debito in scadenza per poi investire prestare profittevolmente.

E tutto questo nonostante i tassi allo zero per cento.

Moody's reviews SLM for possible downgrade

New York, August 27, 2009 -- Moody's Investors Service placed the long-term ratings of SLM Corp. (senior unsecured Ba1) on review for possible downgrade.

The rating action reflects Moody's continued concerns regarding SLM's earnings and cash flow generation as the company transitions to a potential post-FFELP lending environment. Additionally, the company faces significant uncertainties related to the political and consumer lending environment for student lenders. These issues could challenge the company's liquidity and funding position as it nears large unsecured debt maturities in 2010 and particularly in 2011. Today's action reflects Moody's ongoing analysis and concern that these key issues could have more adverse effects on SLM's credit profile than is reflected in the company's current ratings.

Moody's notes that SLM remains a significant force in the education lending and servicing business. The company has benefited from access to the secured funding markets in recent months given U.S. government support through its TALF program, the DOE Participation Program, and the DOE Straight A Funding conduit program. As well, SLM has a significant student loan servicing franchise that is a platform for a potential future non-lending oriented business model.

During the review period Moody's will re-evaluate SLM's future business strategy, core earnings and cash flow generation capability, and borrowing capacity resulting from this cash flow generation and the potential monetization of its unencumbered assets. As Moody's has noted, cash flow generation is taking on increasing importance in SLM's credit profile because the firm's unsecured debt balance exceeds its unencumbered earning assets.

Therefore, SLM will need to generate profits and cash flow in order to service and ultimately repay some of its debt, as opposed to generating the required cash through asset liquidation. This will be a key area of focus, particularly given the potential major business model transition it faces, during Moody's review.

During the review Moody's will also re-assess the potential structural subordination that could arise for SLM's unsecured creditors as it monetizes assets through secured financing to meet debt maturities; as well as SLM's capital adequacy including its ability to replenish capital from earnings generation and retention.

The last rating action on SLM was on May 13, 2009 when Moody's downgraded the company's ratings and assigned a negative outlook.
....

Headquartered in Reston, VA, SLM is the nation's leading provider of saving- and paying-for-college programs. The company manages approximately $188 billion in education loans and serves 10 million student and parent customers

 

[Imark]

E' molto probabile che quello appena visto sia solo il primo di una serie di distressed exchanges sul debito di CIT, secondo Fitch, sempre che basti.

In effetti...

Fitch Downgrades CIT's IDR to 'RD' Following Completion of Tender Offer

17 Aug 2009 3:14 PM (EDT)

Fitch Ratings-New York-17 August 2009: Fitch Ratings has downgraded CIT Group Inc.'s (CIT) Issuer Default Rating (IDR) to Restricted Default (RD) from 'C' following completion of the company's bond tender offer, which covered the purchase of 59.81% of the company's $1 billion floating rate senior secured notes.The purchase is considered a Coercive Debt Exchange (CDE) and consistent with Fitch's CDE criteria. Specifically, bondholders that validly tendered will receive a reduction in principal and, absent completion of the offer, there would have existed a very high probability that CIT would file for bankruptcy.

Despite completion of the offer, Fitch believes CIT's liquidity issues remain acute with bankruptcy still a potential outcome.

Fitch also believes that, as part of the company's broader recapitalization plan, additional CDEs are forthcoming.


....

Eccoci: haircut ai bondholders a fronte di nuovo debito secured di più lunga scadenza e di pressoché tutta l'equity, con azzeramento dei vecchi azionisti ma anche erogazione di nuovi finanziamenti (sempre procurati dagli obbligazionisti) per alcuni miliardi USD per consentire a CIT di tirare avanti.

In alternativa, il Ch 11... sarebbe il quinto maggiore default di sempre negli USA, dopo quello di GM...

CIT in Last-Ditch Rescue Bid - WSJ.com

 

[nik.sala]

Eccoci: haircut ai bondholders a fronte di nuovo debito secured di più lunga scadenza e di pressoché tutta l'equity, con azzeramento dei vecchi azionisti ma anche erogazione di nuovi finanziamenti (sempre procurati dagli obbligazionisti) per alcuni miliardi USD per consentire a CIT di tirare avanti.

In alternativa, il Ch 11... sarebbe il quinto maggiore default di sempre negli USA, dopo quello di GM...

CIT in Last-Ditch Rescue Bid - WSJ.com

dici che ci siamo ???

 

[Imark]

dici che ci siamo ???

Boh ... tanto non si scappa... c'è da capire il timing e se riusciranno a ristrutturare out of the court oppure con un Ch 11 "veloce", che è quanto si prefiggono di fare in caso di mancato accordo con gli obbligazionisti... il punto è che i malcapitati (i detentori di grossi quantitativi, non il retail) dovrebbero essere chiamati anche a fare a CIT un prestito per poter proseguire con l'attività: è una finanziaria, se nessuno le presta denaro, come fa ad erogare i finanziamenti ?

 

[Imark]

Si vanno precisando alcuni dettagli dell'operazione, anche se manca per ora il crisma dell'ufficialità...

CIT sarebbe intenzionata a procedere come ResCap, che ha varato un distressed exchange costituendo per gli obbligazionisti diversi livelli di priorità in funzione della minore o maggiore lunghezza del debito (garantendo prioritariamente nello swap i bh i cui titoli scadevano nel breve termine rispetto ai possessori di titoli lunghi). Rammento che per ResCap quella vicenda si è rivelata una enorme bubbola, come peraltro già anticipato da più d'uno di noi ancora sul FOL, in quanto alla fine - ad avviso di alcune agenzie di rating - il valore residuo della società si attesta ormai su livelli tali per cui il collaterale, costituito dalla gan parte dei beni della società, coprirebbe solo, in caso di dafault, i creditori secured first lien (ossia GMAC, che controlla ResCap ) e lascerebbe scoperti tutti gli altri, i senior secured second e third lien, i senior unsecured e gli altri "a scendere"...

Ove lo swap non riuscisse, voci di stampa fanno riferimento alla possibilità di una bancarotta "prepackaged" (e tuttavia, se fallisse lo swap, i margini per una tale soluzione sarebbero risicati o piuttosto di Ch 11 ordinario, rispetto al quale si cercherebbe per quanto possibile di accellerare i tempi di uscita.

CIT sostiene che il suo default avrebbe conseguenze importanti sull'industria manifatturiera, essendo fra l'altro il terzo finanziatore in USA per l'acquisto di carrozze ferroviarie ed il terzo mondiale per l'acquisto di aeroplani.

CIT May Pit Bondholders Against Each Other With Debt Swap Offer - Bloomberg.com

 

[Imark]

Il CEO di CIT lascia la società a fine anno, su voci circa difficoltà a chiudere la trattativa sulla ristrutturazione del debito della finanziaria...

CIT Group says CEO Peek plans to resign

By STEPHEN BERNARD (AP) – 41 minutes ago
NEW YORK — CIT Group Inc., one of the nation's biggest lenders to small and midsize businesses, said Tuesday its chairman and CEO Jeffrey M. Peek plans to resign at the end of the year.

Devastated by the downturn in the credit markets, CIT has been trying to avoid bankruptcy for months as it restructures its operations.

CIT has posted billions in losses as borrowing costs have outpaced the money it generates from lending to customers. As CIT's customers have struggled amid the recession, they have fallen behind on repaying loans. That has forced CIT to set aside more cash to cover those losses, a problem nearly all lenders have had during the recession.

Some experts have warned that a total collapse of CIT would deal a crippling blow to an economy still bleeding well over 100,000 jobs a month.
Its shares fell 18 cents, or 17.3 percent, to 86 cents in premarket trading.
Peek, who has been with CIT Group since 2003, said in a statement that CIT's recently launched restructuring plan makes it "the appropriate time to focus on a transition of leadership."

New York-based CIT is in the middle of its second debt restructuring in recent months as it looks to reduce costs to remain in business.

The current debt exchange could reduce the financial firm's near-term debt burden by $5.7 billion. CIT is trying to swap debt set to mature in the near future for bonds or preferred shares.

At the same time, CIT has asked its biggest debt holders to approve a prepackaged reorganization plan in case it is forced to file for Chapter 11 bankruptcy protection.

CIT has already received $2.3 billion in federal bailout money, a $3 billion emergency loan from some of its largest bondholders, and bought back $1 billion in debt as it tries to reorganize and avoid collapse. The government bailout money was given to the firm last fall amid the peak of the credit crisis. The emergency loan and initial debt deal were completed over the summer.

The retail sector would be hit especially hard by a CIT collapse, since it serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts have said 60 percent of the apparel industry depends on CIT for financing.

Peek, 62, first served as CIT Group's president and chief operating officer, before being named CEO in 2004 and chairman in 2005.

Before joining CIT, Peek served as a vice chairman at Credit Suisse First Boston LLC, overseeing the firm's financial services division. He also spent 20 years working at Merrill Lynch & Co.

The board of directors is creating a search committee to find a new CEO.

 

[lorixnt2]

In effetti sbircio questo thread da quando avevo scambiato CIT per CITI .
Mi era parso che, qualora avessero dovuto seguire la sorte di Lehman, si sarebbe trattato di un fatto più interno agli USA ma poi, guardando le international locations, anche questi sembrano sparpagliati un po' dappertutto.

Quanto varrebbe un loro default rispetto ai 600 billions di Lehman?