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

[The Beast]

Sempre su CIT

NEW YORK (Dow Jones)--CIT Group's (CIT) failure to secure government support sent investors scurrying for cover, as some prominent analysts called on them to brace for a bankruptcy.
A bondholder call is currently being held with restructuring firm Houlihan Lokey, according to two CIT bondholders. The purpose of the call is to discuss options and possibly form a bondholders' committee, although the two bondholders said no such committee has been formed yet.
The same bondholders said a possible debt exchange could involve trading in unsecured near-term bond maturities for secured debt using unencumbered assets, as well as extending the maturity of the debt.
According to a report in The Wall Street Journal, CIT has given its bondholders 24 hours to come up with $2 billion in rescue financing, saying without help it will likely file for bankruptcy protection from creditors. Even that figure, however, could prove insufficient.
"We believe the figure is in the range of $4 to $6 billion+ making outside capital sources shy away from such a heavy recapitalization," wrote research firm CreditSights in a note early Thursday morning. "We believe the prudent course for bondholders is to brace for bankruptcy."
As Bank of America Merrill Lynch put it in a recent note, CIT, with only 1% of the U.S. lending market, is clearly not too big to fail in the government's eyes - which gives it fewer options. Fitch Ratings on Thursday downgraded its rating on CIT and its subsidiaries to C from BB-, indicating that "default of some kind appears imminent or inevitable."

CIT bond prices fell sharply Thursday, with its 7.625% notes due November 2012 down 22.25 points to 45 cents on the dollar in heavy trade, according to MarketAxess, while its August 2009 floating notes are down 8.25 points at 56 cents.
Recovery for CIT senior unsecured bonds in event of bankruptcy would likely be in the low 50s, with a spread between 40-55 cants on the dollar, estimated Jeff Meli at Barclays Capital in a conference call Thursday morning.
The cost of protecting $10 million of CIT's senior bonds against default for five years jumped to 48 points up front Thursday, according to Phoenix Partners Group - which roughly equals the highest costs seen Monday. This means it costs investors $4.8 million up front plus a $500,000 annual fee to insure this debt. That's compared with 34 points up front Wednesday before trade in CIT stock was halted.
The impact of a potential credit event in CIT's credit default swaps would be half of the impact of the Lehman bankruptcy filing, Meli said. Net notional CDS on CIT is $3.5 billion, about half the amount on Lehman. With a 50% anticipated recovery, the total loss to CIT CDS protection sellers would be $1.75 billion.
CIT's lending business doesn't present the systemic risk associated with Lehman's commercial paper business, said Fordham University finance professor John Hunter.
"I don't see where this really had any dire consequences," Hunter said. "That's why the market is brushing it off."
Hunter added that the government did the right thing in rebuffing CIT. "It's going to be bad for the company involved, but good for competitors and the market as a whole," he said. "It's putting moral hazard back in place."
Bond investors won't be the only ones feeling the pinch. Dividends on three outstanding CIT non-cumulative preferred stocks are likely to be suspended, said Bank of America Merrill Lynch analysts in a note.
They cost $183 million annually, and CIT had been issuing common equity to maintain these payments over the past few quarters. A distressed debt exchange would likely result in the suspension of dividends until certain financial benchmarks are met.
CIT shares were down 68% at 52 cents in recent trade.

 

[stockuccio]

ci penseranno probabilmente GS e JPM ?

 

[Imark]

ci penseranno probabilmente GS e JPM ?

Se gli USA gettano la spugna, difficile che un privato si faccia carico di rischi di default... la circostanza che la FED non abbia accettato che altri asset siano ceduti a CIT bank, sull'assunto che poi quest'ultima possa usarli come collaterale per procurarsi liquidità rifinanziandosi presso la FED medesima fa pensare che si arrivi (per altra via) ad una situazione tipo Lehman: c'è una banca che resta in piedi ed ha in portafoglio asset buoni, mentre quelli di valore più incerto restano a carico della holding bancaria, che viene lasciata defaultare.

La banca viene gestita dalla holding bancaria proprietaria in regime di Ch 11 e si cerca per questa via di generare valore a beneficio dei creditori.

Mi chiedo se questa soluzione non venga standardizzata, oramai è evidente che per l'amministrazione Obama una volta che una holding bancaria non fosse in grado di stare sul mercato, non c'è obbligo di salvataggio a carico del contribuente... allora il problema del too big to fail si approccia consentendo il trasferimento degli asset buoni da holding bancaria a banca controllata, e la holding bancaria viene lasciata defaultare...

GMAC ad esempio potrebbe essere candidata ad una soluzione di questo genere, magari cominciando dalla controllata ResCap, mentre asset buoni vengono convogliati da GMAC e ResCap a GMAC bank (o come si chiama adesso), secondo lo stesso meccanismo visto in opera per CIT Group e realizzato post mortem per Lehman...

 

[Imark]

La situazione descritta dalle agenzie: fino a dicembre le scadenze debitorie sono per 2,4 mld $, poi occorre considerare che brucia cassa. E poi ci sarebbero le scadenze debitorie del 2010, ma queste fanno già parte del "philosophari", e qui siamo al "primum vivere".

Senza i fondi di origine federale e senza terze parti che si facciano carico del suo fabbisogno di liquidità, CIT non ce la fa....

Dovesse essere approvvigionata di liquidità o addirittura rilevata da una delle ex banche di affari con cui sarebbe in trattative (a meno di un anno da Lehman e dal sostegno/salvataggio riservato alle stesse Morgan Stanley e Goldman Sachs, sembra fantascienza), significherebbe che queste stimano che fra pochi mesi la crisi sarà terminata.

PS: leggo rispetto all'ultima ipotesi che queste banche mirerebbero piuttosto a proporsi come DIP lenders in caso di CH 11... mi sembra più verosimile...

[FONT=verdana,arial,helvetica]Moody's downgrades CIT to B3; ratings remain under review[/FONT]

[FONT=verdana,arial,helvetica]New York, July 13, 2009 -- Moody's Investors Service downgraded the senior unsecured rating of CIT Group Inc. to B3 from Ba2. Additionally, Moody's placed CIT's long-term ratings on review for further possible downgrade. The company's short-term rating remains Not Prime. [/FONT]

[FONT=verdana,arial,helvetica]The downgrade of CIT's ratings is based on Moody's growing concern with CIT's liquidity position and prospects for survival of the franchise. In Moody's view, CIT has made inadequate progress in advancing its near-term liquidity initiatives to maintain an appropriate liquidity runway, including pending applications with the firm's regulators regarding access to TLGP and 23A asset transfers to CIT Bank. Longer term, Moody's believes that CIT faces significant challenges in achieving a funding profile that would provide a stable and cost effective source of funding to support its businesses. As a consequence, Moody's believes the firm's probability of default has increased and that the possibility that CIT will undergo significant, and potentially disruptive, organizational and ownership change has increased. [/FONT]

[FONT=verdana,arial,helvetica]During recent quarters, CIT has generated liquidity by reducing origination of new earning assets, resulting in a partial run-off of its loan and lease portfolios, and by securitizing and selling certain assets. However, Moody's had previously estimated that, considering CIT's sizeable debt maturities in March and April 2010, the firm would need to supplement its liquidity sources during 2009 with a combination of 1) approval to issue U.S. government guaranteed debt under the FDIC's Temporary Liquidity Guaranty Program (TLGP), and/or 2) exemptions by the Federal Reserve under section 23A of the Banking Act to allow CIT to transfer additional assets to CIT Bank to be funded by deposits. [/FONT]

[FONT=verdana,arial,helvetica]In April 2009, CIT was given approval to transfer $5.7 billion of student loans and $3.5 billion of related debt into its bank subsidiary. Moody's continues to believe that additional asset transfers to CIT Bank are additional possible options, though CIT has indicated that it continues to discuss these transfers, as well as TLGP issuance, with its regulators. Moody's is concerned that delays in obtaining the necessary approvals has resulted in a smaller margin of error with respect to the firm meeting its obligations for the balance of 2009. CIT has $2.4 billion of debt maturities between July and December 2009. [/FONT]

[FONT=verdana,arial,helvetica]Additionally, Moody's believes that damage to the franchise has become a more prominent issue. CIT customers concerned with the company's status could make higher than expected draws on their funding commitments with the firm, which would worsen its immediate liquidity challenges. At the end of the first quarter 2009, CIT's financing and leasing commitments to its customers totaled $5.3 billion, a meaningful percentage of which involve CIT as sole lender or lead agent. The firm's capacity to fund an unexpected increase in loan advances is limited, in Moody's view. Longer term, this risk could also further decrease CIT's access to capital and prospects for maintaining franchise viability. [/FONT]

[FONT=verdana,arial,helvetica]Moody's is also concerned that, notwithstanding any further achievements the firm may make in respect of its near-term liquidity profile, the prospects for its longer-term funding and business profile remain ambiguous. CIT's access to traditional unsecured debt will likely be constrained for the foreseeable future. Though the firm has embarked on a strategy to shift its funding profile to incorporate greater use of deposit funding through CIT Bank, Moody's believes that CIT will likely require significant third party capital to effect the organizational and business changes necessary to obtain funding stability as a commercial bank.

Also, given the size of the firm's balance sheet and funding needs, its ability to gather enough deposits in the near to medium term to meaningfully reduce its dependence on wholesale funding is limited. During CIT's planned transition, Moody's is concerned that the firm's franchise positioning in its individual businesses is under significant pressure, due to constraints in its ability to meet its customers' needs as well as the reputational damage sustained as a result of its recent performance and negative news flow. [/FONT]

[FONT=verdana,arial,helvetica]Moody's widened the notching of the senior subordinated debt relative the senior unsecured debt rating to reflect the increased potential loss-given-default for this class of securities. [/FONT]

[FONT=verdana,arial,helvetica]During its review, Moody's will monitor CIT's pending applications with its regulators for access to TLGP and 23A exemptions and their potential to improve the firm's near-term liquidity profile. Moody's will also examine CIT's longer-term options for achieving funding stability and the ensuing uncertainties should the firm need to undertake actions that are disruptive to its business prospects or that disadvantage creditors. Moody's expects that its review period will be brief. [/FONT]

[FONT=verdana,arial,helvetica]The following ratings were downgraded: [/FONT]

[FONT=verdana,arial,helvetica]CIT Group, Inc.: [/FONT]
[FONT=verdana,arial,helvetica]Issuer rating -- to B3 from Ba2 [/FONT]
[FONT=verdana,arial,helvetica]Senior Unsecured -- to B3 from Ba2 [/FONT]
[FONT=verdana,arial,helvetica]Senior Secured -- to B2 from Ba1 [/FONT]
[FONT=verdana,arial,helvetica]Senior Subordinated -- to Caa2 from Ba3 [/FONT]
[FONT=verdana,arial,helvetica]Junior Subordinated -- to Caa3 from B2 [/FONT]
[FONT=verdana,arial,helvetica]Preferred Stock -- to Ca from Caa1

....
[/FONT]

 

[Imark]

Ed infatti pochi giorni dopo...


[FONT=verdana,arial,helvetica]Moody's lowers CIT senior unsecured rating to Ca[/FONT]

[FONT=verdana,arial,helvetica]New York, July 16, 2009 -- Moody's Investors Service lowered CIT Group Inc.'s senior unsecured rating to Ca from B3. The downgrade follows CIT's announcement that that it expects no additional support from the U.S. government and that it is evaluating alternatives, which Moody's believes includes a high probability of a near-term bankruptcy filing. The outlook for CIT's ratings is now stable. [/FONT]

[FONT=verdana,arial,helvetica]Moody's said it believes CIT will be unable to meet the near-term debt maturities of the parent holding company given the pressure on the firm's limited cash resources arising from higher than expected draws by customers under committed borrowing arrangements with the firm. In the absence of government support, CIT has few alternatives to generate immediate cash liquidity, in Moody's view. The company could therefore pursue bankruptcy as a means to reorganize its obligations. Moody's rating of Ca is based upon an approximate range of loss senior unsecured creditors could sustain as a consequence of such actions of 30%-50%. [/FONT]

[FONT=verdana,arial,helvetica]In its previous rating action on Monday, July 13, Moody's downgraded CIT's senior unsecured rating to B3, on review for further possible downgrade. The downgrade to Ca represents a conclusion of the ratings review. [/FONT]

[FONT=verdana,arial,helvetica]The following ratings were downgraded: [/FONT]

[FONT=verdana,arial,helvetica]CIT Group, Inc.: [/FONT]
[FONT=verdana,arial,helvetica]Issuer rating -- to Ca from B3 [/FONT]
[FONT=verdana,arial,helvetica]Senior Unsecured -- to Ca from B3 [/FONT]
[FONT=verdana,arial,helvetica]Senior Secured -- to Caa3 from B2 [/FONT]
[FONT=verdana,arial,helvetica]Senior Subordinated -- to C from Caa2 [/FONT]
[FONT=verdana,arial,helvetica]Junior Subordinated -- to C from Caa3 [/FONT]
[FONT=verdana,arial,helvetica]Preferred Stock -- to C from Ca [/FONT]

[FONT=verdana,arial,helvetica]CIT Group (Australia) Limited: [/FONT]
[FONT=verdana,arial,helvetica]Backed Senior Unsecured -- to Ca from B3 [/FONT]

[FONT=verdana,arial,helvetica]CIT Group Funding Company of Canada: [/FONT]
[FONT=verdana,arial,helvetica]Backed Senior Unsecured -- to Ca from B3 [/FONT]

 

[paologorgo]

BREAKING: CIT Group (CIT) cuts deal with key bondholders for $3B in financing, will avoid bankruptcy and restructure outside court. (WSJ)

 

[The Beast]

BREAKING: CIT Group (CIT) cuts deal with key bondholders for $3B in financing, will avoid bankruptcy and restructure outside court. (WSJ)

cioè in soldoni haircut?

 

[Imark]

cioè in soldoni haircut?

O allungamento delle scadenze e riduzione della cedola... occorre verificare il dettaglio dell'accordo, altrimenti non si può dire...

 

[paologorgo]

a me sembra che mettano mano al portafoglio... più coraggiosi di chi i soldi li stampa...

Report: CIT Group board OKs $3 billion rescue loan

Business lender CIT Group's board reportedly OKs $3 billion rescue loan to avoid bankruptcy

WASHINGTON (AP) -- CIT Group Inc.'s board approved a deal late Sunday with major bondholders to keep the company out of bankruptcy with a $3 billion rescue loan, the New York Times reported.
The emergency financing is intended to give the ailing company time to restructure some of the billions of dollars in debt payments coming due this year, the Times reported, citing anonymous sources.
CIT representatives could not immediately be reached for comment.
New York-based CIT had been negotiating with key bondholders -- including bond manager Pimco -- in an attempt to avoid a bankruptcy filing. Jeffrey Peek, the company's chairman and chief executive, was actively involved in the talks, according to a person briefed on the matter. The person spoke on condition of anonymity because the talks are confidential.
CIT has been scrambling to raise $2 billion to $4 billion after the federal government refused to bail out the company. Rescue talks with government regulators broke off late Wednesday after days of round-the-clock negotiations.
Under the deal, CIT's main bondholders would give the company $3 billion at an initial rate of 10.5 percent, the Times reported.
A bankruptcy filing would have threatened funding for scores of small businesses across the country. It also would have wiped out $2.3 billion in federal bailout money injected into the company in December.
The lender faces $7.4 billion in debt due in the first quarter of next year. Highlighting its woes, CIT will be removed from the Standard & Poor's 500 index next Friday and replaced with software distributor Red Hat Inc.
CIT had warned that depriving it of more federal aid could imperil about a million corporate borrowers -- from Dunkin' Donuts franchisees to retailer Dillards Inc. But the Obama administration turned down the company's request, showing it's drawing a line on federal rescues for troubled financial firms.
In recent weeks, as the prospect of a CIT bankruptcy filing loomed, industry trade groups increased their pitch to lawmakers to prevent the collapse of CIT, which they say would imperil their small-business members and derail the already fragile economy.
CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing, so other lenders taking up all the slack would pose a big financial strain.
AP Business Writer Stevenson Jacobs contributed to this report from New York.

http://finance.yahoo.com/news/Repor...6.html?x=0&sec=topStories&pos=1&asset=&ccode=

 

[Imark]

a me sembra che mettano mano al portafoglio... più coraggiosi di chi i soldi li stampa...

Report: CIT Group board OKs $3 billion rescue loan

Business lender CIT Group's board reportedly OKs $3 billion rescue loan to avoid bankruptcy

WASHINGTON (AP) -- CIT Group Inc.'s board approved a deal late Sunday with major bondholders to keep the company out of bankruptcy with a $3 billion rescue loan, the New York Times reported.
The emergency financing is intended to give the ailing company time to restructure some of the billions of dollars in debt payments coming due this year, the Times reported, citing anonymous sources.
CIT representatives could not immediately be reached for comment.
New York-based CIT had been negotiating with key bondholders -- including bond manager Pimco -- in an attempt to avoid a bankruptcy filing. Jeffrey Peek, the company's chairman and chief executive, was actively involved in the talks, according to a person briefed on the matter. The person spoke on condition of anonymity because the talks are confidential.
CIT has been scrambling to raise $2 billion to $4 billion after the federal government refused to bail out the company. Rescue talks with government regulators broke off late Wednesday after days of round-the-clock negotiations.
Under the deal, CIT's main bondholders would give the company $3 billion at an initial rate of 10.5 percent, the Times reported.
A bankruptcy filing would have threatened funding for scores of small businesses across the country. It also would have wiped out $2.3 billion in federal bailout money injected into the company in December.
The lender faces $7.4 billion in debt due in the first quarter of next year. Highlighting its woes, CIT will be removed from the Standard & Poor's 500 index next Friday and replaced with software distributor Red Hat Inc.
CIT had warned that depriving it of more federal aid could imperil about a million corporate borrowers -- from Dunkin' Donuts franchisees to retailer Dillards Inc. But the Obama administration turned down the company's request, showing it's drawing a line on federal rescues for troubled financial firms.
In recent weeks, as the prospect of a CIT bankruptcy filing loomed, industry trade groups increased their pitch to lawmakers to prevent the collapse of CIT, which they say would imperil their small-business members and derail the already fragile economy.
CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing, so other lenders taking up all the slack would pose a big financial strain.
AP Business Writer Stevenson Jacobs contributed to this report from New York.

http://finance.yahoo.com/news/Repor...6.html?x=0&sec=topStories&pos=1&asset=&ccode=

Certo, a parte quello, e concordo con te sul coraggio... da quanto capisco, per ora mettono mano al portafoglio... senz'altro avranno anche ipotizzato (quantomeno) qualche linea di azione circa modalità di ristrutturazione sul debito... anche perché una parte di questo debito dovrebbe essere in portafoglio agli attuali erogatori di credito...

PS: il tasso praticato è da strozzo....