Finally. CIT is launching an exchange offer in hopes of avoiding bankruptcy.
Shares are up 13% on a glimmer of hope that the company will save itself. But it’s obviously not a sure thing.
CIT says $10 billion of outstanding unsecured indebtedness have indicated their intention to participate.
However, CIT is also asking bondholders to approve a prepackaged plan of reorganization to facilitate a potential bankruptcy filing in the case the offer doesn’t work.
“Under the terms of the exchange offers, a tendering holder of an existing debt security would receive a pro rata portion of each of five series of newly issued secured notes, with maturities ranging from four to eight years, and/or shares of newly issued voting preferred stock. Consideration offered varies in amount and type based on issuer, maturity and position in the capital structure.”