CIT Spikes 13% On Last-Minute Restructuring Plan

CIT bailout

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.”

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