CIT Amends Restructuring Plan

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• October 19 2009
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The CIT saga continues. The lender released its latest restructuring plan to keep its head above the waters of bankruptcy over the weekend. Here are the details of the bondholder agreement:

CIT, a leading provider of financing to small businesses and middle market companies, today announced that it has amended its restructuring plan to further build bondholder support. The amendments have been approved by CIT’s Board of Directors and the Steering Committee of CIT’s bondholders.

On October 1, 2009, CIT commenced a series of offers to exchange certain outstanding series of notes and concurrently began a solicitation for votes for a voluntary prepackaged plan of reorganization. Successful completion of either the exchange offers or plan of reorganization will generate significant capital and provide multi-year liquidity through the material reduction of CIT’s outstanding debt.

“Over the last two weeks, we have continued to work constructively with the Steering Committee and believe that these amendments will further build bondholder support for our restructuring plan,” said Jeffrey M. Peek, Chairman and CEO. “Through the completion of the exchange offers or an expedited in-court restructuring process, we will reduce the uncertainty around our business and further maximize the value of our franchise. Either approach is intended to ensure that CIT becomes a well-capitalized bank holding company that will serve as a source of strength for CIT Bank as we implement our new bank-centric funding model.”

Amended Terms of the Restructuring Plan

The amended terms of the restructuring plan include, among others:
•    A comprehensive cash sweep mechanism to accelerate the repayment of the new notes;
•    The shortening of maturities by six months for all new notes and junior credit facilities;
•    An increased amount of equity offered to subordinated debt holders reflecting agreements with holders of the majority of its senior and subordinated debt;
•    The inclusion of the notes maturing after 2018 that had previously not been solicited as part of the exchange offer or plan of reorganization;
•    An increase in the coupon on Series B Notes, to 9% from 7%, being issued by CIT Delaware Funding; and
•    Provided preferred stock holders contingent value rights in the plan of reorganization, and modified the allocation of common stock in the recapitalization after the exchange offers, as part of an agreement with the United States Department of Treasury.

The exchange offers expire at 11:59 pm, New York City time, on Thursday, October 29, 2009, with the exception of the additional notes maturing after 2018 for which there is an early acceptance date of October 29, 2009 and expiration date of November 13, 2009. Tendered securities may be validly withdrawn at any time prior to the expiration or early acceptance date.

NYSE Approval

On October 14, 2009, the New York Stock Exchange (the “NYSE”) accepted CIT’s application of the financial viability exception to the NYSE’s shareholder approval policy in connection with the issuance of the New Preferred Stock should the Offers be consummated. The Audit Committee of the Company’s Board of Directors has approved the use of this exception.

For Additional Information

The Company is filing an 8-K containing the amended Offering Memorandum, Disclosure Statement and Solicitation of Acceptances of a Prepackaged Plan of Reorganization with the Securities and Exchange Commission. Further information about the Company, its restructuring plan, including the amended offering memorandum, will be available at www.cit.com.

The Information Agent for the Offer is D.F. King & Co. Financial Balloting Group, LLC is serving as Exchange Agent for the Exchange Offers and Voting Agent for the Plan of Reorganization. Retail holders of notes with questions regarding the voting and exchange process should contact the information agent at (800) 758-5880 or +1 (212) 269-5550. Banks and brokers with questions regarding the voting and exchange process should contact the exchange and voting agent at +1 (646) 282-1888. BofA Merrill Lynch and Citigroup Global Markets are acting as financial advisors to the Company for purposes of this transaction.

Evercore Partners, Morgan Stanley and FTI Consulting are the Company’s financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP and Sullivan & Cromwell LLP are legal counsel in connection with the restructuring plan.

Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com.