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Late Monday, the Board of Directors at CIT Group (CIT) announced that it plans to repay $750 million of what it terms "high-cost" debt. The first part of this payment will be made Tuesday, totaling $750 million of its $7.5 billion first lien credit facility. The repayment will come on a pro rata basis among the outstanding tranches, and it will be subject to a 2% payment premium. The company will prepay this debt from its available company cash, which is more than $5 billion.
This news comes a day after the company announced that John Thain would take the helm as Chairman and CEO of the company. Thain was the controversial head man at Merrill Lynch (well-noted for his commodes) and will take the place of Jeffrey Peek, who resigned his position in January.
Technically, the stock is consolidating just below the $32 level. Right now, I consider this stock to be nuclear/radioactive -- that is, keep your hands off. With bankruptcy, a controversial $500 million in financing from Bank of America, John Thain, and yesterday's news there is a lot for CIT to digest. Once the news calms down, I am not sure that there are many upside drivers for the stock.
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Reader Comments (Page 1 of 1)
3-26-2010 @ 1:47PM
Pete Samuel said...
How is it possible a company like CIT can go bankrupt rip off all it investors for Billions of $$$$$$$$$$$$ and still be aloud to trade and claim it's going to pay back money for bills, when they don't have any! If Cit is able to pay bills of any kind, why not pay off the investors that you ripped off when you went BANKRUPT.