CIT begins exchange offer for equity units

By Angela McDaniels

Tacoma, Wash., Nov. 17 - CIT Group Inc. began an offer to exchange the equity units related to its mandatory convertible senior notes for cash and shares of common stock, according to a company news release.

Each equity unit has a par value of $25 and is made up of a purchase contract obligating the holder to buy shares of CIT's common stock and a 2.5% undivided beneficial interest in a 7.5% senior note due Nov. 15, 2015 with a principal amount of $1,000. The current outstanding principal amount of the old notes is $690 million.

CIT is offering $4 cash, accrued interest and 0.7147 of a share of CIT common stock for each equity unit.

The offer expiration is 11:59 p.m. ET on Dec. 15.

The company said the exchange offer for the equity units, as well as concurrent private offers to exchange up to $1.5 billion of outstanding notes for cash and new 12% subordinated notes due 2018, are the primary part of CIT's plans to raise roughly $1.4 billion of regulatory capital to support its application to become a bank holding company.

In addition to the exchange offers, CIT intends to raise the remaining amount of required capital through a public or private offering of capital stock that would qualify as Tier 1 regulatory capital.

CIT anticipates that this capital-raising plan, in combination with as much as $2.5 billion of Tier 1 capital it has applied for through the Capital Purchase Program of the Treasury's Troubled Asset Relief Program, will provide enough capital to exceed the regulatory requirements.

The exchange offer for the units is not subject to a minimum condition or completion of the exchange offer for the company's outstanding notes.

D.F. King & Co., Inc. (800 758-5880 or 212 269-5550) is the exchange agent and information agent.

CIT, a New York-based commercial finance company, said it cannot assure that it will obtain approval to become a bank holding company or a financial holding company or that any of the investments described above, including the exchange offers, will be completed.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.