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CIT Group: CVR holders won't receive common stock distribution
By Caroline Salls
Pittsburgh, Feb. 8 - CIT Group Inc. said the eligible holders of its subordinated debt and preferred stock who received contingent value rights under the company's plan of reorganization will receive no distribution of common stock, according to an 8-K filed Monday with the Securities and Exchange Commission.
The CVRs were terminated in accordance with the plan.
The measurement date for the CVRs was Feb. 8.
In order to determine if there would be any distributions of common stock to holders of CVRs, CIT said it was required to calculate the fair market value of its class 8 through 11 securities, including series A notes and common equity, as of the measurement date based on the daily volume-weighted average price of the securities for the 10 consecutive trading days immediately before the measurement date and compare it to the class 8 to 11 par recovery amount.
The company said the fair market value of the securities was less than the par recovery amount.
In addition, CIT said it has used the entire allocated principal amount of its $7.5 billion expansion facility for which repayment would have been required if not used.
Under the terms of the expansion facility, a $4.5 billion principal amount was allocated to specific purposes and was required to be used for those purposes by Jan. 31.
The company would have been required to repay the unused portion. Since it used the allocated portion, CIT said the principal amount of the expansion facility will be payable under its original terms.
CIT, a New York City-based provider of financing to small businesses and middle-market companies, emerged from Chapter 11 bankruptcy on Dec. 10. Its case number was 09-16565.
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