looking increasingly grim as the sting of the global liquidity
crisis penetrates deeper into financial markets.
Following an announcement on March 20 that it resorted to
emergency funding from its US$7.3bn unsecured US bank credit
facilities, CIT revealed in an analyst briefing that it had drawn
down completely on its bank facilities.
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The move signalled it was buckling under pressure from the
credit crunch and fuelled speculation that it may share the same
fate as Bear Stearns if market conditions continue to
deteriorate.
For now though, CIT may look at selling off non-core assets
which it hopes will generate some $5bn to $7bn in proceeds,
chairman Jeffrey M Peek said.
Finding a partner to fund its loans and leases is another option
the group is considering.
Rating agencies, Moody’s and Standard & Poor’s last week cut
CIT’s long and short-term credit ratings which affects its ability
to raise funds in the money markets and raises its borrowing
costs.
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By GlobalDataThe group has taken big hits since the unravelling of the
subprime mortgage crisis. In 2007 it exited the home lending
business and incurred $1.1bn in provisions and goodwill impairment
charges.
