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CIT: Share Price Rises After Raising Purchase Price For Notes

August 3, 2009
CIT CEO Jeff Peek and his wife, Liz Peek

CIT CEO Jeff Peek and his wife, Liz Peek

The price of CIT shares rose today on news that the tender offer for their notes has been raised and extended. The deadline for the note offer was extended, and the repurchase price was increased from 82.5 cents for every dollar that a note was worth, to 87 cents on the dollar. In addition, the company has now reported that the minimum number of notes were exchaged for the rate, so the company is safe – for the short term:

Marketwatch quoted CIT’s CEO from an issued statement.

“We are pleased to announce a constructive resolution to the tender offer as we continue to make progress in the development and execution of a broad restructuring plan that positions CIT for the long-term,” CIT Chief Executive Jeffrey Peek said in a statement.

The Reuters report is here:

NEW YORK (Reuters) – CIT Group Inc said on Monday it raised the purchase price in its tender offer for senior notes due this month.

The lender, which has struggled to meet short-term liquidity requirements amid rising loan losses, raised the purchase price to $875 for each $1000 in principle amount of notes tendered, from $825.

CIT said that as of July 31, the original offer deadline, it had received tenders for 64.97 percent of the notes, and it has extended the deadline until midnight, August 5.

New York-based CIT launched the original cash tender offer on July 20 for $1 billion of outstanding floating rate senior notes due August 17, as the first part of a recapitalization plan.

The company, which lends to small and medium-sized businesses, said any bondholders that tendered before the expiration of the offer will receive the amended purchase price.

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