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CIT: Pimco Rumored to Walk Away

October 8, 2009

Today, Bloomberg is reporting credible rumors that Pimco, the largest bond fund in the world, and Baupost, a hedge fund, will be walking away from the CIT Bondholder Committee in the next very short time. Both The Wall Street Journaland Ruters are also covering the story.

Pimco’s leaving the committee offers the optics of bondholders that hope is fading for CIT avoiding bankruptcy. The value of the bonds themselves are dropping, and the cost of protecting them from defaulting is getting more expensive.

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