CIT Group awaits the decisions of regulators and debtholders to see if its $3 billion private-sector rescue plan will be successful, reports The Wall Street Journal.
The Federal Reserve and Federal Deposit Insurance Corporation officials must issue forbearance in order for CIT’s long-term success to pull through. Right now the $3 billion injection from CIT’s existing bondholders should help the company with $1 billion in debt maturing in August.
Bondholders, such as Allianz SE’s Pacific Investment Management and Centerbridge Partners, have secured virtually of of CIT’s $30 billion in assets that aren’t currently tied to other loans.
As CIT awaits regulator decisions, competitors, such as Fifth Street Capital, are informing clients of capital infusion offiers of as much as $10 million within 48 hours.
“If CIT can’t provide the factoring, we will step in and replace it for our clients,” said Leonard Tannenbaum, Fifth Street Capital president. “In a market dislocation like this, it offers us tremendous business opportunities.”