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To: CalculatedRisk who wrote (211529)	7/21/2009 12:54:59 PM
From: DebtBomb	Read Replies (2) \| Respond to of 306849

The CIT stock action says....that pos may be cooked, IMO.

To: CalculatedRisk who wrote (211529)	7/21/2009 1:06:51 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

Libor plus 10? Such a deal......<G>

To: CalculatedRisk who wrote (211529)	7/21/2009 1:09:57 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

Thanks for pointing this out. This is loan sharking indeed. Recently I was sloppy in reading the terms and posted the "DIP" loan as being L+10. But this is more like L+19.5 for drawn amounts (5+2+13). Then add the prepayment penalty of initially 6.5 (if applicable). 2B are already drawn. This is a great deal for those who tender the bonds at 82.5% and lend them the money for that. it is not super senior (to other senior secured bonds), from what I read: The Credit Facility will be secured by a perfected first priority lien on substantially all unencumbered assets of the Guarantors, which shall include 100% of the stock of CIT Aerospace International, and 65% of the voting and 100% of the non-voting stock of other first-tier foreign subsidiaries (other than direct subsidiaries of the Company), in each case owned by a Guarantor. and yet another fee: Borrowings under the Credit Facility may be prepaid, subject to a prepayment premium in the amount of 6.5% of the amounts prepaid or commitment reduced (the “Call Premium”), declining ratably to zero over the first 18 months following entry into the Credit Facility, provided that no Call Premium will apply if the borrowings are repaid as part of or following a restructuring plan for the Company and its subsidiaries approved by a majority in number of the Steering Committee. The story is still wrong on the details: finance.yahoo.com That $3 billion loan comes at a high price -- an interest rate of about 10.5 percent.

To: CalculatedRisk who wrote (211529)	7/21/2009 5:59:19 PM
From: RockyBalboa	Respond to of 306849

To put this into perspective: this means that CIT is charged 100MM in additional interest per quarter for the drawn part of the facility ($2B). It will save a small fraction of this on retiring the to be tendered 1B FRN.

To: CalculatedRisk who wrote (211529)	7/22/2009 4:27:15 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

the bizarre CIT story: CIT Said to Have Spurned $2 Billion Secured GE Loan (Update1) July 22 (Bloomberg) -- CIT Group Inc., the commercial lender seeking to avoid bankruptcy, rejected a General Electric Co. offer of at least $2 billion in senior secured loans backed by aircraft, four people familiar with the matter said. CIT spurned the loans from GE’s finance arm, a rival in some lending businesses, over the weekend in favor of $3 billion in loans from a group of bondholders, two of the people said. GE’s offer, while less costly and requiring fewer assets as collateral, wouldn’t have provided cash until July 31 because of a delay in structuring the deal, said two of the people, who didn’t want to be identified because the offer wasn’t public. By contrast, CIT received $2 billion of the bondholders’ loan July 20 and expects the rest by month’s end. CIT, led by Chief Executive Officer Jeffrey Peek, in a statement this week called that deal the first step in a “comprehensive restructuring” of liabilities that needs bondholder cooperation. Terms include a 5 percent fee, 13 percent interest rate and assets pledged at five times the loan amount as collateral. “Peek may have felt that the egregious terms he got were the best he could get with certainty,” said Ed Grebeck, the CEO of debt-consulting firm Tempus Advisors in Stamford, Connecticut. “He’s trying to push the crisis down the road.” GE Loan Offer The GE loan could have been expanded to include additional funds using other collateral if CIT required it, three of the people said. GE’s offer wouldn’t have presented cash until the end of July because the company would need time to check out CIT’s collateral. The bondholder loan is secured by assets including 100 percent of the stock of CIT Aerospace International, according to a CIT regulatory filing. The offer from GE likely would have relied on about $4 billion in assets, less than the $8.6 billion for the unit estimated by AirFinance Journal, three of the people said. GE’s plane-leasing arm is part of GE Capital. The CIT bondholder loan has a rate of 10 percentage points more than the three-month London interbank offered rate, with a 3 percentage-point floor for the borrowing benchmark. bloomberg.com

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