CIT Bond Advisers Said To Push For Bankruptcy
July 23, 2009 at 4:48 AM (PT)
Advisers to the bondholders that gave CIT GROUP INC., a large lender to the radio industry, a $3 billion rescue loan are recommending the commercial lender be restructured through a bankruptcy after a debt tender next month, reports BLOOMBERG.
"Even if CIT succeeds in getting 90% of the $1 billion of floating-rate notes due AUGUST 17th swapped at a discount, the advisers will seek a so-called pre-packaged bankruptcy that would allow the company to restructure out of court, HOULIHAN LOKEY HOWARD & ZUKIN CEO JEFFREY WERBALOWSKY told bondholders today, according to a BLOOMBERG source, who declined to be identified because the call was private.
"Should the CIT offer to exchange the notes for as much as 82.5 cents on the dollar fail, HOULIHAN, the investment-banking firm advising the bondholders, will recommend the steering committee let CIT file for bankruptcy before paying the AUGUST maturity, the person said. The steering committee is also being advised by law firm PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP."