CIT » Topics » Item 7.01 Regulation FD Disclosure.

This excerpt taken from the CIT 8-K filed Jul 24, 2009.

Item 7.01 Regulation FD Disclosure.

On July 23, 2009, CIT Group Inc. (the "Company") amended the terms of its cash tender offer for its outstanding Floating Rate Senior Notes due August 17, 2009 (the “August 17 Notes”), commenced on July 20, 2009 (the "Offer"), by disseminating a supplement, dated July 23, 2009 (the "Supplement"), to its Offer to Purchase, dated July 20, 2009. Exhibit 99.1 hereto contains information excerpted from the Supplement and is incorporated herein by reference.

The information in this Form 8-K that is furnished under this “Item 7.01 Regulation FD Disclosure” and the related Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

This excerpt taken from the CIT 8-K filed Jul 21, 2009.

Item 7.01 Regulation FD Disclosure.

The information attached as Exhibit 99.2 hereto is incorporated herein by reference.

The information in this Form 8-K that is furnished under this “Item 7.01 Regulation FD Disclosure” and the related Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

Bankruptcy Relief

In the event that we do not receive prior to the expiration date of the Offer enough tenders of August 17 Notes to meet the Minimum Tender Condition (as defined below) and the Minimum Tender Condition is not otherwise waived, we may need to seek relief under the U.S. Bankruptcy Code, unless we are able to obtain alternative financing. This relief may include (i) seeking bankruptcy court approval for the sale of most or substantially all of our assets pursuant to section 363(b) of the U.S. Bankruptcy Code; (ii) pursuing a plan of reorganization; or (iii) seeking another form of bankruptcy relief, all of which involve uncertainties, potential delays and litigation risks.

Liquidity and Capital Resources

The Company’s business has been historically dependent upon access to the debt capital markets for liquidity and efficient funding, including the ability to issue unsecured term debt. The disruptions in the credit markets that began in 2007 and resulted in the Company’s withdrawal from the unsecured debt markets have continued, and especially with respect to the Company, have materially worsened in the first and second quarters of 2009. As a result of the loss of access to the unsecured debt markets, which were historically significant sources of liquidity for the Company, the Company elected to draw down on the full amount of its bank credit facilities in March 2008, adding additional pressure to the Company’s funding situation. Furthermore, downgrades in the Company’s short- and long-term credit and counterparty ratings in March 2008, April 2009 and June 2009 to below investment grade have materially worsened these general conditions and had the practical effect of leaving the Company without access to the commercial paper market and other unsecured term debt markets.

As a result of these developments, the Company has been forced to reduce its funding sources almost exclusively to secured borrowings, where available. This has resulted in significant additional costs to the Company due to the higher interest rates and restrictions on the types of assets and advance rates as compared to unsecured funding. Further, there are limits to the amount of assets that can be encumbered without further adversely affecting the Company’s ability to execute asset sales or other capital generating actions and to access other debt markets in the future. The Company’s ability to continue to access the secured debt markets is extremely limited. The completion of the Credit Facility has further limited the Company’s ability to encumber assets and enter into further secured financings.

The Company’s ability to satisfy its cash needs has been further constrained by regulatory or contractual restrictions on the manner in which it may use portions of its cash on hand. Cash held at CIT Bank is available solely for the bank’s funding and investment requirements and restricted cash related to securitization transactions is available solely for payments to certificate holders. The cash of CIT Bank and the restricted cash related to securitization transactions cannot be transferred to or used for the benefit of any other affiliate of the Company.

The Company’s funding strategy and liquidity position have been materially adversely affected by the ongoing stress in the credit markets, credit ratings downgrades, and regulatory and cash restrictions and, accordingly, there is substantial doubt about the Company's ability to continue as a going concern. As a result, the Company has initiated restructuring efforts, which include the new Credit Facility, the Offer for the August 17 Notes and is in discussions with noteholders concerning actions which would result in improvements to the Company's liquidity and capital position.


Expected Effects of the Offer and Term Loan Financing on Our Liquidity and Capital Resources

The Offer, the Credit Facility and any additional liquidity and capital initiatives the Company may undertake, if successful, will increase the Company’s capital levels and reduce the amount of its outstanding debt. If the Offer is not successfully completed, the Company does not anticipate that it will otherwise be able to make the upcoming August 17, 2009 maturity payment on the August 17 Notes or otherwise refinance the August 17 Notes prior to their maturity and may need to seek relief under the U.S. Bankruptcy Code, unless the Company is able to obtain alternative financing.

The Company has significant maturities of unsecured debt in the near term and in future years. Estimated funding needs for the twelve months ending June 30, 2010 total approximately $7 billion of unsecured debt (which includes approximately $1 billion aggregate principal amount of the August 17 Notes which mature August 17, 2009). Existing liquidity for the same period is not sufficient to make the upcoming August 17, 2009 maturity payment on the August 17 Notes or otherwise meet the Company’s twelve-month funding requirements. In order to satisfy the Company’s additional funding needs, the Company will need to refinance other debt and commitments, which will be very difficult given the current volatility in the credit markets, and/or generate sufficient cash to retire the debt. The Company cannot assure you that it will be successful in refinancing other debt and commitments or generating sufficient cash to retire other debt.

Even assuming the successful implementation of all of the actions described above, including, among other things, the Offer, adoption of its liquidity and capital enhancement plan and other restructuring alternatives, obtaining sufficient financing from third party sources to continue operations, and successfully operating its business, the Company may be required to execute asset sales or other capital generating actions over and above its normal finance activities to provide additional working capital and repay debt as it matures. If the Company fails to maintain regulatory capital requirements applicable to it as a bank holding company (“BHC”), the Company may be subject to serious consequences, including restrictions on its business and formal enforcement actions and having to divest CIT Bank.

Application for Temporary Liquidity Guarantee Program and Section 23A Waivers

The Company’s capacity to originate new business and its ability to continue its operations depends upon access to cost efficient funding. The Company’s BHC strategy, which was commenced prior to becoming a BHC under the U.S. Bank Holding Company Act of 1956, as amended (the “BHC Act”), was designed to broaden funding sources and was formulated based on discussions with the Federal Reserve and the Federal Deposit Insurance Corporation ("FDIC") in 2008. The BHC strategy prepared in connection with the Company's BHC application which was approved in December 2008 contemplated an orderly transition from a capital markets funded business to a diversified deposit funding model. The transition plan relied on (i) asset transfers from the Company’s nonbank subsidiaries to CIT Bank via limited waivers under Section 23A of the Federal Reserve Act which would be funded by expanded deposit issuance through existing and new channels and (ii) participation by the Company in the FDIC Temporary Liquidity Guarantee Program (“TLGP”). On January 12, 2009, CIT applied for approval to participate in the FDIC’s TLGP. Participation in this program would have enabled CIT to issue government-guaranteed debt, which would enhance liquidity, reduce funding costs and support business growth. In April 2009, the Federal Reserve granted the Company a waiver under Section 23A to transfer $5.7 billion of government guaranteed student loans to CIT Bank, in connection with this transaction, CIT Bank assumed $3.5 billion in debt and paid $1.6 billion in cash to CIT.

On July 15, 2009, the Company announced that it had been advised that there is no appreciable likelihood of additional government support, including any additional Section 23A waivers, being provided in the near term. As a result of the Company’s failure to obtain additional government support, including among other things TLGP approval and additional Section 23A waivers, the Company has not been able to shift its primary operating platform to CIT Bank and will not be able to issue government-guaranteed debt under TLGP, further reducing the liquidity available to the Company.

Bank Holding Company Status

The Company and CIT Bank are each subject to various regulatory capital requirements administered by the Federal Reserve Board and the FDIC, respectively. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions, by regulators that, if undertaken, could have a direct material adverse effect on the Company. Losses during the first and second quarter of 2009 have reduced the Company’s level of regulatory capital and continued losses in future quarters may reduce the Company’s regulatory capital below satisfactory levels. Failure to meet and maintain the appropriate capital levels could affect the Company’s status as a BHC, have a material adverse effect on the Company’s financial condition and results of operations, and subject the Company to a variety of enforcement actions, as well as certain restrictions on its business.

If the Company does not maintain sufficient regulatory capital, the Company may become subject to enforcement actions (including being required to divest CIT Bank or CIT Bank becoming subject to FDIC conservatorship or receivership) or otherwise be unable to successfully execute its business plan. In addition, if the Company is unable to complete the Offer and access the credit markets to meet its capital and liquidity needs in the future or otherwise suffers continued adverse effects on its liquidity, the Company may be subject to formal and informal enforcement actions by the Federal Reserve and CIT Bank may be placed in FDIC conservatorship or receivership or suffer other consequences. Such actions could impair the Company's ability to successfully execute its business plan and have a material adverse effect on its business, results of operations, and financial position and could result in the Company seeking relief under the U.S. Bankruptcy Code.

On July 14, 2009, the Federal Reserve Bank of New York completed a preliminary stress test of the Company, pursuant to which the Federal Reserve determined that, under the circumstances tested, the Company would need approximately $4 billion in additional regulatory capital, including an additional $2.6 billion in tier one capital. The Company was in discussions with the Federal Reserve regarding the results of the preliminary stress test when, on July 15, 2009, the government notified the Company that there was no appreciable likelihood of additional government support being provided in the near term.

If the Company seeks relief under the Bankruptcy Code, the FDIC could place CIT Bank into either receivership or conservatorship. In such an event, the assets of CIT Bank would not be available to creditors of the Company or other subsidiaries.

Financing Commitments

The Company’s outstanding financing commitments, referred to as loan commitments, or lines of credit, are agreements to lend to customers, subject to the customers’ compliance with contractual obligations. The Company also enters into commitments to provide financing, letters of credit and guarantees. These commitments are not typically fully drawn and additional draws with respect to some of such commitments may be drawn by the Company’s customers at any time, provided that such customers meet certain conditions.

Commencing in late June 2009 and continuing in early July 2009, the Company has experienced a significant increase in the draws on such commitments, which has significantly degraded the Company’s liquidity position. If the borrowers on these lines of credit continue to access these lines or increase their rate of borrowing either as a result of their business needs or due to a perception that the Company may be unable to fund these lines of credit in the future, this could further substantially degrade the Company’s liquidity position which could have a material adverse effect on its business.

Selected Financial Information as of and for the Six Months Ended June 30, 2009

The following description of certain of our unaudited selected financial information as of and for the six months ended June 30, 2009 has not been finalized and is subject to change.

The Company expects to report a loss for the second quarter of 2009 in excess of $1.5 billion (including approximately $700 million in goodwill and intangible assets impairment charge) when it files its quarterly report on Form 10-Q. In addition to balance sheet contraction, slightly higher margins, lower expenses and continued high

credit costs it is expected the quarter's results will include goodwill and intangible write-downs, and losses on assets sold for liquidity purposes. Pre-tax items contributing to the expected quarterly loss include:

  • $693 million goodwill and intangible assets impairment charge,
     
  • approximately $500 million provision for credit losses, and
     
  • $185 million loss on receivables of approximately $1 billion which were sold for liquidity purposes.

Section 8 – Other Events

This excerpt taken from the CIT 8-K filed Oct 17, 2007.

Item 7.01. Regulation FD Disclosure.

          The fourth paragraph of the press release, dated October 17, 2007, attached as Exhibit 99.1 to this Current Report on Form 8-K, which contains a quote by Jeffery M. Peek, Chairman and Chief Executive Officer of CIT Group Inc., is furnished pursuant to this Item 7.01.

Section 8 – Other Events

This excerpt taken from the CIT 8-K filed Sep 11, 2007.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation that will be given by management at the Lehman 2007 Financial Services Conference on September 11, 2007. All amounts in the presentation are at or for the period ending June 30, 2007, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on September 11, 2007 at 9:15 a.m. Eastern Daylight Time. A replay of the live webcast will be archived at the same web address from Tuesday, September 11, 2007 at approximately 6:00 p.m. until 11:59 p.m. on Tuesday, September 25, 2007. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Jul 18, 2007.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes the financial targets for the second half of 2007 set forth under the heading “Earnings Guidance” in the press release, dated July 18, 2007, attached as Exhibit 99.1. Such financial targets are furnished pursuant to this Item 7.01.

Section 8 – Other Events

This excerpt taken from the CIT 8-K filed May 16, 2007.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation that will be given by management at the Lehman 2007 Financial Services Conference on May 16, 2007. All amounts in the presentation are at or for the period ending March 31, 2007, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on May 16, 2007 at 8:30 a.m. Eastern Daylight Time (1:30 p.m. London time). A replay of the live webcast will be archived at the same web address from Wednesday, May 16, 2007 at approximately 6:00 p.m. until 11:59 p.m. on May 23, 2007. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed May 14, 2007.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation that will be given by management at the UBS Financial Services Conference on May 14, 2007. All amounts in the presentation are at or for the period ending March 31, 2007, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on May 14, 2007 at 1:30 p.m. Eastern Daylight Time. A replay of the live webcast will be archived at the same web address from Monday, May 14, 2007 at approximately 6:00 p.m. until 11:59 p.m. on May 21, 2007. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Jan 17, 2007.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes the financial targets for 2007 set forth in the fifth paragraph of the press release, dated January 17, 2007, attached as Exhibit 99.1. Such financial targets are furnished pursuant to this Item 7.01.

Section 8 — Other Events

This excerpt taken from the CIT 8-K filed Nov 7, 2006.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation that will be given by management at CIT’s Investor Day conference on November 7, 2006. All amounts in the presentation are as of or for the year ended December 31, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on November 7, 2006 at 8:30 a.m. Eastern Standard Time and is expected to last until approximately 12:30 p.m. Eastern Standard Time. A replay of the live webcast will be archived at the same web address from Tuesday, November 7, 2006 at approximately 6:00 p.m. until 11:59 p.m. on November 30, 2006. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Nov 7, 2006.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit a press release, dated November 7, 2006, announcing the guidance for 2007 earnings and return on equity that will be announced at CIT’s Investor Day conference on November 7, 2006. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on November 7, 2006 at 8:30 a.m. Eastern Standard Time and is expected to last until approximately 12:30 p.m. Eastern Standard Time. A replay of the live webcast will be archived at the same web address from Tuesday, November 7, 2006 at approximately 6:00 p.m. until 11:59 p.m. on November 30, 2006. The press release is attached as Exhibit 99.1. This press release is furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Feb 9, 2006.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation that will be given by management at the CSFB Financial Services Conference on February 9, 2006. All amounts in the presentation are at or for the period ending December 31, 2005, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on February 9, 2006 at 7:30 a.m. Eastern Standard Time. A replay of the live webcast will be archived at the same web address from Thursday, February 9, 2006 at approximately 6:00 p.m. until 11:59 p.m. on February 16, 2006. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Feb 8, 2006.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from presentations that will be given by management to fixed income investors in Europe beginning on February 8, 2006. All amounts in the presentation are at or for the period ending December 31, 2005, unless otherwise noted. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Nov 8, 2005.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation given by management at CIT’s Investor Day conference on November 8, 2005. All amounts in the presentation are at or for the period ending September 30, 2005, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on November 8, 2005 at 8:00 a.m. Eastern Standard Time and is expected to last until approximately 12:45 p.m. Eastern Standard Time. A replay of the live webcast will be archived at the same web address from Tuesday, November 8, 2005 at approximately 6:00 p.m. until 11:59 p.m. on November 30, 2005. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

This excerpt taken from the CIT 8-K filed Nov 8, 2005.

Item 7.01. Regulation FD Disclosure.

        This Current Report on Form 8-K includes as an exhibit the slides from a presentation given by management at CIT’s Investor Day conference on November 8, 2005. All amounts in the presentation are at or for the period ending September 30, 2005, unless otherwise noted. A live webcast of the presentation, in addition to the accompanying slides, will be available at http://ir.cit.com on November 8, 2005 at 8:00 a.m. Eastern Standard Time and is expected to last until approximately 12:45 p.m. Eastern Standard Time. A replay of the live webcast will be archived at the same web address from Tuesday, November 8, 2005 at approximately 6:00 p.m. until 11:59 p.m. on November 30, 2005. The slides from the presentation are attached as Exhibit 99.1. Those slides are furnished pursuant to Item 7.01 and the information contained in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into CIT’s filings under the Securities Act of 1933.

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