News
CIT bondholder loans hold off bankruptcy
Company provides financing for a number of restaurant franchisees.
July 20, 2009
Last week, analysts worried about the effects of the potential bankruptcy of financing provider CIT Group after talks with the federal government about a bailout failed. CIT group, which has provided funding for restaurant operators such as Dunkin' Donuts and Pizza Hut, has since announced that it has entered into a $3 billion secured loan agreement with a group of the company's major bondholders.
CIT intends to begin a comprehensive restructuring of its liabilities to provide additional liquidity and further strengthen its capital position.
As the first step in a broader recapitalization plan, CIT has commenced a cash tender offer for its outstanding Floating Rate Senior Notes due Aug. 17, for $825 for each $1,000 principal amount of notes tendered on or before July 31, 2009.
Analysts, however, are wary of the deal, calling it a stop-gap measure that only gives the company time to restructure without filing for bankruptcy, according to The Star-Ledger (New Jersey). Analysts say the company is still dealing with problem loans and future write-offs and may consider selling parts of its loan portfolio.
Related Media
Subscribe
Get the latest news and resources from QSR Web.
