2009-07-10bloomberg.com

CIT, the century-old lender to 950,000 businesses, became a bank in December to qualify for a government bailout and received $2.33 billion in funds from the U.S. Treasury. The lender, which has reported more than $3 billion of losses in the last eight quarters, faces $10 billion of maturing debt through 2010 and hasn’t had access to the corporate bond market in more than a year, according to data compiled by Bloomberg...

CIT Group Inc. bonds and stock tumbled on concern that the Federal Deposit Insurance Corp. won’t give the commercial lender access to its Temporary Liquidity Guarantee Program.

The FDIC, which has backed $274 billion in bond sales under the TLGP since Nov. 25, has been unwilling to let CIT participate on concern that standing behind the lender’s debt would put taxpayer money at risk, according to people familiar with the regulator’s thinking who declined to be identified because the application process is private...

Without the TLGP, CIT may default as soon as April, when a $2.1 billion credit line matures, according to Fitch Ratings.


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