CIT Group, whose commercial loan portfolio includes a number of radio and television broadcasters, says it is in negotiations with regulators on measures to improve its near-term liquidity. The company’s stock price plunged to just above a dollar in Monday’s trading.
“CIT Group, a leading provider of financing to small businesses and middle market companies, today confirmed that it remains in active discussions with its principal regulators on a series of measures to improve the company’s near-term liquidity position. Among the matters being discussed are the Company’s application to participate in the FDIC’s Temporary Liquidity Guarantee Program. The Company is also actively discussing liquidity solutions that do not involve access to the TLGP program, such as the near-term transfer of assets into CIT Bank through Section 23A waivers and the transfer of its Vendor Finance and Trade Finance businesses into CIT Bank; these transfers if approved would enhance CIT’s liquidity position. There can be no assurance that any of CIT’s discussions with the government will result in any regulatory action nor as to the timing or terms of any such approvals,” the company said in a statement.
The public statement came after a Wall Street Journal report said CIT had been unable to persuade the federal government to let the commercial lender participate in any of the bailout programs for banks. CIT is said to be facing a $1 billion payment that comes due next month.
With the crisis at CIT now public, Reuters caught up with US Treasury Secretary Timothy Geithner in London. He offered assurances that “we have the authority and the ability to make sensible choices.” But that vague response leaves open just about any course for the government to take.