We’re beginning the next leg down: Take advantage of any opportunity to sell.
By Daniel at 9 July, 2009, 2:25 pm
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July 9 (Bloomberg) — CIT Group Inc., the century-old lender to 950,000 businesses, is trading in the bond market as if it may fail.
Since becoming a bank in December to qualify for federal help, CIT has lost all three of its investment-grade ratings. Yields on its bonds are comparable to securities rated on the brink of default on concern CIT won’t get approval to sell U.S.- backed bonds under the Temporary Liquidity Guarantee Program to refinance $10 billion of debt coming due through next year.
“They won’t be able to survive” without cheap funding, said Jason Brady, a managing director at Thornburg Investment Management, which manages $40 billion, including CIT bonds, in Santa Fe, New Mexico. “The fact that their access to TLGP has been delayed so long is a bad sign.”
A failure of CIT, which has almost $76 billion in assets, would be the biggest bank collapse since regulators seized Washington Mutual Inc. in September.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aEa0S34ZmI_A
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