CIT Group Inc., a commercial bank holding company, provides financial products and advisory services to the middle market. The New York-based company offers corporate finance, trade finance, transportation finance, vendor finance, and banking and insurance services. CIT, founded in 1908, is a lender to around one million mostly small and midsize businesses ranging from restaurants and private schools to clothing makers. It also leases railcars, aircraft and equipment, and has a large business providing cash to manufacturers and collecting on their invoices.
The company recently filed for Chapter 11 bankruptcy protection and expects to emerge relatively intact by the end of 2009. A prepackaged plan calls for bondholders to exchange their debt for new debt that matures later, as well as nearly all the company's equity. It will be the fifth largest bankruptcy in U.S. history.
CIT had been on the ropes since the onset of the credit crisis. It had been an industrial loan company, but converted to a bank holding company so that it could receive a $2.33 billion federal bailout, now expected to be wiped out. For years, CIT funded its activities largely by selling bonds -- only to find itself in trouble when credit markets froze.