SEC Filings
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
Form T-3/A
(Amendment No. 1) FOR APPLICATION FOR QUALIFICATION OF INDENTURE
UNDER THE TRUST INDENTURE ACT OF 1939 CIT
Group Inc.
CIT
Group Funding Company of Delaware LLC
(Name of Applicant)
c/o CIT Group Inc.
505 Fifth Avenue New York, New York 10017 (Address of Principal Executive Offices) Securities to be Issued Under the Indentures to be Qualified
Approximate date of proposed public offering: As soon as practicable after the date of this
Application for Qualification.
Applicant hereby amends this Application for Qualification on such date or dates as may be
necessary to delay its effectiveness until (i) the 20th day after the filing of an amendment which
specifically states that it shall supersede this Application for Qualification, or (ii) such date
as the Commission, acting pursuant to Section 307(c) of the Trust Indenture Act of 1939, may
determine upon the written request of the Applicant.
EXPLANATORY
NOTE
This
Amendment No. 1 to Form T-3 (this “Amendment”) is
being filed solely to file as Exhibit T3E.1 an updated copy of the
Offering Memorandum, Disclosure Statement and Solicitation of
Acceptances of a Prepackaged Plan of Reorganization in order to make
certain corrections thereto from the version that had previously been
filed as an exhibit. This Amendment is not intended to amend or
delete any other part of the Application.
2
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Applicants have duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the city of New York, New York, on October 2, 2009.
(SEAL)
Attest:
By: /s/ Andrea L. Nicolas
Name: Andrea L. Nicolas
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OFFERING
MEMORANDUM, DISCLOSURE STATEMENT AND SOLICITATION OF ACCEPTANCES
OF A PREPACKAGED PLAN OF REORGANIZATION
CIT Group Inc.
&
CIT Group Funding Company of
Delaware LLC
Offers to Exchange Relating
to
Any and All of Their Respective
Outstanding Notes Listed Below
and Solicitation of Acceptances
of a Prepackaged Plan of Reorganization
EACH OF THE OFFERS TO EXCHANGE AND SOLICITATION OF
ACCEPTANCES OF THE PREPACKAGED PLAN OF REORGANIZATION WILL
EXPIRE AT 11:59 PM, NEW YORK CITY TIME, ON OCTOBER 29,
2009, UNLESS EXTENDED BY US (SUCH DATE AND TIME, AS THE SAME MAY
BE EXTENDED, THE “EXPIRATION DATE”). HOLDERS OF
PUBLICLY TRADED NOTES SHOULD REFER TO THE BALLOT ATTACHED HERETO
AS APPENDIX E FOR INSTRUCTIONS ON HOW TO TENDER AND/OR VOTE
ON THE PLAN OF REORGANIZATION.
Upon the terms and subject to the conditions set forth in this
offering memorandum, disclosure statement and solicitation of
acceptances of a prepackaged Plan of Reorganization, attached
hereto as Appendix C (the “Plan of
Reorganization”) (as it may be supplemented and amended
from time to time, collectively the “Offering Memorandum
and Disclosure Statement”) and the related letter
of
transmittal (“Letter of Transmittal”) and/or ballot
(“Ballot”) for accepting or rejecting the Plan of
Reorganization, (i) CIT Group Inc. is offering in exchange
for any and all of the outstanding notes (including the
U.S. dollar equivalent of non-U.S. dollar-denominated
notes) of CIT Group Inc. listed in the table “CIT
Outstanding Notes” beginning on the inside cover page each
of five series of our newly issued Series A secured notes
(which are referred to herein as the “Series A
Notes”) and/or up to approximately 70 million shares
of its newly issued preferred stock (which CIT Group Inc. refers
to as the “New Preferred Stock”) and (ii) CIT
Group Funding Company of Delaware LLC (“Delaware
Funding”) is offering in exchange for any and all of the
outstanding notes listed in the table “Delaware Funding
Outstanding Notes” beginning on the inside cover page each
of five series of its newly issued Series B secured notes
(which are referred to herein as the “Series B
Notes” and together with the Series A Notes, the
“New Notes”), in each case, as applicable, as
specified in the tables below. We refer to the exchange offer by
CIT Group Inc. as the “CIT Offers,” the exchange offer
by Delaware Funding as the “Delaware Funding Offers,”
and we refer to the CIT Offers and the Delaware Offers together
as the “Offers.” We refer to the notes to be tendered
in the CIT Offer as the “CIT Old Notes,” the notes to
be tendered in the Delaware Funding Offer as the “Canadian
Senior Unsecured Notes” or the “Delaware Funding Old
Notes,” and we refer to the CIT Old Notes and the Delaware
Funding Old Notes together as the “Old Notes.” The
New Notes will be issued by us and will be secured by the
collateral as described herein. The Series A Notes will be
guaranteed by all of CIT Group Inc.’s current and future
domestic wholly owned subsidiaries, with the exception of
Delaware Funding, CIT Bank and other regulated subsidiaries,
special purpose entities and immaterial subsidiaries (the
“CIT Guarantees”). The Series B Notes will be
guaranteed by CIT Group Inc., on an unsecured basis, and all
current and future domestic wholly owned subsidiaries of CIT
Group Inc., with the exception of Delaware Funding, CIT Bank and
other regulated subsidiaries, special purpose entities and
immaterial subsidiaries, on a secured basis (the “Delaware
Funding Guarantee,” and together with the CIT Guarantees,
the “Guarantees”).
Subject to applicable securities laws and the terms set forth in
this Offering Memorandum and Disclosure Statement, we reserve
the right to waive any and all conditions to the Offers, to
extend or terminate the Offers and voting deadlines with respect
to the Plan of Reorganization in our sole and absolute
discretion, which may be for any or no reason, and otherwise to
amend the Offers or Plan of Reorganization in any respect.
The Offers are subject to a number of conditions, including a
liquidity and leverage condition that states that the Offers
cannot be consummated if an insufficient number of Old Notes are
tendered into the exchange, and/or certain other debt
instruments have not been renegotiated so that, after giving
effect to the Offers and such renegotiations, the face amount of
CIT Group Inc.’s and its direct and indirect
subsidiaries’ total debt would not be reduced by at least
$5.7 billion and its remaining unsecured debt maturities
(excluding foreign vendor facilities) would exceed
$500 million in 2009, $2.5 billion during the period
from 2009 to 2010, $4.5 billion during the period from 2009
to 2011 and $6.0 billion during the period from 2009 to
2012, in each case on a cumulative basis (the “Liquidity
and Leverage Condition”). In addition, consummation of the
Delaware Funding Offers is subject to the consummation of the
CIT Offers. The Liquidity and Leverage Condition cannot be
waived. In the event that the conditions to the Offers are not
satisfied or waived, or if we for any reason determine that it
would be more advantageous or expeditious, and there is
sufficient support for the Plan of Reorganization (as defined
herein), CIT Group Inc. and Delaware Funding may seek to file a
case under Chapter 11 of the title 11 of the United
States Code (“Bankruptcy Code”) to consummate the
restructuring described in this Offering Memorandum and
Disclosure Statement although no decision has been made to
pursue a bankruptcy filing. Through the Plan of Reorganization,
all holders of Old Notes would receive New Notes and new common
stock, as further set forth in the section entitled “The
Plan of Reorganization,” provided that
sufficient holders of Old Notes (i.e., holders representing at
least
662/3%
in principal amount and more than 50% in number of those
impaired creditors entitled to vote in certain classes who
actually vote) vote in favor of the Plan of Reorganization and
the other conditions to consummation of the Plan of
Reorganization are satisfied. Only those parties who actually
vote are counted for these purposes and therefore it is
important that you provide the appropriate instruction to your
broker, dealer, commercial bank, trust company, or other nominee
(each, a “Nominee”) to cast the appropriate vote on
your behalf. Your election to tender your Old Notes into the
Offers, also shall constitute a vote in favor of the Plan of
Reorganization, and you may only change that vote by
withdrawing, to the extent permitted, the Old Notes you have
tendered. If you choose not to tender your Old Notes into the
Offers, or if you withdraw Old Notes previously tendered, you
may vote separately in favor of or against the Plan of
Reorganization by providing the appropriate instruction to your
Nominee. By providing an instruction to your Nominee to
participate in the Offers or vote to accept or reject the Plan
of Reorganization, you are making certain certifications, as
contained in the ballot, and agreeing to certain provisions
contained in the Plan of Reorganization including exculpation,
injunction and release provisions. The class in which your Old
Notes will be classified is set forth in the tables beginning on
the inside cover page.
You should consider the risk factors beginning on
page 27 of this Offering Memorandum and Disclosure
Statement before you decide whether to participate in the Offers
or vote on the Plan of Reorganization.
THIS SOLICITATION OF ACCEPTANCES OF THE PLAN OF
REORGANIZATION IS BEING CONDUCTED TO OBTAIN SUFFICIENT
ACCEPTANCES OF THE PLAN OF REORGANIZATION PRIOR TO THE FILING OF
A VOLUNTARY CASE UNDER CHAPTER 11 OF THE BANKRUPTCY CODE.
BECAUSE NO CHAPTER 11 CASE HAS YET BEEN COMMENCED, THIS
OFFERING MEMORANDUM AND DISCLOSURE STATEMENT HAS NOT BEEN
APPROVED BY ANY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN
THE MEANING OF SECTION 1125(A) OF THE BANKRUPTCY CODE. WE
HAVE NOT AT THIS TIME TAKEN ANY ACTION APPROVING A BANKRUPTCY
FILING AND, IF THE OFFERS ARE CONSUMMATED, NEITHER CIT GROUP
INC. NOR DELAWARE FUNDING WILL COMMENCE A BANKRUPTCY FILING TO
CONSUMMATE THE PLAN OF REORGANIZATION ANNEXED HERETO.
Prior to tendering the Old Notes or voting on the Plan of
Reorganization, holders of Old Notes are encouraged to read and
consider carefully this entire Offering Memorandum and
Disclosure Statement, including the Plan of Reorganization
annexed hereto as Appendix C and the matters described in
this Offering Memorandum and Disclosure Statement, the Letter of
Transmittal and/or the Ballot.
In making a decision in connection with the Offers or the
Plan of Reorganization, holders of Old Notes must rely on their
own examination of the Company and the terms of the Offers, the
restructuring transactions, and the Plan of Reorganization,
including the merits and risks involved. Holders of Old Notes
should not construe the contents of this Offering Memorandum and
Disclosure Statement as providing any legal, business, financial
or tax advice. Each holder of Old Notes should consult with its
own legal, business, financial and tax advisors with respect to
any such matters concerning this Offering Memorandum and
Disclosure Statement, the Offers, the Plan of Reorganization and
the restructuring transactions contemplated thereby.
The Offers are exempt from the registration requirements of
the Securities Act of 1933, as amended (the “Securities
Act”) with respect to the exchange of the Old Notes and the
New Preferred Stock by virtue of the exemption from such
registration contained in Section 3(a)(9) of the Securities
Act. The Offers and the solicitation of acceptances of the Plan
of Reorganization are exempt from state securities law
requirements by virtue of Section 18(b)(4)(C) of the
Securities Act.
All of the Old Notes are freely tradeable securities and not
subject to restriction on transfer, and, therefore upon
consummation of the Offers, holders of the Old Notes who tender
Old Notes will receive New Notes and/or New Preferred Stock that
are also freely tradeable securities and not subject to
restriction on transfer by virtue of our reliance on the
exemption from registration contained in Section 3(a)(9) of
the Securities Act.
October 1, 2009
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The following tables set forth the series of Old Notes subject
to the Offers and indicate the consideration to be received by
holders of Old Notes in the Offers. Holders of Old Notes
accepted for exchange in the Offers will also receive a cash
payment (paid in the stated currency of such Old Notes) equal to
the accrued and unpaid interest in respect of such Old Notes
from the most recent interest payment date to, but not
including, the Settlement Date (as defined herein). Interest on
each New Note will accrue from the Settlement Date. The
principal amount of New Notes offered in exchange for Old Notes
as reflected in the table below will consist of a pro
rata portion of each of five series of New Notes, each of
which series will mature in a different year beginning in 2013
and ending in 2017.
If the Offers are not consummated as contemplated herein, the
Old Notes will be subject to the Plan of Reorganization, to the
extent it is approved and implemented, and placed in the Class
identified in the Chart below. For a complete description of the
persons and securities subject to the Plan of Reorganization and
their potential treatment thereunder, see “The Plan of
Reorganization” and the Plan of Reorganization annexed
hereto as Appendix C.
The three series of Delaware Funding Old Notes tendered pursuant
to the Delaware Funding Offers will be exchanged for
Series B Notes in the exchange, and the CIT Old Notes
tendered pursuant to the CIT Offer will be exchanged for
Series A Notes and New Preferred Stock in the exchange.
CIT
Outstanding Notes
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Delaware
Funding Outstanding Notes
All New Notes will be denominated in U.S. dollars. An
equivalent U.S. dollar principal amount of the
Euro-denominated, British pound-denominated, Swiss
franc-denominated and Canadian dollar-denominated Old Notes
(determined as described herein) will be used when determining
the consideration to be received per US$1,000 principal amount
of Old Notes tendered.
Other than the 5.80% Senior Notes due October 1, 2036
(CUSIP 12560PFP1) and the 6.10% Junior Subordinated Notes due
March 15, 2067 (CUSIP 125577AX4) issued by CIT Group Inc.,
our debt securities maturing after December 31, 2018 have
not been included in the Offers and will be reinstated pursuant
to the Plan of Reorganization. In addition, the Equity Units
(CUSIP 125581405) issued by CIT Group Inc. have not been
included in the Offers but are included in solicitation of
acceptances for the Plan of Reorganization. Further, the 6.00%
Fixed Rate Notes due 3 March 2011 (CUSIP AU300CGAL010) and
the 3 month BBSW plus 34bp Floating Rate Notes due
3 March 2011 (CUSIP AU300CGAL028) issued by CIT Group
(Australia) Limited, a subsidiary of the CIT Group Inc., have
not been included in the Offers and will be reinstated pursuant
to the Plan of Reorganization. As a result, holders of these
notes and other debt securities will not be entitled to
participate in the Offers and will be treated as indicated in
the Plan of Reorganization.
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CONTENTS
You should rely only on the information contained in this
Offering Memorandum and Disclosure Statement or to which this
Offering Memorandum and Disclosure Statement refers you. We have
not authorized anyone to provide you with different information.
We are not making an offer of the New Notes and the New
Preferred Stock in any jurisdiction where such offers are not
permitted. You should not assume that the information provided
in this Offering Memorandum and Disclosure Statement is accurate
as of any date other than the date of this Offering Memorandum
and Disclosure Statement, or that the information incorporated
by reference into this Offering Memorandum and Disclosure
Statement is accurate as of any date other than the date of such
information.
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NOTICE TO
INVESTORS
NONE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, THEIR RESPECTIVE
BOARDS OF DIRECTORS, THE EXCHANGE AGENT, THE VOTING AGENT, THE
INFORMATION AGENT, THE FINANCIAL ADVISORS, THE SWISS
NOTE TENDER AGENT, THE FINANCIAL ADVISORS OR ANY OF THEIR
RESPECTIVE AFFILIATES MAKES ANY RECOMMENDATION AS TO WHETHER OR
NOT HOLDERS OF OLD NOTES SHOULD EXCHANGE OLD NOTES FOR
NEW NOTES AND/OR SHARES OF NEW PREFERRED STOCK, AS
APPLICABLE, IN THE OFFERS AND THE PLAN OF REORGANIZATION.
The information contained in this Offering Memorandum and
Disclosure Statement is as of the date of this Offering
Memorandum and Disclosure Statement and is subject to change,
completion or amendment without notice. Neither the delivery of
this Offering Memorandum and Disclosure Statement at any time
nor the offer, exchange or delivery of any security hereunder
shall, under any circumstances, create any implication that
there has been no change in the information set forth in this
Offering Memorandum and Disclosure Statement or in our affairs
since the date of this Offering Memorandum and Disclosure
Statement.
No person is authorized in connection with these Offers to give
any information or to make any representation not contained in
this Offering Memorandum and Disclosure Statement, and, if given
or made, such other information or representation must not be
relied upon as having been authorized by us.
Neither the SEC, any other securities commission nor any other
regulatory authority, has approved or disapproved the Offers,
Plan of Reorganization or the New Notes and New Preferred Stock
nor have any of the foregoing authorities passed upon or
endorsed the merits of these Offers or the accuracy or adequacy
of this Offering Memorandum and Disclosure Statement. Any
representation to the contrary is a criminal offense.
The Offers and solicitation of votes in respect of the Plan of
Reorganization are being made on the basis of this Offering
Memorandum and Disclosure Statement and are subject to the terms
described in this Offering Memorandum and Disclosure Statement
and the indentures relating to the New Notes. Any decision to
participate in the Offers and/or vote to accept or reject the
Plan of Reorganization must be based on the information
contained in this document. In making an investment decision,
prospective investors must rely on their own examination of us
and the terms of the Offers and Plan of Reorganization and the
New Notes and New Preferred Stock, including the merits and
risks involved. Prospective investors should not construe
anything in this Offering Memorandum and Disclosure Statement as
legal, business or tax advice. Each prospective investor should
consult its advisors as needed to make its investment decision
and to determine whether it is legally permitted to participate
in the Offers under applicable legal investment or similar laws
or regulations.
Each prospective investor must comply with all applicable laws
and regulations in force in any jurisdiction in which it
participates in the Offers and/or vote to accept or reject the
Plan of Reorganization or possesses or distributes this Offering
Memorandum and Disclosure Statement and must obtain any consent,
approval or permission required by it for participation in the
Offers under the laws and regulations in force in any
jurisdiction to which it is subject, and neither we nor any of
our representatives shall have any responsibility therefor.
We reserve the right to amend, modify or withdraw any of the
Offers and Plan of Reorganization at any time and we reserve the
right to reject any tender or vote, in whole or in part.
This Offering Memorandum and Disclosure Statement contains
summaries believed to be accurate with respect to certain
documents, but reference is made to the actual documents for
complete information. All of those summaries are qualified in
their entirety by this reference. Copies of documents referred
to herein will be made available to prospective investors upon
request to the Company.
This Offering Memorandum and Disclosure Statement, including
the documents incorporated by reference herein, the related
Letter of Transmittal and/or Ballot and the Plan of
Reorganization contain important information that should be read
before any decision is made with respect to an exchange of Old
Notes or acceptance or rejection of the Plan of
Reorganization.
The delivery of this Offering Memorandum and Disclosure
Statement shall not under any circumstances create any
implication that the information contained or incorporated by
reference herein is
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correct as of any time subsequent to the date hereof or date
thereof or that there has been no change in the information set
forth or incorporated herein or in any attachments hereto or in
the affairs of CIT Group Inc. or any of its subsidiaries,
including Delaware Funding, or affiliates since the date hereof
or date thereof.
Austria. No prospectus has been or will be
approved
and/or
published pursuant to the Austrian Capital Markets Act
(Kapitalmarktgesetz), as amended. Neither this document
nor any other document connected therewith constitutes a
prospectus according to the Austrian Capital Markets Act, and
neither this document nor any other document connected therewith
may be distributed, passed on or disclosed to any other person
in Austria. No steps may be taken that would constitute a public
offering of New Notes and New Preferred Stock in Austria, and
the Offers may not be advertised in Austria. The New Notes and
New Preferred Stock will be offered in Austria only in
compliance with the provisions of the Austrian Capital Markets
Act and all other laws and regulations in Austria applicable to
the Offers and sale of New Notes and New Preferred Stock in
Austria.
Belgium. The Offers are exclusively conducted
in Belgium under applicable private placement exemptions and
have, therefore, not been and will not be notified to, and the
Offering Memorandum and Disclosure Statement or any other
offering material has not been and will not be approved by, the
Belgian Banking, Finance and Insurance Commission (Commission
bancaire, financière et des assurances/Commissie voor het
Bank-, Financie- en Assurantiewezen). Accordingly, the
Offers may not be advertised and the Offers will not be extended
and no memorandum, information circular, brochure or any similar
document has or will be distributed, directly or indirectly, to
any person in Belgium other than “qualified investors”
in the sense of Article 10 of the Belgian Law of
16 June 2006 on the public offer of placement instruments
and the admission to trading of placement instruments on
regulated markets (as amended from time to time). This Offering
Memorandum and Disclosure Statement has been issued only for the
personal use of the above qualified investors and exclusively
for the purpose of the Offers. Accordingly, the information
contained herein may not be used for any other purpose nor
disclosed to any other person in Belgium.
Bermuda. The Offers are private and not
intended for the public. This Offering Memorandum and Disclosure
Statement has not been approved by the Bermuda Monetary
Authority or the Registrar of Companies in Bermuda. Any
representation to the contrary, express or implied, is
prohibited.
Canada. This Offering Memorandum and
Disclosure Statement constitutes an offering of the New Notes
and New Preferred Stock only in those jurisdictions of Canada
and to those persons where and to whom they may lawfully be
offered.
Cayman Islands. No invitation whether directly
or indirectly may be made to the public in the Cayman Islands to
subscribe for the New Notes and New Preferred Stock as CIT and
Delaware Funding are not listed on the Cayman Islands Stock
Exchange.
Denmark. This Offering Memorandum and
Disclosure Statement has not been and will not be filed with or
approved by the Danish Financial Supervisory Authority or any
other regulatory authority in the Kingdom of Denmark. The New
Notes and New Preferred Stock have not been offered or sold and
may not be offered, sold or delivered directly or indirectly in
Denmark, unless in compliance with Chapters 6 or 12 of the
Danish Act on Trading in Securities and executive orders issued
pursuant thereto as amended from time to time. Accordingly, this
Offering Memorandum and Disclosure Statement may not be made
available nor may the New Notes and New Preferred Stock
otherwise be marketed and offered for sale in Denmark other than
in circumstances which are deemed not to be a marketing or an
offer to the public in Denmark.
European Economic Area. This Offering
Memorandum and Disclosure Statement shall not be distributed to,
and no New Notes and New Preferred Stock may be offered or sold
to persons in a Member State of the European Economic Area which
has implemented Directive 2003/71/EC (the “Prospectus
Directive”) (each, a “Relevant Member State”)
other than to persons who are qualified investors within the
meaning of the law in that Relevant Member State implementing
Article 2(1)(e) of the Prospectus Directive (each, a
“Qualified Investor”).
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France. No prospectus or Offering Memorandum
and Disclosure Statement (including any amendment or supplement
thereto or replacement thereof) has been prepared in connection
with the Offers that have been submitted for clearance to or
approved by the Autorité des marchés financiers; no
New Notes or New Preferred Stock have been offered or sold nor
will any New Notes or New Preferred Stock be offered or sold,
directly or indirectly, to the public in France; neither a
prospectus, the Offering Memorandum and Disclosure Statement nor
any other offering material relating to the New Notes or New
Preferred Stock has been distributed or caused to be
distributed, and a prospectus, the Offering Memorandum and
Disclosure Statement and any other offering material relating to
the New Notes and New Preferred Stock will not be distributed or
caused to be distributed to the public in France; such offer,
sales and distributions have been and shall only be made in
France to (i) persons providing investment services
relating to portfolio management for the account of third
parties (personnes fournissant le service
d’investissement de gestion de portfeuille pour compte de
tiers)
and/or
(ii) qualified investors (investisseurs
qualifiés) acting for their own account, all as defined
in, and in accordance with,
Articles L.411-1,
L.411-2 and D.411-1 to D.411-3 of the Code monétaire et
financier.
Germany. Any offer or solicitation of
securities within Germany must be in full compliance with the
German Securities Prospectus Act (Wertpapierprospektgesetz
(the “WpPG”)), which implements the Prospectus
Directive in Germany, and any other applicable laws in the
Federal Republic of Germany. The offer and solicitation of
securities to the public in Germany requires the prior
publication (with specific requirements for a publication being
set out in the WpPG) of a prospectus drawn up in accordance with
the Prospectus Directive and the WpPG (a “PD-compliant
Prospectus”) approved by the German Federal Financial
Services Supervisory Authority (Bundesanstalt fur
Finanzdienstleistungsaufsicht (the “BaFin”)) or
the notification of a PD-compliant Prospectus approved by
another competent authority in the EEA in accordance with Art.
17 and Art. 18 of the Prospectus Directive. This Offering
Memorandum and Disclosure Statement does not constitute a
PD-compliant Prospectus and has not been and will not be
submitted for approval to the BaFin. It may not be supplied to
the public in Germany or used in connection with any offer for
subscription of New Notes and New Preferred Stock to the public,
any public marketing of New Notes and New Preferred Stock or any
public solicitation for offer to subscribe for or otherwise
acquire New Notes and New Preferred Stock in Germany. This
Offering Memorandum and Disclosure Statement is personally
addressed only to a limited number of persons in Germany who are
qualified investors, as defined in the WpPG, is strictly
confidential and may not be distributed to any person or entity
other than the designated recipients hereof.
Greece. No prospectus subject to the approval
of the Hellenic Capital Markets Commission or another EU
equivalent authority has been prepared in connection with the
Offers. The New Notes and New Preferred Stock may not be offered
or sold, directly or indirectly, to the public in Greece and
neither this Offering Memorandum and Disclosure Statement nor
any other offering material or information contained herein
relating to the New Notes and New Preferred Stock may be
released, issued or distributed to the public in Greece or used
in connection with any offering in respect of the New Notes and
New Preferred Stock to the public in Greece. The New Notes and
New Preferred Stock may exclusively be offered to qualified
investors acting for their own account as defined under
article 2(1)(στ) of Greek Law 3401/2005 and the
Prospectus Directive
and/or under
circumstances where the Offers of the New Notes and New
Preferred Stock is allowed without prior publication of a
prospectus
and/or where
the Offers of the New Notes and New Preferred Stock is exempted
from the publication of a prospectus according to Greek Law
3401/005
and/or the
Prospectus Directive. The offer does not constitute a
solicitation by anyone not authorised to so act and this
Offering Memorandum and Disclosure Statement may not be used for
or in connection with the Offers to solicit anyone to whom it is
unlawful under Greek laws to make such offer in the context of
article 10 of Greek law
876/1979.
Hong Kong. The New Notes and New Preferred
Stock may not be offered or sold in Hong Kong, by means of this
Offering Memorandum and Disclosure Statement or any document
other than to persons whose ordinary business is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong. No advertisement, invitation or document relating to
New Notes and New Preferred Stock, whether in Hong Kong or
elsewhere, which is directed at, or the contents of which are
likely to be accessed or read by, the public in Hong Kong
(except if permitted to do so under the securities laws of Hong
Kong) will
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be issued other than with respect to the New Notes and New
Preferred Stock which is or is intended to be disposed of only
to persons outside Hong Kong or only to “professional
investors” within the meaning of the Securities and Futures
Ordinance (Cap. 571) of Hong Kong and any rules made
thereunder.
Ireland. The Offers are not being made,
directly or indirectly, to the public in Ireland and no offers
or sales of any notes or securities under or in connection with
such Offers may be effected except in conformity with the
provisions of Irish law including the Irish Companies Acts 1963
to 2006, the Prospectus (Directive 2003/71/EC) Regulations 2005
of Ireland, the European Communities (Markets in Financial
Instruments) Regulations 2007 of Ireland and the Market Abuse
(Directive 2003/6/EU) Regulations 2005 of Ireland.
Israel. In the State of Israel this Offering
Memorandum and Disclosure Statement shall not be regarded as an
offer to the public to purchase the New Notes and New Preferred
Stock under the Israeli Securities Law 5728 — 1968
(the “ISL”), which requires a prospectus to be
published and authorised by the Israel Securities Authority, if
it complies with certain provisions of Section 15 of the
ISL, including, among others, if: (i) the Offers are made,
distributed or directed to not more than 35 investors, subject
to certain conditions (the “Addressed Investors”); or
(ii) if the Offers are made, distributed or directed to
certain qualified investors defined in the First Addendum of the
ISL, subject to certain conditions (the “Qualified
Investors”). The Qualified Investors shall not be taken
into account in respect of counting the Addressed Investors.
Qualified Investors may have to submit written evidence that
they meet the definitions set out in the First Addendum to the
ISL. Addressed Investors may have to submit written evidence in
respect to their identities. CIT has not and will not take any
action that would require it to publish a prospectus in
accordance with and subject to the ISL. CIT has not and will not
distribute this Offering Memorandum and Disclosure Statement or
make, distribute or direct an offer to subscribe for the New
Notes and New Preferred Stock to any person within the State of
Israel, other than to Qualified Investors and Addressed
Investors.
Italy. The Offers are not being made in the
Republic of Italy and the Offering Memorandum and Disclosure
Statement has not been submitted to the clearance procedure of
the COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB)
and/or the
Bank of Italy pursuant to Italian laws and regulations.
Accordingly, holders of Old Notes are hereby notified that, to
the extent such holders are Italian residents or persons located
in the Republic of Italy, the Offers are not available to them
and they may not submit for exchange the Old Notes in the Offers
nor may the New Notes and New Preferred Stock be offered, sold
or delivered in the Republic of Italy and, as such, any
acceptances received from such persons shall be ineffective and
void, and neither the NOTE D’INFORMATION nor any other
offering material relating to the Offers, the Old Notes or the
New Notes and New Preferred Stock may be distributed or made
available in the Republic of Italy.
Japan. The New Notes and New Preferred Stock
have not been registered under the Securities and Exchange Law
of Japan. The New Notes and New Preferred Stock have not been
offered or sold and will not be offered or sold, directly or
indirectly, in Japan or to or for the account of any resident of
Japan, except (i) pursuant to an exemption from the
registration requirements of the Securities and Exchange Law and
(ii) in compliance with any other applicable requirements
of Japanese law.
Korea. The New Notes and New Preferred Stock
have not been registered under the Securities and Exchange Law
and none of the New Notes or New Preferred Stock has been or
will be offered, sold or delivered, directly or indirectly, or
offered or sold to any person for re-offering or resale,
directly or indirectly, in Korea or to any resident of Korea
except pursuant to the Securities and Exchange Law, the Foreign
Exchange Transaction Law and any other applicable laws,
regulations and ministerial guidelines in Korea. Without
prejudice to the foregoing, where the New Notes and New
Preferred Stock are sold or re-sold to Korean residents, the New
Notes and New Preferred Stock may only be sold or re-sold to
those Korean residents that are qualified to purchase them under
the relevant laws and regulations without having first to obtain
prior governmental approvals under the relevant Korean
laws/regulations, including the Foreign Exchange Transaction Law
(or that have obtained the required prior governmental approvals
to do so).
Kuwait. No New Notes and New Preferred Stock
have been offered or sold or will be offered or sold and no
documents will be distributed, no materials will be offered, or
no invitation or advertisement will be issued in the State of
Kuwait relating thereto, save in strict compliance with the
provisions of Law No. 31/1990 and the various Ministerial
Orders and Resolutions issued thereunder. No mass-media means of
contact
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are being used to market the New Notes and New Preferred Stock.
The New Notes and New Preferred Stock are being offered for sale
only to qualified institutional investors. Neither the New Notes
or New Preferred Stock nor the private offering have been
licensed by the Ministry of Commerce or any other relevant
Kuwaiti Government Agency. No party involved in this offering is
licensed in the state of Kuwait.
Luxembourg. No New Notes and New Preferred
Stock may be offered or sold in the Grand Duchy of Luxembourg,
directly or indirectly, and neither this Offering Memorandum and
Disclosure Statement or any other offering circular, prospectus,
form of advertisement, form of communication or other material
may be distributed, or otherwise made available in form, or
published in, the Grand Duchy of Luxembourg except in
circumstances which do not constitute an offer of the New Notes
and New Preferred Stock to the public.
Malaysia. No Offering Memorandum and
Disclosure Statement or other offering documents has been or
will be registered with the Securities Commission under the
Securities Commission Act 1993 in respect of the New Notes and
New Preferred Stock. The New Notes and New Preferred Stock will
only be offered for sale to non-residents of Malaysia (being
persons who are not citizens or permanent residents of Malaysia
and who do not engage in a trade or business in Malaysia and
includes any offshore company incorporated under the OCA 1990
and any foreign offshore company registered under the OCA
1990) and that this Offering Memorandum and Disclosure
Statement or any other offering document or material relating to
the New Notes and New Preferred Stock will not be distributed or
circulated, whether directly or indirectly, to residents of
Malaysia.
The Netherlands. No New Notes or New Preferred
Stock have been, directly or indirectly, offered or sold and
will not be, directly or indirectly, offered or sold in the
Netherlands other than to persons who are qualifying investors
(gekwalificeerde beleggers) within the meaning of
article 1:1 of the 2006 Act on Financial Supervision
(Wet op het financieel toezicht) as amended from time to
time unless one of the other exemptions or exceptions to the
prohibition contained in Article 5:2 of the 2006 Act on
Financial Supervision (Wet op het financieel toezicht) is
applicable and the conditions attached to such exemption or
exception are complied with.
People’s Republic of China. This Offering
Memorandum and Disclosure Statement has not been and will not be
circulated or distributed in the People’s Republic of China
(PRC) and no New Notes and New Preferred Stock have been offered
or sold, nor will be offered or sold to any person for
re-offering or resale, directly or indirectly, to any resident
of the PRC except pursuant to applicable laws and regulations of
the PRC. For the purpose of this paragraph, PRC does not include
Hong Kong, Macau and Taiwan. Neither this Offering Memorandum
and Disclosure Statement nor any advertisement or other offering
material may be distributed or published and no offer or sale of
any New Notes and New Preferred Stock may be made in the PRC,
except under circumstances that will result in compliance with
applicable laws and regulations.
Portugal. This Offering Memorandum and
Disclosure Statement has not been nor will it be subject to the
approval of the Portuguese Securities Market Commission (the
“CMVM”). No approval action has been or will be
requested from the CMVM that would permit a public offering of
any of the New Notes and New Preferred Stock referred to in this
Offering Memorandum and Disclosure Statement; therefore the same
cannot be offered to the public in Portugal. Accordingly, no New
Notes and New Preferred Stock may be offered, sold or delivered
except in circumstances that will result in compliance with any
applicable laws and regulations. In particular, this Offering
Memorandum and Disclosure Statement and the Offers of New Notes
and New Preferred Stock are only intended for qualified
investors within the meaning of Article 30 of the
Portuguese Securities Code (Código dos Valores
Mobiliários).
Singapore. The offer of New Notes and New
Preferred Stock is made only to and directed at, and the New
Notes and New Preferred Stock are only available to, persons in
Singapore who are existing holders of the Old Notes previously
issued by CIT Group Inc. or Delaware Funding. This Offering
Memorandum and Disclosure Statement has not been registered as a
prospectus with the Monetary Authority of Singapore.
Accordingly, this Offering Memorandum and Disclosure Statement
and any other document or material in connection with the Offers
or sale, or invitation for subscription or purchase, of the New
Notes and New Preferred Stock may not be circulated or
distributed, nor may the New Notes and New Preferred Stock be
offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) existing holders of Old
Notes or (ii) pursuant to, and in
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accordance with, the conditions of an exemption under any
provision of Subdivision (4) of Division 1 of
Part XIII of the Securities and Futures Act,
Chapter 289 of Singapore.
Spain. The New Notes and New Preferred Stock
will not be offered, sold or distributed in Spain, except in
circumstances which do not constitute a public offer of
securities in Spain within the meaning of the Spanish Securities
Market Law (Ley 24/1988, de 28 de Julio, del Mercado de
Valores), as amended and restated, or without complying with all
legal and regulatory requirements under Spanish securities laws.
The New Notes, New Preferred Stock and the Offering Memorandum
and Disclosure Statement have not been registered with the
Spanish Securities Market Commission (Comision Nacional del
Mercado de Valores) and therefore the Offering Memorandum
and Disclosure Statement are not intended for any public offer
of the New Notes or Preferred Stock in Spain.
Switzerland. The New Notes and New Preferred
Stock may not be publicly offered, sold or advertised, directly
or indirectly, in or from Switzerland. Neither this Offering
Memorandum and Disclosure Statement nor any other offering or
marketing material relating to CIT or the New Notes or New
Preferred Stock constitutes a prospectus as that term is
understood pursuant to article 652a or 1156 of the Swiss
Federal Code of Obligations (Schweizerisches
Obligationenrecht), and neither this document nor any other
offering material relating to CIT or the New Notes or New
Preferred Stock may be publicly distributed or otherwise made
publicly available in Switzerland.
United Kingdom. This communication is not
being made and has not been approved by an authorized person for
the purpose of section 21 of the Financial Services and
Markets Act 2000 (the “Act”). Accordingly, this
communication is not being distributed to, and must not be
passed onto, the general public in the United Kingdom save in
circumstances where section 21(1) of the Act does not
apply. This communication is only directed at persons who
(i) are outside the United Kingdom or (ii) are
investment professionals within the meaning of
Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005 (the “Financial
Promotion Order”) or (iii) are high net worth entities
or other persons to whom it may lawfully be communicated falling
within Article 49(2)(a) to (e) of the Financial
Promotion Order or (iv) fall within Article 43 of the
Financial Promotion Order (all such persons together being
referred to as “relevant persons”). This communication
must not be acted on or relied on by persons who are not
relevant persons. Any investment or investment activity to which
this communication relates is available only to relevant persons
and will be engaged in only with relevant persons.
The New Notes and New Preferred Stock will initially be
available in book-entry form only. We expect that each series of
New Notes will be issued in the form of one or more registered
global notes. The global notes will be deposited with, or on
behalf of, DTC and registered in its name or in the name of
Cede & Co., its nominee. Beneficial interests in the
global notes will be shown on, and transfers of beneficial
interests in the global notes will be effected only through,
records maintained by DTC and its participants. After the
initial issuance of the global notes, certificated notes will be
issued in exchange for global notes only in the limited
circumstances set forth in the applicable indenture governing
the New Notes. See “Book-Entry, Delivery and Form.”
NOTICE TO
NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN
APPLICATION FOR A LICENSE HAS BEEN FILED UNDER
CHAPTER 421-B
OF THE NEW HAMPSHIRE UNIFORM SECURITIES ACT, 1955, AS AMENDED,
WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS
EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF
NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF
NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER
RSA 421-B
IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR
THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A
SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS
PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS
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OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY
OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO
ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS
PARAGRAPH.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this Offering Memorandum and
Disclosure Statement are “forward-looking statements”
within the meaning of applicable federal securities laws. All
statements contained herein that are not clearly historical in
nature are forward-looking and the words “anticipate,”
“believe,” “could,” “expect,”
“estimate,” “forecast,” “intend,”
“plan,” “potential,” “project,”
“target” and similar expressions are generally
intended to identify forward-looking statements. All statements
contained in this Offering Memorandum and Disclosure Statement,
other than statements of historical fact, including without
limitation, statements about our plans, strategies, prospects
and expectations regarding future events and our financial
performance, are forward-looking statements that involve certain
risks and uncertainties. While these statements represent our
current judgment on what the future may hold, and we believe
these judgments are reasonable in the circumstances, these
statements are not guarantees of any events or financial
results, and our actual results may differ materially. You are
urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue
reliance on these forward-looking statements. The
forward-looking statements included in this Offering Memorandum
and Disclosure Statement, including the Projections of Certain
Financial Data Following Consummation of Plan of Reorganization
and the Liquidation Analysis, are made only as of the date of
this Offering Memorandum and Disclosure Statement. All
subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are
expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We
undertake no obligation to update publicly these forward-looking
statements to reflect new information, future events or
otherwise, except as required by law. You should, however,
review the factors and risks we describe in the reports we file
from time to time with the SEC. All forward-looking statements
involve risks and uncertainties, many of which are beyond our
control, which may cause actual results, performance or
achievements to differ materially from anticipated results,
performance or achievements. We cannot assure you that projected
results or events will be achieved. Factors that could cause our
actual results to be materially different from our expectations
include those factors described herein under the caption
“Risk Factors” and “Risk Factors Affecting the
Plan of Reorganization” and in documents incorporated
herein by reference, including, among others, the following:
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INDUSTRY
AND MARKET DATA
In this Offering Memorandum and Disclosure Statement, we rely on
and refer to information and statistics regarding our industry.
We obtained this market data from independent industry
publications or other publicly available information. Although
we believe that these sources are reliable, we have not
independently verified and do not guarantee the accuracy and
completeness of this information.
INCORPORATION
BY REFERENCE; ADDITIONAL INFORMATION
CIT is “incorporating by reference” the information it
files with the SEC into this Offering Memorandum and Disclosure
Statement, which means that CIT is disclosing important
information to you by referring you to those documents.
Information that is incorporated by reference is an important
part of this Offering Memorandum and Disclosure Statement.
Certain information that CIT files after the date of this
Offering Memorandum and Disclosure Statement with the SEC will
automatically update and supersede the information included or
incorporated by reference herein. CIT incorporates by reference
into this Offering Memorandum and Disclosure Statement the
documents listed below, which were filed with the SEC, and such
documents form an integral part of this Offering Memorandum and
Disclosure Statement:
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CIT is also incorporating by reference any future filings CIT
makes with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), after the date of this Offering
Memorandum and Disclosure Statement and prior to the expiration
or termination of the Offers, except that, unless otherwise
indicated, CIT is not incorporating any information furnished
under Item 2.02 or Item 7.01 of any Current Report on
Form 8-K.
Any statement contained in this Offering Memorandum and
Disclosure Statement or in a document (or part thereof)
incorporated or considered to be incorporated by reference in
this Offering Memorandum and Disclosure Statement shall be
considered to be modified or superseded for purposes of this
Offering Memorandum and Disclosure Statement to the extent that
a statement contained in this Offering Memorandum and Disclosure
Statement or in any other subsequently filed document (or part
thereof) which is or is considered to be incorporated by
reference in this Offering Memorandum and Disclosure Statement
modifies or supersedes that statement. The modifying or
superseding statement need not state that it has modified or
superseded a prior statement or include any other information
set forth in the document that it modifies or supersedes. Any
statement so modified or superseded shall not be considered,
except as so modified or superseded, to constitute part of this
Offering Memorandum and Disclosure Statement.
Copies of each of the documents incorporated by reference into
this Offering Memorandum and Disclosure Statement (other than an
exhibit to a filing unless that exhibit is specifically
incorporated by reference into that filing) may be obtained at
no cost, by contacting the information agent at its telephone
number set forth on the back cover of this Offering Memorandum
and Disclosure Statement.
CIT is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports and information
statements and other information with the SEC. You may read and
copy any document CIT files with the SEC at the SEC’s
public reference room at 100 F Street, N.E.,
Washington, DC 20549. You may also obtain copies of the same
documents from the public reference room of the SEC in
Washington by paying a fee. Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms.
CIT’s filings are also electronically available from the
SEC’s Electronic Document Gathering and Retrieval System,
which is commonly known by the acronym “EDGAR,” and
which may be accessed at www.sec.gov, as well as from commercial
document retrieval services.
Anyone who receives this Offering Memorandum and Disclosure
Statement may obtain a copy of the indenture for the New Notes
without charge by writing to the Company at Investor Relations
Department, CIT Group Inc., 505 Fifth Avenue, New York, New
York 10017.
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SUMMARY
This summary highlights some basic information contained, or
incorporated by reference, in this Offering Memorandum and
Disclosure Statement to help you understand our business, the
Offers and the Plan of Reorganization. It does not contain all
of the information that is important to you. You should
carefully read this Offering Memorandum and Disclosure Statement
to understand fully the terms of the Offers and the Plan of
Reorganization, as well as the information incorporated by
reference herein. You should pay special attention to the
information in the section entitled “Risk Factors”
beginning on page 28 and the section entitled
“Cautionary Statement Regarding Forward-Looking
Statements.”
Unless stated otherwise, the discussion in this Offering
Memorandum and Disclosure Statement of our business includes the
business of CIT Group Inc. and its direct and indirect
consolidated subsidiaries. Unless otherwise indicated or the
context otherwise requires, (i) when discussing the CIT
Offers, the CIT Old Notes and the Series A Notes,
“CIT,” “the Company,” “we,”
“us” and “our” refer to CIT Group Inc. and
its direct and indirect subsidiaries on a consolidated basis;
(ii) when discussing the Delaware Funding Offers, the
Delaware Funding Old Notes and the Series B Notes,
“the Company,” “we,” “us” and
“our” refer to Delaware Funding; and (iii) when
discussing the Offers, the Old Notes and the New Notes,
“the Company,” “we,” “us” and
“our” refer to CIT Group Inc. and its direct and
indirect subsidiaries on a consolidated basis, including
Delaware Funding.
Overview
Through the consummation of the Offers or Plan of
Reorganization, we intend to restructure the Company’s
capital structure to improve the Company’s liquidity
position, enhance our capital levels, and accelerate our return
to profitability while providing adequate time to execute the
business restructuring strategy. Upon the terms and subject to
the conditions set forth in this Offering Memorandum and
Disclosure Statement and the accompanying Letter of Transmittal
and/or Ballot, we are offering to exchange the Old Notes for the
New Notes
and/or New
Preferred Stock in the Offers and soliciting acceptances of the
Plan of Reorganization.
In connection with the transactions contemplated by the
Offers and the Plan of Reorganization, you may elect to
(i) tender your Old Notes in the Offers and vote to accept
the Plan of Reorganization, (ii) vote to accept the Plan of
Reorganization without tendering your Old Notes, (iii) vote
to reject the Plan of Reorganization without tendering your Old
Notes or (iv) take no action with respect to the Offers and
the Plan of Reorganization. In the event that you choose to take
no action with respect to the Offers and the Plan of
Reorganization, you will have rejected the Offers and will have
no bearing on the approval of the Plan of Reorganization.
If we consummate the Offers, tendering holders of Old Notes will
receive the consideration described in this Offering Memorandum
and Disclosure Statement.
If we do not consummate the Offers and elect to proceed with a
restructuring under the Plan of Reorganization, all holders of
Old Notes will receive the treatment provided in the Plan of
Reorganization upon consummation of the Plan of Reorganization
(if approved).
If the Offers are not consummated and the Plan of Reorganization
is not accepted, the Company expects that it will likely be
necessary to file for bankruptcy protection without the benefit
of an agreed plan of reorganization, which may require
significant and accelerated asset liquidations. No decision has
been made by the Company’s board of directors to file
petitions for relief under the Bankruptcy Code.
Our
Business
CIT Group Inc. is a bank holding company providing commercial
financing and leasing products and management advisory services
to clients in a wide variety of industries. The Company operates
primarily in North America, with locations in Europe, Latin
America, Australia and the Asia-Pacific region. CIT Group
Inc.’s primary regulator is the Federal Reserve Bank of New
York and CIT Bank’s primary regulators are the
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Federal Deposit Insurance Corporation (“FDIC”) and the
Utah Department of Financial Institution (“UDFI”).
Delaware Funding is an indirect subsidiary of CIT Group Inc.
that is a non-operating funding vehicle.
The Company provides financing and leasing capital to its
clients and their customers in over 30 industries and 50
countries. The Company’s businesses focus on commercial
clients with a particular emphasis on middle market companies.
Through its corporate finance, transportation finance, trade
finance and vendor finance segments, the Company serves clients
in a wide variety of industries including aerospace and rail,
manufacturing, wholesaling, retailing, healthcare,
communications, media and entertainment and various
service-related industries. The Company is also a leader in
small business lending with an emphasis on originating
U.S. Small Business Administration (“SBA”) loans.
We previously offered student loans through our consumer
segment, but we discontinued originations of student loans in
2008 and are running off the remaining portfolio.
The Company has both bank and non-bank subsidiaries. CIT Bank,
which amended its charter in December 2008 from an industrial
bank to a state-chartered bank in Utah, is the Company’s
primary bank subsidiary. CIT Bank, which had historically funded
consumer loans, shifted its focus to commercial lending in late
2007/early 2008. In addition, the Company has regulated
subsidiaries in a number of other jurisdictions, including but
not limited to the United Kingdom, France, Germany, Sweden, and
Brazil. The Company’s non-bank subsidiaries, both in the
U.S. and abroad, currently house the majority of the
Company’s assets and operations. As a bank holding company,
CIT Group Inc. is prohibited from certain business activities
including certain of its insurance services and its equity
investment activities, and may have to exit these activities
within a specified time period.
Background
The global financial market crisis and negative economic
conditions materially and adversely affected the Company’s
liquidity position and operating results over the past
30 months. Accordingly, there is substantial doubt about
the Company’s ability to continue as a going concern.
The Company’s business historically relied upon access to
both the secured and unsecured debt capital markets for
cost-efficient funding. The disruptions in the credit markets
coupled with the global economic deterioration that began in
2007, and downgrades in the Company’s credit ratings to
well below investment grade in 2008 and 2009, materially
worsened the Company’s liquidity situation and left it
without access to the unsecured debt market and impaired its
access to cost efficient secured financing. Since January 2008
the Company obtained interim financing through secured
financings and reduced financing needs through balance sheet
contraction.
As part of its overall plan to transition to a bank-centric
business model, the Company (i) applied to participate in
the FDIC’s Temporary Liquidity Guarantee Program
(“TLGP”), which would have enabled the Company to
issue government guaranteed debt and (ii) applied for
exemptions under Section 23A of the Federal Reserve Act
(“Section 23A”) to transfer a significant portion
of its U.S. assets to CIT Bank, which would have enabled
the Company to generate liquidity by leveraging the
deposit-taking capabilities of CIT Bank. In April 2009, the
Federal Reserve granted the Company a partial Section 23A
waiver to transfer $5.7 billion of government-guaranteed
student loans to CIT Bank. In connection with this transaction,
CIT Bank assumed $3.5 billion in debt and paid
$1.6 billion in cash to CIT Group Inc.
On July 15, 2009, the Company was advised that there was no
appreciable likelihood of additional government support being
provided in the near term, through either participation in the
FDIC’s TLGP or further approvals of asset transfers under
its pending Section 23A exemption request. Following the
announcement of these developments, the Company experienced
higher draws on financing commitments which accelerated the
degradation of its liquidity position. This liquidity situation,
continued portfolio deterioration and the weak economic and
credit environment, all weighed heavily on the Company’s
recent financial performance.
In order to meet its near-term liquidity needs, the Company
entered into a senior secured term loan facility on
July 20, 2009, as amended and restated on July 29,
2009 and as further amended on August 3,
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2009, August 31, 2009 and October 1, 2009, for up to
$3 billion provided by a syndicate initially comprised of
certain holders of the Company’s Old Notes (the
“Senior Credit Facility”). As of August 4, 2009,
the Company had drawn the entire $3 billion in financing
under the Senior Credit Facility. The Company and certain of its
subsidiaries are borrowers under the Senior Credit Facility
(collectively, the “Borrowers”). The Company and all
of its current and future domestic wholly owned subsidiaries,
with the exception of CIT Bank and other regulated subsidiaries,
special purpose entities, and immaterial subsidiaries, are
guarantors of the Senior Credit Facility (the “Credit
Facility Guarantors”).
The Senior Credit Facility is secured by a perfected first
priority lien on substantially all unencumbered assets of the
Borrowers and Credit Facility Guarantors (other than CIT Group
Inc.), and also includes 65% of the voting and 100% of the
non-voting stock of other first-tier foreign subsidiaries (other
than direct subsidiaries of CIT Group Inc.), in each case owned
by a Credit Facility Guarantor, 100% of the stock of CIT
Aerospace International and between 49% and 65% of certain other
material
non-U.S.,
non-regulated subsidiaries.
The Senior Credit Facility requires the Company to adopt and
comply with a restructuring plan acceptable to a majority in
number of a committee comprised of certain lenders under the
Senior Credit Facility (the “Steering Committee”) by
October 1, 2009. This requirement is subject to the
fiduciary duty of the Company’s board of directors to act
in the best interests of the Company and its stakeholders. The
Company has developed the Offers and the Plan of Reorganization
described in this Offering Memorandum and Disclosure Statement
in consultation with the Steering Committee.
Business
Restructuring Strategy
The Company and its board of directors, in consultation with its
advisors, continue to develop and execute the Company’s
business restructuring strategy, which has the following
objectives:
Financial
Strength
Business
Model
By successfully implementing its business restructuring
strategy, the Company’s goal is to transition to a smaller
company focused on serving small- and mid-sized commercial
businesses. The Company’s goal is to create a sustainable
and profitable business model by reducing balance sheet exposure
through completion of targeted asset sales and net portfolio
run-off and through facilitating a return to the capital markets
by achieving investment grade ratings. In addition, the Company
is seeking to reduce its leverage and carry a manageable
interest burden going forward. The Company aims to position
itself to execute a transition to a bank-centric business model
by seeking to obtain regulatory support for our business
restructuring strategy and emerging from the restructuring with
our bank holding company status as a source of strength for the
Company, including CIT Bank.
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The Company commenced execution of its business restructuring
strategy by entering into the Senior Credit Facility and
consummating the cash tender offer described below for the
outstanding August 17 Notes (as defined below) and continues its
restructuring efforts with the transactions contemplated by the
Offers and the Plan of Reorganization (together, the
“Restructuring Plan”). We believe that the successful
implementation of our business restructuring strategy, including
the Restructuring Plan, will be viewed favorably by our
regulators and will position us to request approval to transfer
certain business platforms into CIT Bank over the next 12 to
18 months.
Restructuring
Plan
The Company’s principal objective in developing the
restructuring of its capital structure contemplated by the
Restructuring Plan was to ensure that maximum franchise value is
recognized for its stakeholders. Additionally, the Restructuring
Plan satisfies the applicable requirements of the Senior Credit
Facility. The Company believes that the Restructuring Plan,
whether implemented through the Offers or through the Plan of
Reorganization:
The principal elements of the Restructuring Plan include:
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Upon successful implementation of the Restructuring
Plan — whether through the Offers or the Plan of
Reorganization — the Company believes it will be
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