CIT delays quarterly report
TROUBLED US bank CIT has delayed filing its second-quarter financial report with the US Securities and Exchange Commission (SEC) and repeated warnings that it may file for bankruptcy.
The bank, which lends to thousands of US firms, said it could not meet the deadline for filing with the SEC without “unreasonable effort and expense” due to restructuring efforts aimed at saving it from collapse. CIT repeated its forecast of a second-quarter loss of more than $1.5bn (£910m) and said that operating losses, credit-rating downgrades and regulatory and funding restrictions had cast “considerable doubt” on its ability to continue as a going concern.
The bank lost $2.3bn last year, including a $2.1bn loss from discontinued operations related to the disposal of its home-lending business.
CIT’s six largest bondholders agreed last month to provide it with $3bn in emergency funding, but the bank is still working to restructure its debt and is also conducting a review of businesses and assets that it could sell to raise funds.
The 101-year-old bank has also launched a tender offer for $1bn of floating-rate notes due 17 August. It said it would use the funding from bondholders to complete the tender and make payment on the notes if the tender offer was unsuccessful.
But the company said that if the tender offer fell through and it was unable to secure alternative financing, it would file for bankruptcy.
CIT was forced to cast around for emergency measures to save it from collapse after President Obama’s administration made it clear last month that the lender would not receive a government bailout.