(CIT) CIT Group Prices Senior Notes

CIT Group Inc. (CIT) announced the pricing of a registered public offering worth nearly $3 billion. This marks the fourth bond offering by the company in the current year.

The public offering includes $1.75 billion of senior unsecured notes due in 2017 and $1.25 billion of senior unsecured notes maturing in 2022. The former senior notes are priced at par and carry a coupon rate of 4.25%. Moreover, the latter senior notes are priced at par but these bear an interest rate of 5.00%.

CIT anticipates the offering to be completed by August 3, 2012, subject to certain customary conditions. Merrill Lynch, a wing of Bank of America Corporation (BAC), Deutsche Bank Securities Inc., a unit of Deutsche Bank AG (DB), The Goldman Sachs Group, Inc. (GS) and JPMorgan Chase & Co. (JPM) are acting as the joint book-running managers for the offering.

The sale proceeds from the offering are planned to be used for general corporate purposes. Additionally, refinancing of $3.8 billion of 7% Series C Notes is also expected out of the proceeds. Of this amount, nearly $2.4 billion worth of notes will be maturing in 2016 and approximately $1.4 billion of 7% notes will mature in 2017.

Earlier in May, CIT had offered $2 billion worth of senior notes. Of the total, $1.25 billion worth of senior notes are due in 2017 and the remaining lot, worth $750 million, is due in 2020.

CIT has been constantly restructuring its balance sheet to bring down its cost of capital and improve profitability. On July 20, CIT announced that it would redeem $600 million of its 7% Series C Notes maturing in 2017 on August 20. Following the completion of this redemption, the company will have eliminated or refinanced over $26.5 billion of high-cost debt since 2010.

The several bond offerings by CIT emulate the funding profile conversion and increased investor confidence in the stock. We anticipate all these to favor the company’s future growth as well. However, a slow economic recovery, stringent regulatory landscape and persistent low interest rate environment remain the major causes of concern.

CIT currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long-term Neutral recommendation on the stock.

Read the full analyst report on “CIT”
Read the full analyst report on “JPM”
Read the full analyst report on “DB”
Read the full analyst report on “GS”
Read the full analyst report on “BAC”
Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | | | | | | | | | Credit Services | Financial

RSS feeds: BAC | Bank of America Corporation | CIT | CIT Group Inc. | DB | Deutsche Bank AG | Goldman Sachs Group | GS | JPM | JPMorgan Chase & Company | Credit Services | Financial |

Other Posts by | RSS Feed for this author