The last few weeks have been tumultuous for CIT Group, Inc. The company, which has been lending to almost 1 million small and mid-sized businesses for over 100 years, is looking at a second-quarter loss of more than $1.5 billion.
After learning from the Federal Deposit Insurance Corp. that it has not approved CIT’s application for one of its borrowing programs, late Sunday evening CIT’s board secured $3 billion in rescue financing, which could help the company to avoid bankruptcy.
According to Reuters, “In a regulatory filing, CIT said the cash tender offer for its outstanding floating-rate senior notes due August 17 was the first step in its recapitalization plan. CIT said it could file for bankruptcy if the offer does not succeed. The offer, disclosed on Monday, is $825 for each $1,000 principal amount of notes tendered on or before July 31.”
Needless to say, a CIT bankruptcy can deeply affect the children’s wear industry. According to the American Apparel and Footwear Association, “CIT funds more than a million businesses-many of them are small- or mid-sized companies. In the case of the smaller manufacturers, more than 90% of the business is done with the thousands of U.S. specialty retailers who have one or more outlets. Industry growth has happened because of available factoring; it has been the lifeblood of the creative process.”
CIT has taken its story public and is asking for your help. HUDSON’S has already seen support after our posting on our Facebook page. Please click here to contact your elected government Representatives and urge them to take action now.
Photo Credit: Ernst Moeksis