Wednesday, July 15, 2009

Should CIT Stay Or Should It Go?

The New York Times updates the story on teetering CIT, describing ongoing negotiations between the firm and government regulators. The question at the heart of the talks is whether the government will guarantee CIT's debt and possibly add to the $2.3 billion bail-out that has been provided to the firm or whether it will let CIT fail.

Compounding CIT's problems, the Times reports

Corporate customers started to draw down on their credit lines Monday and Tuesday, according to a report Wednesday in The Wall Street Journal, which cited unidentified people familiar with the situation. Those people told the newspaper the drawdowns amounted to several hundred million dollars, with one number mentioned as high as $775 million.
Last week, Bloomberg had a more detailed story on the firm's condition and problems.