More on the CIT conundrum

21 07 2009


By Jon Castle, CFP®, ChFC®

It is with a definite sense of relief that we welcome the news that CIT has reached a deal with some of its major lenders to acquire more financing and to avoid having to file for Chapter 11 bankruptcy protection.  Watching the bond markets today was interesting; short duration CIT bond priced  jumped significantly as investors realized that in all likelihood, bonds maturing before the end of 2009 will likely pay off.

It is also a good sign that this rescue came not from the government, but from private capital.  Either CIT’s lenders felt their backs were against the wall and had to prop up the company to avoid getting less than they would have in a bankruptcy sale, or they truly feel that CIT can restructure itself and become a profitable business again.

Interesting that only a few short months ago, the Fed felt that CIT was viable enough to not only lend them over 2 billion dollars, but also approve their re-registration into a bank-holding company.

Needless to say, we will be closely watching CIT, and also watching closely for any opportunities to exit these positions at a profit if at all possible.  I can’t help but feel that we dodged a bullet and just may not get a second chance in the future.

This blog is for informational purposes only.  This is neither an offer to purchase nor sell any securities.  All investing involves the potential of loss – including invested principal.  Indices quoted are general barometers of security price movement.  You cannot invest directly in an index.  All information is obtained from sources deemed reliable but not guaranteed.  Past performance is not a guarantee of future performance.  No tax or legal advice is given nor intended.

Investment advisory services provided by Paragon Wealth Strategies, LLC, a registered investment advisor. 

10245 Centurion Pkwy. N. Ste 105, Jacksonville FL 32256   (904) 861-0093  Certified Financial Planner Board of Standards Inc. owns the certification marks CFP(R), CERTIFIED FINANCIAL PLANNER(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.




2 responses

29 01 2011
Penny Stock Promo Review

I’m a penny stock person myself but I enjoyed reading this post. I will keep on visiting your webblog regularly. Keep up the news!

1 03 2011

Hi Jonathan ,

You should be able to subscribe to our RSS feed using the RSS button. That way you’ll be notified every time we add a new article.

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