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Imark · 12-07-2009, 18:55

E anche Fitch abbatte il rating di Cit Group a livelli molto bassi, lo tiene in creditwatch negativo e fa presente che se non arriva in tempi molto brevi una risposta positiva alla richiesta di ammissione al TLGP da parte della FDIC, abbatterà nuovamente il rating a livelli tali da significare la reale possibilità di un default in tempi contenuti.

Della serie: il tempo per le dicisioni è maturo...

Fitch Downgrades CIT's IDR to 'BB-

08 Jul 2009 1:27 PM (EDT)
Fitch Ratings-New York-08 July 2009: Fitch Ratings has downgraded the Long-term Issuer Default Ratings (IDR) of CIT Group Inc. (CIT) and subsidiaries to 'BB- ' from 'BB+'. Concurrent with this action, Fitch has upgraded CIT's Support Rating to '3' from '5', reflecting Fitch's view that there is a moderate probability of support from the U.S. government. In addition, Fitch lowered the Individual Rating to 'E' from 'D', which indicates CIT either requires or is likely to require external support. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual Ratings while the prospect of external support is reflected in Fitch's Support Rating. Collectively these ratings drive Fitch's long- and short-term IDRs. All ratings remain on Rating Watch Negative. A complete list of issuer and issue ratings is included at the end of this release; approximately $35 billion of debt is affected by today's action.

CIT recently converted to a bank holding company and much of its efforts to date in 2009 have been focused on shifting its business from the holding company to its bank subsidiary, largely to broaden available funding options to include insured deposits.

That said, CIT remains heavily reliant on wholesale funding amidst challenging market conditions. CIT's application for funding under the FDIC's Temporary Liquidity Guarantee Program (TLGP) remains active, but has not yet received approval.

Fitch is maintaining CIT on Watch Negative pending resolution of CIT's TLGP application. If CIT's application is not approved over the very short term, Fitch would likely lower CIT's ratings to levels that would indicate that default is a real possibility. Conversely, if the company's TLGP application is approved and CIT is able to issue FDIC guaranteed debt, Fitch believes the near-term liquidity pressures could be addressed, allowing CIT to execute on its ongoing business plan. In addition to TLGP, Fitch expects that CIT will look to complete remaining 23A transfers (asset sales from CIT Group to CIT Bank, requiring regulatory approval) and write future financing business out of its bank subsidiary.

CIT's funding profile is its most immediate challenge, however, it is also suffering to a lesser extent from the weakened economic environment and consequent asset quality deterioration, including higher credit losses.

Assuming the funding profile is addressed, longer-term, potential improvements to the company's ratings will depend on a moderation of credit losses, further strengthening of the company's capital base, accessibility to non-government guaranteed funding, and generation of sustained profitability.

Today's rating action reflects that, absent external support, CIT's franchise value and client confidence could quickly erode and jeopardize CIT's long-term viability. The upgrade of the Support Rating to a '3' reflects Fitch's view that the probability that support will be forthcoming is considered moderate (not certain).

The downgrade of the company's Individual Rating to 'E ' denotes a bank with very serious problems, which either requires or is likely to require external support. Taken together, Fitch's actions on CIT's Support and Individual Ratings results in the company's Long-term IDR set at the minimum rating 'BB- ', which is Fitch's Support Floor, or the minimum rating for an entity of a Support Rating of '3' and indicates the rating is reliant on government support.

CIT, a bank holding company with $75.7 billion in assets and $4.3 billion in equity, provides financing to a variety of industries such as transportation, aerospace, rail, and a broad range of manufacturing and retailing sectors. CIT Bank, CIT's primary bank subsidiary and state chartered bank, primarily originates middle market, commercial loans to the wholesaling, healthcare, communications, media and entertainment and various service-related industries.

Fitch has downgraded the following ratings, which remain on Watch Negative

......

12-07-2009, 18:55	#40 (permalink)
Imark Utente Senior Data registrazione: Oct 2006 Messaggi: 16,943	E anche Fitch abbatte il rating di Cit Group a livelli molto bassi, lo tiene in creditwatch negativo e fa presente che se non arriva in tempi molto brevi una risposta positiva alla richiesta di ammissione al TLGP da parte della FDIC, abbatterà nuovamente il rating a livelli tali da significare la reale possibilità di un default in tempi contenuti. Della serie: il tempo per le dicisioni è maturo... Fitch Downgrades CIT's IDR to 'BB- 08 Jul 2009 1:27 PM (EDT) Fitch Ratings-New York-08 July 2009: Fitch Ratings has downgraded the Long-term Issuer Default Ratings (IDR) of CIT Group Inc. (CIT) and subsidiaries to 'BB- ' from 'BB+'. Concurrent with this action, Fitch has upgraded CIT's Support Rating to '3' from '5', reflecting Fitch's view that there is a moderate probability of support from the U.S. government. In addition, Fitch lowered the Individual Rating to 'E' from 'D', which indicates CIT either requires or is likely to require external support. In Fitch's rating criteria, a bank's standalone risk is reflected in Fitch's Individual Ratings while the prospect of external support is reflected in Fitch's Support Rating. Collectively these ratings drive Fitch's long- and short-term IDRs. All ratings remain on Rating Watch Negative. A complete list of issuer and issue ratings is included at the end of this release; approximately $35 billion of debt is affected by today's action. CIT recently converted to a bank holding company and much of its efforts to date in 2009 have been focused on shifting its business from the holding company to its bank subsidiary, largely to broaden available funding options to include insured deposits. That said, CIT remains heavily reliant on wholesale funding amidst challenging market conditions. CIT's application for funding under the FDIC's Temporary Liquidity Guarantee Program (TLGP) remains active, but has not yet received approval. Fitch is maintaining CIT on Watch Negative pending resolution of CIT's TLGP application. If CIT's application is not approved over the very short term, Fitch would likely lower CIT's ratings to levels that would indicate that default is a real possibility. Conversely, if the company's TLGP application is approved and CIT is able to issue FDIC guaranteed debt, Fitch believes the near-term liquidity pressures could be addressed, allowing CIT to execute on its ongoing business plan. In addition to TLGP, Fitch expects that CIT will look to complete remaining 23A transfers (asset sales from CIT Group to CIT Bank, requiring regulatory approval) and write future financing business out of its bank subsidiary. CIT's funding profile is its most immediate challenge, however, it is also suffering to a lesser extent from the weakened economic environment and consequent asset quality deterioration, including higher credit losses. Assuming the funding profile is addressed, longer-term, potential improvements to the company's ratings will depend on a moderation of credit losses, further strengthening of the company's capital base, accessibility to non-government guaranteed funding, and generation of sustained profitability. Today's rating action reflects that, absent external support, CIT's franchise value and client confidence could quickly erode and jeopardize CIT's long-term viability. The upgrade of the Support Rating to a '3' reflects Fitch's view that the probability that support will be forthcoming is considered moderate (not certain). The downgrade of the company's Individual Rating to 'E ' denotes a bank with very serious problems, which either requires or is likely to require external support. Taken together, Fitch's actions on CIT's Support and Individual Ratings results in the company's Long-term IDR set at the minimum rating 'BB- ', which is Fitch's Support Floor, or the minimum rating for an entity of a Support Rating of '3' and indicates the rating is reliant on government support. CIT, a bank holding company with $75.7 billion in assets and $4.3 billion in equity, provides financing to a variety of industries such as transportation, aerospace, rail, and a broad range of manufacturing and retailing sectors. CIT Bank, CIT's primary bank subsidiary and state chartered bank, primarily originates middle market, commercial loans to the wholesaling, healthcare, communications, media and entertainment and various service-related industries. Fitch has downgraded the following ratings, which remain on Watch Negative ......