CIT Agrees to Sell Home Lending Business.Completes Exit of Business Including Entire Loan Book and Servicing Operations NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- CIT n. 1. A citizen; an inhabitant of a city; a pert townsman; - used contemptuously. Which past endurance sting the tender cit. - Emerson. Group Inc. (NYSE NYSE See: New York Stock Exchange : CIT), a leading global commercial finance company, announced today that it has agreed to sell its Home Lending business, consisting of $9.3 billion in assets and related servicing operations, to Lone Star Funds Lone Star Funds is a worldwide private equity firm based in Dallas, Texas, that specializes in purchasing distressed companies and assets, often well-known consumer brands that have seen better times or gone through financial difficuties due to leveraged buy-outs. for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities. The servicing centers, which employ approximately 300 people, are located in Marlton, NJ and Oklahoma City, OK. In a separate transaction, CIT agreed to sell its approximately $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance, Inc. for approximately $300 million. Net cash proceeds from the two transactions are expected to be approximately $1.8 billion. In the second quarter of 2008, CIT expects to record an estimated pretax loss pretax loss A loss reported before tax benefits are considered. for the Home Lending segment of approximately $2.5 billion ($2.0 billion after tax). This loss consists of an estimated $2.2 billion loss on sale and an approximate $350 million loss from operations during the period. Home Lending will be accounted for as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . The sale of the portfolios is scheduled to be completed in July, while the transfer of the servicing platform will be completed by the first quarter 2009. It is expected that the company's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma tangible equity to managed assets ratio at June 30, 2008 will be in excess of 9%, above the company's current 8.5% target. "These sales complete our exit from all home lending businesses, removing the uncertainty surrounding this asset class, and advances our strategic transformation into a company focused entirely on commercial finance," said Jeffrey M. Peek, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , of CIT. This transaction represents another significant step in CIT's efforts to reduce risk and enhance liquidity, as it positions itself for long-term success and profitability. Since April 1, 2008, the Company has successfully executed on several additional key balance sheet strengthening initiatives, including: raising $1.6 billion in new capital, completing asset-backed financings of approximately $1.5 billion, selling more than $2 billion of assets at approximately book value and obtaining a $3 billion long-term financing Long-term financing Liabilities repayable in more than one year plus equity. facility from Goldman Sachs, while retiring $5.3 billion in debt and significantly reducing unfunded commitments. JPMorgan Chase & Co. and Morgan Stanley served as financial advisors to CIT. Wachtell, Lipton, Rosen & Katz and McKee Nelson, LLP LLP - Lower Layer Protocol served as CIT's legal advisors. Mr. Peek and Joseph M. Leone, Vice Chairman and Chief Financial Officer, will host an investor conference call at 9:00 AM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today, Tuesday, July 1, 2008, to discuss this announcement. Call-in Number: U.S. & Canada < 800-573-4840 International < 617-224-4326 Access code < CIT Group Webcast: http://ir.cit.com Please dial-in to the call or link to the webcast at least 10 minutes prior to register or download any necessary software. A replay of the call and webcast will be available until 11:59 PM EDT on July 15, 2008. Replay Number: U.S. & Canada > 888-286-8010 International > 617-801-6888 Access Code > 28722577 Webcast Replay: http://ir.cit.com Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com. About CIT CIT (NYSE: CIT) is a global commercial finance company that provides financial products and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to more than one million customers in over 50 countries across 30 industries. A leader in middle market financing, CIT has more than $80 billion in managed assets and provides financial solutions for more than half of the Fortune 1000. A member of the S&P 500 and Fortune 500, it maintains leading positions in asset-based, cash flow and Small Business Administration lending, equipment leasing, vendor financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. and factoring. The CIT brand platform, Capital Redefined, articulates its value proposition of providing its customers with the relationship, intellectual and financial capital to yield infinite possibilities. Founded in 1908, CIT is celebrating its Centennial throughout 2008. www.cit.com Forward-Looking Statements This release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. All forward-looking statements (including statements regarding future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond CIT's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," "target," and similar expressions are generally intended to identify forward-looking statements. Economic, business, funding market, competitive and/or regulatory factors, among others, affecting CIT's businesses are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors are described in CIT's filings with the Securities and Exchange Commission, including its quarterly report on Form 10-Q for the quarter ended March 31, 2008. CIT is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. This release includes certain non-GAAP financial measures as defined under SEC rules. As required by SEC rules, we have provided a reconciliation of those measures to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures, which is available with this release and on our website at http://ir.cit.com. |
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