CIT stock is trading again after being suspended over the course of what now appear to be failed government bailout talks.

Here’s how shares in the beleaguered corporate-lender have opened:

That’s a drop of some 70 per cent to 40 cents — a market cap slide which increasingly ups the odds of the lender failing to meet its minimum capital ratios and therefore the probability of bankruptcy.

Here’s the impact on the company’s CDS and bonds via the Barclays platform:

What all this of course means is that the US government has decided CIT is not too big to fail, after all.

Something CIT clearly disagrees with if the hints on its website pages are anything to go by.

Here’s CIT’s own opinion, as voiced on their website (H/T Daddy):

Here are some prominently placed views from the industry on the matter:

And here are some rather alarming assessments by the press:

We might add that CIT also happens to be the most prevalent credit in European synthetic CDO portfolios (H/T Sam Jones).

Related link:
European CDOs would suffer widespread hit from CIT – Reuters
CIT would be the fourth-largest bankruptcy in US history – FT Alphaville
CIT Fails to Win U.S. Bailout as Bankruptcy Looms  – Bloomberg

This entry was posted by Izabella Kaminska on Thursday, July 16th, 2009 at 15:34 and is filed under Capital markets. Tagged with bankruptcy, CIT. Edit this entry.