Things are looking grim for New York–based CIT Group: Shares in the TARP-supported lender plummeted 21 percent today, and Moody’s slashed its credit rating by four points, after reports came out this weekend that the lender was having liquidity problems and CEO Jeffrey Peek (whose wife, Liz, wrote an article for now-defunct magazine Portfolio about the changes in her lifestyle since the financial crisis began) hired Skadden Arps to prepare for a possible bankruptcy filing. Meanwhile, company executives have been trying to convince the administration and regulators to give them an extra infusion of cash, claiming that the bank’s failure would affect the financial system and the broader economy, but right now it sounds like they’d be lucky to meet the same fate as Washington Mutual.
One analyst tells Bloomberg:
“Absent a change of heart on the part of the FDIC, it is difficult to see how CIT can survive. Fixed- income investors have lost confidence in the viability of CIT’s business model, which will make it extremely difficult for the company to fund its upcoming debt maturities and ongoing operations.”
Brutal. Poor Liz Peek: If she thought she had it rough before, she’s going to have a much worse time funding her lifestyle through journalism.