Another look at CIT

July 27, 2009 | By Jim Kim

We all assumed that CIT was pretty much cooked--especially after the government decided that it didn't represent a systemic threat and therefore was not worthy of a buyout. But Forbes notes that the story took a few twists and turns. Basically, no one--not the lender or its creditors--liked the bankruptcy court option. So they worked out a private bailout. Two sides worked out a $3 billion restructuring plan that will keep the lender in business.

The rates charged, on the loan CIT is taking as part of the deal, are said to be onerous. But the positives will surely outweigh the negatives that inevitably go along with government aid. The $3 billion private bailout includes some really high interest rates, but at least CIT lives--and the top executives still have jobs. We'll see if shareholders force the issue. Forbes wonders if Bear Stearns would have saved itself as well, if only the government had let it. We'll never know.

For more:
- here's the Forbes article