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With Credit Markets Frozen, CIT Shops for Investors

CIT was locked in negotiations with investors late Thursday, hoping to
persuade them to provide the company with $2 billion to $3 billion.
Any deal, however, would hinge on a special waiver from the Federal
Reserve, and time was short.

As the talks dragged on, the financial markets rendered a brutal
judgment. Shares of CIT plunged $1.23, to 41 cents. The price of its
bonds sank to 26 cents on the dollar. Fitch, the credit ratings
agency, warned that a “default of some kind appears imminent or
inevitable.”

After coming to CIT’s aid seven months ago, by rushing through its
application to become a traditional bank holding company and providing
a $2.33 billion bailout, federal officials apparently concluded that
CIT was too troubled to save a second time. Source: http://bit.ly/zunr3