News About Corporate Credit

CIT Rises on Talks With U.S. Regulators About Lender’s Rescue

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By Pierre Paulden and Caroline Salas

July 14 (Bloomberg) -- CIT Group Inc. rose in New York trading and the cost to protect its debt against default fell after the lender said it’s in talks with regulators about a rescue.

The lender’s stock jumped 36 cents, or 27 percent, to $1.71 at 9:42 a.m. in New York Stock Exchange composite trading, boosted by CIT’s statement that it was in “active discussions” with regulators about federal aid. CIT has $1 billion of bonds maturing next month, and the firm so far has been unable to persuade the U.S. to back its debt sales. Those talks continued yesterday, said Curt Ritter, a CIT spokesman.

A Wall Street Journal report said that U.S. officials are “in advanced talks” about aid for New York-based CIT, citing unidentified people familiar with the matter.

“They’re on life-support right now,” said David Hendler, an analyst at debt research firm CreditSights Inc. in New York. The financial system is in a “once-in-a-lifetime meltdown” and CIT “went into it in a weakened position,” he said.

Five-year credit-default swaps on the lender declined 4.1 percentage points to 37 percent upfront, according to CMA DataVision. That’s in addition to 5 percent a year, meaning it would cost $3.7 million initially and $500,000 annually to protect $10 million of the company’s debt from default. The upfront cost reached $4.2 million yesterday, CMA data show. Read Full Article Here

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Japan Corporate Bankruptcies Climb 7.4% as Credit Woes Persist
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By Toru Fujioka and Mayumi Otsuma

July 8 (Bloomberg) -- Japanese corporate bankruptcies rose 7.4 percent in June from a year earlier as businesses struggled to get access to credit and the global recession crippled sales.

A total of 1,422 companies went out of business in the month, Tokyo Shoko Research Ltd. said in Tokyo today. Bankruptcies climbed 8.3 percent in the first half of 2009 to 8,169 cases, the report showed.

Bank of Japan Governor Masaaki Shirakawa said this week that funding remains tight even though some companies are finding it easier to issue debt. While the central bank and the government are helping companies obtain cash, earnings are under pressure amid a dearth of demand at home and abroad. Read Full Article.

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S&P lowers Advanstar’s corporate credit rating

Story posted: July 7, 2009 - 12:52 pm EDT

New York—Advanstar Communications, which produces the MAGIC apparel trade shows, had its corporate credit rating lowered Monday to “CCC” from “B-” by Standard & Poor’s Rating Services.
The ratings service said in its announcement that Advanstar’s outlook is negative.