Another group throws their comments in on CIT Group:
“Forget Icahn, forget the exchange,” Egan-Jones said in a note to clients this morning. “Neither Icahn’s offer nor the revised exchange (which reduces maturities by 6 months) provides the best value to creditors.”
On Monday, mr. Icahn proposed an alternative plan in which he would loan CIT the $6 billion it needs to avert bankruptcy. In a note to CIT’s board Monday morning, Mr. Icahn says that his plan would save the company $150 million in fees by not “shamelessly offering certain large unsecured bondholders the opportunity to purchase $6 billion in secured loans in the company at well below fair market value.”
But Egan-Jones believes that CIT’s new exchange offer, as well as Mr. Icahn’s new loan offer, is inadequate and that bondholders should push the company into bankruptcy to recover more value. The firm’s liquidation analysis uses a value of 70 percent on CIT’s loans and creditors realizing 82.5 percent upon liquidation and 68.5 percent on a present value basis. The firm is urging bondholders to reject all deals below 90 percent of the face value of the bonds.
The short of the Egan-Jones comment: liquidation.
On another note, the link above has the fully Icahn letter to the CIT board.
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