This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Is Buffett Eyeing CIT?

Is a billionaire investor stalking CIT Group (CIT)?

A source following the embattled New York-based commercial finance company, which on Thursday was forced to draw on its entire $7.3 billion emergency revolving credit line in order to pay down debt, says CIT has been on Warren Buffett's radar for a possible cash infusion or outright purchase.

Buffett's interest could not be confirmed and a spokeswoman at Berkshire Hathaway's (BRK.A) offices in Omaha, Neb., said the Sage of Omaha was not immediately available for comment. A CIT spokesman declined to comment.

Peek said late Thursday in a public statement that "protracted disruption'" in capital markets was forcing the company to tap the capital markets. He added the company might shop assets to fund itself.

During an afternoon conference call, Peek said that asset sales and identifying "a strategic partner" would be a part of the firm's plan toward repaying its credit lines. "We've had preliminary discussions with several; we've gotten close with one," Peek said.

CIT noted that it has approximately $45 billion in unencumbered assets that it might be able to shop. The CEO also noted during the call that a number of institutions were being considered as partners, but did not specify names. He also did not highlight which assets specifically it might look to unload.

Sources tell that the firm has essentially been in search of a buyer or partner for the past several months, during a credit crisis that has seen the costs of performing its core financing business deeply undercut by ballooning corporate borrowing costs. Flagging confidence also saw the stunning collapse of Bear Stearns (BSC), which is being offered a $2-a-share buyout from JPMorgan Chase (JPM) being back by the Federal Reserve.

The source says another potential good fit for CIT is vulture investor Wilbur Ross, who also may have been asked to look at the company. Ross has been pushing into distressed assets and opportunistic investments at a rapid clip. An assistant at his office in New York said the billionaire investor was in transit and could not be reached for comment.

"Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies," Peek's public statement read.

Standard & Poor's cut CIT's short-term rating one level on Monday to A-2 from A-1 and the long-term rating to A- from A. Moody's Investors Service cut the firm's short-term rating one level to Prime-2 from Prime-1 and lowered the long-term ratings to A3, its fourth level of investment grade, from A2. CIT is on the hook this year for $2.8 billion of commercial paper coming due and $8.2 billion of other debt.

CIT's business centers on funding loans to entities for commercial leases, including airplanes and trains, as well as offering home lending, small-business lending, student loans, structured financing and commercial real estate lending.

Credit markets have been particularly skittish about lending due to a crisis in confidence about what market participants are holding on their balance sheets.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,908.16 +103.36 0.58%
S&P 500 2,071.83 +1.18 0.06%
NASDAQ 4,773.7480 +8.3680 0.18%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs