NEW YORK, Oct. 27 /PRNewswire/ -- Carl C. Icahn announced today that the following letter was delivered to CIT, pursuant to which certain of his affiliates have committed to provide a new $4.5 billion term loan to CIT as an alternative to the loan currently being arranged by Bank of America, N.A.:
ICAHN CAPITAL LP
CIT Group Inc.
1 CIT Drive
Livingston, NJ 07039
Attention: Glenn Votek, Executive Vice President & Treasurer
October 27, 2009
Ladies and Gentlemen:
Attached is our commitment letter to provide a new $4.5 billion term loan. The term loan would be structured as an expansion of your existing $3.0 billion first lien term loan and would be conditioned upon your receiving amendments from your existing lenders to allow us to share collateral on a pari passu basis with them. It is our understanding that all of the terms and conditions for this loan are identical to the expansion first lien loan that is currently being agented by Bank of America ("BOA"), with two exceptions: 1) the upfront fees to the company would be 2.50% in our loan versus 5.00% under the BOA loan, for a total savings to CIT of approximately $112.5 million, and 2) allocations of our term loan will not be conditioned on a vote for or against the company's Exchange Offer/Plan of Reorganization.
You have indicated to us that your existing first lien lenders are willing to provide an amendment to allow for an expansion of the existing loan currently being agented by BOA. It is our understanding that that loan is being provided primarily by the largest lenders in the existing secured term loan, who also happen to be some or all of the members of the Steering Committee of the unsecured bondholders of CIT. We believe that Steering Committee members, who are influencing a significant degree of control over the company, have a responsibility to act in the best interests of the company and the other bondholders, and therefore should be willing to grant us the same amendments they are willing to grant themselves. The fact that they have agreed to provide an amendment to allow for the incremental debt in the BOA loan indicates that they are comfortable with the increased debt from a credit perspective. Therefore, it would be reprehensible to deny us the same amendment so that they can earn over $100 million in extra fees while at the same time being complicit in the manipulation of the vote for the Exchange Offer/Plan of Reorganization.
We are eager to work with you through the night to close the loan and save the company a significant amount of money. We would also be happy to assist you in getting the appropriate amendments to allow us to close the loan. Based on the fact pattern discussed above, if the existing lenders will not grant you the amendments and instead force you to close on the BOA loan, we intend to challenge the validity of the loan and the liens through the courts.
In order to close and fund the loan on a timely basis, we will need you to accept our commitment by 6:00 p.m. this evening.
Sincerely,
Carl C. Icahn
Carl Icahn
