By Jennifer Ablan and Walden Siew
NEW YORK, Oct 7 (Reuters) - Pacific Investment Management Co and Baupost Group have quit a committee of CIT's largest bondholders, which could indicate support for any kind of debt-exchange restructuring is in jeopardy.
Sources familiar with the matter told Reuters on Wednesday that PIMCO, which oversees more than $850 billion, left the six-member steering committee in late September, while Baupost was not part of the group as of last month.
The remaining four creditors on the committee are Centerbridge Partners LP, Oaktree Capital Management, Capital Research & Management Co and Silver Point Capital.
The departures by PIMCO and Baupost are seen as yet another setback for CIT as the 101-year-old commercial lender has scrambled to convince creditors to support a sweeping debt restructuring, or the company will file for a pre-packaged bankruptcy.
CIT launched a debt-exchange plan on Oct. 1 that the company hopes will prevent it from filing for bankruptcy. CIT also asked bondholders to approve a prepackaged plan of reorganization that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange offer, which expires on Oct. 29, fails to attract enough participants.
PIMCO, Baupost, Centerbridge Partners LP, Oaktree Capital Management, Capital Research & Management Co and Silver Point Capital were part of the six-member steering committee that put in place $3 billion of emergency loans for CIT at the end of July.
But a provision in that loan agreement requires members of the steering committee to hold a certain amount of CIT debt, The Wall Street Journal said, citing a source familiar with the matter.
PIMCO sold positions in CIT that triggered the provision which led the firm to sell its position in the emergency loan and forced it off the steering committee, the paper said.
A PIMCO spokesperson did not return calls seeking comment while Baupost declined to comment. A CIT spokesman declined to comment on the committee members.
CIT's 5 percent notes due in 2015 fell 1 cent on the dollar on Wednesday to 63 cents, yielding 15.5 percent, according to MarketAxess data.
((Reporting by Jennifer Ablan and Walden Siew, additional reporting by Paritosh Bansal, Editing by Gary Crosse)) Keywords: PIMCO CIT/ (walden.siew@thomsonreuters.com; +1-646-223-6333; Reuters Messaging: walden.siew.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Oct 7 (Reuters) - Pacific Investment Management Co and Baupost Group have quit a committee of CIT's largest bondholders, which could indicate support for any kind of debt-exchange restructuring is in jeopardy.
Sources familiar with the matter told Reuters on Wednesday that PIMCO, which oversees more than $850 billion, left the six-member steering committee in late September, while Baupost was not part of the group as of last month.
The remaining four creditors on the committee are Centerbridge Partners LP, Oaktree Capital Management, Capital Research & Management Co and Silver Point Capital.
The departures by PIMCO and Baupost are seen as yet another setback for CIT as the 101-year-old commercial lender has scrambled to convince creditors to support a sweeping debt restructuring, or the company will file for a pre-packaged bankruptcy.
CIT launched a debt-exchange plan on Oct. 1 that the company hopes will prevent it from filing for bankruptcy. CIT also asked bondholders to approve a prepackaged plan of reorganization that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange offer, which expires on Oct. 29, fails to attract enough participants.
PIMCO, Baupost, Centerbridge Partners LP, Oaktree Capital Management, Capital Research & Management Co and Silver Point Capital were part of the six-member steering committee that put in place $3 billion of emergency loans for CIT at the end of July.
But a provision in that loan agreement requires members of the steering committee to hold a certain amount of CIT debt, The Wall Street Journal said, citing a source familiar with the matter.
PIMCO sold positions in CIT that triggered the provision which led the firm to sell its position in the emergency loan and forced it off the steering committee, the paper said.
A PIMCO spokesperson did not return calls seeking comment while Baupost declined to comment. A CIT spokesman declined to comment on the committee members.
CIT's 5 percent notes due in 2015 fell 1 cent on the dollar on Wednesday to 63 cents, yielding 15.5 percent, according to MarketAxess data.
((Reporting by Jennifer Ablan and Walden Siew, additional reporting by Paritosh Bansal, Editing by Gary Crosse)) Keywords: PIMCO CIT/ (walden.siew@thomsonreuters.com; +1-646-223-6333; Reuters Messaging: walden.siew.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.