By Jennifer Ablan and Walden Siew
NEW YORK, Oct 7 (Reuters) - Bond fund giant Pacific Investment Management Co. and Baupost Group quit a committee of CIT's largest bondholders, indicating that 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, and Baupost quit the six-member steering committee in late September.
CIT launched a debt-exchange plan on Oct. 1 that the struggling lender to small and mid-sized companies 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, Centerbridge Partners LP, Oaktree Capital Management, Baupost Group, 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 to Reuters seeking comment while a CIT spokesman declined comment on 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.
(Editing by Editing by Andrew Hay) Keywords: PIMCO CIT/ (walden.siew@thomsonreuters.com; Tel: +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) - Bond fund giant Pacific Investment Management Co. and Baupost Group quit a committee of CIT's largest bondholders, indicating that 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, and Baupost quit the six-member steering committee in late September.
CIT launched a debt-exchange plan on Oct. 1 that the struggling lender to small and mid-sized companies 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, Centerbridge Partners LP, Oaktree Capital Management, Baupost Group, 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 to Reuters seeking comment while a CIT spokesman declined comment on 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.
(Editing by Editing by Andrew Hay) Keywords: PIMCO CIT/ (walden.siew@thomsonreuters.com; Tel: +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.