Other Lenders Likely to Fill Middle-Market Lending Gap in the Event of a CIT Bankruptcy According to Latest ABI Quick Poll
Contact: John Hartgen
OTHER LENDERS LIKELY TO FILL MIDDLE-MARKET LENDING GAP IN THE EVENT OF A CIT BANKRUPTCY, ACCORDING TO LATEST ABI QUICK POLL
August 6, 2009, Alexandria, Va. —A majority of respondents (60 percent) in a recent ABI Quick Poll thought that other middle-market lenders would fill in the gap if CIT were to file for bankruptcy. Fifteen percent of respondents thought that a potential CIT bankruptcy filing would sharply reduce the availability of credit to the middle market, while 14 percent thought that a filing would only modestly affect credit access. Eight percent of respondents thought that if CIT were to file for bankruptcy, it would just be a reflection of the larger economic problems affecting the lending market.
CIT Group Inc., a lender to nearly a million small and midsize U.S. companies, was forced to turn to bondholders for help last month after the government refused to save the company—a sign that the government is pulling back on costly and unpopular bank rescues. Had CIT been allowed to collapse, some experts feared it would have dealt a crippling blow to the retail sector and small businesses. CIT serves as short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts say 60 percent of the apparel industry depends on CIT for financing.
ABI members and members of the public were welcome to submit their response to the statement: “What will be the biggest impact of a CIT bankruptcy on the loan market?”
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.