Not to ride the Goldman Sachs hater-wagon while its already rolling, but what's to stop GS Prop Desk from snatching up shares of CIT to frontrun this newsflash?
Looks from my T&S that the first atypically large interests were floated at 12:19, while Reuters leaked the story around 12:30, officially confirming it at 14:24. There were relatively huge bid sizes we saw between 12:15 - 12:19, but I'm sure these prop desks had a lot of time to corral some CIT marketshare.
Are GS & JPM truly interested in negotiating a deal here? or is this a shenanigan to give prop desks 124% return in a few hours? Just considerations.
An angellic creditor (like GS or JPM) could sweep in on a cloud of goodwill and close this deal upon the contingency that unsecured bondholders take an equity swap. Depending on thier exposure to CIT, GS & JPM may or may not consider the opportunity cost of such strategery.
When the government held its ground and said "no" to CIT, bondholders finally took matters into their own hands. (I'm sure CIT never considered asking its bondholders for concessions, because that's a slow, painful process. But, isn't something wrong when companies & their investors forgo the whole self-sacrifice healing talk and turn straight to Plan Z: the US government?)
More likely than not, the talks are an introduction to more realistic DIP financing.
Disclosure: No Positions