EX-99.2 3 y02330exv99w2.htm EX-99.2 exv99w2
Table of Contents

 
OFFERING MEMORANDUM, DISCLOSURE STATEMENT AND SOLICITATION OF ACCEPTANCES OF A PREPACKAGED PLAN OF REORGANIZATION
CIT Group Inc.
&
CIT Group Funding Company of Delaware LLC
Offers to Exchange Relating to
Any and All of Their Respective Outstanding Notes Listed Below
and Solicitation of Acceptances of a Prepackaged Plan of Reorganization
 
EACH OF THE OFFERS TO EXCHANGE AND SOLICITATION OF ACCEPTANCES OF THE PREPACKAGED PLAN OF REORGANIZATION WILL EXPIRE AT 11:59 PM, NEW YORK CITY TIME, ON OCTOBER 29, 2009, UNLESS EXTENDED BY US (SUCH DATE AND TIME, AS THE SAME MAY BE EXTENDED, THE “EXPIRATION DATE”). HOLDERS OF PUBLICLY TRADED NOTES SHOULD REFER TO THE BALLOT ATTACHED HERETO AS APPENDIX E FOR INSTRUCTIONS ON HOW TO TENDER AND/OR VOTE ON THE PLAN OF REORGANIZATION.
 
Upon the terms and subject to the conditions set forth in this offering memorandum, disclosure statement and solicitation of acceptances of a prepackaged Plan of Reorganization, attached hereto as Appendix C (the “Plan of Reorganization”) (as it may be supplemented and amended from time to time, collectively the “Offering Memorandum and Disclosure Statement”) and the related letter of transmittal (“Letter of Transmittal”) and/or ballot (“Ballot”) for accepting or rejecting the Plan of Reorganization, (i) CIT Group Inc. is offering in exchange for any and all of the outstanding notes (including the U.S. dollar equivalent of non-U.S. dollar-denominated notes) of CIT Group Inc. listed in the table “CIT Outstanding Notes” beginning on the inside cover page each of five series of our newly issued Series A secured notes (which are referred to herein as the “Series A Notes”) and/or up to approximately 70 million shares of its newly issued preferred stock (which CIT Group Inc. refers to as the “New Preferred Stock”) and (ii) CIT Group Funding Company of Delaware LLC (“Delaware Funding”) is offering in exchange for any and all of the outstanding notes listed in the table “Delaware Funding Outstanding Notes” beginning on the inside cover page each of five series of its newly issued Series B secured notes (which are referred to herein as the “Series B Notes” and together with the Series A Notes, the “New Notes”), in each case, as applicable, as specified in the tables below. We refer to the exchange offer by CIT Group Inc. as the “CIT Offers,” the exchange offer by Delaware Funding as the “Delaware Funding Offers,” and we refer to the CIT Offers and the Delaware Offers together as the “Offers.” We refer to the notes to be tendered in the CIT Offer as the “CIT Old Notes,” the notes to be tendered in the Delaware Funding Offer as the “Canadian Senior Unsecured Notes” or the “Delaware Funding Old Notes,” and we refer to the CIT Old Notes and the Delaware Funding Old Notes together as the “Old Notes.” The New Notes will be issued by us and will be secured by the collateral as described herein. The Series A Notes will be guaranteed by all of CIT Group Inc.’s current and future domestic wholly owned subsidiaries, with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries (the “CIT Guarantees”). The Series B Notes will be guaranteed by CIT Group Inc., on an unsecured basis, and all current and future domestic wholly owned subsidiaries of CIT Group Inc., with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries, on a secured basis (the “Delaware Funding Guarantee,” and together with the CIT Guarantees, the “Guarantees”).
 
Subject to applicable securities laws and the terms set forth in this Offering Memorandum and Disclosure Statement, we reserve the right to waive any and all conditions to the Offers, to extend or terminate the Offers and voting deadlines with respect to the Plan of Reorganization in our sole and absolute discretion, which may be for any or no reason, and otherwise to amend the Offers or Plan of Reorganization in any respect.
 
The Offers are subject to a number of conditions, including a liquidity and leverage condition that states that the Offers cannot be consummated if an insufficient number of Old Notes are tendered into the exchange, and/or certain other debt instruments have not been renegotiated so that, after giving effect to the Offers and such renegotiations, the face amount of CIT Group Inc.’s and its direct and indirect subsidiaries’ total debt would not be reduced by at least $5.7 billion and its remaining unsecured debt maturities (excluding foreign vendor facilities) would exceed $500 million in 2009, $2.5 billion during the period from 2009 to 2010, $4.5 billion during the period from 2009 to 2011 and $6.0 billion during the period from 2009 to 2012, in each case on a cumulative basis (the “Liquidity and Leverage Condition”). In addition, consummation of the Delaware Funding Offers is subject to the consummation of the CIT Offers. The Liquidity and Leverage Condition cannot be waived. In the event that the conditions to the Offers are not satisfied or waived, or if we for any reason determine that it would be more advantageous or expeditious, and there is sufficient support for the Plan of Reorganization (as defined herein), CIT Group Inc. and Delaware Funding may seek to file a case under Chapter 11 of the title 11 of the United States Code (“Bankruptcy Code”) to consummate the restructuring described in this Offering Memorandum and Disclosure Statement although no decision has been made to pursue a bankruptcy filing. Through the Plan of Reorganization, all holders of Old Notes would receive New Notes and new common stock, as further set forth in the section entitled “The Plan of Reorganization,” provided that sufficient holders of Old Notes (i.e., holders representing at least 662/3% in principal amount and more than 50% in number of those impaired creditors entitled to vote in certain classes who actually vote) vote in favor of the Plan of Reorganization and the other conditions to consummation of the Plan of Reorganization are satisfied. Only those parties who actually vote are counted for these purposes and therefore it is important that you provide the appropriate instruction to your broker, dealer, commercial bank, trust company, or other nominee (each, a “Nominee”) to cast the appropriate vote on your behalf. Your election to tender your Old Notes into the Offers, also shall constitute a vote in favor of the Plan of Reorganization, and you may only change that vote by withdrawing, to the extent permitted, the Old Notes you have tendered. If you choose not to tender your Old Notes into the Offers, or if you withdraw Old Notes previously tendered, you may vote separately in favor of or against the Plan of Reorganization by providing the appropriate instruction to your Nominee. By providing an instruction to your Nominee to participate in the Offers or vote to accept or reject the Plan of Reorganization, you are making certain certifications, as contained in the ballot, and agreeing to certain provisions contained in the Plan of Reorganization including exculpation, injunction and release provisions. The class in which your Old Notes will be classified is set forth in the tables beginning on the inside cover page.
 
You should consider the risk factors beginning on page 27 of this Offering Memorandum and Disclosure Statement before you decide whether to participate in the Offers or vote on the Plan of Reorganization.
 
THIS SOLICITATION OF ACCEPTANCES OF THE PLAN OF REORGANIZATION IS BEING CONDUCTED TO OBTAIN SUFFICIENT ACCEPTANCES OF THE PLAN OF REORGANIZATION PRIOR TO THE FILING OF A VOLUNTARY CASE UNDER CHAPTER 11 OF THE BANKRUPTCY CODE. BECAUSE NO CHAPTER 11 CASE HAS YET BEEN COMMENCED, THIS OFFERING MEMORANDUM AND DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY ANY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN THE MEANING OF SECTION 1125(A) OF THE BANKRUPTCY CODE. WE HAVE NOT AT THIS TIME TAKEN ANY ACTION APPROVING A BANKRUPTCY FILING AND, IF THE OFFERS ARE CONSUMMATED, NEITHER CIT GROUP INC. NOR DELAWARE FUNDING WILL COMMENCE A BANKRUPTCY FILING TO CONSUMMATE THE PLAN OF REORGANIZATION ANNEXED HERETO.
 
Prior to tendering the Old Notes or voting on the Plan of Reorganization, holders of Old Notes are encouraged to read and consider carefully this entire Offering Memorandum and Disclosure Statement, including the Plan of Reorganization annexed hereto as Appendix C and the matters described in this Offering Memorandum and Disclosure Statement, the Letter of Transmittal and/or the Ballot.
 
In making a decision in connection with the Offers or the Plan of Reorganization, holders of Old Notes must rely on their own examination of the Company and the terms of the Offers, the restructuring transactions, and the Plan of Reorganization, including the merits and risks involved. Holders of Old Notes should not construe the contents of this Offering Memorandum and Disclosure Statement as providing any legal, business, financial or tax advice. Each holder of Old Notes should consult with its own legal, business, financial and tax advisors with respect to any such matters concerning this Offering Memorandum and Disclosure Statement, the Offers, the Plan of Reorganization and the restructuring transactions contemplated thereby.
 
The Offers are exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) with respect to the exchange of the Old Notes and the New Preferred Stock by virtue of the exemption from such registration contained in Section 3(a)(9) of the Securities Act. The Offers and the solicitation of acceptances of the Plan of Reorganization are exempt from state securities law requirements by virtue of Section 18(b)(4)(C) of the Securities Act.
 
All of the Old Notes are freely tradeable securities and not subject to restriction on transfer, and, therefore upon consummation of the Offers, holders of the Old Notes who tender Old Notes will receive New Notes and/or New Preferred Stock that are also freely tradeable securities and not subject to restriction on transfer by virtue of our reliance on the exemption from registration contained in Section 3(a)(9) of the Securities Act.
 
October 1, 2009


Table of Contents

 
The following tables set forth the series of Old Notes subject to the Offers and indicate the consideration to be received by holders of Old Notes in the Offers. Holders of Old Notes accepted for exchange in the Offers will also receive a cash payment (paid in the stated currency of such Old Notes) equal to the accrued and unpaid interest in respect of such Old Notes from the most recent interest payment date to, but not including, the Settlement Date (as defined herein). Interest on each New Note will accrue from the Settlement Date. The principal amount of New Notes offered in exchange for Old Notes as reflected in the table below will consist of a pro rata portion of each of five series of New Notes, each of which series will mature in a different year beginning in 2013 and ending in 2017.
 
If the Offers are not consummated as contemplated herein, the Old Notes will be subject to the Plan of Reorganization, to the extent it is approved and implemented, and placed in the Class identified in the Chart below. For a complete description of the persons and securities subject to the Plan of Reorganization and their potential treatment thereunder, see “The Plan of Reorganization” and the Plan of Reorganization annexed hereto as Appendix C.
 
The three series of Delaware Funding Old Notes tendered pursuant to the Delaware Funding Offers will be exchanged for Series B Notes in the exchange, and the CIT Old Notes tendered pursuant to the CIT Offer will be exchanged for Series A Notes and New Preferred Stock in the exchange.
 
CIT Outstanding Notes
 
                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
6.88% Notes due November 1, 2009
  USD 300,000,000   12560PCL3   $ 900       0.40749       Class 7  
4.13% Notes due November 3, 2009
  USD 500,000,000   125581AM0   $ 900       0.40749       Class 7  
3.85% Notes due November 15, 2009
  USD 1,959,000   12557WJP7   $ 900       0.40749       Class 7  
4.63% Notes due November 15, 2009
  USD 1,349,000   12557WLV1   $ 900       0.40749       Class 7  
5.05% Notes due November 15, 2009
  USD 2,800,000   12557WPC9   $ 900       0.40749       Class 7  
5.00% Notes due November 15, 2009
  USD 4,217,000   12557WB26   $ 900       0.40749       Class 7  
5.00% Notes due November 15, 2009
  USD 5,083,000   12557WB59   $ 900       0.40749       Class 7  
5.00% Notes due November 15, 2009
  USD 6,146,000   12557WB83   $ 900       0.40749       Class 7  
3.95% Notes due December 15, 2009
  USD 3,314,000   12557WJV4   $ 900       0.40749       Class 7  
4.80% Notes due December 15, 2009
  USD 2,073,000   12557WMB4   $ 900       0.40749       Class 7  
4.70% Notes due December 15, 2009
  USD 285,000   12557WPL9   $ 900       0.40749       Class 7  
4.85% Notes due December 15, 2009
  USD 582,000   12557WPU9   $ 900       0.40749       Class 7  
6.25% Notes due December 15, 2009
  USD 63,703,000   12557WSJ1   $ 900       0.40749       Class 7  
6.50% Notes due December 15, 2009
  USD 40,994,000   12557WSM4   $ 900       0.40749       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
Floating Rate Notes due December 21, 2009
  USD 113,000,000   12560PDL2   $ 900       0.40749       Class 7  
4.25% Notes due
February 1, 2010
  USD 750,000,000   125581AQ1   $ 850       1.22248       Class 7  
4.05% Notes due February 15, 2010
  USD 4,172,000   12557WKE0   $ 850       1.22248       Class 7  
5.15% Notes due February 15, 2010
  USD 1,918,000   12557WQC8   $ 850       1.22248       Class 7  
5.05% Notes due February 15, 2010
  USD 1,497,000   12557WQL8   $ 850       1.22248       Class 7  
6.50% Notes due February 15, 2010
  USD 58,219,000   12557WSX0   $ 850       1.22248       Class 7  
6.25% Notes due February 15, 2010
  USD 44,138,000   12557WTE1   $ 850       1.22248       Class 7  
Floating Rate Notes due March 1, 2010
  CHF 100,000,000   CH0029382659   $ 850       1.22248       Class 7  
2.75% Notes due March 1, 2010
  CHF 50,000,000   CH0029407191   $ 850       1.22248       Class 7  
Floating Rate Notes due March 12, 2010
  USD 1,000,000,000   125581CX4   $ 850       1.22248       Class 7  
4.30% Notes due March 15, 2010
  USD 1,822,000   12557WKL4   $ 850       1.22248       Class 7  
5.05% Notes due March 15, 2010
  USD 4,241,000   12557WMH1   $ 850       1.22248       Class 7  
5.15% Notes due March 15, 2010
  USD 6,375,000   12557WMP3   $ 850       1.22248       Class 7  
4.90% Notes due March 15, 2010
  USD 297,000   12557WQU8   $ 850       1.22248       Class 7  
4.85% Notes due March 15, 2010
  USD 784,000   12557WRC7   $ 850       1.22248       Class 7  
6.50% Notes due March 15, 2010
  USD 33,677,000   12557WTL5   $ 850       1.22248       Class 7  
Floating Rate Notes due March 22, 2010
  USD 150,000,000   12560PFN6   $ 850       1.22248       Class 7  
4.45% Notes due May 15, 2010
  USD 3,980,000   12557WKS9   $ 850       1.22248       Class 7  
5.25% Notes due May 15, 2010
  USD 2,414,000   12557WMV0   $ 850       1.22248       Class 7  
5.38% Notes due June 15, 2017(2)
  GBP 300,000,000   XS0276327342   $ 850       1.22248       Class 7  
4.30% Notes due June 15, 2010
  USD 1,013,000   12557WKX8   $ 850       1.22248       Class 7  
4.35% Notes due June 15, 2010
  USD 1,419,000   12557WLE9   $ 850       1.22248       Class 7  
5.30% Notes due June 15, 2010
  USD 2,622,000   12557WNB3   $ 850       1.22248       Class 7  
4.60% Notes due August 15, 2010
  USD 1,131,000   12557WLL3   $ 850       1.22248       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
5.45% Notes due
August 15, 2010
  USD 11,920,000   12557WNH0   $ 850       1.22248       Class 7  
5.50% Notes due
August 15, 2010
  USD 1,511,000   12557WA92   $ 850       1.22248       Class 7  
4.25% Notes due September 15, 2010
  USD 295,000   12557WLS8   $ 850       1.22248       Class 7  
5.25% Notes due September 15, 2010
  USD 11,403,000   12557WNR8   $ 850       1.22248       Class 7  
5.20% Notes due November 3, 2010
  USD 500,000,000   125577AS5   $ 850       1.22248       Class 7  
Floating Rate Notes due November 3, 2010
  USD 474,000,000   125577AT3   $ 850       1.22248       Class 7  
5.05% Notes due November 15, 2010
  USD 9,054,000   12557WLY5   $ 850       1.22248       Class 7  
5.25% Notes due November 15, 2010
  USD 6,349,000   12557WNZ0   $ 850       1.22248       Class 7  
5.25% Notes due November 15, 2010
  USD 12,292,000   12557WC33   $ 850       1.22248       Class 7  
5.25% Notes due November 15, 2010
  USD 1,686,000   12557WC74   $ 850       1.22248       Class 7  
4.75% Notes due December 15, 2010
  USD 750,000,000   12560PDB4   $ 850       1.22248       Class 7  
5.00% Notes due December 15, 2010
  USD 5,842,000   12557WME8   $ 850       1.22248       Class 7  
5.05% Notes due December 15, 2010
  USD 5,926,000   12557WPH8   $ 850       1.22248       Class 7  
4.90% Notes due December 15, 2010
  USD 3,188,000   12557WPR6   $ 850       1.22248       Class 7  
5.25% Notes due December 15, 2010
  USD 807,000   12557WSE2   $ 850       1.22248       Class 7  
6.50% Notes due December 15, 2010
  USD 12,177,000   12557WSR3   $ 850       1.22248       Class 7  
6.50% Notes due
January 15, 2011
  USD 17,752,000   12557WSV4   $ 800       2.03746       Class 7  
4.72% Notes due February 10, 2011
  CAD 400,000,000   125581AU2   $ 800       2.03746       Class 7  
5.15% Notes due February 15, 2011
  USD 2,158,000   12557WPZ8   $ 800       2.03746       Class 7  
5.15% Notes due February 15, 2011
  USD 1,458,000   12557WQH7   $ 800       2.03746       Class 7  
6.60% Notes due February 15, 2011
  USD 25,229,000   12557WTB7   $ 800       2.03746       Class 7  
Floating Rate Notes due February 28, 2011(3)
  GBP 70,000,000   XS0245933121   $ 800       2.03746       Class 7  
5.05% Notes due
March 15, 2011
  USD 1,560,000   12557WML2   $ 800       2.03746       Class 7  
5.00% Notes due
March 15, 2011
  USD 1,001,000   12557WQR5   $ 800       2.03746       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
4.90% Notes due
March 15, 2011
  USD 806,000   12557WQZ7   $ 800       2.03746       Class 7  
5.00% Notes due
March 15, 2011
  USD 1,589,000   12557WRH6   $ 800       2.03746       Class 7  
6.75% Notes due
March 15, 2011
  USD 7,604,000   12557WTJ0   $ 800       2.03746       Class 7  
6.50% Notes due
March 15, 2011
  USD 6,187,000   12557WTQ4   $ 800       2.03746       Class 7  
5.15% Notes due
April 15, 2011
  USD 957,000   12557WMS7   $ 800       2.03746       Class 7  
Floating Rate Notes due April 27, 2011
  USD 280,225,000   125581BA5   $ 800       2.03746       Class 7  
5.60% Notes due
April 27, 2011
  USD 750,000,000   125581AZ1   $ 800       2.03746       Class 7  
5.40% Notes due
May 15, 2011
  USD 1,283,000   12557WMY4   $ 800       2.03746       Class 7  
5.35% Notes due
June 15, 2011
  USD 558,000   12557WNE7   $ 800       2.03746       Class 7  
Floating Rate Notes due July 28, 2011
  USD 669,500,000   125581BE7   $ 800       2.03746       Class 7  
5.80% Notes due
July 28, 2011
  USD 550,000,000   125581BF4   $ 800       2.03746       Class 7  
5.35% Notes due
August 15, 2011
  USD 2,254,000   12557WNM9   $ 800       2.03746       Class 7  
5.20% Notes due September 15, 2011
  USD 2,685,000   12557WNV9   $ 800       2.03746       Class 7  
Floating Rate Notes due September 21, 2011(3)
  GBP 40,000,000   XS0268935698   $ 800       2.03746       Class 7  
4.25% Notes due September 22, 2011(4)
  EUR 750,000,000   XS0201605192   $ 800       2.03746       Class 7  
5.20% Notes due November 15, 2011
  USD 7,392,000   12557WPD7   $ 800       2.03746       Class 7  
5.25% Notes due November 15, 2011
  USD 4,427,000   12557WB34   $ 800       2.03746       Class 7  
5.25% Notes due November 15, 2011
  USD 5,175,000   12557WB67   $ 800       2.03746       Class 7  
5.25% Notes due November 15, 2011
  USD 4,944,000   12557WB91   $ 800       2.03746       Class 7  
Floating Rate Notes due November 30, 2011(3)
  EUR 500,000,000   XS0275670965   $ 800       2.03746       Class 7  
4.85% Notes due December 15, 2011
  USD 482,000   12557WPM7   $ 800       2.03746       Class 7  
5.00% Notes due December 15, 2011
  USD 1,685,000   12557WPV7   $ 800       2.03746       Class 7  
5.40% Notes due February 13, 2012
  USD 479,996,000   125581CT3   $ 800       2.03746       Class 7  
Floating Rate Notes due February 13, 2012
  USD 654,250,000   125581CU0   $ 800       2.03746       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
5.25% Notes due February 15, 2012
  USD 2,937,000   12557WQD6   $ 800       2.03746       Class 7  
5.15% Notes due February 15, 2012
  USD 1,532,000   12557WQM6   $ 800       2.03746       Class 7  
7.25% Notes due February 15, 2012
  USD 30,577,000   12557WSY8   $ 800       2.03746       Class 7  
7.00% Notes due February 15, 2012
  USD 17,676,000   12557WTF8   $ 800       2.03746       Class 7  
5.00% Notes due
March 15, 2012
  USD 482,000   12557WQV6   $ 800       2.03746       Class 7  
5.00% Notes due
March 15, 2012
  USD 1,059,000   12557WRD5   $ 800       2.03746       Class 7  
7.25% Notes due
March 15, 2012
  USD 13,609,000   12557WTM3   $ 800       2.03746       Class 7  
7.75% Notes due
April 2, 2012
  USD 259,646,000   125581AB4   $ 800       2.03746       Class 7  
5.75% Notes due
August 15, 2012
  USD 466,000   12557WA68   $ 800       2.03746       Class 7  
3.80% Notes due November 14, 2012(3)
  EUR 450,000,000   XS0234935434   $ 800       2.03746       Class 7  
5.50% Notes due November 15, 2012
  USD 2,711,000   12557WC41   $ 800       2.03746       Class 7  
5.50% Notes due November 15, 2012
  USD 1,381,000   12557WC82   $ 800       2.03746       Class 7  
7.63% Notes due November 30, 2012
  USD 1,277,653,000   125577AZ9   $ 800       2.03746       Class 7  
5.50% Notes due December 15, 2012
  USD 495,000   12557WSF9   $ 800       2.03746       Class 7  
7.00% Notes due December 15, 2012
  USD 36,343,000   12557WSK8   $ 800       2.03746       Class 7  
7.25% Notes due December 15, 2012
  USD 19,425,000   12557WSN2   $ 800       2.03746       Class 7  
7.30% Notes due December 15, 2012
  USD 11,775,000   12557WSS1   $ 800       2.03746       Class 7  
Floating Rate Notes due December 21, 2012
  USD 290,705,000   12560PEP2   $ 800       2.03746       Class 7  
6.15% Notes due
January 15, 2013
  USD 29,038,000   12557WAZ4   $ 700       3.25993       Class 7  
6.25% Notes due
January 15, 2013
  USD 62,461,000   12557WBC4   $ 700       3.25993       Class 7  
6.15% Notes due
January 15, 2013
  USD 52,560,000   12557WBF7   $ 700       3.25993       Class 7  
6.25% Notes due
January 15, 2013
  USD 53,967,000   12557WBJ9   $ 700       3.25993       Class 7  
7.50% Notes due
January 15, 2013
  USD 27,292,000   12557WSW2   $ 700       3.25993       Class 7  
6.25% Notes due February 15, 2013
  USD 22,781,000   12557WBM2   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
6.20% Notes due February 15, 2013
  USD 24,387,000   12557WBQ3   $ 700       3.25993       Class 7  
6.00% Notes due February 15, 2013
  USD 22,368,000   12557WBT7   $ 700       3.25993       Class 7  
7.60% Notes due February 15, 2013
  USD 23,615,000   12557WTC5   $ 700       3.25993       Class 7  
6.15% Notes due February 15, 2013
  USD 23,318,000   12557WBW0   $ 700       3.25993       Class 7  
5.40% Notes due
March 7, 2013
  USD 483,516,000   125581AX6   $ 700       3.25993       Class 7  
7.75% Notes due
March 15, 2013
  USD 18,242,000   12557WTK7   $ 700       3.25993       Class 7  
7.90% Notes due
March 15, 2013
  USD 17,591,000   12557WTN1   $ 700       3.25993       Class 7  
7.25% Notes due
March 15, 2013
  USD 5,350,000   12557WTR2   $ 700       3.25993       Class 7  
6.00% Notes due
March 15, 2013
  USD 26,178,000   12557WBZ3   $ 700       3.25993       Class 7  
6.00% Notes due
March 15, 2013
  USD 27,547,000   12557WCC3   $ 700       3.25993       Class 7  
6.10% Notes due
March 15, 2013
  USD 27,499,000   12557WCF6   $ 700       3.25993       Class 7  
6.25% Notes due
March 15, 2013
  USD 26,121,000   12557WCJ8   $ 700       3.25993       Class 7  
6.15% Notes due
April 15, 2013
  USD 24,593,000   12557WCM1   $ 700       3.25993       Class 7  
6.15% Notes due
April 15, 2013
  USD 28,983,000   12557WCQ2   $ 700       3.25993       Class 7  
6.05% Notes due
April 15, 2013
  USD 19,386,000   12557WCT6   $ 700       3.25993       Class 7  
6.05% Notes due
May 15, 2013
  USD 44,494,000   12557WCW9   $ 700       3.25993       Class 7  
4.95% Notes due
May 15, 2013
  USD 9,133,000   12557WCZ2   $ 700       3.25993       Class 7  
4.95% Notes due
May 15, 2013
  USD 11,492,000   12557WDC2   $ 700       3.25993       Class 7  
4.88% Notes due
June 15, 2013
  USD 6,237,000   12557WDF5   $ 700       3.25993       Class 7  
4.85% Notes due
June 15, 2013
  USD 7,956,000   12557WDJ7   $ 700       3.25993       Class 7  
4.60% Notes due
June 15, 2013
  USD 9,421,000   12557WDM0   $ 700       3.25993       Class 7  
4.45% Notes due
June 15, 2013
  USD 5,051,000   12557WDQ1   $ 700       3.25993       Class 7  
Floating Rate Notes due June 20, 2013(3)
  EUR 500,000,000   XS0258343564   $ 700       3.25993       Class 7  
5.05% Notes due
July 15, 2013
  USD 5,228,000   12557WEF4   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
4.65% Notes due
July 15, 2013
  USD 9,267,000   12557WDT5   $ 700       3.25993       Class 7  
4.75% Notes due
July 15, 2013
  USD 2,318,000   12557WDW8   $ 700       3.25993       Class 7  
5.00% Notes due
July 15, 2013
  USD 15,182,000   12557WDZ1   $ 700       3.25993       Class 7  
4.75% Notes due
July 15, 2013
  USD 5,779,000   12557WEC1   $ 700       3.25993       Class 7  
5.30% Notes due
August 15, 2013
  USD 7,479,000   12557WEJ6   $ 700       3.25993       Class 7  
5.50% Notes due
August 15, 2013
  USD 2,903,000   12557WEM9   $ 700       3.25993       Class 7  
5.50% Notes due
August 15, 2013
  USD 6,810,000   12557WEQ0   $ 700       3.25993       Class 7  
5.40% Notes due September 15, 2013
  USD 2,445,000   12557WET4   $ 700       3.25993       Class 7  
5.50% Notes due September 15, 2013
  USD 4,171,000   12557WEW7   $ 700       3.25993       Class 7  
5.25% Notes due September 15, 2013
  USD 4,374,000   12557WEZ0   $ 700       3.25993       Class 7  
5.20% Notes due September 15, 2013
  USD 4,378,000   12557WFC0   $ 700       3.25993       Class 7  
5.20% Notes due
October 15, 2013
  USD 5,497,000   12557WFF3   $ 700       3.25993       Class 7  
5.20% Notes due
October 15, 2013
  USD 8,130,000   12557WFJ5   $ 700       3.25993       Class 7  
5.25% Notes due
October 15, 2013
  USD 3,359,000   12557WFM8   $ 700       3.25993       Class 7  
5.30% Notes due November 15, 2013
  USD 3,146,000   12557WFQ9   $ 700       3.25993       Class 7  
5.10% Notes due November 15, 2013
  USD 7,480,000   12557WFT3   $ 700       3.25993       Class 7  
5.40% Notes due December 15, 2013
  USD 5,783,000   12557WFW6   $ 700       3.25993       Class 7  
5.20% Notes due December 15, 2013
  USD 7,241,000   12557WFZ9   $ 700       3.25993       Class 7  
5.10% Notes due
January 15, 2014
  USD 2,897,000   12557WGC9   $ 700       3.25993       Class 7  
4.85% Notes due
January 15, 2014
  USD 1,333,000   12557WGF2   $ 700       3.25993       Class 7  
5.00% Notes due February 13, 2014
  USD 671,749,000   125581AH1   $ 700       3.25993       Class 7  
5.00% Notes due February 15, 2014
  USD 5,957,000   12557WGJ4   $ 700       3.25993       Class 7  
4.90% Notes due February 15, 2014
  USD 1,958,000   12557WGM7   $ 700       3.25993       Class 7  
7.85% Notes due February 15, 2014
  USD 23,034,000   12557WSZ5   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
7.65% Notes due February 15, 2014
  USD 10,897,000   12557WTG6   $ 700       3.25993       Class 7  
4.80% Notes due
March 15, 2014
  USD 4,492,000   12557WGQ8   $ 700       3.25993       Class 7  
4.60% Notes due
March 15, 2014
  USD 4,211,000   12557WGT2   $ 700       3.25993       Class 7  
7.85% Notes due
March 15, 2014
  USD 4,573,000   12557WTS0   $ 700       3.25993       Class 7  
4.80% Notes due
April 15, 2014
  USD 2,177,000   12557WGW5   $ 700       3.25993       Class 7  
5.10% Notes due
April 15, 2014
  USD 5,735,000   12557WGZ8   $ 700       3.25993       Class 7  
5.00% Notes due
May 13, 2014(3)
  EUR 463,405,000   XS0192461837   $ 700       3.25993       Class 7  
5.25% Notes due
May 15, 2014
  USD 4,898,000   12557WHC8   $ 700       3.25993       Class 7  
5.80% Notes due
May 15, 2014
  USD 11,357,000   12557WHF1   $ 700       3.25993       Class 7  
5.70% Notes due
June 15, 2014
  USD 8,890,000   12557WHJ3   $ 700       3.25993       Class 7  
5.75% Notes due
June 15, 2014
  USD 10,815,000   12557WHM6   $ 700       3.25993       Class 7  
5.75% Notes due
June 15, 2014
  USD 1,930,000   12557WRU7   $ 700       3.25993       Class 7  
5.85% Notes due
June 15, 2014
  USD 1,593,000   12557WRX1   $ 700       3.25993       Class 7  
6.00% Notes due
June 15, 2014
  USD 10,892,000   12557WSA0   $ 700       3.25993       Class 7  
5.65% Notes due
July 15, 2014
  USD 8,504,000   12557WHQ7   $ 700       3.25993       Class 7  
5.30% Notes due
July 15, 2014
  USD 10,005,000   12557WHT1   $ 700       3.25993       Class 7  
5.20% Notes due
August 15, 2014
  USD 5,691,000   12557WHW4   $ 700       3.25993       Class 7  
5.30% Notes due
August 15, 2014
  USD 3,915,000   12557WHZ7   $ 700       3.25993       Class 7  
6.00% Notes due
August 15, 2014
  USD 2,555,000   12557WA27   $ 700       3.25993       Class 7  
6.00% Notes due
August 15, 2014
  USD 2,389,000   12557WA76   $ 700       3.25993       Class 7  
5.25% Notes due September 15, 2014
  USD 16,332,000   12557WJC6   $ 700       3.25993       Class 7  
5.05% Notes due September 15, 2014
  USD 17,112,000   12557WJF9   $ 700       3.25993       Class 7  
5.13% Notes due September 30, 2014
  USD 638,267,000   125581AK4   $ 700       3.25993       Class 7  
4.90% Notes due
October 15, 2014
  USD 5,520,000   12557WJJ1   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
5.10% Notes due
October 15, 2014
  USD 13,944,000   12557WJM4   $ 700       3.25993       Class 7  
5.05% Notes due November 15, 2014
  USD 7,238,000   12557WJQ5   $ 700       3.25993       Class 7  
5.50% Notes due December 1, 2014(4)
  GBP 480,000,000   XS0207079764   $ 700       3.25993       Class 7  
5.13% Notes due December 15, 2014
  USD 7,632,000   12557WJT9   $ 700       3.25993       Class 7  
5.10% Notes due December 15, 2014
  USD 18,101,000   12557WJW2   $ 700       3.25993       Class 7  
5.05% Notes due
January 15, 2015
  USD 6,302,000   12557WJZ5   $ 700       3.25993       Class 7  
5.00% Notes due
February 1, 2015
  USD 671,141,000   125581AR9   $ 700       3.25993       Class 7  
4.95% Notes due February 15, 2015
  USD 6,678,000   12557WKC4   $ 700       3.25993       Class 7  
4.90% Notes due February 15, 2015
  USD 6,848,000   12557WKF7   $ 700       3.25993       Class 7  
7.90% Notes due February 15, 2015
  USD 24,329,000   12557WTD3   $ 700       3.25993       Class 7  
5.10% Notes due
March 15, 2015
  USD 12,247,000   12557WKJ9   $ 700       3.25993       Class 7  
5.05% Notes due
March 15, 2015
  USD 2,575,000   12557WKM2   $ 700       3.25993       Class 7  
4.25% Notes due
March 17, 2015(4)
  EUR 412,500,000   XS0215269670   $ 700       3.25993       Class 7  
5.38% Notes due
April 15, 2015
  USD 6,369,000   12557WKQ3   $ 700       3.25993       Class 7  
5.25% Notes due
May 15, 2015
  USD 15,954,000   12557WKT7   $ 700       3.25993       Class 7  
5.30% Notes due
May 15, 2015
  USD 27,090,000   12557WKW0   $ 700       3.25993       Class 7  
5.10% Notes due
June 15, 2015
  USD 14,930,000   12557WKZ3   $ 700       3.25993       Class 7  
5.05% Notes due
June 15, 2015
  USD 10,912,000   12557WLA7   $ 700       3.25993       Class 7  
5.20% Notes due
June 15, 2015
  USD 8,322,000   12557WLF6   $ 700       3.25993       Class 7  
5.30% Notes due
August 15, 2015
  USD 10,741,000   12557WLJ8   $ 700       3.25993       Class 7  
5.38% Notes due
August 15, 2015
  USD 15,892,000   12557WLM1   $ 700       3.25993       Class 7  
5.25% Notes due September 15, 2015
  USD 11,241,000   12557WLQ2   $ 700       3.25993       Class 7  
5.10% Notes due September 15, 2015
  USD 4,898,000   12557WLT6   $ 700       3.25993       Class 7  
5.50% Notes due November 15, 2015
  USD 4,016,000   12557WLW9   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
5.80% Notes due November 15, 2015
  USD 7,456,000   12557WLZ2   $ 700       3.25993       Class 7  
5.75% Notes due December 15, 2015
  USD 8,155,000   12557WMC2   $ 700       3.25993       Class 7  
5.80% Notes due December 15, 2015
  USD 12,621,000   12557WMF5   $ 700       3.25993       Class 7  
5.40% Notes due January 30, 2016
  USD 604,263,000   125581AW8   $ 700       3.25993       Class 7  
5.85% Notes due March 15, 2016
  USD 14,372,000   12557WMJ7   $ 700       3.25993       Class 7  
5.80% Notes due March 15, 2016
  USD 11,705,000   12557WMM0   $ 700       3.25993       Class 7  
6.00% Notes due March 15, 2016
  USD 69,046,000   12557WMQ1   $ 700       3.25993       Class 7  
5.88% Notes due April 15, 2016
  USD 4,888,000   12557WMT5   $ 700       3.25993       Class 7  
6.05% Notes due May 15, 2016
  USD 14,943,000   12557WMW8   $ 700       3.25993       Class 7  
6.15% Notes due May 15, 2016
  USD 18,636,000   12557WMZ1   $ 700       3.25993       Class 7  
6.10% Notes due June 15, 2016
  USD 15,478,000   12557WNC1   $ 700       3.25993       Class 7  
6.10% Notes due June 15, 2016
  USD 17,660,000   12557WNF4   $ 700       3.25993       Class 7  
6.20% Notes due August 15, 2016
  USD 37,135,000   12557WNJ6   $ 700       3.25993       Class 7  
6.13% Notes due August 15, 2016
  USD 36,401,000   12557WNN7   $ 700       3.25993       Class 7  
5.85% Notes due September 15, 2016
  USD 391,533,000   125581CS5   $ 700       3.25993       Class 7  
6.05% Notes due September 15, 2016
  USD 31,772,000   12557WNS6   $ 700       3.25993       Class 7  
5.95% Notes due September 15, 2016
  USD 11,219,000   12557WNW7   $ 700       3.25993       Class 7  
4.65% Notes due September 19, 2016
  EUR 474,000,000   XS0268133799   $ 700       3.25993       Class 7  
6.00% Notes due November 15, 2016
  USD 29,155,000   12557WPA3   $ 700       3.25993       Class 7  
5.95% Notes due November 15, 2016
  USD 13,264,000   12557WPE5   $ 700       3.25993       Class 7  
Floating Rate Notes due December 14, 2016
  USD 34,452,000   12560PDK4   $ 700       3.25993       Class 7  
5.80% Notes due December 15, 2016
  USD 35,842,000   12557WPJ4   $ 700       3.25993       Class 7  
5.65% Notes due December 15, 2016
  USD 8,701,000   12557WPN5   $ 700       3.25993       Class 7  
5.70% Notes due December 15, 2016
  USD 9,571,000   12557WPS4   $ 700       3.25993       Class 7  


Table of Contents

                                 
            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
5.70% Notes due December 15, 2016
  USD 9,817,000   12557WPW5   $ 700       3.25993       Class 7  
5.50% Notes due December 20, 2016
  GBP 367,400,000   XS0278525992   $ 700       3.25993       Class 7  
5.65% Notes due February 13, 2017
  USD 548,087,000   125577AY2   $ 700       3.25993       Class 7  
5.85% Notes due February 15, 2017
  USD 7,724,000   12557WQA2   $ 700       3.25993       Class 7  
5.95% Notes due February 15, 2017
  USD 11,074,000   12557WQE4   $ 700       3.25993       Class 7  
5.85% Notes due February 15, 2017
  USD 6,471,000   12557WQJ3   $ 700       3.25993       Class 7  
5.80% Notes due February 15, 2017
  USD 7,792,000   12557WQN4   $ 700       3.25993       Class 7  
Floating Rate Notes due March 15, 2017
  USD 50,000,000   12560PDR9   $ 700       3.25993       Class 7  
5.75% Notes due March 15, 2017
  USD 6,741,000   12557WQS3   $ 700       3.25993       Class 7  
5.75% Notes due March 15, 2017
  USD 13,498,000   12557WQW4   $ 700       3.25993       Class 7  
5.70% Notes due March 15, 2017
  USD 9,533,000   12557WRA1   $ 700       3.25993       Class 7  
5.65% Notes due March 15, 2017
  USD 5,935,000   12557WRE3   $ 700       3.25993       Class 7  
5.75% Notes due March 15, 2017
  USD 10,298,000   12557WRJ2   $ 700       3.25993       Class 7  
5.75% Notes due May 15, 2017
  USD 2,708,000   12557WRL7   $ 700       3.25993       Class 7  
5.80% Notes due May 15, 2017
  USD 3,779,000   12557WRN3   $ 700       3.25993       Class 7  
5.80% Notes due May 15, 2017
  USD 5,038,000   12557WRQ6   $ 700       3.25993       Class 7  
6.00% Notes due June 15, 2017
  USD 23,842,000   12557WRS2   $ 700       3.25993       Class 7  
6.00% Notes due June 15, 2017
  USD 8,205,000   12557WRV5   $ 700       3.25993       Class 7  
6.10% Notes due June 15, 2017
  USD 6,648,000   12557WRY9   $ 700       3.25993       Class 7  
6.25% Notes due June 15, 2017
  USD 10,535,000   12557WSB8   $ 700       3.25993       Class 7  
6.25% Notes due August 15, 2017
  USD 1,190,000   12557WA35   $ 700       3.25993       Class 7  
6.25% Notes due November 15, 2017
  USD 8,958,000   12557WB42   $ 700       3.25993       Class 7  
6.25% Notes due November 15, 2017
  USD 11,778,000   12557WB75   $ 700       3.25993       Class 7  
6.25% Notes due November 15, 2017
  USD 6,339,000   12557WC25   $ 700       3.25993       Class 7  


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            Consideration per US$1,000
   
            Principal Amount of
   
            Old Notes Tendered    
                Number of
   
            Principal
  Shares of
   
            Amount
  New Preferred
  Plan of
    Outstanding Principal
      of New Notes
  Stock
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   to be Issued(1)   Class
 
6.40% Notes due November 15, 2017
  USD 3,404,000   12557WC58   $ 700       3.25993       Class 7  
6.50% Notes due November 15, 2017
  USD 2,197,000   12557WC90   $ 700       3.25993       Class 7  
10-Year Forward Rate Bias Notes due December 11, 2017(4)
  USD 500,000,000   N/A   $ 700       3.25993       Class 7  
6.50% Notes due December 15, 2017
  USD 556,000   12557WSG7   $ 700       3.25993       Class 7  
7.50% Notes due December 15, 2017
  USD 24,275,000   12557WSL6   $ 700       3.25993       Class 7  
7.75% Notes due December 15, 2017
  USD 14,936,000   12557WSP7   $ 700       3.25993       Class 7  
7.80% Notes due December 15, 2017
  USD 8,731,000   12557WST9   $ 700       3.25993       Class 7  
5.80% Senior Notes due October 1, 2036(5)
  USD 316,015,000   12560PFP1   $ 700       3.25993       Class 7  
12.00% Subordinated Notes due December 18, 2018
  USD 1,117,448,000   125581FS2   $ 0       4.07492       Class 10  
12.00% Subordinated Notes due December 18, 2018
  USD 31,559,000   U17186AF1   $ 0       4.07492       Class 10  
6.10% Junior Subordinated Notes due March 15, 2067
  USD 750,000,000   125577AX4   $ 0       2.03746       Class 11  
 
 
(1) The New Preferred Stock will have a liquidation preference per share of $1,300 and be entitled to 87.5 votes per share on all matters presented to our stockholders for a vote. See “Description of the New Preferred Stock.” Assuming the exchange of 100% of the Old Notes for the New Notes and the New Preferred Stock, the New Preferred Stock issued will consist of approximately 70 million shares having an aggregate liquidation preference of approximately $91.0 billion and representing approximately 94.0% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders. If we receive the minimum level of participation in the Offers required to satisfy the Liquidity and Leverage Condition, the New Preferred Stock issued will consist of approximately 48.5 million shares having an aggregate liquidation preference of approximately $63 billion and representing approximately 91.5% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders.
 
(2) The 5.38% Notes due June 15, 2017 have a put right on June 15, 2010.
 
(3) Listed on the London Stock Exchange. Following consummation of the Offers, we intend to delist the Old Notes from the London Stock Exchange’s Gilt Edged and Fixed Interest Market.
 
(4) Listed on the Luxembourg Stock Exchange. Following consummation of the Offers, we intend to delist the Old Notes from the Luxembourg Stock Exchange.
 
(5) The 5.80% Senior Notes due October 1, 2036 have a put right on October 1, 2018.


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(4) These securities are not listed with DTC (as defined below).
 
Delaware Funding Outstanding Notes
 
                         
            Consideration per
   
            US$1,000 Principal
   
            Amount of
   
            Old Notes Tendered    
            Principal
   
            Amount
  Plan of
    Outstanding Principal
      of New Notes
  Reorganization
Title of Old Notes to be Tendered
 
Amount
 
CUSIP/ISIN
  to be Issued   Class
 
4.65% Notes due
July 1, 2010
  USD 1,000,000,000   125568AA3/125568AB1   $ 1,000       Class 6  
5.60% Notes due
November 2, 2011
  USD 487,000,000   125568AE5   $ 1,000       Class 6  
5.20% Notes due
June 1, 2015
  USD 657,408,000   125568AC9/125568AD7   $ 1,000       Class 6  
 
All New Notes will be denominated in U.S. dollars. An equivalent U.S. dollar principal amount of the Euro-denominated, British pound-denominated, Swiss franc-denominated and Canadian dollar-denominated Old Notes (determined as described herein) will be used when determining the consideration to be received per US$1,000 principal amount of Old Notes tendered.
 
 
Other than the 5.80% Senior Notes due October 1, 2036 (CUSIP 12560PFP1) and the 6.10% Junior Subordinated Notes due March 15, 2067 (CUSIP 125577AX4) issued by CIT Group Inc., our debt securities maturing after December 31, 2018 have not been included in the Offers and will be reinstated pursuant to the Plan of Reorganization. In addition, the Equity Units (CUSIP 125581405) issued by CIT Group Inc. have not been included in the Offers but are included in solicitation of acceptances for the Plan of Reorganization. Further, the 6.00% Fixed Rate Notes due 3 March 2011 (CUSIP AU300CGAL010) and the 3 month BBSW plus 34bp Floating Rate Notes due 3 March 2011 (CUSIP AU300CGAL028) issued by CIT Group (Australia) Limited, a subsidiary of the CIT Group Inc., have not been included in the Offers and will be reinstated pursuant to the Plan of Reorganization. As a result, holders of these notes and other debt securities will not be entitled to participate in the Offers and will be treated as indicated in the Plan of Reorganization.


 

 
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You should rely only on the information contained in this Offering Memorandum and Disclosure Statement or to which this Offering Memorandum and Disclosure Statement refers you. We have not authorized anyone to provide you with different information. We are not making an offer of the New Notes and the New Preferred Stock in any jurisdiction where such offers are not permitted. You should not assume that the information provided in this Offering Memorandum and Disclosure Statement is accurate as of any date other than the date of this Offering Memorandum and Disclosure Statement, or that the information incorporated by reference into this Offering Memorandum and Disclosure Statement is accurate as of any date other than the date of such information.


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NOTICE TO INVESTORS
 
NONE OF THE COMPANY OR ANY OF ITS SUBSIDIARIES, THEIR RESPECTIVE BOARDS OF DIRECTORS, THE EXCHANGE AGENT, THE VOTING AGENT, THE INFORMATION AGENT, THE FINANCIAL ADVISORS, THE SWISS NOTE TENDER AGENT, THE FINANCIAL ADVISORS OR ANY OF THEIR RESPECTIVE AFFILIATES MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS OF OLD NOTES SHOULD EXCHANGE OLD NOTES FOR NEW NOTES AND/OR SHARES OF NEW PREFERRED STOCK, AS APPLICABLE, IN THE OFFERS AND THE PLAN OF REORGANIZATION.
 
The information contained in this Offering Memorandum and Disclosure Statement is as of the date of this Offering Memorandum and Disclosure Statement and is subject to change, completion or amendment without notice. Neither the delivery of this Offering Memorandum and Disclosure Statement at any time nor the offer, exchange or delivery of any security hereunder shall, under any circumstances, create any implication that there has been no change in the information set forth in this Offering Memorandum and Disclosure Statement or in our affairs since the date of this Offering Memorandum and Disclosure Statement.
 
No person is authorized in connection with these Offers to give any information or to make any representation not contained in this Offering Memorandum and Disclosure Statement, and, if given or made, such other information or representation must not be relied upon as having been authorized by us.
 
Neither the SEC, any other securities commission nor any other regulatory authority, has approved or disapproved the Offers, Plan of Reorganization or the New Notes and New Preferred Stock nor have any of the foregoing authorities passed upon or endorsed the merits of these Offers or the accuracy or adequacy of this Offering Memorandum and Disclosure Statement. Any representation to the contrary is a criminal offense.
 
The Offers and solicitation of votes in respect of the Plan of Reorganization are being made on the basis of this Offering Memorandum and Disclosure Statement and are subject to the terms described in this Offering Memorandum and Disclosure Statement and the indentures relating to the New Notes. Any decision to participate in the Offers and/or vote to accept or reject the Plan of Reorganization must be based on the information contained in this document. In making an investment decision, prospective investors must rely on their own examination of us and the terms of the Offers and Plan of Reorganization and the New Notes and New Preferred Stock, including the merits and risks involved. Prospective investors should not construe anything in this Offering Memorandum and Disclosure Statement as legal, business or tax advice. Each prospective investor should consult its advisors as needed to make its investment decision and to determine whether it is legally permitted to participate in the Offers under applicable legal investment or similar laws or regulations.
 
Each prospective investor must comply with all applicable laws and regulations in force in any jurisdiction in which it participates in the Offers and/or vote to accept or reject the Plan of Reorganization or possesses or distributes this Offering Memorandum and Disclosure Statement and must obtain any consent, approval or permission required by it for participation in the Offers under the laws and regulations in force in any jurisdiction to which it is subject, and neither we nor any of our representatives shall have any responsibility therefor.
 
We reserve the right to amend, modify or withdraw any of the Offers and Plan of Reorganization at any time and we reserve the right to reject any tender or vote, in whole or in part.
 
This Offering Memorandum and Disclosure Statement contains summaries believed to be accurate with respect to certain documents, but reference is made to the actual documents for complete information. All of those summaries are qualified in their entirety by this reference. Copies of documents referred to herein will be made available to prospective investors upon request to the Company.
 
This Offering Memorandum and Disclosure Statement, including the documents incorporated by reference herein, the related Letter of Transmittal and/or Ballot and the Plan of Reorganization contain important information that should be read before any decision is made with respect to an exchange of Old Notes or acceptance or rejection of the Plan of Reorganization.
 
The delivery of this Offering Memorandum and Disclosure Statement shall not under any circumstances create any implication that the information contained or incorporated by reference herein is


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correct as of any time subsequent to the date hereof or date thereof or that there has been no change in the information set forth or incorporated herein or in any attachments hereto or in the affairs of CIT Group Inc. or any of its subsidiaries, including Delaware Funding, or affiliates since the date hereof or date thereof.
 
 
Austria.  No prospectus has been or will be approved and/or published pursuant to the Austrian Capital Markets Act (Kapitalmarktgesetz), as amended. Neither this document nor any other document connected therewith constitutes a prospectus according to the Austrian Capital Markets Act, and neither this document nor any other document connected therewith may be distributed, passed on or disclosed to any other person in Austria. No steps may be taken that would constitute a public offering of New Notes and New Preferred Stock in Austria, and the Offers may not be advertised in Austria. The New Notes and New Preferred Stock will be offered in Austria only in compliance with the provisions of the Austrian Capital Markets Act and all other laws and regulations in Austria applicable to the Offers and sale of New Notes and New Preferred Stock in Austria.
 
Belgium.  The Offers are exclusively conducted in Belgium under applicable private placement exemptions and have, therefore, not been and will not be notified to, and the Offering Memorandum and Disclosure Statement or any other offering material has not been and will not be approved by, the Belgian Banking, Finance and Insurance Commission (Commission bancaire, financière et des assurances/Commissie voor het Bank-, Financie- en Assurantiewezen). Accordingly, the Offers may not be advertised and the Offers will not be extended and no memorandum, information circular, brochure or any similar document has or will be distributed, directly or indirectly, to any person in Belgium other than “qualified investors” in the sense of Article 10 of the Belgian Law of 16 June 2006 on the public offer of placement instruments and the admission to trading of placement instruments on regulated markets (as amended from time to time). This Offering Memorandum and Disclosure Statement has been issued only for the personal use of the above qualified investors and exclusively for the purpose of the Offers. Accordingly, the information contained herein may not be used for any other purpose nor disclosed to any other person in Belgium.
 
Bermuda.  The Offers are private and not intended for the public. This Offering Memorandum and Disclosure Statement has not been approved by the Bermuda Monetary Authority or the Registrar of Companies in Bermuda. Any representation to the contrary, express or implied, is prohibited.
 
Canada.  This Offering Memorandum and Disclosure Statement constitutes an offering of the New Notes and New Preferred Stock only in those jurisdictions of Canada and to those persons where and to whom they may lawfully be offered.
 
Cayman Islands.  No invitation whether directly or indirectly may be made to the public in the Cayman Islands to subscribe for the New Notes and New Preferred Stock as CIT and Delaware Funding are not listed on the Cayman Islands Stock Exchange.
 
Denmark.  This Offering Memorandum and Disclosure Statement has not been and will not be filed with or approved by the Danish Financial Supervisory Authority or any other regulatory authority in the Kingdom of Denmark. The New Notes and New Preferred Stock have not been offered or sold and may not be offered, sold or delivered directly or indirectly in Denmark, unless in compliance with Chapters 6 or 12 of the Danish Act on Trading in Securities and executive orders issued pursuant thereto as amended from time to time. Accordingly, this Offering Memorandum and Disclosure Statement may not be made available nor may the New Notes and New Preferred Stock otherwise be marketed and offered for sale in Denmark other than in circumstances which are deemed not to be a marketing or an offer to the public in Denmark.
 
European Economic Area.  This Offering Memorandum and Disclosure Statement shall not be distributed to, and no New Notes and New Preferred Stock may be offered or sold to persons in a Member State of the European Economic Area which has implemented Directive 2003/71/EC (the “Prospectus Directive”) (each, a “Relevant Member State”) other than to persons who are qualified investors within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive (each, a “Qualified Investor”).


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France.  No prospectus or Offering Memorandum and Disclosure Statement (including any amendment or supplement thereto or replacement thereof) has been prepared in connection with the Offers that have been submitted for clearance to or approved by the Autorité des marchés financiers; no New Notes or New Preferred Stock have been offered or sold nor will any New Notes or New Preferred Stock be offered or sold, directly or indirectly, to the public in France; neither a prospectus, the Offering Memorandum and Disclosure Statement nor any other offering material relating to the New Notes or New Preferred Stock has been distributed or caused to be distributed, and a prospectus, the Offering Memorandum and Disclosure Statement and any other offering material relating to the New Notes and New Preferred Stock will not be distributed or caused to be distributed to the public in France; such offer, sales and distributions have been and shall only be made in France to (i) persons providing investment services relating to portfolio management for the account of third parties (personnes fournissant le service d’investissement de gestion de portfeuille pour compte de tiers) and/or (ii) qualified investors (investisseurs qualifiés) acting for their own account, all as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the Code monétaire et financier.
 
Germany.  Any offer or solicitation of securities within Germany must be in full compliance with the German Securities Prospectus Act (Wertpapierprospektgesetz (the “WpPG”)), which implements the Prospectus Directive in Germany, and any other applicable laws in the Federal Republic of Germany. The offer and solicitation of securities to the public in Germany requires the prior publication (with specific requirements for a publication being set out in the WpPG) of a prospectus drawn up in accordance with the Prospectus Directive and the WpPG (a “PD-compliant Prospectus”) approved by the German Federal Financial Services Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht (the “BaFin”)) or the notification of a PD-compliant Prospectus approved by another competent authority in the EEA in accordance with Art. 17 and Art. 18 of the Prospectus Directive. This Offering Memorandum and Disclosure Statement does not constitute a PD-compliant Prospectus and has not been and will not be submitted for approval to the BaFin. It may not be supplied to the public in Germany or used in connection with any offer for subscription of New Notes and New Preferred Stock to the public, any public marketing of New Notes and New Preferred Stock or any public solicitation for offer to subscribe for or otherwise acquire New Notes and New Preferred Stock in Germany. This Offering Memorandum and Disclosure Statement is personally addressed only to a limited number of persons in Germany who are qualified investors, as defined in the WpPG, is strictly confidential and may not be distributed to any person or entity other than the designated recipients hereof.
 
Greece.  No prospectus subject to the approval of the Hellenic Capital Markets Commission or another EU equivalent authority has been prepared in connection with the Offers. The New Notes and New Preferred Stock may not be offered or sold, directly or indirectly, to the public in Greece and neither this Offering Memorandum and Disclosure Statement nor any other offering material or information contained herein relating to the New Notes and New Preferred Stock may be released, issued or distributed to the public in Greece or used in connection with any offering in respect of the New Notes and New Preferred Stock to the public in Greece. The New Notes and New Preferred Stock may exclusively be offered to qualified investors acting for their own account as defined under article 2(1)(στ) of Greek Law 3401/2005 and the Prospectus Directive and/or under circumstances where the Offers of the New Notes and New Preferred Stock is allowed without prior publication of a prospectus and/or where the Offers of the New Notes and New Preferred Stock is exempted from the publication of a prospectus according to Greek Law 3401/005 and/or the Prospectus Directive. The offer does not constitute a solicitation by anyone not authorised to so act and this Offering Memorandum and Disclosure Statement may not be used for or in connection with the Offers to solicit anyone to whom it is unlawful under Greek laws to make such offer in the context of article 10 of Greek law 876/1979.
 
Hong Kong.  The New Notes and New Preferred Stock may not be offered or sold in Hong Kong, by means of this Offering Memorandum and Disclosure Statement or any document other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong. No advertisement, invitation or document relating to New Notes and New Preferred Stock, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) will


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be issued other than with respect to the New Notes and New Preferred Stock which is or is intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.
 
Ireland.  The Offers are not being made, directly or indirectly, to the public in Ireland and no offers or sales of any notes or securities under or in connection with such Offers may be effected except in conformity with the provisions of Irish law including the Irish Companies Acts 1963 to 2006, the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland, the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland and the Market Abuse (Directive 2003/6/EU) Regulations 2005 of Ireland.
 
Israel.  In the State of Israel this Offering Memorandum and Disclosure Statement shall not be regarded as an offer to the public to purchase the New Notes and New Preferred Stock under the Israeli Securities Law 5728 — 1968 (the “ISL”), which requires a prospectus to be published and authorised by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the ISL, including, among others, if: (i) the Offers are made, distributed or directed to not more than 35 investors, subject to certain conditions (the “Addressed Investors”); or (ii) if the Offers are made, distributed or directed to certain qualified investors defined in the First Addendum of the ISL, subject to certain conditions (the “Qualified Investors”). The Qualified Investors shall not be taken into account in respect of counting the Addressed Investors. Qualified Investors may have to submit written evidence that they meet the definitions set out in the First Addendum to the ISL. Addressed Investors may have to submit written evidence in respect to their identities. CIT has not and will not take any action that would require it to publish a prospectus in accordance with and subject to the ISL. CIT has not and will not distribute this Offering Memorandum and Disclosure Statement or make, distribute or direct an offer to subscribe for the New Notes and New Preferred Stock to any person within the State of Israel, other than to Qualified Investors and Addressed Investors.
 
Italy.  The Offers are not being made in the Republic of Italy and the Offering Memorandum and Disclosure Statement has not been submitted to the clearance procedure of the COMMISSIONE NAZIONALE PER LE SOCIETA E LA BORSA (CONSOB) and/or the Bank of Italy pursuant to Italian laws and regulations. Accordingly, holders of Old Notes are hereby notified that, to the extent such holders are Italian residents or persons located in the Republic of Italy, the Offers are not available to them and they may not submit for exchange the Old Notes in the Offers nor may the New Notes and New Preferred Stock be offered, sold or delivered in the Republic of Italy and, as such, any acceptances received from such persons shall be ineffective and void, and neither the NOTE D’INFORMATION nor any other offering material relating to the Offers, the Old Notes or the New Notes and New Preferred Stock may be distributed or made available in the Republic of Italy.
 
Japan.  The New Notes and New Preferred Stock have not been registered under the Securities and Exchange Law of Japan. The New Notes and New Preferred Stock have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.
 
Korea.  The New Notes and New Preferred Stock have not been registered under the Securities and Exchange Law and none of the New Notes or New Preferred Stock has been or will be offered, sold or delivered, directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to the Securities and Exchange Law, the Foreign Exchange Transaction Law and any other applicable laws, regulations and ministerial guidelines in Korea. Without prejudice to the foregoing, where the New Notes and New Preferred Stock are sold or re-sold to Korean residents, the New Notes and New Preferred Stock may only be sold or re-sold to those Korean residents that are qualified to purchase them under the relevant laws and regulations without having first to obtain prior governmental approvals under the relevant Korean laws/regulations, including the Foreign Exchange Transaction Law (or that have obtained the required prior governmental approvals to do so).
 
Kuwait.  No New Notes and New Preferred Stock have been offered or sold or will be offered or sold and no documents will be distributed, no materials will be offered, or no invitation or advertisement will be issued in the State of Kuwait relating thereto, save in strict compliance with the provisions of Law No. 31/1990 and the various Ministerial Orders and Resolutions issued thereunder. No mass-media means of contact


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are being used to market the New Notes and New Preferred Stock. The New Notes and New Preferred Stock are being offered for sale only to qualified institutional investors. Neither the New Notes or New Preferred Stock nor the private offering have been licensed by the Ministry of Commerce or any other relevant Kuwaiti Government Agency. No party involved in this offering is licensed in the state of Kuwait.
 
Luxembourg.  No New Notes and New Preferred Stock may be offered or sold in the Grand Duchy of Luxembourg, directly or indirectly, and neither this Offering Memorandum and Disclosure Statement or any other offering circular, prospectus, form of advertisement, form of communication or other material may be distributed, or otherwise made available in form, or published in, the Grand Duchy of Luxembourg except in circumstances which do not constitute an offer of the New Notes and New Preferred Stock to the public.
 
Malaysia.  No Offering Memorandum and Disclosure Statement or other offering documents has been or will be registered with the Securities Commission under the Securities Commission Act 1993 in respect of the New Notes and New Preferred Stock. The New Notes and New Preferred Stock will only be offered for sale to non-residents of Malaysia (being persons who are not citizens or permanent residents of Malaysia and who do not engage in a trade or business in Malaysia and includes any offshore company incorporated under the OCA 1990 and any foreign offshore company registered under the OCA 1990) and that this Offering Memorandum and Disclosure Statement or any other offering document or material relating to the New Notes and New Preferred Stock will not be distributed or circulated, whether directly or indirectly, to residents of Malaysia.
 
The Netherlands.  No New Notes or New Preferred Stock have been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in the Netherlands other than to persons who are qualifying investors (gekwalificeerde beleggers) within the meaning of article 1:1 of the 2006 Act on Financial Supervision (Wet op het financieel toezicht) as amended from time to time unless one of the other exemptions or exceptions to the prohibition contained in Article 5:2 of the 2006 Act on Financial Supervision (Wet op het financieel toezicht) is applicable and the conditions attached to such exemption or exception are complied with.
 
People’s Republic of China.  This Offering Memorandum and Disclosure Statement has not been and will not be circulated or distributed in the People’s Republic of China (PRC) and no New Notes and New Preferred Stock have been offered or sold, nor will be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include Hong Kong, Macau and Taiwan. Neither this Offering Memorandum and Disclosure Statement nor any advertisement or other offering material may be distributed or published and no offer or sale of any New Notes and New Preferred Stock may be made in the PRC, except under circumstances that will result in compliance with applicable laws and regulations.
 
Portugal.  This Offering Memorandum and Disclosure Statement has not been nor will it be subject to the approval of the Portuguese Securities Market Commission (the “CMVM”). No approval action has been or will be requested from the CMVM that would permit a public offering of any of the New Notes and New Preferred Stock referred to in this Offering Memorandum and Disclosure Statement; therefore the same cannot be offered to the public in Portugal. Accordingly, no New Notes and New Preferred Stock may be offered, sold or delivered except in circumstances that will result in compliance with any applicable laws and regulations. In particular, this Offering Memorandum and Disclosure Statement and the Offers of New Notes and New Preferred Stock are only intended for qualified investors within the meaning of Article 30 of the Portuguese Securities Code (Código dos Valores Mobiliários).
 
Singapore.  The offer of New Notes and New Preferred Stock is made only to and directed at, and the New Notes and New Preferred Stock are only available to, persons in Singapore who are existing holders of the Old Notes previously issued by CIT Group Inc. or Delaware Funding. This Offering Memorandum and Disclosure Statement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Offering Memorandum and Disclosure Statement and any other document or material in connection with the Offers or sale, or invitation for subscription or purchase, of the New Notes and New Preferred Stock may not be circulated or distributed, nor may the New Notes and New Preferred Stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) existing holders of Old Notes or (ii) pursuant to, and in


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accordance with, the conditions of an exemption under any provision of Subdivision (4) of Division 1 of Part XIII of the Securities and Futures Act, Chapter 289 of Singapore.
 
Spain.  The New Notes and New Preferred Stock will not be offered, sold or distributed in Spain, except in circumstances which do not constitute a public offer of securities in Spain within the meaning of the Spanish Securities Market Law (Ley 24/1988, de 28 de Julio, del Mercado de Valores), as amended and restated, or without complying with all legal and regulatory requirements under Spanish securities laws. The New Notes, New Preferred Stock and the Offering Memorandum and Disclosure Statement have not been registered with the Spanish Securities Market Commission (Comision Nacional del Mercado de Valores) and therefore the Offering Memorandum and Disclosure Statement are not intended for any public offer of the New Notes or Preferred Stock in Spain.
 
Switzerland.  The New Notes and New Preferred Stock may not be publicly offered, sold or advertised, directly or indirectly, in or from Switzerland. Neither this Offering Memorandum and Disclosure Statement nor any other offering or marketing material relating to CIT or the New Notes or New Preferred Stock constitutes a prospectus as that term is understood pursuant to article 652a or 1156 of the Swiss Federal Code of Obligations (Schweizerisches Obligationenrecht), and neither this document nor any other offering material relating to CIT or the New Notes or New Preferred Stock may be publicly distributed or otherwise made publicly available in Switzerland.
 
United Kingdom.  This communication is not being made and has not been approved by an authorized person for the purpose of section 21 of the Financial Services and Markets Act 2000 (the “Act”). Accordingly, this communication is not being distributed to, and must not be passed onto, the general public in the United Kingdom save in circumstances where section 21(1) of the Act does not apply. This communication is only directed at persons who (i) are outside the United Kingdom or (ii) are investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Financial Promotion Order”) or (iii) are high net worth entities or other persons to whom it may lawfully be communicated falling within Article 49(2)(a) to (e) of the Financial Promotion Order or (iv) fall within Article 43 of the Financial Promotion Order (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.
 
 
The New Notes and New Preferred Stock will initially be available in book-entry form only. We expect that each series of New Notes will be issued in the form of one or more registered global notes. The global notes will be deposited with, or on behalf of, DTC and registered in its name or in the name of Cede & Co., its nominee. Beneficial interests in the global notes will be shown on, and transfers of beneficial interests in the global notes will be effected only through, records maintained by DTC and its participants. After the initial issuance of the global notes, certificated notes will be issued in exchange for global notes only in the limited circumstances set forth in the applicable indenture governing the New Notes. See “Book-Entry, Delivery and Form.”
 
NOTICE TO NEW HAMPSHIRE RESIDENTS
 
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE UNIFORM SECURITIES ACT, 1955, AS AMENDED, WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS


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OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
 
Certain statements contained in this Offering Memorandum and Disclosure Statement are “forward-looking statements” within the meaning of applicable federal securities laws. All statements contained herein that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “could,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “potential,” “project,” “target” and similar expressions are generally intended to identify forward-looking statements. All statements contained in this Offering Memorandum and Disclosure Statement, other than statements of historical fact, including without limitation, statements about our plans, strategies, prospects and expectations regarding future events and our financial performance, are forward-looking statements that involve certain risks and uncertainties. While these statements represent our current judgment on what the future may hold, and we believe these judgments are reasonable in the circumstances, these statements are not guarantees of any events or financial results, and our actual results may differ materially. You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this Offering Memorandum and Disclosure Statement, including the Projections of Certain Financial Data Following Consummation of Plan of Reorganization and the Liquidation Analysis, are made only as of the date of this Offering Memorandum and Disclosure Statement. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We undertake no obligation to update publicly these forward-looking statements to reflect new information, future events or otherwise, except as required by law. You should, however, review the factors and risks we describe in the reports we file from time to time with the SEC. All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. We cannot assure you that projected results or events will be achieved. Factors that could cause our actual results to be materially different from our expectations include those factors described herein under the caption “Risk Factors” and “Risk Factors Affecting the Plan of Reorganization” and in documents incorporated herein by reference, including, among others, the following:
 
  •  capital markets liquidity,
 
  •  risks of a continuation or worsening of the economic recession,
 
  •  industry cycles and trends,
 
  •  uncertainties associated with risk management, including credit, prepayment, asset/liability, interest rate and currency risks,
 
  •  adequacy of reserves for credit losses,
 
  •  risks inherent in changes in market interest rates and quality spreads,
 
  •  funding opportunities, deposit taking capabilities and borrowing costs,
 
  •  risks that the Senior Credit Facility (as defined below) with Barclays Bank and certain lenders will not provide the liquidity the Company is seeking due to material increases in customer drawdowns on outstanding commitments,
 
  •  risks that the Company will be unsuccessful in its efforts to effectuate a comprehensive restructuring of its capital structure,
 
  •  risks that the Company will be unsuccessful in its efforts to consummate the proposed recapitalization transaction following consummation of the Offers,


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  •  risks if the Company seeks protection under the Bankruptcy Code,
 
  •  risks that the Company will be unable to comply with the terms of the Written Agreement with the Federal Reserve Bank of New York or the Orders of the Federal Deposit Insurance Corporation and Utah Department of Financial Institutions,
 
  •  risks that banking regulators will not provide approval for the Company to originate certain types of business or products through CIT Bank,
 
  •  risks that the Company will be required to divest CIT Bank if the Company files for bankruptcy or for other reasons,
 
  •  conditions and/or changes in funding markets, including commercial paper, term debt and the asset-backed securitization markets,
 
  •  risks associated with the value and recoverability of leased equipment and lease residual values,
 
  •  application of fair value accounting in volatile markets,
 
  •  application of goodwill accounting in a recessionary economy,
 
  •  changes in laws or regulations governing our business and operations,
 
  •  risks that a bankruptcy filing will harm our customer relationships and cause us to lose revenues,
 
  •  changes in competitive factors,
 
  •  inability to retain management or hire employees through the restructuring, including because of regulatory limits on our ability to pay retention bonuses,
 
  •  demographic trends,
 
  •  future acquisitions or dispositions of businesses or asset portfolios, and
 
  •  regulatory changes and/or developments.
 
INDUSTRY AND MARKET DATA
 
In this Offering Memorandum and Disclosure Statement, we rely on and refer to information and statistics regarding our industry. We obtained this market data from independent industry publications or other publicly available information. Although we believe that these sources are reliable, we have not independently verified and do not guarantee the accuracy and completeness of this information.
 
INCORPORATION BY REFERENCE; ADDITIONAL INFORMATION
 
CIT is “incorporating by reference” the information it files with the SEC into this Offering Memorandum and Disclosure Statement, which means that CIT is disclosing important information to you by referring you to those documents. Information that is incorporated by reference is an important part of this Offering Memorandum and Disclosure Statement. Certain information that CIT files after the date of this Offering Memorandum and Disclosure Statement with the SEC will automatically update and supersede the information included or incorporated by reference herein. CIT incorporates by reference into this Offering Memorandum and Disclosure Statement the documents listed below, which were filed with the SEC, and such documents form an integral part of this Offering Memorandum and Disclosure Statement:
 
  •  Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the audited consolidated financial statements as of December 31, 2008 and 2007, and for each of the three years in the period ended December 31, 2008, and the audit report from the independent registered public accounting firm, have been updated with the documents included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 1, 2009),
 
  •  Definitive Proxy Statement filed with the SEC on April 1, 2009;


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  •  Quarterly Report on Form 10-Q for the quarter ended March 31, 2009;
 
  •  Quarterly Report on Form 10-Q for the quarter ended June 30, 2009;
 
  •  Current Reports on Form 8-K filed on January 5, 2009, January 7, 2009, January 22, 2009, February 24, 2009, April 23, 2009, April 30, 2009, May 7, 2009, May 18, 2009, May 22, 2009, June 18, 2009, July 21, 2009, July 30, 2009, August 7, 2009, August 13, 2009, August 17, 2009 (Item 5.03 only), September 1, 2009, and September 4, 2009; and
 
  •  Current Report on Form 8-K/A filed on September 11, 2009.
 
CIT is also incorporating by reference any future filings CIT makes with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date of this Offering Memorandum and Disclosure Statement and prior to the expiration or termination of the Offers, except that, unless otherwise indicated, CIT is not incorporating any information furnished under Item 2.02 or Item 7.01 of any Current Report on Form 8-K. Any statement contained in this Offering Memorandum and Disclosure Statement or in a document (or part thereof) incorporated or considered to be incorporated by reference in this Offering Memorandum and Disclosure Statement shall be considered to be modified or superseded for purposes of this Offering Memorandum and Disclosure Statement to the extent that a statement contained in this Offering Memorandum and Disclosure Statement or in any other subsequently filed document (or part thereof) which is or is considered to be incorporated by reference in this Offering Memorandum and Disclosure Statement modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. Any statement so modified or superseded shall not be considered, except as so modified or superseded, to constitute part of this Offering Memorandum and Disclosure Statement.
 
Copies of each of the documents incorporated by reference into this Offering Memorandum and Disclosure Statement (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) may be obtained at no cost, by contacting the information agent at its telephone number set forth on the back cover of this Offering Memorandum and Disclosure Statement.
 
CIT is subject to the informational requirements of the Exchange Act, and in accordance therewith files reports and information statements and other information with the SEC. You may read and copy any document CIT files with the SEC at the SEC’s public reference room at 100 F Street, N.E., Washington, DC 20549. You may also obtain copies of the same documents from the public reference room of the SEC in Washington by paying a fee. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. CIT’s filings are also electronically available from the SEC’s Electronic Document Gathering and Retrieval System, which is commonly known by the acronym “EDGAR,” and which may be accessed at www.sec.gov, as well as from commercial document retrieval services.
 
Anyone who receives this Offering Memorandum and Disclosure Statement may obtain a copy of the indenture for the New Notes without charge by writing to the Company at Investor Relations Department, CIT Group Inc., 505 Fifth Avenue, New York, New York 10017.


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SUMMARY
 
This summary highlights some basic information contained, or incorporated by reference, in this Offering Memorandum and Disclosure Statement to help you understand our business, the Offers and the Plan of Reorganization. It does not contain all of the information that is important to you. You should carefully read this Offering Memorandum and Disclosure Statement to understand fully the terms of the Offers and the Plan of Reorganization, as well as the information incorporated by reference herein. You should pay special attention to the information in the section entitled “Risk Factors” beginning on page 28 and the section entitled “Cautionary Statement Regarding Forward-Looking Statements.”
 
Unless stated otherwise, the discussion in this Offering Memorandum and Disclosure Statement of our business includes the business of CIT Group Inc. and its direct and indirect consolidated subsidiaries. Unless otherwise indicated or the context otherwise requires, (i) when discussing the CIT Offers, the CIT Old Notes and the Series A Notes, “CIT,” “the Company,” “we,” “us” and “our” refer to CIT Group Inc. and its direct and indirect subsidiaries on a consolidated basis; (ii) when discussing the Delaware Funding Offers, the Delaware Funding Old Notes and the Series B Notes, “the Company,” “we,” “us” and “our” refer to Delaware Funding; and (iii) when discussing the Offers, the Old Notes and the New Notes, “the Company,” “we,” “us” and “our” refer to CIT Group Inc. and its direct and indirect subsidiaries on a consolidated basis, including Delaware Funding.
 
Overview
 
Through the consummation of the Offers or Plan of Reorganization, we intend to restructure the Company’s capital structure to improve the Company’s liquidity position, enhance our capital levels, and accelerate our return to profitability while providing adequate time to execute the business restructuring strategy. Upon the terms and subject to the conditions set forth in this Offering Memorandum and Disclosure Statement and the accompanying Letter of Transmittal and/or Ballot, we are offering to exchange the Old Notes for the New Notes and/or New Preferred Stock in the Offers and soliciting acceptances of the Plan of Reorganization.
 
In connection with the transactions contemplated by the Offers and the Plan of Reorganization, you may elect to (i) tender your Old Notes in the Offers and vote to accept the Plan of Reorganization, (ii) vote to accept the Plan of Reorganization without tendering your Old Notes, (iii) vote to reject the Plan of Reorganization without tendering your Old Notes or (iv) take no action with respect to the Offers and the Plan of Reorganization. In the event that you choose to take no action with respect to the Offers and the Plan of Reorganization, you will have rejected the Offers and will have no bearing on the approval of the Plan of Reorganization.
 
If we consummate the Offers, tendering holders of Old Notes will receive the consideration described in this Offering Memorandum and Disclosure Statement.
 
If we do not consummate the Offers and elect to proceed with a restructuring under the Plan of Reorganization, all holders of Old Notes will receive the treatment provided in the Plan of Reorganization upon consummation of the Plan of Reorganization (if approved).
 
If the Offers are not consummated and the Plan of Reorganization is not accepted, the Company expects that it will likely be necessary to file for bankruptcy protection without the benefit of an agreed plan of reorganization, which may require significant and accelerated asset liquidations. No decision has been made by the Company’s board of directors to file petitions for relief under the Bankruptcy Code.
 
Our Business
 
CIT Group Inc. is a bank holding company providing commercial financing and leasing products and management advisory services to clients in a wide variety of industries. The Company operates primarily in North America, with locations in Europe, Latin America, Australia and the Asia-Pacific region. CIT Group Inc.’s primary regulator is the Federal Reserve Bank of New York and CIT Bank’s primary regulators are the


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Federal Deposit Insurance Corporation (“FDIC”) and the Utah Department of Financial Institution (“UDFI”). Delaware Funding is an indirect subsidiary of CIT Group Inc. that is a non-operating funding vehicle.
 
The Company provides financing and leasing capital to its clients and their customers in over 30 industries and 50 countries. The Company’s businesses focus on commercial clients with a particular emphasis on middle market companies. Through its corporate finance, transportation finance, trade finance and vendor finance segments, the Company serves clients in a wide variety of industries including aerospace and rail, manufacturing, wholesaling, retailing, healthcare, communications, media and entertainment and various service-related industries. The Company is also a leader in small business lending with an emphasis on originating U.S. Small Business Administration (“SBA”) loans. We previously offered student loans through our consumer segment, but we discontinued originations of student loans in 2008 and are running off the remaining portfolio.
 
The Company has both bank and non-bank subsidiaries. CIT Bank, which amended its charter in December 2008 from an industrial bank to a state-chartered bank in Utah, is the Company’s primary bank subsidiary. CIT Bank, which had historically funded consumer loans, shifted its focus to commercial lending in late 2007/early 2008. In addition, the Company has regulated subsidiaries in a number of other jurisdictions, including but not limited to the United Kingdom, France, Germany, Sweden, and Brazil. The Company’s non-bank subsidiaries, both in the U.S. and abroad, currently house the majority of the Company’s assets and operations. As a bank holding company, CIT Group Inc. is prohibited from certain business activities including certain of its insurance services and its equity investment activities, and may have to exit these activities within a specified time period.
 
Background
 
The global financial market crisis and negative economic conditions materially and adversely affected the Company’s liquidity position and operating results over the past 30 months. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern.
 
The Company’s business historically relied upon access to both the secured and unsecured debt capital markets for cost-efficient funding. The disruptions in the credit markets coupled with the global economic deterioration that began in 2007, and downgrades in the Company’s credit ratings to well below investment grade in 2008 and 2009, materially worsened the Company’s liquidity situation and left it without access to the unsecured debt market and impaired its access to cost efficient secured financing. Since January 2008 the Company obtained interim financing through secured financings and reduced financing needs through balance sheet contraction.
 
As part of its overall plan to transition to a bank-centric business model, the Company (i) applied to participate in the FDIC’s Temporary Liquidity Guarantee Program (“TLGP”), which would have enabled the Company to issue government guaranteed debt and (ii) applied for exemptions under Section 23A of the Federal Reserve Act (“Section 23A”) to transfer a significant portion of its U.S. assets to CIT Bank, which would have enabled the Company to generate liquidity by leveraging the deposit-taking capabilities of CIT Bank. In April 2009, the Federal Reserve granted the Company a partial Section 23A waiver to transfer $5.7 billion of government-guaranteed student loans to CIT Bank. In connection with this transaction, CIT Bank assumed $3.5 billion in debt and paid $1.6 billion in cash to CIT Group Inc.
 
On July 15, 2009, the Company was advised that there was no appreciable likelihood of additional government support being provided in the near term, through either participation in the FDIC’s TLGP or further approvals of asset transfers under its pending Section 23A exemption request. Following the announcement of these developments, the Company experienced higher draws on financing commitments which accelerated the degradation of its liquidity position. This liquidity situation, continued portfolio deterioration and the weak economic and credit environment, all weighed heavily on the Company’s recent financial performance.
 
In order to meet its near-term liquidity needs, the Company entered into a senior secured term loan facility on July 20, 2009, as amended and restated on July 29, 2009 and as further amended on August 3,


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2009, August 31, 2009 and October 1, 2009, for up to $3 billion provided by a syndicate initially comprised of certain holders of the Company’s Old Notes (the “Senior Credit Facility”). As of August 4, 2009, the Company had drawn the entire $3 billion in financing under the Senior Credit Facility. The Company and certain of its subsidiaries are borrowers under the Senior Credit Facility (collectively, the “Borrowers”). The Company and all of its current and future domestic wholly owned subsidiaries, with the exception of CIT Bank and other regulated subsidiaries, special purpose entities, and immaterial subsidiaries, are guarantors of the Senior Credit Facility (the “Credit Facility Guarantors”).
 
The Senior Credit Facility is secured by a perfected first priority lien on substantially all unencumbered assets of the Borrowers and Credit Facility Guarantors (other than CIT Group Inc.), and also includes 65% of the voting and 100% of the non-voting stock of other first-tier foreign subsidiaries (other than direct subsidiaries of CIT Group Inc.), in each case owned by a Credit Facility Guarantor, 100% of the stock of CIT Aerospace International and between 49% and 65% of certain other material non-U.S., non-regulated subsidiaries.
 
The Senior Credit Facility requires the Company to adopt and comply with a restructuring plan acceptable to a majority in number of a committee comprised of certain lenders under the Senior Credit Facility (the “Steering Committee”) by October 1, 2009. This requirement is subject to the fiduciary duty of the Company’s board of directors to act in the best interests of the Company and its stakeholders. The Company has developed the Offers and the Plan of Reorganization described in this Offering Memorandum and Disclosure Statement in consultation with the Steering Committee.
 
Business Restructuring Strategy
 
The Company and its board of directors, in consultation with its advisors, continue to develop and execute the Company’s business restructuring strategy, which has the following objectives:
 
Financial Strength
 
  •  targeting a capital structure with significantly less leverage and establishing capital ratios well in excess of our regulatory standards and in line with the most financially sound of our peers;
 
  •  achieving sufficient liquidity and restructuring our debt maturity schedule to reduce reliance on the capital markets; and
 
  •  positioning the Company for a return to profitability and investment grade ratings.
 
Business Model
 
  •  optimizing our portfolio of businesses and organizational structure, which may include identifying businesses or portfolios to be liquidated or sold over time;
 
  •  identifying the core businesses that, subject to regulatory approvals, would operate in CIT Bank, including certain core small and middle market financing businesses; and
 
  •  aligning the funding model to reflect the changes in our business model and diversifying CIT Bank’s funding to include commercial deposits, retail deposits, asset-backed financings and a reduced proportion of brokered deposits.
 
By successfully implementing its business restructuring strategy, the Company’s goal is to transition to a smaller company focused on serving small- and mid-sized commercial businesses. The Company’s goal is to create a sustainable and profitable business model by reducing balance sheet exposure through completion of targeted asset sales and net portfolio run-off and through facilitating a return to the capital markets by achieving investment grade ratings. In addition, the Company is seeking to reduce its leverage and carry a manageable interest burden going forward. The Company aims to position itself to execute a transition to a bank-centric business model by seeking to obtain regulatory support for our business restructuring strategy and emerging from the restructuring with our bank holding company status as a source of strength for the Company, including CIT Bank.


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The Company commenced execution of its business restructuring strategy by entering into the Senior Credit Facility and consummating the cash tender offer described below for the outstanding August 17 Notes (as defined below) and continues its restructuring efforts with the transactions contemplated by the Offers and the Plan of Reorganization (together, the “Restructuring Plan”). We believe that the successful implementation of our business restructuring strategy, including the Restructuring Plan, will be viewed favorably by our regulators and will position us to request approval to transfer certain business platforms into CIT Bank over the next 12 to 18 months.
 
Restructuring Plan
 
The Company’s principal objective in developing the restructuring of its capital structure contemplated by the Restructuring Plan was to ensure that maximum franchise value is recognized for its stakeholders. Additionally, the Restructuring Plan satisfies the applicable requirements of the Senior Credit Facility. The Company believes that the Restructuring Plan, whether implemented through the Offers or through the Plan of Reorganization:
 
  •  significantly reduces leverage by lowering the Company’s aggregate debt balance;
 
  •  increases the total capital ratio to well in excess of 13%, which exceeds regulatory requirements and mitigates the risk of future loss to creditors;
 
  •  provides a sufficient period of time (approximately three years) to implement a revised funding plan before the Company faces significant debt maturities;
 
  •  minimizes business disruptions and potential customer defections by limiting uncertainty as to the viability of the Company as a going concern and the period of time during which the Company is subject to such uncertainty;
 
  •  positions the Company for a return to investment grade ratings;
 
  •  provides the Company with sufficient operating flexibility to execute the balance of the Company’s business restructuring strategy;
 
  •  positions the Company to seek approval from regulators for future transfers of business platforms to CIT Bank;
 
  •  offers consideration based on position in the existing capital structure; and
 
  •  preserves significantly higher value for the Company than a liquidation of CIT or a bankruptcy filing without an approved plan of reorganization.
 
The principal elements of the Restructuring Plan include:
 
  •  conducting the Offers and soliciting of acceptances of the Plan of Reorganization so that after the Expiration Date, we may determine based on the participation rate in the Offers and other circumstances at the time, whether it is in the best interests of the Company and its stakeholders to consummate the Offers or to file for bankruptcy and seek confirmation of the Plan of Reorganization;
 
  •  negotiating a new or amended secured credit facility to provide additional liquidity;
 
  •  continuing negotiations with certain other noteholders and lenders to obtain amendments or waivers that would result in an improvement to our liquidity and capital position, including negotiating the restructuring of our revolving bank credit agreements and two other term loan agreements pursuant to which each accepting lender would receive, in satisfaction of all amounts owed to such lender, obligations under a new credit facility providing economically equivalent terms as the New Notes (the “Junior Credit Facility”) and New Preferred Stock; and
 
  •  if the Offers are consummated, taking the steps necessary to effectuate the Recapitalization described below.


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Upon successful implementation of the Restructuring Plan — whether through the Offers or the Plan of Reorganization — the Company believes it will be better-positioned to pursue the remainder of its business restructuring strategy including potential significant business line restructurings and/or dispositions.
 
Recapitalization
 
If we consummate the Offers, tendering holders of Old Notes will receive the consideration described in this Offering Memorandum and Disclosure Statement. As soon as practicable thereafter, subject to the affirmative vote of our stockholders, we intend to seek to effectuate certain recapitalization transactions (the “Recapitalization”), including to increase our authorized common shares and reclassify our outstanding preferred stock, including the New Preferred Stock, into common stock. Following the consummation of the Recapitalization, assuming 100% participation in the Offers and approval by the United States Department of the Treasury of the reclassification into common stock of its Fixed Rate Cumulative Perpetual Preferred Stock, Series D (the “Series D Preferred Stock”), we will have only common stock and no preferred stock issued and outstanding, and holders of the New Preferred Stock will hold 94.0% of the equity and voting power of the Company, holders of our currently outstanding preferred stock will hold 3.5% of the equity and voting power of the Company, and holders of our currently outstanding common stock will hold 2.5% of the equity and voting power of the Company. If we receive the minimum level of participation in the Offers required to satisfy the Liquidity and Leverage Condition, and assuming approval from the United States Department of the Treasury as noted above, following consummation of the Recapitalization, holders of the New Preferred Stock will hold approximately 92.5% of the equity and voting power of the Company, holders of our currently outstanding preferred stock will hold approximately 5.0% of the equity and voting power of the Company and holders of our currently outstanding common stock will hold approximately 2.5% of the equity and voting power of the Company. For more information, see “Recapitalization After the Offers” and “Risk Factors — Risks Related to the Recapitalization.”
 
Summary Comparison of Treatment in the Offers and the Plan of Reorganization
 
The table below summarizes the treatment of holders of Old Notes and the other noteholders, claimants and interest holders under the Offers and the Plan of Reorganization. Under the Plan of Reorganization, the holders of Old Notes will receive the New Notes as well as shares of newly issued common stock (the “New Common Interests”) and, in certain instances, Contingent Value Rights (“CVRs”). Each entry under the “Treatment Under” columns represents the principal amount of New Notes per $1 of existing securities. This summary does not reflect the potential effect of the Recapitalization described above, which we intend to pursue if the Offers are consummated.
 
         
    Treatment Under
Security
  The Offers   The Plan of Reorganization
 
Senior Unsecured Debt Maturing 2009
  90 cents of New Notes, plus New Preferred Stock   70 cents of New Notes, plus New Common Interests
Senior Unsecured Debt Maturing 2010(1)
  85 cents of New Notes, plus New Preferred Stock   70 cents of New Notes, plus New Common Interests
Senior Unsecured Debt Maturing
2011 — 2012
  80 cents of New Notes, plus New Preferred Stock   70 cents of New Notes, plus New Common Interests
Senior Unsecured Debt Maturing
2013 — 2018(2)
  70 cents of New Notes, plus New Preferred Stock   70 cents of New Notes, plus New Common Interests
Senior Unsecured Debt Maturing 2021 or Later
  Not Solicited in the Offers   Not affected
Structurally Senior Unsecured Debt(3)
  100 cents of New Notes   100 cents of New Notes
Subordinated Debt
  New Preferred Stock   New Common Interests and Contingent Value Rights
 
 
(1) Includes 5.38% Notes due June 15, 2019, with a put right on June 15, 2010.
 
(2) Includes 5.8% Senior Notes due October 1, 2036, with a put right on October 1, 2018.
 


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    Treatment Under
Security
  The Offers   The Plan of Reorganization
 
Junior Subordinated Debt
  New Preferred Stock   New Common Interests and Contingent Value Rights
Preferred Stock, Series A, B, C and D
  Not Solicited in the Offers(4)   No Recovery
Common Stock
  Not Solicited in the Offers(4)   No Recovery
 
 
(3) The structurally senior unsecured debt includes the Delaware Funding Old Notes. Certain other debt securities of our subsidiaries which are structurally senior unsecured debt are not included in the Offers and not affected by the Plan of Reorganization, including notes issued by CIT Group (Australia) Limited.
 
(4) The existing series of preferred stock and the existing common stock have not been included in the Offers or the solicitation of acceptances for the Plan of Reorganization. If the Offers are consummated, the issuance of the New Preferred and the proposed Recapitalization will result in substantial dilution to our existing equity holders, leaving such holders with little economic or voting interest in the Company.
 
The Offers
 
Consummation of the Restructuring Plan through the Offers provides several benefits, including:
 
  •  an immediate solution to our near term liquidity issues;
 
  •  different, and in some instances, more desirable, consideration for holders of the Old Notes; and
 
  •  ability to effectuate the restructuring in a short period of time.
 
Consummating the Offers also avoids the potential need to seek bankruptcy protection and the related costs and disruptions. Unless our mitigation efforts are successful, these costs could be material and may include:
 
  •  direct costs of bankruptcy, including fees paid to a trustee and to attorneys and other professionals;
 
  •  costs of terminations of defaulted borrowing facilities; and
 
  •  costs of unwinding derivative transactions used to hedge interest rate and currency risks.
 
Additionally, a bankruptcy filing could have other effects on our business that are more difficult to measure, including indirect costs, such as an adverse impact on:
 
  •  new business originations through referral sources and other intermediaries that are concerned about our ability to perform;
 
  •  new business originations directly with customers that are concerned about our ability to perform and our long-term viability;
 
  •  our existing portfolio of customers seeking new funding sources to replace their existing relationship with us, including refinancing revolving credit facilities and developing new factoring relationships; and
 
  •  our brand equity of the negative connotations surrounding a bankruptcy filing.
 
Other considerations related to the Offers include:
 
  •  the possibility that not all holders of Old Notes may tender their Old Notes into the Offers, resulting in less debt being extinguished;
 
  •  the obligation to make principal payments on Old Notes that are not exchanged on a less desirable maturity schedule; and
 
  •  the need to effectuate the Recapitalization if we consummate the Offers in order to streamline our capital structure.

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The Plan of Reorganization
 
Consummation of the Restructuring Plan through the Plan of Reorganization provides several benefits, including:
 
  •  providing for the same treatment of all holders of claims in the same class whether or not they vote to accept the Plan of Reorganization, thereby resolving our near term liquidity issues without the “holdout” problem presented by the Offers in connection with holders of Old Notes that do not participate in the Offers; and
 
  •  eliminating the need to effectuate the Recapitalization following consummation of the Offers in order to streamline our capital structure and provide holders of Old Notes with shares of our common stock.
 
Other considerations with respect to the Plan of Reorganization include:
 
  •  direct and incremental financing costs to the Company related to the termination of defaulted borrowing facilities, unwinding derivative transactions and the payment of additional fees and expenses;
 
  •  disruptions to our business, employees and customers and a reduction in our ability to consummate a restructuring on an expedited basis;
 
  •  incremental borrowings to satisfy cash outflows triggered by a bankruptcy filing by CIT Group Inc.; and
 
  •  reputational damage resulting from the filing of a bankruptcy case.
 
Effects of Bankruptcy Filing without an Approved Plan of Reorganization
 
It is the Company’s intent to pursue its Restructuring Plan through the Offers or the Plan of Reorganization. If, however, the Offers are not consummated and the Plan of Reorganization is not approved, the Company expects that it will likely be necessary to file for bankruptcy protection, without the benefit of an agreed plan of reorganization, or liquidate CIT. In the event of a bankruptcy filing without an agreed plan of reorganization, we would likely be subject to a lengthy and costly bankruptcy process and such a filing would cause substantial damage to our business and reputation. In addition, such a bankruptcy filing would present obstacles to conducting our business, including the inability to insulate our operating units from the proceedings, additional uncertainty and constraints with respect to our liquidity and increased risk of seizure of CIT Bank by its regulators.
 
Conditions to the Consummation of the Offers and Plan of Reorganization
 
Consummation of the Offers is subject to a number of conditions, including a Liquidity and Leverage Condition that states that the Offers cannot be consummated unless a sufficient number of Old Notes are tendered into the exchange, and/or certain other debt instruments have been renegotiated so that, after giving effect to the Offers and such renegotiations, the face amount of the Company’s total debt would be reduced by at least $5.7 billion and its remaining unsecured debt maturities (excluding foreign vendor facilities) would not exceed $500 million in 2009, $2.5 billion during the period from 2009 to 2010, $4.5 billion during the period from 2009 to 2011 and $6.0 billion for the period from 2009 to 2012, in each case on a cumulative basis. The Liquidity and Leverage Condition must be met in order for us to consummate the Offers and cannot be waived. In addition, whether or not the conditions to the Offers are satisfied, we may file for bankruptcy and seek to confirm the Plan of Reorganization if we conclude that it would be more advantageous or expeditious for us to do so.
 
Under the Plan of Reorganization a class is deemed to accept their treatment under a plan if 662/3% in amount and more than 50% in number of the claims voting on the Plan of Reorganization vote to accept it. The Plan of Reorganization contemplates only CIT Group Inc. and Delaware Funding being plan proponents and commencing bankruptcy cases. It would be our intention to seek Bankruptcy Court (as defined below) approval to continue to operate the business of all of our non-debtor operating subsidiaries in the ordinary course of business.


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Certain Securities Not Addressed in the Offers or Plan of Reorganization
 
Other than the 5.80% Senior Notes due October 1, 2036 (CUSIP 12560PFP1) and the 6.10% Junior Subordinated Notes due March 15, 2067 (CUSIP 125577AX4) issued by CIT Group Inc., our debt securities maturing after December 31, 2018 have not been included in the Offers and will be reinstated pursuant to the Plan of Reorganization. In addition, the Equity Units (CUSIP 125581405) issued by CIT Group Inc. have not been included in the Offers but are included in solicitation of acceptances for the Plan of Reorganization. Such holders will be able to select option 2 or option 3 only. Further, the 6.00% Fixed Rate Notes due 3 March 2011 (CUSIP AU300CGAL010) and the 3 month BBSW plus 34bp Floating Rate Notes due 3 March 2011 (CUSIP AU300CGAL028) issued by CIT Group (Australia) Limited, a subsidiary of CIT Group Inc., have not been included in the Offers and will be reinstated pursuant to the Plan of Reorganization. As a result, holders of these notes and other debt securities will not be entitled to participate in the Offers and will be treated as indicated in the Plan of Reorganization.
 
Board of Directors
 
CIT Group Inc.’s board of directors (which as of the date of this Offering Memorandum and Disclosure Statement has ten members) has determined that the appropriate size of the board of directors on and after the consummation of the Offers or the Plan of Reorganization would be 13 directors. At the request of and in cooperation with the Steering Committee, CIT Group Inc. has engaged Spencer Stuart, an internationally recognized director search firm, to assist the Nominating and Governance Committee of the board of directors (the “N&GC”) in identifying, interviewing and selecting candidates for the expanded board of directors and/or replacing members of the present board who may decide to step down from the board of directors. Spencer Stuart will identify candidates who are independent of CIT Group Inc., not affiliated with, or representatives of, any of the members of the Steering Committee, and who possess the qualifications, skills and experience specified by the N&GC. The Steering Committee will recommend to the N&GC candidates for the board of directors from among the qualified individuals identified by Spencer Stuart. The candidates recommended by the Steering Committee that are approved by the N&GC will be reviewed with the Federal Reserve Bank of New York and, to the extent approved by the Federal Reserve Bank of New York, will be submitted to the full board of directors for consideration and appointment to the board of directors. Following the consummation of the Offers or the Plan of Reorganization, the board of directors will include a minority of directors that were recommended to the N&GC by the Steering Committee.
 
Our Business Post-Restructuring Plan
 
Following the consummation of the Offers or the Plan of Reorganization, the Company will continue to pursue its broader business restructuring strategy. The Restructuring Plan — whether implemented through the Offers or the Plan of Reorganization — will significantly enhance CIT’s capital structure and liquidity position. Management’s expectations are that CIT’s capital ratio would be in excess of 15%; however, the ultimate capital ratio will be dependent on market conditions, valuations and other factors. The Company’s financing needs would be significantly reduced over the next three years. Moreover, the resolution of the short term liquidity threat facing CIT will reduce uncertainty surrounding the Company and should allow it to reinforce its leadership position in its core small business and middle-market financing franchises.
 
A strong capital position and liquidity profile should afford CIT the time and resources required to execute on its broad business restructuring strategy, including refinement of its business model, liquidation or sale of select businesses or portfolios, efficiency enhancements and long term bank-centric funding strategy. CIT will continue to focus on providing financing solutions to small and medium size enterprises, a market segment that remains relatively underserved by both large national banks and smaller regional and local banks. We believe that the opportunities in this segment will be even more compelling in the future as many independent financing companies have not been able to survive the current economic downturn and few banks have the focused sales, underwriting and operational know-how required to serve this niche market. Business platforms such as Corporate Finance, Trade Finance, Vendor Finance and Small Business Lending are suitable to operate in CIT Bank; however, we will evaluate all of our businesses to determine the optimal portfolio mix and size that can be supported by our long term funding model.


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Bank-centric diversified funding is at the core of CIT’s long-term funding strategy. CIT Bank remains central and critical to the long-term growth and success of the Company. We continue to have regular discussions with our regulators and expect to emerge from the restructuring with our bank holding company as a source of strength for CIT Bank. We hope to elicit regulatory support for our broader bank strategies and anticipate requesting approval to transfer certain business platforms into CIT Bank within 12 to 18 months following consummation of the restructuring transactions. If approved, this would allow us to operate those businesses in the bank on a go-forward basis although we cannot assure you that any required approvals will be received. In the long term we plan to diversify our funding base at CIT Bank by adding commercial and retail deposits through organic growth and potential strategic transactions.
 
At the completion of our restructuring efforts, we believe CIT will be a more streamlined commercial lender focused on serving small and medium-sized enterprises. Subject to regulatory approvals, most of our core platforms would be integrated into CIT Bank, providing an opportunity to access cost-efficient funding through deposits in the short term and expanded deposits (both commercial and retail) and capital markets in the long term. Our streamlined business model combined with stable and competitive funding would position us to seek a return to profitability. Finally, we expect the value of the CIT brand to grow again as we continue to provide a unique combination of financial, intellectual and relationship capital to markets we have served for more than 100 years.
 
Certain Regulatory Considerations
 
The Company’s Written Agreement (as defined below) with the Federal Reserve Bank of New York requires the prior written approval of the Federal Reserve Bank of New York for the incurrence of debt by the Company other than in the ordinary course of business. The Company hopes to obtain such approval in connection with the issuance of the New Notes contemplated by this Offering Memorandum and Disclosure Statement. In addition, during the implementation of its business restructuring strategy the Company expects to continue to comply with the cease and desist orders issued to CIT Bank by each of the FDIC and the UDFI on July 16, 2009 in connection with the diminished liquidity of CIT. Further, the Company has met with the United States Department of the Treasury and the Federal Reserve Bank of New York to describe the restructuring transactions contemplated by this Offering Memorandum and Disclosure Statement. We have submitted a request for approval of the restructuring transactions contemplated by this Offering Memorandum and Disclosure Statement to the Federal Reserve Bank of New York.
 
Other Recent Developments
 
Current Liquidity
 
The Company’s corporate cash portfolio (cash readily available to cover operating demands from across our business operations and maturing obligations) increased to approximately $2.3 billion at August 31, 2009, from $1.2 billion at June 30, 2009, driven by the $3 billion Senior Credit Facility that closed in July 2009. In total, we had approximately $6.8 billion of cash and cash equivalents at August 31, 2009 up from $4.5 billion at June 30, 2009, as proceeds from the Senior Credit Facility and portfolio collections more than offset the paydowns of approximately $1.1 billion of unsecured debt during the two-month period ended August 31, 2009. The August 31, 2009 cash position is comprised of $2.3 billion of corporate cash available to CIT and its non-bank operating subsidiaries, and approximately $4.5 billion of restricted cash, comprised of $2.6 billion of cash and short-term investments at CIT Bank and $1.9 billion of cash balances, related to securitizations and other miscellaneous cash.
 
The Company has significant maturities of unsecured debt in both the near term and future years. Estimated unsecured debt funding needs for the twelve months ending August 31, 2010 total approximately $7.6 billion. In the four months ended December 31, 2009, the Company has unsecured debt maturities of approximately $1.6 billion, including $0.8 billion of notes maturing in the first week of November. If these debt maturities were paid, the Company’s liquidity is expected to fall below $1 billion, which, in the Company’s experience, is inadequate to conduct normal operations.


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Estimated secured facilities maturities (which are generally repaid in tandem with underlying receivable maturities) are $5.3 billion for the twelve months ending August 31, 2010. There were two facilities with approximately $1.6 billion of availability at June 30, 2009 that were subject to renewal during the remainder of 2009. If the facilities are not renewed, the assets already held will remain outstanding and the obligations will be repaid out of the cash flows from the assets. During August, one of the facilities with approximately $1.2 billion of availability expired without being renewed. A replacement facility is currently being negotiated. In order to satisfy the Company’s funding needs, the Company will need to seek to extend debt maturities or sell assets to generate sufficient cash to retire the debt.
 
Goldman TRS Facility
 
On June 6, 2008, a wholly owned subsidiary of CIT executed a long-term, committed financing facility with Goldman Sachs International (“GSI”) that is structured and documented as a total return swap (“TRS”). The TRS is secured and is guaranteed by the Company and CIT Financial (Barbados) Srl. The maximum notional amount of the facility is $3 billion during the first ten years of the contract, and thereafter the maximum notional amount declines by $300 million per year for ten years. The arrangement obligates the CIT subsidiary to pay GSI an annual facility fee equal to 2.85% of the maximum notional amount for that year. The CIT subsidiary has the right to terminate the facility before maturity; however, if it did so, or if the facility was terminated by GSI due to a CIT default, including a bankruptcy of CIT, the governing documents state that the CIT subsidiary would be required to pay GSI a make whole amount equal to the discounted present value of the annual facility fee for its remaining term. The Company and GSI are currently in negotiations concerning an amendment to this facility but no amendment has been agreed to.
 
Tender Offer for Floating Rate Senior Notes due August 17, 2009
 
On July 20, 2009 the Company commenced a cash tender offer for its outstanding Floating Rate Senior Notes due August 17, 2009 (the “August 17 Notes”) upon the terms and conditions set forth in its offer dated July 20, 2009. The transaction was completed on August 17, 2009 in accordance with the terms and conditions of the offer.
 
Federal Reserve Bank of New York Written Agreement
 
On August 12, 2009, the Company entered into a written agreement (the “Written Agreement”) with the Federal Reserve Bank of New York. The Written Agreement requires regular reporting to the Federal Reserve Bank of New York, the submission of plans related to corporate governance, credit risk management, capital, liquidity and funds management, the Company’s business plan for the remainder of 2009 and for 2010, and the review and revision, as appropriate, of the Company’s consolidated allowances for loan and lease losses methodology. Prior written approval by the Federal Reserve Bank of New York is required for payment of dividends and distributions, incurrence of debt, other than in the ordinary course of business, and the purchase or redemption of stock. The Written Agreement requires notifying the Federal Reserve Bank of New York prior to the appointment of new directors or senior executive officers, and restrictions on indemnifications and severance payments.
 
Pursuant to the Written Agreement, the board of directors of the Company appointed a special compliance committee to monitor and coordinate the Company’s compliance with the Written Agreement. The Company submitted a Capital Plan and a Liquidity Plan, as well as a draft of the recapitalization plan, on August 27, 2009, as required by the Written Agreement. The Company is currently working with its outside advisors to prepare its Credit Risk Management Plan and to meet the other requirements of the Written Agreement. Further, the Company is preparing its Corporate Governance Plan and its Business Plan for submission to the Federal Reserve Bank of New York by October 26, 2009. The Company is continuing to provide periodic reports to the Federal Reserve Bank of New York as required by the Written Agreement. The Written Agreement will not be affected by the consummation of the Offers or of the Plan of Reorganization.


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Deferral of Junior Subordinated Debt Interest
 
On August 31, 2009, the Company provided a Notice of Continuance of Trigger Period (the “Notice”) to the holders of the Company’s junior subordinated notes due March 15, 2067 (the “Subordinated Notes”) with respect to the continuance of a Trigger Period (as defined in the indenture for the Subordinated Notes). As set forth in the Notice, a Trigger Event (as defined in the indenture for the Subordinated Notes) occurred requiring the Company to use commercially reasonable efforts to execute the Alternative Payment Mechanism (as defined in the indenture for the Subordinated Notes, the “APM”) to satisfy the September 15, 2009 interest payment. The Company was not able to execute the APM and therefore the Company was required to mandatorily defer interest on the Subordinated Notes. Accordingly, the Company provided notice of deferral for the September 15, 2009 interest payment to the holders of the Subordinated Notes. Subject to the terms of the indenture for the Subordinated Notes, deferred interest will continue to accrue and compound, as applicable, until payment is made.
 
Business Operations and Financial Performance
 
The liquidity constraints that we have been operating under, including events discussed earlier in this Summary, in addition to a weak economic and credit environment, continue to weigh heavily on the Company’s financial performance. Nevertheless, we believe that there still exists significant value in the Company’s commercial franchises. Despite the recent turmoil, CIT continues to hold market leading positions in its business segments including being the largest provider of factoring services, a top 3 aircraft and railcar lessor and one of a select few global vendor finance companies. In the third quarter of 2009, we anticipate the trade finance and transportation finance segments to both be profitable on a stand-alone basis, offset by losses in the corporate finance segment, and to a lesser extent the vendor finance unit. The Company will report its complete results for the quarter ended September 30, 2009 when it files its quarterly report on Form 10-Q.
 
Indenture Amendments
 
On October 1, 2009, CIT Group Inc. and Delaware Funding amended each of the indentures under which certain of their respective Old Notes were issued to provide guarantees of the principal, premium, if any, and interest on the Old Notes that are being offered New Notes in the Offers, and other monetary obligations under the indentures, by all of CIT Group Inc.’s current domestic wholly owned subsidiaries, with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries. The maximum aggregate liability of each guarantor under each of the guarantees under any indenture under which the old Notes were issued is limited to an aggregate of $50,000. This guarantee is subordinate to senior indebtedness as defined in the amended indentures.
 
Recent Litigation
 
On September 23, 2009, holders of unsecured notes issued by Delaware Funding, a guarantor under the Senior Credit Facility, filed an action in the United States District Court for the Southern District of New York on behalf of themselves and other noteholders, against Delaware Funding, Barclays Bank PLC, as administrative agent and collateral agent, Barclays Capital, Inc., as sole lead arranger, sole bookrunner and syndication agent, and the lenders under the Senior Credit Facility. The lawsuit alleges, among other things, that Delaware Funding was insolvent at the time that the secured guarantee was incurred in connection with the Senior Credit Facility, or was rendered insolvent thereby, and seeks to annul as a fraudulent conveyance the secured guarantee. In addition, on September 23, 2009, a number of holders of unsecured notes issued by Delaware Funding filed a derivative action in the Court of Chancery of the State of Delaware, on behalf of Delaware Funding, against members of the board of managers of Delaware Funding, and naming Delaware Funding as a nominal defendant. The lawsuit alleges that members of the board of managers of Delaware Funding breached their fiduciary duty by approving the secured guarantee incurred in connection with the Senior Credit Facility and seeks to recover damages.


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Summary of the Offers
 
Offers We are offering in exchange for (i) any and all of the outstanding notes (including the U.S. dollar equivalent of non-U.S. dollar-denominated notes) of CIT Group Inc. listed in the table beginning on the inside cover page, each of five series of our newly issued Series A Notes and up to approximately 70.0 million shares of our New Preferred Stock and (ii) any and all of the outstanding notes of Delaware Funding, listed in the table beginning on the inside cover page, each of five series of our newly issued Series B Notes, all on the terms described in this Offering Memorandum and Disclosure Statement. Assuming the exchange of 100% of the Old Notes for the New Notes and the New Preferred Stock, the New Preferred Stock issued will consist of approximately 70 million shares having an aggregate liquidation preference of approximately $91.0 billion and representing approximately 94.0% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders.
 
All New Notes issued pursuant to the Offers will be denominated in U.S. dollars. For purposes of determining the principal amount of New Notes to be received in exchange for the non-U.S. dollar-denominated Old Notes, an equivalent U.S. dollar principal amount of each tender of such series of Old Notes will be determined by multiplying the principal amount of such tender by the weekly average of the applicable currency exchange rate in the most recent Federal Reserve Statistical Release H.10 which has become available prior to the Expiration Date. Such equivalent U.S. dollar principal amount will be used in all cases when determining the consideration to be received pursuant to the Offers per $1,000 principal amount of Old Notes tendered.
 
Your election to tender your Old Notes into the Offers will constitute a vote in favor of the Plan of Reorganization. If you choose not to tender your Old Notes into the Offers, or if you withdraw Old Notes previously tendered, you may vote separately in favor of or against the Plan of Reorganization on the Ballot (as defined below).
 
None of CIT, its subsidiaries, their respective boards of directors, the exchange agent, the information agent, the Swiss tender agent or any of their respective affiliates makes any recommendation as to whether holders of Old Notes should exchange Old Notes for New Notes and/or New Preferred Stock in the Offers.
 
Consideration If you tender your Old Notes and we consummate the Offers, you will receive the consideration set forth in the table beginning on the inside cover page of this Offering Memorandum and Disclosure Statement. Upon consummation of the Offers, holders of $1,000 of Old Notes maturing: in 2009 will receive $900 in New Notes and 0.40749 shares of New Preferred Stock; in 2010 will receive $850 in New Notes and 1.22248 shares of New Preferred Stock; in 2011 and 2012 will receive $800 in New Notes and 2.03746 shares of New Preferred Stock; in 2013 through 2017 and in 2036 will receive $700 in New Notes and 3.25993 shares of New Preferred


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Stock; in 2018 will receive 4.07492 in shares of New Preferred Stock; and in 2067 will receive 2.03746 shares of New Preferred Stock.
 
Accrued and Unpaid Interest on Old Notes Accepted in the Offers Holders whose Old Notes are accepted in the Offers will receive a cash payment (paid in the currency of such Old Notes) equal to the accrued and unpaid interest in respect of such Old Notes from the most recent interest payment date to, but not including, the Settlement Date. Holders who do not exchange will be paid interest according to the terms of their securities.
 
Expiration Date The Offers will expire at 11:59 p.m., (prevailing Eastern Time), on October 29, 2009 unless extended by us with respect to any or all series of Old Notes (such date and time, as the same may be extended, the “Expiration Date”). We, in our absolute discretion, may extend the Expiration Date for any offer for any purpose, including in order to permit the satisfaction of any or all conditions to any offer or waiver.
 
Settlement Date The Settlement Date of the Offers will be as soon as practicable following the Expiration Date.
 
Withdrawal of Tenders You may withdraw the tender of your Old Notes at any time prior to the Expiration Date by submitting a notice of withdrawal to the exchange agent using DTC’s ATOP (as defined below) procedures and/or upon compliance with the other procedures described herein.
 
Conditions to the Offers Consummation of the Offers is conditioned upon the satisfaction of the Liquidity and Leverage Condition, which requires that a sufficient number of Old Notes are tendered into the exchange and certain other debt instruments have been successfully renegotiated so that, after giving effect to the Offers and such renegotiations, the face amount of the Company’s total debt would be reduced by at least $5.7 billion and its remaining unsecured debt maturities (excluding foreign vendor facilities) would not exceed $500 million in 2009, $2.5 billion during the period from 2009 to 2010, $4.5 billion during the period from 2009 to 2011 and $6.0 billion during the period from 2009 to 2012, in each case on a cumulative basis. In addition to the Liquidity and Leverage Condition, consummation of the Offers is subject to certain other conditions described under “Description of the Offers — Conditions to the Offers.”
 
In addition, consummation of the Delaware Funding Offers is subject to the consummation of the CIT Offers.
 
Procedures for Tendering If you wish to participate in the Offers and your Old Notes are held by a custodial entity, such as a bank, broker, dealer, trust company or other nominee, you must instruct that custodial entity to tender your Old Notes on your behalf pursuant to the procedures of that custodial entity. If your Old Notes are registered in your name, you must complete, sign and date the accompanying Letter of Transmittal, or a facsimile of the Letter of Transmittal, according to the instructions contained in this Offering Memorandum and


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Disclosure Statement and the Letter of Transmittal. See “Description of the Offers — Procedures for Tendering Old Notes.”
 
Consequences of Failure to Tender Claims with respect to any Old Notes not tendered in the Offers will be effectively subordinated to claims with respect to any New Notes (to the extent of the value of the collateral securing the New Notes). For a description of the consequences of failing to exchange your Old Notes in this case, see “Risk Factors — Risks to Holders of Non-Tendered Old Notes.”
 
If the Liquidity and Leverage Condition is not satisfied by the Expiration Date, the Company may pursue the prepackaged Plan of Reorganization. Even if such condition is satisfied, the Company may seek to pursue the prepackaged Plan of Reorganization. Although the Company would seek authority from the Bankruptcy Court on the petition date to continue funding loan commitments, lines of credit, factoring, receivable and collection management products and secured financing to their clients by CIT and on behalf of its non-debtor operating affiliates, there can be no assurance that the bankruptcy case would not disrupt operations or cause the Company to lose revenue. No decision has been made by the board of directors to file petitions for relief under Chapter 11 of the Bankruptcy Code.
 
Taxation For a summary of the material U.S. federal income tax consequences of the Offers, see “Certain U.S. Federal Income Tax Consequences.”
 
Exchange Agent and Voting Agent Financial Balloting Group LLC (“FBG”) is the exchange agent for the Offers and the voting agent (the “Voting Agent”) for the Plan of Reorganization. The addresses and telephone numbers of FBG are listed on the back cover page of this Offering Memorandum and Disclosure Statement.
 
Information Agent D.F. King & Co., Inc. is the information agent for retail investors for the Offers and the Plan of Reorganization. The address and telephone numbers of the information agent are listed on the back cover page of this Offering Memorandum and Disclosure Statement.
 
Swiss Note Tender Agent UBS AG is the Swiss note tender agent (the “Swiss Note Tender Agent”).
 
London Stock Exchange’s Gilt Edged and Fixed Interest Market Following consummation of the Offers, we intend to delist the Old Notes listed on the London Stock Exchange’s Gilt Edged and Fixed Interest Market.


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Summary of the Plan of Reorganization
 
If we for any reason determine that it would be more advantageous or expeditious, we may seek to effectuate the restructuring transactions by filing a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, along with Delaware Funding, in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) and seek Bankruptcy Court approval of the restructuring transactions through confirmation of the Plan of Reorganization.
 
To facilitate court approval of the in-court alternative, we are soliciting acceptances of the Plan of Reorganization, a copy of which is attached hereto as Appendix C. In the event a Chapter 11 case is commenced and we determine that it is appropriate, we would use the acceptances of the Plan of Reorganization secured through the solicitation of acceptances to obtain Bankruptcy Court approval of the Plan of Reorganization and effectuate the restructuring transactions. The Plan of Reorganization, if approved, would result in noteholders and other claimants and interest holders receiving the treatment set forth below and in the Plan of Reorganization, which treatment differs in certain material respects from the consideration provided by the Offers. For purposes of this Summary of the Plan of Reorganization, all capitalized terms have the meaning described in the Plan of Reorganization which is Appendix C to this Offering Memorandum and Disclosure Statement.
 
WE HAVE NOT MADE ANY DECISION AT THIS TIME TO COMMENCE ANY CHAPTER 11 CASES, AND RESERVE ALL OF OUR RIGHTS TO PURSUE ANY AND ALL OF OUR STRATEGIC ALTERNATIVES IN THE EVENT THE OUT-OF-COURT ALTERNATIVE IS NOT CONSUMMATED.
 
Overview The Plan of Reorganization provides for, among other things, the Exchanges, pursuant to which holders of Senior Unsecured Note Claims, including holders of most of the Old Notes, Senior Unsecured Term Loan Claims and Senior Unsecured Credit Agreement Claims would receive their pro rata share of (i) Series A Notes in the amount of 70% of the principal amount of such holder’s Allowed Claim and (ii) New Common Interests. Holders of Canadian Senior Unsecured Note Claims would receive their pro rata share of Series B Notes in the amount of 100% of the principal amount of such holder’s Allowed Canadian Senior Unsecured Note Claim. Holders of Senior Subordinated Note Claims and Junior Subordinated Note Claims would receive specified percentages of New Common Interests, provided that such Classes vote to accept the Plan of Reorganization and (ii) Contingent Value Rights in full satisfaction and settlement of such Claims and debt facilities. The Old Preferred Interests, the Old Common Interests and the Other Equity Interests (if any) would be cancelled. If sufficient holders of Canadian Senior Unsecured Note Claims vote to accept the Plan of Reorganization, Old Delaware Funding Interests will be Reinstated.
 
Through the Plan of Reorganization, all Claims against and Interests in CIT and Delaware Funding that would exist on the date when we would file our voluntary petitions for reorganization relief under Chapter 11 of the Bankruptcy Code would be divided into classes, exclusive of certain claims, including DIP Facility Claims (if any), Administrative Claims, and Priority Tax Claims, which would not be required to be classified.
 
Please note the estimated recoveries for Class 6, 7, 8 and 9 Claims do not necessarily reflect the market value of the Series A Notes and Series B Notes.


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Unimpaired Classes of Claims Not Entitled to Vote on the Plan of Reorganization Class 1 Other Priority Claims, Class 2 Other Secured Claims, Class 3 Other Unsecured Debt Claims and Guarantee Claims, Class 4 Intercompany Claims, Class 5 General Unsecured Claims and Class 15 Old Delaware Funding Interests would be Unimpaired by the Plan of Reorganization. Holders of these Claims would be deemed to accept the Plan of Reorganization, would not be entitled to vote on the Plan of Reorganization and all of their legal, equitable and contractual rights would be fully reinstated and retained under the Plan of Reorganization; provided, however, that Class 15 Old Delaware Funding Interest will be reinstated only if Class 6 votes in favor of the Plan of Reorganization.
 
Class 6 (Canadian Senior Unsecured Note Claims) Estimated Amount: $2,188 million Impaired — Class 6 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 6 Canadian Senior Unsecured Note Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Canadian Senior Unsecured Note Claim shall receive its pro rata share of Series B Notes equal to a distribution in the amount of one hundred percent (100%) of the principal amount such holder’s Allowed Canadian Senior Unsecured Note Claim.
 
Estimated Recovery: 100%
 
Class 7 (Senior Unsecured Note Claims) Estimated Amount: $25,504 million Impaired — Class 7 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 7 Senior Unsecured Note Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Senior Unsecured Note Claim shall receive its pro rata share of (i) Series A Notes, equal to a distribution in the amount of 70% of such holder’s Allowed Senior Unsecured Note Claim and (ii) (A) if Class 10 and Class 11 vote to accept the Plan, 83.4% of New Common Interests, (B) if Class 10 votes to accept the Plan and Class 11 does not vote to accept the Plan of Reorganization, 84.2% of New Common Interests, (C) if Class 10 does not vote to accept the Plan of Reorganization and if Class 11 votes to accept the Plan of Reorganization, 88.2% of New Common Interests, or (D) if neither Class 10 nor Class 11 vote to accept the Plan of Reorganization, 88.2% of New Common Interests.
 
Estimated Recovery: 96%, assuming (i) acceptance of the Plan of Reorganization by Class 10 Senior Subordinated Note Claims and Class 11 Junior Subordinated Note Claims and (ii) New Common Interests valued at mid-point of Common Equity Value (as defined herein) range.


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Class 8 (Senior Unsecured Term Loan Claims) Estimated Amount: $321 million Impaired — Class 8 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 8 Senior Unsecured Term Loan Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Senior Unsecured Term Loan Claim shall receive its pro rata share of (i) Series A Notes, equal to a distribution in the amount of 70% of such holder’s Allowed Senior Unsecured Term Loan Claim and (ii) (A) if Class 10 and Class 11 vote to accept the Plan of Reorganization, 1.0% of New Common Interests, (B) if Class 10 votes to accept the Plan and Class 11 does not vote to accept the Plan of Reorganization, 1.1% of New Common Interests, (C) if Class 10 does not vote to accept the Plan and if Class 11 votes to accept the Plan of Reorganization, 1.1% of New Common Interests, or (D) if neither Class 10 nor Class 11 vote to accept the Plan, 1.1% of New Common Interests; provided that if (i) holders of at least two-thirds in amount of the Allowed Senior Unsecured Term Loan Claims actually voting in Class 8 have voted to accept the Plan of Reorganization and (ii) holders of at least one-half in number of the Allowed Senior Unsecured Term Loan Claims actually voting in Class 8 have voted to accept the Plan of Reorganization, then such holders of Allowed Senior Unsecured Term Loan Claims shall have the option to receive a distribution of their pro rata share of loans under credit facilities of Reorganized CIT on substantially the same terms as the Series A Notes in lieu of a distribution of the Series A Notes.
 
Estimated Recovery: 96%, assuming (i) acceptance of the Plan of Reorganization by Class 10 Senior Subordinated Note Claims and Class 11 Junior Subordinated Note Claims and (ii) New Common Interests valued at mid-point of Common Equity Value (as defined herein) range.
 
Class 9 (Senior Unsecured Credit Agreement Claims) Estimated Amount: $3,101 million Impaired — Class 9 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 9 Senior Unsecured Credit Agreement Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Senior Unsecured Credit Agreement Claim shall receive its pro rata share of (i) Series A Notes, equal to a distribution in the amount of 70% of such holder’s Allowed Senior Unsecured Credit Agreement Claim and (ii) (A) if Class 10 and Class 11 vote to accept the Plan of Reorganization, 10.1% of New Common Interests, (B) if Class 10 votes to accept the Plan of Reorganization and Class 11 does not vote to accept the Plan, 10.2% of New Common Interests, (C) if Class 10 does not vote to accept the Plan of Reorganization and if Class 11 votes to accept the Plan, 10.7% of New Common Interests, or (D) if neither Class 10 nor Class 11 vote to accept the Plan of Reorganization,


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10.7% of New Common Interests; provided that if holders of at least (i) two-thirds in amount of the Allowed Senior Unsecured Credit Agreement Claims actually voting in Class 9 have voted to accept the Plan of Reorganization and (ii) one-half in number of the Allowed Senior Unsecured Credit Agreement Claims actually voting in Class 9 have voted to accept the Plan of Reorganization, then such holders of Allowed Senior Unsecured Credit Agreement Claims shall have the option to receive a distribution of their pro rata share of loans under credit facilities of Reorganized CIT on substantially the same terms as the Series A Notes in lieu of a distribution of the Series A Notes.
 
Estimated Recovery: 96%, assuming (i) acceptance of the Plan of Reorganization by Class 10 Senior Subordinated Note Claims and Class 11 Junior Subordinated Note Claims and (ii) New Common Interests valued at mid-point of Common Equity Value (as defined herein) range
 
Class 10 (Senior Subordinated Note Claims) Estimated Amount: $1,200 million Impaired — Class 10 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 10 Senior Subordinated Note Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Senior Subordinated Note Claim shall receive its pro rata share of (i)(A) 4.5% of New Common Interests if Class 10 and Class 11 vote to accept the Plan of Reorganization, or (B) 4.6% of New Common Interests if Class 10 votes to accept the Plan of Reorganization and Class 11 does not vote to accept the Plan of Reorganization; provided that (1) the holders of at least two-thirds in amount of the Allowed Senior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization and (2) the holders of more than one-half in number of the Allowed Senior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization, in each case not counting the vote of any holder designated under section 1126(e) of the Bankruptcy Code; provided further however that in the event that less than (1) two-thirds in amount of the Allowed Senior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization and (2) one-half in number of the Allowed Senior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization, but the Plan of Reorganization is nonetheless confirmed, no holder of an Allowed Senior Subordinated Note Claim shall receive any shares of New Common Interests, and (ii) Contingent Value Rights.
 
Estimated Recovery: 30%, assuming (i) acceptance of the Plan of Reorganization by Class 10 Senior Subordinated Note Claims and Class 11 Junior Subordinated Note Claims and (ii) New Common Interests valued at mid-point of Common Equity Value (as defined herein) range.


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Class 11 (Junior Subordinated Note Claims) Estimated Amount: $779 million Impaired — Class 11 would be impaired by the Plan of Reorganization. Each holder of an allowed Class 11 Junior Subordinated Note Claim would be entitled to vote on the Plan of Reorganization.
 
On, or as soon as reasonably practicable after, the Effective Date, each holder of an Allowed Junior Subordinated Note Claim shall receive its pro rata share of (a) 0.9% of New Common Interests if both Class 10 and Class 11 vote to accept the Plan of Reorganization; provided that (i) the holders of at least two-thirds in amount of the Allowed Junior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization and (ii) the holders of more than one-half in number of the Allowed Junior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization, in each case not counting the vote of any holder designated under section 1126(e) of the Bankruptcy Code; provided further however that in the event that less than (i) two-thirds in amount of the Allowed Senior Subordinated Note Claims or Allowed Junior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization and (ii) one-half in number of the Allowed Senior Subordinated Note Claims or Allowed Junior Subordinated Note Claims actually voting in such classes have voted to accept the Plan of Reorganization, but the Plan of Reorganization is nonetheless confirmed, no holder of an Allowed Junior Subordinated Note Claim shall receive any shares of New Common Interests, and (b) Contingent Value Rights.
 
Estimated Recovery: 9% assuming (i) acceptance of the Plan of Reorganization by Class 10 Senior Subordinated Notes Claims and Class 11 Junior Subordinated Note Claims and (ii) New Common Interests valued at mid-point of Common Equity Value (as defined herein) range.
 
Impaired Classes of Claims Not Entitled to Vote on the Plan of Reorganization Each of Class 12 (Subordinated 510(b) Claims), Class 13 (Old Preferred Interests), Class 14 (Old Common Interests) and Class 16 (Other Equity Interests (if any)) would be impaired by the Plan of Reorganization. No holder of a Class 12, 13, 14 or 16 Claim or Interest will retain any property or interest in the Debtors under the Plan of Reorganization. Each holder of a Class 12, 13, 14 or 16 Claim or Interest would be deemed to reject the Plan of Reorganization and would not be entitled to vote on the Plan of Reorganization.
 
Unimpaired Class of Interests Not Entitled to Vote on the Plan of Reorganization Class 15 Old Delaware Funding Interests would be unimpaired by the Plan of Reorganization. In the event that (i) the holders of at least two-thirds in amount of the Allowed Canadian Senior Note Claims actually voting in Class 6 have voted to accept the Plan of


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Reorganization and (ii) the holders of more than one-half in number of the Allowed Canadian Senior Note Claims actually voting in Class 6 have voted to accept the Plan of Reorganization, in each case not counting the vote of any holder designated under section 1126(e) of the Bankruptcy Code, the Old Delaware Funding Interests shall be Reinstated. Each holder of a Class 15 Interest would be deemed to accept the Plan of Reorganization and would not be entitled to vote on the Plan of Reorganization.
 
For a more detailed discussion of treatment under the Plan of Reorganization, see the section of this Offering Memorandum and Disclosure Statement entitled “Plan of Reorganization— Classification and Treatment of Claims and Interests.”
 
Voting on the Plan of Reorganization The “Voting Record Date” for purposes of determining noteholders, claimholders and interest holders that are eligible to vote on the Plan of Reorganization is the Expiration Date/Voting Deadline with respect to the Old Notes. To be counted, an appropriate instruction must be provided to the Nominee prior to the Voting Deadline (in the case of the Old Notes).
 
Any beneficial holder whose Old Notes are registered or held of record in the name of his broker, dealer, commercial bank, trust company or other Nominee and who wishes to vote on the Plan of Reorganization should provide the appropriate instruction to such Nominee, as instructed by such nominee. Nominees in turn must complete Master Ballots and must return all such Master Ballots to the Voting Agent.
 
Any beneficial holders whose Old Notes are certificated must complete a Ballot and Letter of Transmittal and return such Ballot and Letter of Transmittal to the Exchange Agent.
 
The “Voting Deadline” is 11:59 p.m., New York City time, on October 29, 2009, unless extended. All Master Ballots tendered by the Voting Deadline may be utilized by us in connection with determining acceptances and rejections of the Plan of Reorganization at any time. Thus, all votes represented by such Master Ballots shall be deemed continuously effective until such time. Nominees shall have until 8:00 p.m. (prevailing Eastern Time) on October 30, 2009 to transmit their Master Ballots to the Voting Agent provided they provide the contents of their Master Ballots in an electronic format acceptable to the Voting Agent.
 
Under the Bankruptcy Code, for purposes of determining whether the requisite acceptances of the Plan of Reorganization have been received, only holders who vote will be counted. Creditors who do not follow the instructions provided herein for indicating a vote on the Plan of Reorganization will not be counted for purposes of determining whether the Plan of Reorganization has been accepted by the requisite number and amount of votes.


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Summary of New Notes
 
Issuers CIT Group Inc., as issuer of the Series A Notes
CIT Group Funding Company of Delaware LLC, as issuer of the Series B Notes
 
Series A Guarantors All current and future domestic wholly owned subsidiaries of CIT Group Inc., with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries. See “Collateral — Guarantors and Foreign Grantors.”
 
Series B Guarantors CIT Group Inc., on an unsecured basis, and by all of its current and future domestic wholly owned subsidiaries of CIT Group Inc., with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries, on a secured basis. See “Collateral — Guarantors and Foreign Grantors.”
 
Indenture Trustee The Bank of New York Mellon, in its capacity as Indenture Trustee under the Series A Notes Indenture and the Series B Notes Indenture (together, the “New Notes Indentures”).
 
Series A Collateral Agent The Bank of New York Mellon, in its capacity as collateral agent (the “Series A Collateral Agent”) for the Series A Indenture Trustee and each of the administrative agents under each of the Junior Credit Facilities (as defined herein) (the “Junior Administrative Agents”). The Series A Collateral Agent will be appointed pursuant to the Junior Collateral Agency Agreement. See “Description of Material Indebtedness — Junior Credit Facilities.”
 
Series B Collateral Agent The Bank of New York Mellon in its capacity, as collateral agent (the “Series B Collateral Agent”).
 
Issuance and Aggregate Principal Amount $2,025 million 7.0% Series A Secured Notes due 2013
 
$3,037 million 7.0% Series A Secured Notes due 2014
 
$3,037 million 7.0% Series A Secured Notes due 2015
 
$5,062 million 7.0% Series A Secured Notes due 2016
 
$7,087 million 7.0% Series A Secured Notes due 2017
 
$219 million 7.0% Series B Secured Notes due 2013
 
$328 million 7.0% Series B Secured Notes due 2014
 
$328 million 7.0% Series B Secured Notes due 2015
 
$547 million 7.0% Series B Secured Notes due 2016
 
$766 million 7.0% Series B Secured Notes due 2017
 
The three series of Delaware Funding Old Notes tendered pursuant to the Offers will be exchanged for Series B Notes in the exchange, and the CIT Old Notes tendered pursuant to the Offers will be exchanged for Series A Notes and New Preferred Stock in the exchange.


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The obligations of CIT Group Inc. under the Series A Notes will be secured by liens granted by the Series A guarantors and certain of our foreign grantors and the obligations of Delaware Funding under the Series B Notes will be secured by liens granted by the Series B guarantors (other than CIT Group Inc.) and certain of our foreign grantors. See “Description of New Notes.”
 
Maturity The New Notes will mature as set forth below, unless redeemed earlier by us as described under the heading “Description of New Notes — Optional Redemption.”
 
7.0% Series A Secured Notes due 2013
mature on November 1, 2013
 
7.0% Series A Secured Notes due 2014
mature on November 1, 2014
 
7.0% Series A Secured Notes due 2015
mature on November 1, 2015
 
7.0% Series A Secured Notes due 2016
mature on November 1, 2016
 
7.0% Series A Secured Notes due 2017
mature on November 1, 2017
 
7.0% Series B Secured Notes due 2013
mature on November 1, 2013
 
7.0% Series B Secured Notes due 2014
mature on November 1, 2014
 
7.0% Series B Secured Notes due 2015
mature on November 1, 2015
 
7.0% Series B Secured Notes due 2016
mature on November 1, 2016
 
7.0% Series B Secured Notes due 2017
mature on November 1, 2017
 
Interest
Interest on the notes will be payable quarterly in cash on each:
 
• January 10, April 10, July 10, and October 10, commencing January 10, 2010 with respect to the 2013 Notes and 2014 Notes;
 
• February 10, May 10, August 10, and November 10, commencing February 10, 2010 with respect to the 2015 Notes and 2016 Notes; and
 
• March 10, June 10, September 10, and December 10, commencing March 10, 2010 with respect to with respect to the 2017 Notes.
 
Series A Collateral and Series B Collateral The New Notes and the Junior Credit Facilities will be secured on a junior priority basis by the same personal property assets that also secure the Senior Credit Facility. See “Collateral — Assets Securing Senior Obligations, Series A Obligations and Series B Obligations.”


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Optional Redemption We may redeem any of the New Notes beginning on January 1, 2010 at a redemption price of 103.5% of their principal amount, plus accrued interest, beginning on January 1, 2011 at a redemption price of 102.0% of their principal amount, plus accrued interest, and beginning on January 1, 2012 at par. See “Description of New Notes — Optional Redemption.”
 
Guarantees The Series A guarantors will guarantee the payment of principal, interest and premium, if any, on the Series A Notes and the Series B guarantors will guarantee the payment of principal, interest and premium, if any, on the Series B Notes, as described under the heading “Description of New Notes — Note Guarantees.”
 
Ranking The New Notes and related Note Guarantees will be our and the Guarantors’ secured obligations. The Series A Notes and the Guarantees will be secured by a second Lien on the Collateral.
 
The New Notes will be:
 
• equal in right of payment with all of our and the Guarantors’ existing and future obligations (other than our and the Guarantors’ respective obligations under the Credit Agreement and other permitted liens) that are not expressly subordinated to the Series A Notes and the guarantees;
 
• effectively subordinated to any of our and the Guarantors’ existing and future indebtedness that is secured by a Lien on any of our or the Guarantors’ assets under the Credit Agreement to the extent of the value of the assets securing such indebtedness;
 
• in the case of the Series A Notes, effectively subordinated to the Series B Notes to the extent of the value of notes receivable from CIT Financial Ltd. to Delaware Funding issued by Delaware Funding;
 
• subordinated in right of payment to any existing and future indebtedness under the Senior Credit Facility;
 
• senior in right of payment to all of our and the Guarantors’ existing and future indebtedness that is expressly subordinated to the Series A Notes and Guarantees; and
 
• effectively subordinated to all liabilities of our Subsidiaries that are not Guarantors.
 
Covenants The New Notes Indentures contain covenants that limit, among other things, our ability and the ability of our subsidiaries (other than unrestricted subsidiaries) to:
 
• incur additional indebtedness;
 
• pay dividends on our capital stock or repurchase our capital stock or subordinated debt;
 
• make investments;
 
• create liens or use assets as security in other transactions;
 
• merge, consolidate or transfer or dispose of substantially all of our assets;


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• engage in transactions with affiliates; and
 
• sell certain assets or merge with or into other companies.
 
These covenants are subject to a number of important exceptions. See “Description of the New Notes — Certain Covenants.”
 
Intercreditor Arrangements The Senior Collateral Agent, the Series A Collateral Agent and the Series B Collateral Agent will enter into a senior intercreditor agreement (the “Senior Intercreditor Agreement”) that will govern the relative rights of the holders of Senior Obligations and the holders of Series A Obligations and Series B Obligations (collectively, the “Junior Obligations”) in respect of the collateral securing all such obligations and will include provisions relating to lien subordination, turnover obligations with respect to proceeds of collateral, restrictions on exercise of remedies, releases of collateral, restrictions on amendments to junior lien documentation, bankruptcy related provisions, and other intercreditor matters.
 
The Series A Collateral Agent and the Series B Collateral Agent will enter into a junior intercreditor agreement (the “Junior Intercreditor Agreement”) that will govern the relative rights among the holders of the Junior Obligations in respect of the collateral securing the Junior Obligations and will include provisions relating to equal and ratable liens, the ratable sharing of the proceeds of collateral, exercise of remedies, releases of collateral and other intercreditor matters.
 
In addition, the Series A Trustee, each of the Junior Administrative Agents and the Series A Collateral Agent will enter into a collateral agency agreement (the “Series A Collateral Agency Agreement”) that will govern the relative rights of the holders of Series A Obligations, including provisions whereby the benefits of the collateral securing the Series A Obligations will be shared among the Series A Trustee and each of the Junior Administrative Agents, and provisions with respect to voting rights and other intercreditor matters.
 
Form and Denomination The New Notes will be represented by one or more global notes, deposited with a trustee as a custodian for DTC and registered in the name of Cede & Co., DTC’s nominee. Beneficial interests in the global notes will be shown on, and any transfers will be effective only through, records maintained by DTC and its participants. Interests in the global notes will be issued in minimum denominations of $1 and integral multiples of $1.
 
Use of Proceeds We will not receive any proceeds from the Offers or the issuance of New Notes.
 
Governing Law The indentures for the Old Notes are, and the New Notes Indentures and the New Notes will be, governed by New York law.
 
For a description of certain considerations that should be taken into account in connection with the Offers and in connection with an investment in the New Notes, see “Risk Factors” beginning on page 27.


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Summary of New Preferred Stock
 
Issuer CIT Group Inc.
 
Securities Offered 70,009,815 shares of Series F preferred stock, $0.01 par value per share, with a liquidation preference of $1,300 per share (the “New Preferred Stock”).
 
CIT Preferred Stock Outstanding After the Offers 99,339,815 shares, assuming 100% participation in the Offers.
 
Dividends The New Preferred Stock will have no stated dividend. In addition, we do not intend to declare or pay dividends on the New Preferred Stock.
 
Redemption The New Preferred Stock will be redeemable at our option, in whole or in part, at a redemption price equal to the liquidation preference per share. Holders of the New Preferred Stock will have no right to require the redemption or repurchase of the New Preferred Stock and the New Preferred Stock will not be subject to any sinking fund.
 
Ranking The New Preferred Stock:
 
• Will rank senior to our junior stock with respect to distributions of assets upon liquidation, dissolution or winding up of CIT Group Inc. “Junior stock” means any class or series of our stock that ranks junior to the New Preferred Stock as to the distribution of our assets upon any liquidation, dissolution or winding up of CIT Group Inc. Junior stock includes our common stock.
 
• Will rank at least equally with any other series of parity stock that is currently outstanding or that we may from time to time issue with respect to distributions of assets upon liquidation, dissolution or winding up of CIT Group Inc. “Parity stock” means any other class or series of our preferred stock that ranks equally with the New Preferred Stock in the distribution of our assets on any liquidation, dissolution or winding up of CIT Group Inc. and includes, without limitation, our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock.
 
Liquidation Rights Upon any voluntary or involuntary liquidation, dissolution or winding up of CIT Group Inc., holders of the New Preferred Stock and any parity stock are entitled to receive out of the assets of CIT Group Inc., available for distribution to stockholders, before any distribution is made to holders of common stock or any other junior stock, a liquidating distribution in the amount of $1,300 per share of New Preferred Stock. Holders of the New Preferred Stock will not be entitled to any other amounts from us after they have received their full liquidation preference.
 
In any such distribution, if our assets are not sufficient to pay the liquidation preferences in full to all holders of the New Preferred Stock and all holders of any parity stock, the amounts paid to the holders of New Preferred Stock and to the holders of any parity stock will be paid pro rata in accordance with the respective


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aggregate liquidation preferences of those holders. See “Description of the New Preferred Stock — Preferred Stock — Liquidation Rights.”
 
Voting Rights Holders of the New Preferred Stock will have class voting rights together with holders of parity stock having like voting rights with respect to certain fundamental changes in the terms of the New Preferred Stock. In addition to the foregoing, holders of the New Preferred Stock will be entitled to vote upon all matters upon which holders of common stock have the right to vote, and, in connection with such matters, will be entitled to 87.5 votes per share, such votes to be counted together with all other shares of capital stock having general voting powers and not separately as a class. See “Description of the New Preferred Stock — Voting Rights.”
 
Maturity The New Preferred Stock does not have any maturity date, and we are not required to redeem the New Preferred Stock.
 
Preemptive Rights Holders of the New Preferred Stock will have no preemptive rights.
 
Listing We do not intend to list the New Preferred Stock on any exchange.
 
Use of Proceeds We will not receive any proceeds from the Offers or the issuance of shares of New Preferred Stock.
 
Transfer Agent and Registrar BNY Mellon Shareowner Services
 
For a description of certain considerations that should be taken into account in connection with the Offers and in connection with an investment in the New Preferred Stock, see “Risk Factors” beginning on page 27.


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RISK FACTORS
 
The restructuring transactions (whether effectuated under the Offers or the Plan of Reorganization) involve a high degree of risk and uncertainty. You should carefully consider the risks and uncertainties described below as well as the other information appearing elsewhere in this Offering Memorandum and Disclosure Statement before making a decision whether to participate in the Offers and/or vote to accept the Plan of Reorganization.
 
Risks Related to Failure to Consummate the Restructuring Plan
 
The Offers may not be consummated and our restructuring efforts may not be successful.
 
If the conditions to the Offers, including the Liquidity and Leverage Condition, are not satisfied, we will not be obligated to accept any Old Notes tendered in the Offers. These conditions are for our benefit and may be asserted by us or may be waived by us at any time and from time to time, in our sole discretion. See “Description of the Offers — Conditions to the Offers.”
 
The Offers are being made as part of a larger group of restructuring transactions designed to improve the Company’s consolidated balance sheet and capital structure over time by decreasing the Company’s outstanding consolidated debt and significantly reducing its annual interest expense. See “Summary — Restructuring.” However, these efforts may not be successful. Accordingly, we cannot assure you that we will be able to achieve our objectives with respect to the business restructuring strategy, regardless of whether the Offers are consummated.
 
If the Offers are not consummated, but we receive sufficient votes in favor of the Plan of Reorganization, holders of Old Notes that did not vote to accept the Plan of Reorganization may nevertheless receive New Notes and Common Interests in exchange for their Old Notes.
 
If we choose to effectuate the restructuring in bankruptcy court through the Plan of Reorganization, all holders of Old Notes will receive the same treatment and will be bound by the terms of the Plan of Reorganization whether or not they vote to accept the Plan of Reorganization. Under the Plan of Reorganization, holders of Old Notes will receive the New Notes as well as shares of newly issued common stock. If the Plan of Reorganization is approved, holders of Old Notes that did not vote to accept the Plan of Reorganization will nevertheless receive New Notes and New Common Interests in exchange for their Old Notes.
 
If the Offers are not consummated and the Plan of Reorganization is not approved, we and Delaware Funding will likely need to seek relief under the Bankruptcy Code without the benefit of a plan of reorganization approved by the claimants, unless we are able to obtain alternative financing. If we seek bankruptcy relief under such circumstances, holders of Old Notes may receive consideration that is substantially less than what is being offered in the Offers or the Plan of Reorganization. If we obtain alternative financing, that financing will likely be on a secured basis and the lenders will have priority over holders of Old Notes in any ensuing bankruptcy.
 
We believe that restructuring through the Offers or the Plan of Reorganization is critical to our continuing viability. If we do not consummate the Offers or obtain approval of the Plan of Reorganization, we will likely need to seek relief under the Bankruptcy Code without the benefit of a plan of reorganization approved by claimants.
 
We believe that seeking relief under the Bankruptcy Code other than in connection with the prepackaged Plan of Reorganization could materially adversely affect the relationships between us and our existing and potential customers, employees, partners and other stakeholders. For example:
 
  •  it is likely that such a filing would substantially erode our customers’ confidence in our ability to provide commercial financing and leasing capital and that as a result there would be a significant and precipitous decline in our global revenues, profitability and cash flow;


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  •  employees could be distracted from performance of their duties, or more easily attracted to other career opportunities;
 
  •  it may be more difficult to attract or replace key employees;
 
  •  lenders and other partners could seek to terminate their relationship with us, require financial assurances or enhanced returns, or refuse to provide credit on the same terms as prior to the reorganization case under Chapter 11 of the Bankruptcy Code;
 
  •  lenders to subsidiaries that are not subject to the bankruptcy proceedings could, in certain cases, terminate financing agreements, accelerate amounts due thereunder or otherwise claim an event of default has occurred thereunder;
 
  •  if the prepackaged plan is not approved, we could be forced to operate in bankruptcy for an extended period of time while we tried to develop a reorganization plan that could be confirmed;
 
  •  certain of our non-U.S. subsidiaries may be required to seek bankruptcy or similar relief under proceedings outside the United States, which would adversely affect their businesses;
 
  •  we may not be able to obtain debtor-in-possession financing to sustain us during the reorganization case under Chapter 11 of the Bankruptcy Code;
 
  •  if we were not able to confirm and implement a plan of reorganization or if sufficient debtor-in-possession financing were not available, we may be forced to liquidate under Chapter 7 of the Bankruptcy Code;
 
  •  we may be forced to divest our bank subsidiaries, including CIT Bank, or the FDIC or other applicable regulators could place our regulated entities into either receivership or conservatorship and, in either case, the assets of those subsidiaries would not be available to creditors of the Company or other subsidiaries;
 
  •  any distributions to you that you may receive in respect of your Old Notes under a liquidation or under a protracted reorganization case or cases under Chapter 11 of the Bankruptcy Code would likely be substantially delayed and the value of any potential recovery likely would be adversely impacted by such delay; and
 
  •  if the Offers are not consummated, we believe that alternative financing would only be available on a secured basis. Any lenders providing such alternative financing would likely require that they be granted a first or second lien on substantially all of the assets of the Company, which would give such lenders priority over the holders of Old Notes in any bankruptcy, liquidation, or insolvency proceeding.
 
Risks to Holders of Non-Tendered Old Notes
 
The following risks specifically apply to the extent a holder of Old Notes elects not to participate in the Offers. There are additional risks attendant to being an investor in our securities that you should review, whether or not you elect to tender your Old Notes. These risks are described elsewhere in this “Risk Factors” section under the headings “— Risks to Holders of New Notes Issued in the Offers” and “— Risks Related to Our Business.”
 
If we consummate the Offers, claims with respect to the Old Notes will be effectively and structurally subordinated to claims with respect to the New Notes to the extent of the value of the Collateral securing the Series A Notes and the Series B Notes.
 
The structural subordination and unsecured nature of the claims of the non-tendered Old Notes could materially and adversely affect the value of a holder’s non-tendered Old Notes and, in the event of a bankruptcy, liquidation or insolvency of the Company, the extent of such holder’s recovery. The New Notes will be secured on a second lien basis by substantially all unencumbered personal property of the Guarantors, but the Old Notes will remain unsecured. See “Collateral — Assets Securing Senior Obligations, Series A Obligations and Series B Obligations.” As a result, the Old Notes will be subordinated to the New Notes to


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the extent of the value of the assets securing the New Notes. In the event of a bankruptcy, liquidation or insolvency of CIT, it is possible that there would be little or no assets remaining to satisfy the claims of the Old Notes.
 
The Series A Notes will be guaranteed by all current and future domestic wholly owned subsidiaries of the Company, with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries. The Series B Notes will be guaranteed by CIT Group Inc., on an unsecured basis, and by all current and future domestic wholly owned subsidiaries of CIT Group Inc., with the exception of Delaware Funding, CIT Bank and other regulated subsidiaries, special purpose entities and immaterial subsidiaries, on a secured basis. We are a holding company and conduct all of our operations and hold substantially all of our assets through such subsidiaries on a secured basis. Holders of the Series A Notes will have claims secured by certain of the assets of the subsidiary guarantors. Holders of Series B Notes will have claims secured by CIT Group Inc. and certain of the assets of CIT Group Inc.’s subsidiaries. As a result, in the event of a bankruptcy, liquidation or insolvency of the Company, the New Notes will be entitled to seek recourse against the subsidiary guarantors before any funds are available to the Company for payment of the obligations under the Old Notes.
 
Liquidity of the market for unexchanged Old Notes likely will be lessened, and the market prices for non-tendered Old Notes may therefore be reduced.
 
If the Offers are consummated, the aggregate principal amount of outstanding Old Notes will be reduced, which would likely adversely affect the liquidity of non-tendered Old Notes. An issue of securities with a small outstanding principal amount available for trading, or float, generally commands a lower price than does a comparable issue of securities with a greater float. Therefore, the market price for Old Notes that are not tendered in the Offers may be adversely affected. The reduced float also may tend to make the trading prices of Old Notes that are not exchanged more volatile. The market prices for unexchanged Old Notes may also be negatively affected by their structural subordination to New Notes.
 
We cannot assure non-tendering holders of Old Notes that, if we consummate the Offers, existing ratings for the Old Notes will be maintained.
 
We cannot assure you that, as a result of the Offers, the rating agencies, including Standard & Poor’s Ratings Service, Moody’s Investors Service and Fitch Ratings, will not downgrade or negatively comment upon the ratings for unexchanged Old Notes. If this were to occur, the market price for the Old Notes may be adversely affected.
 
Risks to Holders of New Notes Issued in the Offers
 
The following risks specifically apply only to holders of New Notes issued in the Offers and should be considered, along with the other risk factors, by eligible holders. There are additional risks attendant to being an investor in our debt securities that you should review, whether or not you elect to tender your Old Notes. These risks are described elsewhere in this “Risk Factors” section under the headings “— Risks Related to Our Business.”
 
To the extent that a holder of Old Notes is exchanging Old Notes for New Notes with a later maturity, such holder may ultimately find that we are able to repay the non-tendered Old Notes when they mature, but are unable to repay or refinance the New Notes when they mature.
 
If you are a holder of Old Notes, you may be offered New Notes with a later maturity than the Old Notes that you presently own. It is possible that tendering holders of such Old Notes will be adversely affected by the extension of maturity. Following the maturity date of a given issue of Old Notes, but prior to the maturity date of the corresponding issue of New Notes, we may become subject to a bankruptcy or similar proceeding. If so, holders of that issue of Old Notes who opted not to participate in the Offers may have been paid in full, and there is a risk that the holders of the issue who did opt to participate in the Offers will not be paid in full. If you decide to tender Old Notes, you will be exposed to the risk of nonpayment for a longer period of time.


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A court could deem the issuance of the New Notes or the guarantees thereof, as applicable, a fraudulent conveyance and void all or a portion of the obligations represented by the New Notes or the guarantees.
 
In a bankruptcy proceeding, a trustee, debtor in possession, or someone else acting on behalf of the bankruptcy estate may seek to recover transfers made or void obligations incurred prior to the bankruptcy proceeding on the basis that such transfers and obligations constituted fraudulent conveyances. Fraudulent conveyances are generally defined to include transfers made or obligations incurred for inadequate consideration when the debtor was insolvent, inadequately capitalized or in similar financial distress, or transfers made or obligations incurred with the intent of hindering, delaying or defrauding current or future creditors. A trustee or such other parties may recover such transfers and avoid such obligations made within two years prior to the commencement of a bankruptcy proceeding. Furthermore, under certain circumstances, creditors may recover transfers or void obligations under state fraudulent conveyance laws, within the applicable limitation period, which may be longer than two years, even if the debtor is not in bankruptcy. In bankruptcy, a representative of the estate may also assert such state law claims. If a court were to find that CIT Group Inc. issued the New Notes or a guarantor issued its guarantee under circumstances constituting a fraudulent conveyance, the court could void all or a portion of the obligations under the New Notes or the guarantees, or the pledge of collateral granted in connection therewith. In addition, under such circumstances, the value of any consideration holders received with respect to the New Notes, including upon foreclosure of the collateral, could also be subject to recovery from such holders and possibly from subsequent transferees, or holders might be returned to the same position they held as holders of the Old Notes. If the pledge of collateral were voided and the issuance of New Notes and/or guarantees were not voided, holders of New Notes would be unsecured creditors with claims that ranked pari passu with all other unsubordinated creditors of the applicable obligor, including trade creditors, except that the claims under the New Notes would be for a lower principal amount than the prior claim under the Old Notes.
 
A note or guarantee could be voided, or claims in respect of a note or guarantee could be subordinated to all other debts of CIT Group Inc. or the applicable guarantor, if CIT Group Inc. or the applicable guarantor at the time it incurred the indebtedness evidenced by the New Notes or its guarantee:
 
  •  received less than reasonably equivalent value or fair consideration for the issuance of the notes or the incurrence of the guarantee and was insolvent or rendered insolvent by reason of such issuance or incurrence;
 
  •  was engaged in a business or transaction for which CIT Group Inc.’s or the applicable guarantor’s remaining assets constituted unreasonably small capital; or
 
  •  intended to incur, or believed that it would incur, debts beyond its ability to pay those debts as they mature.
 
The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a debtor would be considered insolvent if:
 
  •  the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;
 
  •  the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
 
  •  it could not pay its debts as they become due.
 
We cannot assure you as to what standard a court would apply in determining whether CIT Group Inc. or a guarantor would be considered to be insolvent. If a court determined that CIT Group Inc. or a guarantor was insolvent after giving effect to the issuance of the New Notes or the applicable guarantee, it could void the notes or the applicable guarantees of the notes and require you to return any payments received from CIT Group Inc. or such subsidiaries.


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We may purchase or repay any Old Notes not tendered in the Offers on terms that could be more favorable to holders of such Old Notes than the terms of the Offers.
 
Subject to applicable law, after the Expiration Date, we may purchase Old Notes in the open market, in privately negotiated transactions, through subsequent tender or exchange Offers or otherwise. Any other purchases may be made on the same terms or on terms which are more or less favorable to holders of such Old Notes than the terms of the Offers. We also reserve the right to repay any Old Notes not tendered in accordance with their terms. If we decide to repurchase or repay Old Notes that are not tendered in the Offers, those holders who decided not to participate in the Offers could be better off than those who participated in the Offers.
 
The New Notes are new issues of securities and the trading market for such New Notes may be limited.
 
The New Notes will be new securities for which there currently is no, and on issuance there will not be any, established trading market. We do not intend to apply for listing of the New Notes on any securities exchange or for quotation in any automated dealer quotation system and we cannot assure you that any liquid market will develop for any series of New Notes. If any of the New Notes are traded after their initial issuance, they may trade at a discount from their initial issue price or principal amount, depending upon many factors, including prevailing interest rates, the market for similar securities and other factors, including general economic conditions and our financial condition, performance and prospects. Any decline in trading prices, regardless of the cause, may adversely affect the liquidity and trading markets for the New Notes.
 
Risks Related to Collateral Securing the New Notes
 
CIT Group Inc. and Delaware Funding are not granting any liens on any of their assets or pledging the equity of their direct subsidiaries under the New Notes.
 
Because CIT Group Inc. is prevented by certain agreements from granting liens on its assets, CIT Group Inc. is not itself granting a lien on any of its assets (including the equity of any of its direct subsidiaries). In addition, Delaware Funding is not granting a lien on any of its assets. The New Notes will be secured only by liens granted by the Guarantors (in the case of the Series B Notes other than CIT Group Inc.). See “Collateral — Guarantors and Foreign Grantors.” This may make it more difficult or costly for the Senior Collateral Agent, the Series A Collateral Agent or the Series B Collateral Agent to exercise remedies under their respective liens in the event that there is a default and foreclosure. Likewise, in the event that a third party obtains a lien on the assets of CIT Group Inc., such third party may obtain control or ownership of a Guarantor or Foreign Grantor.
 
The liens in favor of the Series A Collateral Agent or the Series B Collateral Agent will rank junior in priority to the liens in favor of the Senior Collateral Agent and holders of certain liens permitted under the Series A Indenture or the Series B Indenture may also obtain interests in the collateral equal or prior to the interest of the Series A Collateral Agent or the Series B Collateral Agent.
 
The liens securing each of the Series A Notes and the Series B Notes will rank junior in priority to the liens securing the Senior Credit Facility. In the event there is a default and foreclosure on the collateral securing the New Notes, the proceeds from the sale of such collateral may not be sufficient to satisfy the obligations under the New Notes. Proceeds from the sale of any collateral securing the Series A Obligations or Series B Obligations would be distributed first to satisfy in full the outstanding obligations under the Senior Credit Facility, as well as obligations secured by certain liens permitted pursuant to the Series A Indenture and the Series B Indenture before any remaining proceeds would be available for any distribution to either the Series A Collateral Agent or the Series B Collateral Agent. See “Description of Notes — Permitted Liens.”
 
The Senior Collateral Agent may exercise remedies against the Senior Collateral in any order or in any manner it determines to be commercially reasonable and need not exercise its rights in a manner or in an order designed to maximize the proceeds ultimately available to either the Series A Collateral Agent or the Series B Collateral Agent. Accordingly when exercising its remedies, the Senior Collateral Agent may choose


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to apply more liquid collateral to its outstanding obligations, leaving less liquid collateral for the junior secured parties. See “Collateral — Assets Securing Senior Obligations and Junior Obligations.”
 
The lien on the collateral securing the Series A Obligations will secure not only the obligations under the Series A Notes but also the obligations under the Junior Credit Facilities.
 
The lien on the collateral securing the Series A Obligations will secure the obligations under both the Series A Notes and the Junior Credit Facilities equally and ratably and such lien will be granted in favor of a single Series A Collateral Agent. The holders of the Series A Notes and the lenders under the Junior Credit Facilities will enter into a Series A Collateral Agency Agreement appointing the Series A Collateral Agent. The Series A Collateral Agency Agreement will contain provisions governing the distribution of the proceeds received from the sale of any collateral securing the Series A Obligations and the ability of holders of the Series A Notes and the lenders under the Junior Credit Facilities to direct the Series A Collateral Agent and other provisions governing the exercise of remedies and the foreclosure on the collateral securing the Series A Obligations by the Series A Collateral Agent.
 
The Series A Collateral Agent will act only upon the direction of the Series A Trustee or Junior Administrative Agents collectively representing the requisite holders or secured parties under one or more series of Series A Notes or Junior Credit Facilities that, individually or in the aggregate, constitutes more than 50% of the aggregate outstanding principal amount of the then outstanding Series A Notes and Junior Credit Facilities. The ability of the holders of the Series A Notes to influence the exercise of rights or remedies will therefore be limited to such holders’ proportionate share of the aggregate amount of Series A Obligations. Accordingly, the exercise of rights and remedies may not be within the control of the Series A Trustee if the Series A Notes are in default.
 
The Series A Collateral Agency Agreement will specify that proceeds to which the holders of Series A Notes and Junior Credit Facilities are entitled will be applied on a pro rata basis to the holders of Series A Notes and Junior Credit Facilities, subject to the terms of the Junior Intercreditor Agreement and the Senior Intercreditor Agreement.
 
The Series A Obligations and the Series B Obligations will be equally and ratably secured by liens on the collateral on a junior lien basis.
 
The lien on the collateral securing the Series A Obligations will be equal and ratable to the lien on the collateral securing the Series B Obligations. The Series A Collateral Agent and the Series B Collateral Agent will enter into a Junior Intercreditor Agreement which will contain provisions governing the equal and ratable treatment of the liens of the Series A Collateral Agent and the Series B Collateral Agent, the distribution of proceeds received from the sale of any collateral, and other provisions governing the exercise of remedies and the foreclosure on the collateral by the Series A Collateral Agent and the Series B Collateral Agent.
 
Future restructuring may reduce the value or the amount of the collateral securing the Series A Notes and the Series B Notes.
 
The Company’s restructuring plan may involve the incurrence of additional debt (including secured debt) by CIT Group Inc. and its affiliates. See “Summary — Restructuring.” Although each of the Guarantors has granted liens on substantially all of its own assets, in many cases valuable assets are owned by entities in our corporate structure which are not, and are not contemplated to be, Guarantors and are not required to grant liens on their assets. With regard to the collateral securing the Series A Notes and the Series B Notes, our restructuring plans may include the sale of substantial portions of such collateral or the businesses that generate such collateral. See “Collateral — Release or Subordination of Collateral.” In addition, although the lien granted by the Guarantors extends to property subsequently to be acquired by the Guarantors, there can be no assurances that new property will be acquired in the future.
 
The terms of the Series A Indenture and Series B Indenture will also permit us to incur significant additional debt at non-guarantor subsidiaries and to grant additional senior liens on certain collateral to secure


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other debt without equally and ratably securing the Series A Notes and the Series B Notes. See “Description of New Notes — Certain Covenants.”
 
The Senior Credit Facility may be refinanced and the terms and conditions of such refinanced Senior Credit Facility may differ from those of the Senior Credit Facility as of the date hereof. Following any such refinancing, the lien in favor of the Series A Collateral Agent securing the Series A Notes and the Junior Credit Facilities and the lien in favor of the Series B Collateral Agent securing the Series B Notes will continue to be subordinated to any lien securing the refinanced Senior Credit Facility.
 
As a result of the Senior Intercreditor Agreement, the rights that would otherwise be available to the holders of Series A Obligations and Series B Obligations as creditors will be substantially limited.
 
The Senior Intercreditor Agreement between the Senior Collateral Agent, the Series A Collateral Agent and the Series B Collateral Agent could affect your rights as a creditor in ways that they would not be affected if the Series A Obligations and Series B Obligations were not secured and there was no Senior Intercreditor Agreement between the holders of the Senior Obligations and the holders of the Junior Obligations. For instance, the new Senior Intercreditor Agreement will provide, among other things, that:
 
  •  none of the Series A Collateral Agent, the Series B Collateral Agent, any holder of Series A Notes or Series B Notes nor any secured party under the Junior Credit Facilities may challenge the validity or priority of the liens securing the Senior Obligations or the validity or amount of Senior Obligations;
 
  •  if the Series A Collateral Agent, the Series B Collateral Agent, any holder of Series A Notes or Series B Notes and the secured parties under the Junior Credit Facilities receives any payment on account of the Series A Collateral Agent’s or the Series B Collateral Agent’s lien (as applicable) on the collateral prior to the obligations under the Senior Credit Facility being repaid in full in cash, then such agent, holder or secured party will be required to turn over such amount to the Senior Collateral Agent regardless of whether any such Senior Obligations or any lien on the collateral securing such obligations is otherwise found to be unenforceable or subordinated to any other claim or lien or is otherwise recharacterized under applicable law;
 
  •  if for any reason it is determined that any or all of the liens securing the Senior Credit Facility are void or otherwise not entitled to proceeds of the collateral, the aggregate amount of proceeds available to satisfy the liens of the Series A Collateral Agent, the Series B Collateral Agent and the Senior Collateral Agent will be reduced. In such circumstances, each of the Series A Collateral Agent and the Series B Collateral Agent, as applicable, and each other Junior Lien Secured Party receiving such proceeds will be required to turn over all such proceeds to the Senior Collateral Agent and will not realize any benefit from its security interest on the collateral;
 
  •  the Series A Collateral Agent, the Series B Collateral Agent, any holder of Series A Notes or Series B Notes and the secured parties under the Junior Credit Facilities will be prohibited from enforcing the Series A Collateral Agent’s or the Series B Collateral Agent’s (as applicable) liens on the collateral or objecting to any commercially reasonable exercise of remedies by the Senior Collateral Agent on behalf of the holders of the Senior Obligations;
 
  •  even though commercially reasonable, decisions made by the Senior Collateral Agent could nonetheless reduce or delay amounts available for distribution to the Series A Collateral Agent, the Series B Collateral Agent, any holder of Series A Notes or Series B Notes and the secured parties under the Junior Credit Facilities;
 
  •  the Series A Collateral Agent, the Series B Collateral Agent, any holder of Series A Notes or Series B Notes and the secured parties under the Junior Credit Facilities may be prohibited from, or limited in, taking certain significant actions in connection with any bankruptcy or insolvency proceeding including: (i) objecting to the use of cash collateral or to certain “debtor-in-possession” financings secured by liens on the collateral, (ii) objecting to any request for “adequate protection” by the Senior Collateral Agent or the holders of the Senior Obligations and (iii) supporting any plan of reorganization that does


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  not provide for satisfaction of all Senior Obligations before distributions are available for the Series A Obligations and the Series B Obligations; and
 
  •  the liens on the collateral securing the Series A Obligations and the Series B Obligations will be automatically released, and the liens in favor of the Series A Collateral Agent and the Series B Collateral Agent will be automatically subordinated, upon the release of such collateral or the subordination of such liens in favor of the Senior Collateral Agent in connection with certain releases of collateral and subordination of liens under the Senior Credit Facility. See “Collateral — Release or Subordination of Collateral.”
 
As a result of these provisions and the other terms of the Senior Intercreditor Agreement, the holders of the Series A Notes and the Series B Notes will be prohibited from or limited in taking certain actions and it is possible that the holders of the Series A Notes and the Series B Notes could receive proportionately less in a bankruptcy or liquidation proceeding than our unsecured creditors. See “Description of New Notes— Intercreditor Agreement.”
 
Because the issuer of the Series B Notes is also a guarantor under our Senior Credit Facility, assets of Delaware Funding may not be available to satisfy obligations to the holders of Series B Notes
 
The issuer of the Series B Notes, Delaware Funding, has guaranteed the obligations of the CIT Group Inc., as well as the obligations of the other borrowers and guarantors, under our Senior Credit Facility and such guaranty is secured by certain of its assets. While the outstanding indebtedness under the Senior Credit Facility is approximately $3 billion, if the Senior Facility Amendments become effective, the aggregate amount of this senior indebtedness may be increased so that the total indebtedness may be between $6 billion and $9 billion. Accordingly, there can be no assurances that Delaware Funding will have sufficient assets to satisfy its obligations under the Series B Notes.
 
The value of the collateral securing the Series A Obligations and the Series B Obligations is highly uncertain.
 
We have not prepared any appraisals of the collateral securing the Series A Obligations and the Series B Obligations in connection with the issuance of the Series A Notes and the Series B Notes or our entering into of the Junior Credit Facilities. By its nature, some or all of the collateral may be illiquid and may have no readily ascertainable value, and the value of the collateral in the event of a liquidation will depend in part on market conditions and other factors beyond our control, including the availability of suitable buyers for the collateral. Although we have provided the carrying value of certain of the collateral securing the Series A Obligations and the Series B Obligations for purposes of this Offering Memorandum and Disclosure Statement, the carrying value of an asset does not necessarily represent its current market value. Carrying value is the amount shown on our accounting records for assets net of reductions for loan premium discounts, allowances for bad debts and accounting pronouncements. Furthermore, carrying value could be reduced in the event Fresh Start Accounting principles were to be applied in the future. Recent attempts to sell certain assets on the open market have resulted in offers below the carrying value.
 
A portion of the collateral consists of assets located outside of the U.S. or governed by laws other than state or federal laws of the U.S. Certain of our borrowers, lessees and account debtors are located outside the U.S. Likewise, certain assets may be located outside of the U.S. The collateral securing the Series A Obligations and the Series B Obligations includes liens on equity interests in certain affiliates located in Canada, Ireland and England. The ability of the Series A Collateral Agent or the Series B Collateral Agent to exercise remedies may be governed by these foreign laws and there can be no assurance that the exercise of remedies governed by such foreign law will not result in delay or additional risk or cost.
 
In addition, to the extent any item of collateral securing the Series A Obligations and the Series B Obligations consists of a right of payment from a third party, the amount of any such payment may be reduced if such party exercises a right of set-off. Due to our extensive relationships with many third parties through servicing arrangements and various accounts receivable, rights of set-off may, at any given time, arise as a result of significant amounts that we owe in connection with our relationships. We do not expect to seek and


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have not obtained waivers of any rights of set-off from third parties which adversely affecting the value of the collateral securing the Series A Obligations and the Series B Obligations.
 
A significant portion of our business involves the creation, purchase and sale of receivables. There is considerable uncertainty concerning the continuing viability of this business. Our ability to continue to generate after acquired receivables is dependent on our reputation in the market, our ability to collect upon the receivables, typical default rates and general business conditions which are beyond our ability to control. If we are unable to generate sufficient after acquired receivables, our ability to repay the Series A Notes and Series B Notes may be negatively impacted.
 
Although the Guarantors have liens on substantially all after-acquired personal property assets available to be pledged, there might not be any significant value associated with such after-acquired assets other than the primary collateral described herein. See “Collateral — Release or Subordination of Collateral.”
 
The benefit of the liens of the Series A Collateral Agent and the Series B Collateral Agent on proceeds of collateral securing the Series A Obligations and the Series B Obligations (including collections or receivables and income) may be lost or negatively impacted by our cash management procedures.
 
Proceeds of collateral securing the Series A Obligations and the Series B Obligations are expected to be credited to deposit accounts over which neither the Series A Collateral Agent nor the Series B Collateral Agent may have a perfected lien. Although we maintain a substantial number of collection accounts into which payments on collateral securing the Series A Obligations and the Series B Obligations may be made, the funds in these accounts are promptly transferred to concentration accounts maintained by the CIT Group Inc. and such concentration accounts will not be subject to the liens of each of the Series A Collateral Agent and the Series B Collateral Agent. The Company has covenanted that it will not maintain more than $500 million in these concentration accounts. However, even after funds in excess of $500 million are debited from these concentration accounts, there is no requirement that cash collateral be segregated for either of the Series A Collateral Agent, the Series B Collateral Agent or the Junior Collateral Agent. There can be no assurance that either of the Series A Collateral Agent or the Series B Collateral Agent will be able to trace the proceeds of the collateral securing the Series A Obligations and the Series B Obligations, nor can there be any assurance that proceeds of such collateral will be identifiable in our current cash management procedures.
 
We have no present plans to alter any cash management systems to facilitate the identification of property owned by the Guarantors or Foreign Grantors or property consisting of proceeds of collateral securing the Series A Obligations and the Series B Obligations. Neither do we have any obligation or plans to segregate cash collateral for the benefit of either of the Series A Collateral Agent or the Series B Collateral Agent.
 
Furthermore, the Company is under no obligation to use proceeds of collateral to satisfy Senior Obligations, Series A Obligations, or Series B Obligations. Likewise there are limited instances in which the Company must apply proceeds of asset sales to satisfy Senior Obligations, Series A Obligations or Series B Obligations. See “Description of Notes.”
 
Other than the filing of UCC financing statements in appropriate jurisdictions, the Series A Collateral Agent and the Series B Collateral Agent will take only limited additional actions to preserve or protect the liens.
 
Except for the additional actions with respect to Rail Collateral, Aircraft Collateral, the Pledged Foreign Equity Collateral and certain items of intellectual property, the only action to be taken to perfect the liens securing each of the Series A Notes and the Series B Notes will be the filing of UCC financing statements in appropriate jurisdictions, provided that the Series A Collateral Agent and Series B Collateral Agent intend to take all actions (or action will be taken on their behalf) that the Senior Collateral Agent has taken to perfect liens in collateral that cannot be perfected by filing UCC financing statements.
 
In the case of the Foreign Pledged Equity Collateral, certain filings will be made pursuant to the laws of Canada, Ireland and Barbados, as applicable, with respect to the Foreign Pledged Equity Collateral. Each of the Series A Collateral Agent and the Series B Collateral Agent may have a limited benefit, or no benefit,


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from such filings. The pledge by CIT Group Holdings (UK) Limited of 65% of the shares in CIT Vendor Finance (UK) Limited (not to exceed 65% of the voting shares) will only be perfected by filing UCC financing statements, but will not be pledged or perfected under the laws of England and Wales and may not be enforceable under the laws of England and Wales. The pledge by CIT Holdings Canada ULC of all of the shares in CIT Aerospace International, except one share which is owned by CIT Financial Ltd. as a nominee, will be perfected pursuant to Irish law. The pledge by CIT Holdings No. 2 (Ireland) of 49% of the shares in CIT Group Finance (Ireland) will be perfected pursuant to Irish law. The pledge by CIT Financial (Barbados) Srl of 65% of the voting shares and 100% of the non-voting shares in CIT Financial Ltd. will be perfected by filing pursuant to Canadian law and registered in Barbados. The Pledge by CIT Financial Ltd. of 65% of the voting shares and 100% of the non-voting shares in CIT Financial (Alberta) ULC will be perfected by filing pursuant to Canadian Law.
 
In the case of the Aircraft Collateral, each of the Series A Collateral Agent and the Series B Collateral Agent may have a limited benefit, or no benefit, from Aircraft Collateral that is registered outside of the United States or Canada. There can be no assurance that the liens of the Series A Collateral Agent or the Series B Collateral Agent on Aircraft Collateral will be perfected under the laws of any jurisdiction outside of the United States or Canada, notwithstanding registrations of international interests and assignments of international interests under the Convention on International Interests in Mobile Equipment (Cape Town, 2001) (the “Cape Town Convention”) and The Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment 2001 (collectively, the “Cape Town Filings”). No Surface Transportation Board filings, FAA filings, Cape Town Filings, foreign filings or mortgages will be made with respect to any rail or aircraft assets other than the Rail Collateral and the Aircraft Collateral. Therefore there can be no assurance that the Series A Collateral Agent or Series B Collateral Agent will obtain any benefit from such other rail or aircraft assets.
 
To the extent that the liens of each of the Series A Collateral Agent and the Series B Collateral Agent are not perfected in any item of collateral, such property may not be available to satisfy obligations to the Series A Notes holders and the Series B Note holders in the event of a bankruptcy (or other insolvency proceeding) or the exercise of remedies by a third party creditor whose interest in the asset is perfected. The Series A Collateral Agent and Series B Collateral Agent intend to take all additional actions that the Senior Collateral Agent takes to perfect its security interest in collateral.
 
Other creditors in addition to the Senior Collateral Agent may have or obtain liens prior to the liens of the Series A Collateral Agent and the Series B Collateral Agent.
 
The lien of each of the Series A Collateral Agent and the Series B Collateral Agent may be subordinated not only to the lien of the Senior Collateral Agent but to other liens as well. The security interest of each of the Series A Collateral Agent and the Series B Collateral Agent may be subordinated for liens arising by operation of law (such as landlord liens, warehouse liens, mechanics liens, custom and revenue liens, tax liens); liens and deposits in connection with workers’ compensation; surety and appeal bonds; deposits with derivatives counterparties and purchase money liens. See “Description of New Notes — Liens. In particular, the lien of the each of the Series A Collateral Agent and the Series B Collateral Agent may be subordinated in connection with certain ordinary course of business activities of the Company. Furthermore, certain liens that arise by operation of law (e.g., certain tax and ERISA liens, mechanics liens and other liens perfected by possession or control) may be senior to the lien of the Junior Collateral Agent. The lien of the Junior Collateral Agent will be perfected only by the filing of UCC financing statements (with the exception of certain limited actions taken with respect to Rail Collateral, Aircraft Collateral and Pledged Foreign Equity Collateral).
 
Lessees of leased assets, including Aircraft Collateral and Rail Collateral, have the right to quiet enjoyment under their lease agreements. The liens of each of the Series A Collateral Agent and the Series B Collateral Agent on the Rail Collateral, Aircraft Collateral and other assets leased to lessees are subject to the rights of the lessees under such lease agreements.


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Collateral securing the Series A Obligations and the Series B Obligations will be released or subordinated in connection with transactions permitted under the Series A Indentures and the Series B Indentures, including ordinary course business activities.
 
Very few of the assets securing the Series A Obligations and the Series B Obligations consist of fixed assets over which either of the Series A Collateral Agent or Series B Collateral Agent is expected to have a lien until the maturity of the Series A Notes or Series B Notes. It is anticipated that assets such as receivables and leases will themselves mature and necessarily decrease in value as payments by lessees and account debtors are made on the receivables. Notwithstanding that each of the Series A Collateral Agent and the Series B Collateral Agent has a security interest in after-acquired property, there can be no assurances that collateral that is released or subordinated will be replaced with collateral of the same type or the same value. In addition, collateral will be released from the liens of each of the Series A Collateral Agent and the Series B Collateral Agent, including in connection with ordinary course of business transactions. See “Collateral — Release or Subordination of Collateral.”
 
The liens of each of the Series A Collateral Agent and the Series B Collateral Agent on Aircraft Collateral and Rail Collateral must be released when there is a sale or other disposition permitted under the terms of the Series A Indenture and Series B Indenture or an aircraft mortgage, including upon sales and transfers of the Aircraft Collateral and Rail Collateral in the ordinary course of business or upon a casualty. In addition, if any Aircraft Collateral is re-registered in another jurisdiction, the liens of each of the Series A Collateral Agent and the Series B Collateral Agent must be released in order to permit such re-registration. If the re-registration is into the United States, new FAA filings will be required with respect to that aircraft. Similarly, if the re-registration is into a country that is a party to the Cape Town Convention, Cape Town Filings will be made with respect to the liens of each of the Series A Collateral Agent and the Series B Collateral Agent on such aircraft. The Company expects to require releases of the lien on certain Aircraft Collateral and certain Rail Collateral on a frequent and routine basis.
 
The ability of each of the Series A Collateral Agent and the Series B Collateral Agent to exercise remedies against the collateral securing the Series A Obligations and the Series B Obligations may be limited by terms of agreements to which we are a party.
 
We do not expect to notify third parties of the liens of each of the Series A Collateral Agent and the Series B Collateral Agent or to obtain consents from such third parties to pledge their obligations under any agreements constituting collateral. However, some agreements restrict us from transferring our right to receive payments without the consent of such third parties. In these cases, the Series A Notes and Series B Notes will only be secured by such payment rights to the extent that Sections 9-406 or 9-408 of the UCC render such restrictions unenforceable or ineffective. Sections 9-406 and 9-408 of the UCC generally provide that provisions in agreements purporting to restrict or prohibit the right to pledge accounts receivable, promissory notes and payment intangibles are not enforceable. These sections are relatively new provisions and a meaningful body of case law has not yet developed to interpret them. UCC Section 9-408, if applicable, could prevent each of the Series A Collateral Agent and the Series B Collateral Agent from exercising certain rights with respect to these pledged accounts receivable, notes and payment intangibles. If the Series A Collateral Agent or Series B Collateral Agent is unable to exercise these rights under the UCC or obtain consents, the value of the collateral securing the Series A Obligations and the Series B Obligations as well as the ability each of the Series A Collateral Agent and the Series B Collateral Agent to realize or foreclose on such collateral in a timely manner will be adversely affected.
 
The right of each of the Series A Collateral Agent and the Series B Collateral Agent to repossess and dispose of the leased assets (including Rail Collateral and Aircraft Collateral) upon acceleration is subject to the lessees’ rights under the lease agreements. This limitation may adversely affect the value of the collateral securing the Series A Obligations and the Series B Obligations.


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Rights in the collateral securing the Series A Obligations and the Series B Obligations may be adversely affected by bankruptcy proceedings.
 
The right of each of the Series A Collateral Agent and the Series B Collateral Agent to repossess and dispose of the collateral securing the Series A Obligations and the Series B Obligations upon acceleration is likely to be significantly impaired by federal bankruptcy law if bankruptcy proceedings are commenced by or against us. This could be true even if bankruptcy proceedings are commenced after the Series A Collateral Agent or Series B Collateral Agent has repossessed and disposed of the collateral securing the Series A Obligations and the Series B Obligations. Under bankruptcy law, a secured creditor such as the Series A Collateral Agent or Series B Collateral Agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from a debtor, without bankruptcy court approval. Moreover, bankruptcy law permits the debtor to continue to retain and to use collateral, and the proceeds, products, rents, or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given “adequate protection.”
 
The meaning of the term “adequate protection” varies according to circumstance, but in general the doctrine of “adequate protection” requires a troubled debtor to protect the value of a secured creditor’s interest in the collateral, through cash payments, the granting of an additional security interest or otherwise, if and at such time as the court in its discretion may determine during the pendency of the bankruptcy case. In view of the broad discretionary powers of a bankruptcy court, it is impossible to predict how long payments under the Series A Notes and the Series B Notes could be delayed following commencement of a bankruptcy case, whether or when the trustee would repossess or dispose of the collateral, or whether or to what extent holders of the Series A Notes or Series B Notes would be compensated for any delay in payment or loss of value of the collateral through the requirements of “adequate protection.” Furthermore, in the event the Bankruptcy Court determines that the value of the collateral is not sufficient to repay all amounts due on the Series A Notes and the Series B Notes, the holders of the Series A Notes and the Series B Notes would have unsecured “deficiency claims” as to the difference. Federal bankruptcy laws do not generally permit the payment or accrual of interest, costs, or attorneys’ fees for unsecured claims during the debtor’s bankruptcy case.
 
Risks Related to Consummation of the Offers
 
The exchange ratios for the Offers do not reflect any independent valuation of the Old Notes, the New Notes or the New Preferred Stock.
 
We have not obtained or requested a fairness opinion from any banking or other firm as to the fairness of the exchange ratios or the relative values of Old Notes, the New Notes or the New Preferred Stock. If you tender your Old Notes, you may or may not receive as much value than if you choose to keep them.
 
No trading market for the New Preferred Stock exists, and none is likely to develop.
 
The shares of New Preferred Stock issued in the Offers have not been listed on the New York Stock Exchange (“NYSE”) or any other national or regional securities exchange, and we are not likely to list the shares of New Preferred Stock in the future. As a result, no trading market for the New Preferred Stock will exist upon consummation of the Offers, and none is likely to develop. In addition, the high liquidation preference per share of the New Preferred Stock and the complexity of the Company’s capital structure following consummation of the Offers, which could exist indefinitely if we fail to consummate the Recapitalization, may further limit the liquidity of the New Preferred Stock.
 
Consummation of the Recapitalization is subject to a number of contingencies, including the consummation of the Offers and the affirmative vote of our stockholders. There can be no assurance that the Recapitalization will be consummated.
 
In the event that the conditions to the Offers are satisfied and the Offers are consummated, following the Settlement Date we intend to effect the Recapitalization, including a reclassification of the outstanding shares of our preferred stock, including the New Preferred Stock, into common stock in a manner that, assuming 100% participation in the Offers and approval of the United States Department of Treasury as to the


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reclassification of its series of preferred stock, will result in holders of our currently outstanding common stock retaining 2.5% of our common stock, holders of our currently outstanding preferred stock receiving approximately 3.5% of our common stock and holders of the New Preferred Stock receiving the remaining approximately 94.0% of our common stock. If we receive the minimum level of participation in the Offers required to satisfy the Liquidity and Leverage Condition and assuming approval from the United States Department of the Treasury as noted above, following consummation of the Recapitalization, holders of the New Preferred Stock will hold 92.5% of the voting power and the equity of the Company, holders of our currently outstanding preferred stock will hold 5% of the voting power and the equity of the Company and holders of our currently outstanding Common Stock will hold 2.5% of the equity and voting power of the Company.
 
In order to effectuate the reclassification of our preferred stock into common stock, we will file a proxy statement with the SEC and solicit votes from our stockholders to amend our certificate of incorporation to increase our authorized common shares and reclassify our preferred stock into common stock. These actions will be subject to the approval by the holders of a majority of our outstanding voting stock (common stock and New Preferred Stock voting together as a single class) and, with respect to the reclassification of our preferred stock into common stock only, by holders of at least two-thirds of the aggregate liquidation preference of our Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and the New Preferred Stock, voting together as a single class. In addition, the reclassification of the Series D Preferred Stock is subject to the approval of the United States Department of the Treasury which Series D Preferred was issued to the United States Department of the Treasury under the Troubled Asset Relief Program (“TARP”). There can be no assurance that the United States Department of the Treasury will vote to approve the reclassification of the Series D Preferred Stock nor has the United States Department of the Treasury agreed to do so. The Company and the United States Department of Treasury are discussing the treatment of the Company’s outstanding Series D Preferred but the Company and the United States Department of the Treasury have not reached an agreement.
 
Even though holders of the New Preferred Stock will hold, collectively, sufficient voting power to approve the increase in authorized common shares and the reclassification of our preferred stock into common stock (other than the reclassification of the Series D Preferred Stock into common stock which requires consent of the United States Department of the Treasury as noted above which has not been given), there can be no assurance that the Offers will be consummated or that our stockholders will vote to approve these actions. In addition, we may seek relief under Chapter 11 of the Bankruptcy Code before the Recapitalization is complete, one or more stakeholders may file an action to prevent us from consummating the Recapitalization, or a stakeholder or third party may intervene in a manner that prevents us from consummating the Recapitalization.
 
If the Offers are consummated, existing holders of our preferred stock and our common stock will be subject to substantial dilution of their voting power and ownership interests.
 
Consummation of the Offers will result in substantial dilution to our existing equity holders, leaving such holders with little economic or voting interest in the Company. Currently, our preferred stock consists of approximately $3.4 billion liquidation preference in the aggregate, and our common stock represents 100% of our voting power and 100% of the equity value of the Company after the preferred stock liquidation preference is paid in full. The aggregate liquidation preference of the New Preferred Stock will be substantially higher than the aggregate combined liquidation preference of our outstanding series of preferred stock and, assuming 100% participation in the Offers, will represent approximately 94.0% of our voting power.
 
Absent an exception to the NYSE rule requiring stockholder approval prior to issuance of our New Preferred Stock, our equity securities currently listed on the NYSE will be de-listed if we consummate the Offers and, in any event, may be de-listed if we are unable to consummate the Recapitalization transactions within a reasonable period of time.
 
Paragraph 312.03(c) of the NYSE Manual provides that stockholder approval is required prior to the issuance of common stock, or securities convertible into or exercisable for common stock, if the securities being issued are equal to or in excess of 20 percent of the voting power or number of shares of common stock


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outstanding immediately before the issuance. If we consummate the Offers, we will be required to issue shares of New Preferred Stock having general voting power substantially in excess of the 20% threshold provided under paragraph 312.03(c). However, as soon as practicable following the date of this Offering Memorandum and Disclosure Statement, we intend to submit a formal request to the NYSE for a waiver from the stockholder approval requirement pursuant to the financial viability exception contained in paragraph 312.05 of the NYSE Manual. Such paragraph provides that exception may be made to the stockholder approval policy described above upon application to the NYSE when (1) the delay in securing stockholder approval would seriously jeopardize the financial viability of the enterprise and (2) reliance by the company on this exception is expressly approved by the Audit Committee of the Board. In the event that the NYSE does not grant our request for an exemption, our listed equity securities, including our common stock, Series A Preferred Stock, Series C Preferred Stock and our Equity Units, would be subject to de-listing by the NYSE.
 
In addition, the NYSE’s continued listing requirements provide, among other requirements, that the minimum trading price of our common stock not fall below $1.00 per share over a consecutive 30 day trading period. Upon receipt from the NYSE of notice of non-compliance, we would have a period of 180 days to regain compliance with this requirement. Upon consummation of the Offers, the price per share of our common stock will likely be well below the $1.00 per share minimum trading price. However, if we are able to complete the Recapitalization within a reasonable period of time, including, if required, the Reverse Stock Split, we may be able to regain compliance with the NYSE’s continued listing requirements and thus maintain our listing. There can be no assurance that we will be successful in completing the Recapitalization within the requisite time period following consummation of the Offers, or at all. See “Recapitalization After the Offers.”
 
Delisting of our common stock would have an adverse effect on the market liquidity of our common stock and, as a result, the market price for our common stock could become more volatile. Further, delisting also could make it more difficult for us to raise additional capital.
 
There can be no assurance that the United States Department of Treasury, which holds all of our Series D Preferred Stock, will consent to the reclassification of its preferred stock, in which case the Recapitalization may result in an alternative capital structure.
 
Holders of the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and the New Preferred Stock will vote as a single class on the reclassification of those series of preferred stock. The United States Department of Treasury, which holds all of our Series D Preferred Stock, will vote separately from these holders and may not vote in favor of the reclassification of its preferred stock. In the event that holders of our Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and New Preferred Stock consent to the Recapitalization, but the United States Department of Treasury, as holder of the Series D Preferred Stock, does not consent, we will reclassify all of our outstanding preferred stock, other than the Series D Preferred Stock, into shares of common stock and the United States Department of Treasury, as holder of the Series D Preferred Stock, will have preferential rights with respect to payment of dividends and upon liquidation up to the full amount of its liquidation preference. As of September 30, 2009, the aggregate liquidation preference (which includes accrued dividends) on the Series D Preferred Stock was $2.4 billion.
 
Risks Related to the Chapter 11 Case and the Plan of Reorganization
 
The commencement of a Chapter 11 case for the purpose of implementing the Plan of Reorganization may result in a number of adverse consequences.
 
The Chapter 11 environment may adversely affect our business model.
 
We are principally engaged in borrowing and lending activities. While in Chapter 11 we may not be able to access credit at interest rates lower than the rates at which we extend credit. Although we intend to continue to provide loan commitments, lines of credit, factoring, receivable and collection management products and secured financing to our customers in the normal course, there can be no assurances that counterparties will


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continue to conduct business with us while we are in Chapter 11. The failure to engage in lending activities will result in material losses.
 
If we file for bankruptcy under Chapter 11 of the Bankruptcy Code, our derivative contracts may be subject to early termination resulting in significant losses in value and additional unsecured claims and interest rate and currency risk to us.
 
In a substantial portion of our business, we use derivative contracts that may fall within the “safe harbor” protections set forth in sections 556 and 560 as well as other sections of the Bankruptcy Code. The safe harbor provisions permit non-debtor parties to, among other things, exercise certain contractual rights and remedies notwithstanding the commencement of a Chapter 11 case. Although case law surrounding the scope of the safe harbor provisions under the Bankruptcy Code remains unsettled, we believe that a substantial number of our contracts would qualify for safe harbor protection, resulting in early termination of these contracts by the counterparties. Upon early termination, settlement payments are determined by the non-defaulting counterparty using mark-to-market valuation methodologies. Given the inherent uncertainties in mark-to-market valuation, we may not be able to realize the net current value of any existing derivative trading contracts subject to early termination. Although we cannot accurately predict whether a substantial number of counterparties will exercise early termination rights, early termination by a substantial number of counterparties may result in a significant loss of value.
 
In addition, many of our counterparties owing settlement payments upon termination may refuse to make such payments absent litigation, further reducing the value of our existing trading positions. Furthermore, early termination will result in an acceleration of settlement payments required to be paid by us in full upon emergence from Chapter 11, absent consent of the counterparty or to the extent not fully secured by cash or letters of credit. Although we cannot accurately predict the number of counterparties that may exercise early termination rights, in the event that a substantial number of parties exercise early termination rights, we anticipate additional unsecured claims in the form of accelerated termination payments. In addition, as a result of termination of these agreements we may be exposed to interest rate and currency risk.
 
If we file for bankruptcy under Chapter 11 of the Bankruptcy Code, agreements of subsidiaries, including financing transactions, may be subject to termination.
 
A substantial number of our subsidiaries are parties to contracts that we guaranteed. Accordingly, a Chapter 11 filing by CIT Group Inc. may result in defaults in the underlying obligations. Such defaults may permit counterparties to terminate the underlying contract, repossess collateral and/or terminate servicing rights.
 
If we file for bankruptcy under Chapter 11 of the Bankruptcy Code, the letters of credit we use to secure the obligations of our subsidiaries may be drawn, increasing our liabilities.
 
A substantial portion of the obligations of CIT Group Inc.’s subsidiaries are secured with cash or letters of credit issued by CIT Group Inc. Upon a Chapter 11 filing by CIT Group Inc. or other event of default, including a Chapter 11 filing by CIT Group Inc. as credit support provider, CIT Group Inc.’s funded debt exposure would increase if approximately $250 million of letters of credit currently outstanding as of August 31, 2009 (excluding cash collateralized letters of credit) were to be drawn. In the event that such letters of credit are drawn, we will be required to include the satisfaction of such incremental liability in our Plan of Reorganization, including increased interest costs, and replace the extinguished letter of credit capacity. There can be no assurances that we will be able to satisfy such requirements.
 
There can be no assurances that we will have sufficient excess liquidity within our Plan of Reorganization to satisfy obligations owing under a debtor in possession financing facility upon our emergence from bankruptcy.
 
If we commence a bankruptcy case, we may need to obtain a debtor in possession financing facility in order to meet liquidity needs, including any need arising out of existing letters of credit being drawn or


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otherwise terminated by their terms while we are in Chapter 11 to meet future letter of credit demands and other working capital needs. There can be no assurances that we will have sufficient excess liquidity within our Plan of Reorganization to satisfy obligations owing under the debtor in possession financing facility upon our emergence from bankruptcy.
 
If the Company files for bankruptcy under Chapter 11 of the Bankruptcy Code and the Plan of Reorganization is confirmed, the Company’s existing common stock and preferred stock will no longer have any value.
 
If the Company files the prepackaged bankruptcy case and the Plan of Reorganization is confirmed, then holders of CIT Group Inc.’s outstanding common and/or preferred stock will have no stake in the reorganized Company. Moreover, holders of equity interests in Delaware Funding will only retain such equity interests if holders of Canadian Senior Note Claims vote in favor of the Plan of Reorganization. There can be no assurance that holders of our equity securities would retain a stake in the Company or receive any value as a result of a bankruptcy case.
 
The automatic stay under Bankruptcy Code section 362 may not prevent creditors from exercising their remedies against non-debtor affiliates.
 
The “automatic stay” under Bankruptcy Code section 362 prevents creditors from taking or continuing any debt collection enforcement actions against entities that seek bankruptcy court protection. These protections typically extend only to the chapter 11 debtor and its property and do not typically extend to the property of non-debtor affiliates or related parties. Accordingly, the rights of creditors against non-debtors are not typically impacted by the bankruptcy filing of affiliated entities.
 
Numerous non-debtor affiliates of CIT are co-obligors with the debtors on certain debt or have guaranteed the debt of CIT. In other instances, CIT has guaranteed the debt of certain of its anticipated non-debtor affiliates. Certain of CIT’s non-debtor affiliates may have also granted their own creditors or the creditors of CIT a security interest in some or all of their property as a form of credit enhancement. In nearly all instances, a bankruptcy filing by CIT will result in an event of default of CIT’s debt or a non-debtor affiliate’s debt if such debt is guaranteed by CIT.
 
Upon such an event of default, the Company’s lenders would be free to pursue their remedies against their non-debtor affiliates and their property, including foreclosing on property pledged to the Company’s creditors. The Company hopes to negotiate waivers or standstill agreements with their lenders in advance of commencing their bankruptcy cases to avoid or minimize collection efforts against their non-debtor affiliates. There can be no guarantee that the Company will be successful in such efforts. If the Company is not successful in all instances in negotiating waivers of events of default, its non-debtor affiliates and their property may become the subject of collection and debt recovery actions by their creditors.
 
Risks Relating to Solicitation
 
If the Bankruptcy Court determines that our solicitation or vote did not comply with the requirements of the Bankruptcy Code, we may need to resolicit acceptances which would delay confirmation of the Plan of Reorganization.
 
Section 1126(b) of the Bankruptcy Code provides that the holder of a claim against, or interest in, a debtor who accepts or rejects a plan before the commencement of a Chapter 11 case is deemed to have accepted or rejected such plan under the Bankruptcy Code so long as the solicitation of such acceptance was made in accordance with applicable nonbankruptcy law governing the adequacy of disclosure in connection with such solicitations, or, if such laws do not exist, such acceptance was solicited after disclosure of “adequate information,” as defined in section 1125 of the Bankruptcy Code.
 
In addition, Bankruptcy Rule 3018(b) provides that a holder of a claim or interest who has accepted or rejected a plan before the commencement of the case under the Bankruptcy Code will not be deemed to have accepted or rejected the plan if the court finds after notice and a hearing that the plan was not transmitted in


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accordance with reasonable solicitation procedures. Section 1126(b) of the Bankruptcy Code provides that a holder of a claim or interest that has accepted or rejected a plan before the commencement of a case under the Bankruptcy Code is deemed to have accepted or rejected the plan if (i) the solicitation of such acceptance or rejection was in compliance with applicable nonbankruptcy law, rule or regulation governing the adequacy of disclosure in connection with such solicitation or (ii) there is no such law, rule, or regulation, and such acceptance or rejection was solicited after disclosure to such holder of adequate information (as defined by section 1125(a) of the Bankruptcy Code).
 
The Company believes that its Solicitation of votes to accept or reject the Plan of Reorganization from Holders of Claims in Class 6, Class 7, Class 8, Class 9, Class 10 and Class 11 is proper under applicable nonbankruptcy law, rules, and regulations, and contains adequate information as defined by section 1125(a) of the Bankruptcy Code. The Company also believes that it is not required to solicit any other class under the Bankruptcy Code or applicable nonbankruptcy law, rules, or regulations. The Company cannot be certain, however, that its solicitation of acceptances or rejections will be approved by the Bankruptcy Court. There is also a risk that confirmation of the Plan could be denied by the Bankruptcy Court.
 
The Company believes that the use of the Disclosure Statement, Ballots, and Master Ballots for the purpose of obtaining acceptances of the Plan and the Solicitation complies with the Bankruptcy Code. The Bankruptcy Court may decide, however, that the Solicitation failed to meet the requirements of section 1126(b) of the Bankruptcy Code. If the Bankruptcy Court determines that the Solicitation did not comply with the requirements of section 1126(b) of the Bankruptcy Code, the Company may seek to resolicit acceptances, and, in that event, confirmation of the Plan could be delayed and possibly jeopardized.
 
Risks Related to Our Business
 
Our business activities involve various elements of risk. The risks described below and incorporated herein by reference are not the only ones facing us. Additional risks that are presently unknown to us or that we currently deem immaterial may also impact our business. We consider the following issues to be the most critical risks to the success of our business:
 
We have determined there is substantial doubt about the Company’s ability to continue as a going concern.
 
On October 1, 2009, we updated our consolidated financial statements originally filed in our Annual Report on Form 10-K for the year ended December 31, 2008 to summarize significant subsequent events including certain matters regarding the Company that raise substantial doubt as to our ability to continue as a going concern. We filed the updated consolidated financial statements on a Current Report on Form 8-K on October 1, 2009. Our consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. If we are unable to consummate a restructuring transaction such as the transactions contemplated by this Offering Memorandum and Disclosure Statement, we may need to seek bankruptcy protection. We cannot guarantee that we can generate net income, increase revenues or successfully expand our operation in the future, and if we cannot do so, the company may not be able to continue as a going concern.
 
Our debt agreements will contain restrictions that will limit our flexibility in operating our business.
 
The New Notes Indentures will contain and the credit agreement governing our Senior Credit Facility contains various covenants that limit our ability to engage in specified types of transactions. These covenants limit us and our subsidiaries’ ability to, among other things:
 
  •  incur additional indebtedness;
 
  •  pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;
 
  •  make certain investments;
 
  •  sell, transfer or otherwise convey certain assets;


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  •  create liens;
 
  •  designate our subsidiaries as unrestricted subsidiaries;
 
  •  consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
 
  •  enter into a new or different line of business; and
 
  •  enter into certain transactions with our affiliates.
 
A breach of any of these covenants could result in a default under the New Notes Indentures or our Senior Credit Facility. In addition, any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions.
 
Risks Related to Liquidity and Capital
 
If consummation of the transactions contemplated by the Restructuring Plan does not result in sufficient capital to satisfy the Federal Reserve Bank of New York, the FDIC and the UDFI, the Federal Reserve Bank of New York or the FDIC could require the Company to divest CIT Bank or otherwise further limit the ability of CIT Bank to conduct business and/or limit access to CIT Bank by the Company or its creditors.
 
The Written Agreement requires that, among other things, the Company prepare (i) an acceptable capital plan to maintain sufficient capital at the Company on a consolidated basis and at CIT Bank on a stand-alone basis and (ii) an acceptable liquidity plan with respect to the Company’s liquidity position and funds management practices (See below, “Risks Related to Regulation”). In addition, on July 16, 2009, the FDIC and the UDFI each issued an order to cease and desist (together, the “Cease and Desist Orders”) to CIT Bank in connection with the diminished liquidity of CIT Group Inc. The Cease and Desist Orders restrict CIT Bank from increasing its level of brokered deposits and restricts the ability of CIT Bank to originate new business (See below, “Risks Related to Regulation”). Consummating the transactions contemplated by the Restructuring Plan will be a key component for developing a capital plan and a liquidity plan acceptable to the Federal Reserve Bank of New York and developing sufficient liquidity at the Company to satisfy the FDIC and the UDFI. If the restructuring plan is not acceptable to the Federal Reserve Bank of New York and the FDIC, or if the restructuring plan does not lead to a capital plan and a liquidity plan acceptable to the Federal Reserve Bank of New York or result in adequate liquidity to the satisfaction of the FDIC and UDFI, the Federal Reserve Bank of New York or the FDIC could take action to require the Company to divest its interest in CIT Bank or otherwise limit access to CIT Bank by the Company and its creditors.
 
Even if we successfully consummate the Offers, inadequate liquidity could materially adversely affect our future business operations.
 
Even if the Offers are consummated successfully, we will require significant additional funding during the remainder of 2009 and through 2010 and beyond to manage and operate our businesses. Given the current business environment, our liquidity needs could be significantly higher than we currently anticipate. Our ability to maintain adequate liquidity through 2010 and beyond will depend on entering into a new credit facility, successfully consummating the Offers, successfully operating our business, continuing to curtail operating expenses and capital spending, and, potentially, completing various asset sales. Our forecasted liquidity needs are highly sensitive to changes in each of these and other factors.
 
Even if we successfully consummate the Offers, implement our business restructuring strategy, obtain sufficient financing from third party sources to continue operations, and successfully operate our business, we may be required to execute asset sales or other capital generating actions over and above our normal finance activities and cut back or eliminate other programs that are important to the future success of our business. In addition, our customers and counterparties might respond to further weakening of our liquidity position by requesting quicker payment, requiring additional collateral and increasing draws on our outstanding commitments. If this were to happen, our need for cash would be intensified and we likely would be unable to operate our business successfully.


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Even if we successfully consummate the Offers, our indebtedness and other obligations will continue to be significant. If the current economic environment does not improve, we may not be able to generate sufficient cash flow from operations to satisfy our obligations as they come due, and as a result we would need additional funding, which may be difficult to obtain.
 
Even if we successfully consummate the Offers, and complete the other steps of our business restructuring strategy with respect to our capital structure and our businesses, we will continue to have a significant amount of indebtedness and other obligations, including potential new securities issued at increased interest rates/cost of capital, which are likely to have several important consequences to our business. For example, the amount of indebtedness and other obligations could:
 
  •  require us to dedicate a significant portion of our cash flow from operations to the payment of principal and interest on our indebtedness and other obligations, which will reduce the funds available for other purposes necessary to run our business;
 
  •  make it more difficult for us to satisfy our obligations;
 
  •  limit our ability to withstand competitive pressures;
 
  •  limit our ability to fund working capital, capital expenditures and other general corporate purposes;
 
  •  make us more vulnerable to any continuing downturn in general economic conditions and adverse developments in our industry and business; and
 
  •  reduce our flexibility in responding to changing business and economic conditions.
 
If we are unable to return to profitability as a result of our restructuring, and/or if current economic conditions do not improve in the foreseeable future, we will not be able to generate sufficient cash flow from operations in the future to allow us to service our debt, pay our other obligations as required and make necessary capital expenditures, in which case we likely would need to dispose of additional assets and/or minimize capital expenditures and/or try to raise additional financing. There is no assurance that any of these alternatives would be available to us, if at all, on satisfactory terms.
 
Our business will be adversely affected if we do not successfully expand our deposit-taking capabilities at CIT Bank, which is currently restricted from increasing its level of broker deposits pursuant to the Cease and Desist Orders.
 
The Company currently does not have ready access to the debt capital markets and likely will not be able to obtain such access in the foreseeable future, which will make the Company reliant upon bank deposits to fund its business. CIT Bank currently does not have a retail branch network and obtains all of its deposits through broker accounts. The FDIC and the UDFI, pursuant to the Cease and Desist Orders, have restricted the level of broker accounts that CIT Bank may hold, without the prior written consent of both the FDIC and UDFI. In order to diversify its deposit-taking capabilities beyond broker accounts, the Company may need to establish de novo or acquire a retail branch network, an internet banking operation, or a cash management operation for the existing customers of CIT Bank. Any such alternatives will require significant time and effort to implement and will be subject to regulatory approval, which may not be obtained, particularly if the financial condition of the Company does not improve. In addition, we are likely to face strong competition for deposits from other bank holding companies many of whom are in a stronger financial position than the Company and are similarly seeking larger and more stable pools of funding. If CIT Bank is unable to expand its deposit-taking capability on a timely basis, because of lack of regulatory approval or otherwise, it would have a material adverse effect on our business, results of operations, and financial position.
 
Even if the Offers are consummated, our liquidity and/or ability to issue unsecured debt in the capital markets may be limited by our capital structure and by the performance of our business, market conditions, credit ratings, or regulatory or contractual restrictions.
 
Our traditional business model depended upon access to the debt capital markets to provide sources of liquidity and efficient funding for asset growth. These markets have exhibited heightened volatility and


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dramatically reduced liquidity. Liquidity in the debt capital markets has become significantly more constrained. The unsecured debt markets generally have been unavailable to us since the fourth quarter of 2007, and will likely remain unavailable to us for the foreseeable future, in part because we have not earned a profit since the first quarter of 2007. In addition, while secured borrowing has been available to us, it is more costly and interest rates available to us have increased significantly relative to benchmark rates, such as U.S. treasury securities and LIBOR. Downgrades in our short- and long-term credit ratings in March 2008, April 2009 and June 2009 to below investment grade have worsened these general conditions and had the practical effect of leaving us without current access to the commercial paper market and other unsecured term debt markets, which were historically significant sources of liquidity for us, and necessitated our action to draw down on our bank credit facilities in March 2008.
 
As a result of these developments, the Company has been forced to reduce its funding sources almost exclusively to secured borrowings, where available. This has resulted in significant additional costs to the Company due to the higher interest rates and restrictions on the types of assets and advance rates as compared to unsecured funding. Further, when the Company entered into the Senior Credit Facility, it granted liens on almost all of its remaining unencumbered assets, and the Company’s ability to continue to access the secured debt markets will be limited by the outstanding secured financings. The Company’s ability to execute asset sales or other capital generating actions and to access other debt markets in the future, including the unsecured debt markets, is likely to be adversely affected by the Company’s outstanding secured financings, which in the aggregate encumber substantially all of the Company’s assets. Also, if the perception of the market is that the existing security holders are adversely affected by the Restructuring Plan, it may adversely affect the Company’s ability to issue new debt in unsecured debt markets in the future. There can be no assurance that we will be able to regain access to the commercial paper and unsecured term debt markets, or more than limited access to the secured debt markets, and if we are unable to do so, it would adversely affect our business, operating results and financial condition unless the Company is able to obtain alternative sources of liquidity.
 
Our ability to satisfy our cash needs also is constrained by regulatory or contractual restrictions on the manner in which we may use portions of our cash on hand. The cash at CIT Bank is available solely for the Bank’s own funding and investment requirements. The restricted cash related to securitization transactions is available solely for payments to certificate holders. The cash of CIT Bank and the restricted cash related to securitization transactions cannot be transferred to or used for the benefit of any other affiliate of ours. In addition, as part of our business we extend lines of credit, some of which can be drawn by the borrowers at any time. During the second quarter of 2009 and July 2009, we experienced a significant increase in the draws on such commitments, which significantly degraded our liquidity position. If the borrowers on these lines of credit continue to access these lines or increase their rate of borrowing either as a result of their business needs or due to a perception that we may be unable to fund these lines of credit in the future, this could further substantially degrade our liquidity position which could have a material adverse effect on our business unless the Company is able to obtain alternative sources of liquidity.
 
If we do not maintain sufficient capital to satisfy regulatory capital requirements in the future, there could be an adverse effect on the manner in which we do business, or we could become subject to various enforcement or regulatory actions and will likely need to seek relief under the Bankruptcy Code.
 
Under regulatory capital adequacy guidelines, the Company and its principal banking subsidiary, CIT Bank, are required to meet requirements that involve both qualitative and quantitative measures of assets, liabilities and certain off-balance sheet items. When we became a bank holding company, we agreed with the Federal Reserve Bank of New York to maintain Total Capital of 13% for the Company and our regulatory capital exceeded the agreed upon levels. Further, we agreed with the FDIC to maintain a leverage capital ratio of 15% for the Bank and the Bank’s regulatory capital exceeded the agreed upon levels. Although CIT Bank continues to maintain regulatory capital on a stand-alone basis at or above the levels agreed to with regulators, losses during the first and second quarter of 2009 have reduced the Company’s level of Total Capital below the 13% threshold that the Company agreed to maintain when it became a bank holding company, and a projected loss in the third quarter of 2009 and continued losses in future quarters may further reduce the


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Company’s Total Capital. If either the Offers or the Plan of Reorganization are not successful, we have no assurances that we will be able to raise our regulatory capital to satisfactory levels based on the current level of performance of our businesses. Failure to meet and maintain the appropriate capital levels would adversely affect the Company’s status as a bank holding company, have a material adverse effect on the Company’s financial condition and results of operations, and subject the Company to a variety of enforcement actions, as well as certain restrictions on its business. In addition to the requirement to be well-capitalized, CIT Group Inc. and CIT Bank are subject to regulatory guidelines that involve qualitative judgments by regulators about the entities’ status as well-managed and the entities’ compliance with Community Reinvestment Act obligations, and failure to meet those standards may have a material adverse effect on our business.
 
If we do not maintain sufficient regulatory capital, the Federal Reserve Bank of New York and the FDIC could take action to require the Company to divest its interest in CIT Bank or otherwise limit access to CIT Bank by the Company and its creditors. The FDIC, in the case of CIT Bank, and the Federal Reserve Bank of New York, in the case of the Company, placed restrictions on the ability of CIT Bank and the Company to take certain actions without the prior approval of the applicable regulators. If we are unable to consummate the Offers, finalize and complete our business restructuring strategy and access the credit markets to meet our capital and liquidity needs in the future, or if we otherwise suffer continued adverse effects on our liquidity, and operating results, we may be subject to formal and informal enforcement actions by the Federal Reserve Bank of New York, we may be forced to divest CIT Bank and/or CIT Bank may be placed in FDIC conservatorship or receivership or suffer other consequences. Such actions would impair our ability to successfully execute any restructuring plan and have a material adverse effect on our business, results of operations, and financial position.
 
Risks Related to Regulatory Actions
 
We are currently subject to the Written Agreement, which may adversely affect our business.
 
Under the terms of the Written Agreement, the Company must provide the Federal Reserve Bank of New York with (i) a corporate governance plan, focusing on strengthening internal audit, risk management, and other control functions, (ii) a credit risk management plan, (iii) a written program to review and revise, as appropriate, its program for determining, documenting and recording the allowance for loan and lease losses, (iv) a capital plan for the Company and CIT Bank, (v) a liquidity plan, including meeting short term funding needs and longer term funding, without relying on government programs or Section 23A waivers, and (vi) a business plan for the remainder of 2009 and 2010. The Written Agreement also prohibits the Company, without the prior approval of the Federal Reserve Bank of New York, from paying dividends, paying interest on subordinated debt, incurring or guaranteeing debt outside of the ordinary course of business, or purchasing or redeeming the Company’s stock. Under the Written Agreement, the Company must comply with certain procedures and restrictions on appointing or changing the responsibilities of any senior officer or director, restricting the provision of indemnification to officers and directors, and restricting the payment of severance to employees.
 
We are currently subject to the Cease and Desist Orders, which may adversely affect our business.
 
CIT Bank relies principally on brokered deposits to fund its ongoing business which may require payment of slightly higher yields and may be subject to inherent limits on the aggregate amount available, depending on market conditions. The UDFI and the FDIC have issued, and CIT Bank has consented to (without admitting or denying the allegations), the Cease and Desist Orders. Under the terms of the Cease and Desist Orders, the FDIC and the UDFI have imposed, among other matters, additional restrictions on CIT Bank’s ability to enter into transactions with affiliates and to make dividend payments. Under the Cease and Desist Orders, CIT Bank submitted a contingency plan providing for and ensuring the continuous and satisfactory servicing of all loans held by CIT Bank, which was accepted as satisfactory by the FDIC, and must obtain prior regulatory approval in order to increase the current level of brokered deposits held by CIT Bank. CIT Bank must notify the FDIC in writing at least 30 days prior to any management changes, and must obtain prior approval before entering into any “golden parachute” arrangements or any agreement to make any excess nondiscriminatory severance


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plan payments. In addition, the FDIC is requiring CIT Bank to submit a liquidity plan for funding any maturing debt and an outline of plans or scenarios for the future operation of CIT Bank.
 
Many of Our Regulated Subsidiaries Could be Affected by the Reorganization of a Bankruptcy Filing
 
In addition to CIT Bank, we have a number of other regulated subsidiaries that may be affected by the Offers or a bankruptcy filing by CIT Group Inc. In particular, the regulators of our banking subsidiaries in the UK, Germany, Sweden, France and Brazil as well as our SBA and insurance subsidiaries, may take action against such entities including seizing such entities and/or prohibiting transactions with CIT Group Inc.
 
Risks Related to Bank Holding Company Status
 
Our business, financial condition and results of operations could be adversely affected by regulations which we are subject to as a result of becoming a bank holding company, by new regulations or by changes in other regulations or the application thereof.
 
On December 22, 2008, the Board of Governors of the Federal Reserve System approved our application to become a bank holding company and the Department of Financial Institutions of the State of Utah approved our application to convert our Utah industrial bank to a Utah state bank.
 
Most of the activities in which we currently engage are permissible activities for a bank holding company. However, since we are not a financial holding company, certain of our existing businesses are not permissible under regulations applicable to a bank holding company, including certain of our insurance services and our equity investment activities, and we could be required to divest those activities within two years from December 22, 2008. In addition, we are subject to the comprehensive, consolidated supervision of the Federal Reserve, including risk-based and leverage capital requirements and information reporting requirements. We are subject to the Cease and Desist Orders and the Written Agreement (See “Risk Factors — Risks Related to Regulatory Actions”). This regulatory oversight is established to protect depositors, federal deposit insurance funds and the banking system as a whole, and is not intended to protect security holders. In addition, pursuant to the Written Agreement with the Federal Reserve Bank of New York, we are required to review the adequacy of resources for corporate governance functions, including whether the staffing levels and resources for audit, risk management, and other control functions are adequate, and providing additional resources in those areas will increase our expenses for the foreseeable future. In addition, if the FDIC and UDFI require CIT Bank to separate all of its operations from the Company, which will eliminate the cost advantages of the scale of operations of the Company, it will increase the expenses of CIT Bank for the foreseeable future.
 
The financial services industry, in general, is heavily regulated. Proposals for legislation further regulating the financial services industry are continually being introduced in the United States Congress and in state legislatures. The agencies regulating the financial services industry also periodically adopt changes to their regulations. In light of current conditions in the U.S. financial markets and economy, regulators have increased the level and scope of their supervision and their regulation of the financial services industry. In addition, in October 2008, Congress passed the Emergency Economic Stabilization Act of 2008 (“EESA”), TARP and the Capital Purchase Program. Under EESA, Congress also established the Special Inspector General for TARP, who is charged with monitoring, investigating and reporting on how the recipients of funds under TARP utilize such funds. Similarly, there is a substantial prospect that Congress will restructure the regulation and supervision of financial institutions in the foreseeable future. We are unable to predict how this increased supervision and regulation will be fully implemented or in what form, or whether any additional or similar changes to statutes or regulations, including the interpretation or implementation thereof, will occur in the future. Any such action, particularly in view of our financial condition, could affect us in substantial and unpredictable ways and could have an adverse effect on our business, financial condition and results of operations.
 
The financial services industry is also heavily regulated in many jurisdictions outside of the United States. We have subsidiaries in various countries that are licensed as banks, banking corporations, broker-dealers, and insurance companies, all of which are subject to regulation and examination by banking, securities, and insurance regulators in their home jurisdiction. In addition, in several jurisdictions, including the United


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Kingdom and Germany, the local banking regulators have requested the local regulated entity to develop contingency plans to operate on a stand-alone basis if the Company seeks protection under the Bankruptcy Code. Given the evolving nature of regulations in many of these jurisdictions, it may be difficult for us to meet all of the regulatory requirements even after we establish operations and receive approvals. Our inability to remain in compliance with regulatory requirements in a particular jurisdiction could have a material adverse effect on our operations in that market, on our ability to permanently reinvest our earnings, and on our reputation generally.
 
We are also affected by the economic and other policies adopted by various governmental authorities and bodies in the United States and other jurisdictions. For example, the actions of the Federal Reserve and international central banking authorities directly impact our cost of funds for lending, capital raising and investment activities and may impact the value of financial instruments we hold. In addition, such changes in monetary policy may affect the credit quality of our customers. Changes in domestic and international monetary policy are beyond our control and difficult to predict.
 
Our business may be adversely affected if we do not successfully implement our project to transform our compliance, risk management, finance, treasury, operations, and other areas of our business to meet the standards of a bank holding company.
 
When we became a bank holding company and converted our Utah industrial bank to a Utah state bank, we analyzed our business to identify areas that require improved policies and procedures to meet the regulatory requirements and standards for banks and bank holding companies, including but not limited to compliance, risk management, finance, treasury, and operations. We developed and we are implementing project plans to improve policies, procedures, and systems in the areas identified. Our new business model is based on the assumption that we will be able to make this transition in a reasonable amount of time. We are currently subject to the Written Agreement, which, among other things, requires the development of plans to enhance corporate governance, including increasing resources in audit, risk management and control functions, correct weaknesses in credit risk management, review and revise, as appropriate, the consolidated allowance for loan and lease losses methodology, and develop capital and liquidity plans (See “Risk Factors — Risks Related to Regulatory Actions”). If we have not identified all of the required improvements, particularly in our control functions, or if we are unsuccessful in implementing the policies, procedures, and systems that have been identified, or if we do not implement the policies, procedures, and systems quickly enough, we could be subject to a variety of formal and informal enforcement actions that could result in the imposition of certain restrictions on our business, or preclude us from making acquisitions, and such actions could impair our ability to execute our business plan and have a material adverse effect on our business, results of operations, or financial position.
 
Risks Related to Operation of Our Businesses
 
The Restructuring Plan, which contemplates transactions that will modify our capital structure and the structure and operation of our businesses, is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, our plan may be unsuccessful in its execution and we may be unable to continue as a going concern.
 
The Restructuring Plan, which contemplates transactions that will affect both our capital structure and the structure and operation of our businesses, and is based upon assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we consider appropriate under the circumstances. Whether actual future results and developments will be consistent with our expectations and assumptions depends on a number of factors, including but not limited to (i) our ability to obtain adequate liquidity and financing sources and establish an appropriate level of debt, including our ability to consummate the Offers and implement the Restructuring Plan; (ii) our ability to restore customers’ confidence in our viability as a continuing entity and to attract and retain sufficient customers; (iii) our ability to retain key employees in those businesses that we intend to continue to emphasize, and (iv) the overall strength and stability of general economic conditions of the financial industry,


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both in the United States and in global markets. The failure of any of these factors could materially adversely affect the successful execution of the restructuring of our businesses.
 
In addition, the Restructuring Plan relies upon financial forecasts, including with respect to revenue growth, improved earnings before interest, taxes, depreciation and amortization, improved interest margins, and growth in cash flow. Financial forecasts are necessarily speculative, and it is likely that one or more of the assumptions and estimates that are the basis of these financial forecasts will not be accurate. In our case, the forecasts are even more speculative than normal, because they involve fundamental changes in the nature of our business. Accordingly, we expect that our actual financial condition and results of operations will differ, perhaps materially, from what we have anticipated. Consequently, there can be no assurance that the results or developments contemplated by the Restructuring Plan will occur or, even if they do occur, that they will have the anticipated effects on us and our subsidiaries or our businesses or operations. The failure of any such results or developments to materialize as anticipated could materially adversely affect the successful execution of the transactions contemplated by the Restructuring Plan.
 
We may be additionally negatively affected by credit risk exposures and our reserves for credit losses may prove inadequate.
 
Our business depends on the creditworthiness of our customers and their ability to fulfill their obligations to us. We maintain a consolidated reserve for credit losses on finance receivables that reflects management’s judgment of losses inherent in the portfolio. We periodically review our consolidated reserve for adequacy considering economic conditions and trends, collateral values and credit quality indicators, including past charge-off experience and levels of past due loans, past due loan migration trends, and non-performing assets. During the first and second quarters of 2009, losses were significantly more severe than in 2008, and more severe than in prior economic downturns, due to an increase in the proportion of unsecured or undersecured cash flow loans versus asset backed loans in our Corporate Finance segment, the limited ability of borrowers to restructure their liabilities or their business, and reduced values of the collateral for loans.
 
Our consolidated reserve for credit losses may prove inadequate and we cannot assure that it will be adequate over time to cover credit losses in our portfolio because of adverse changes in the economy or events adversely affecting specific customers, industries or markets. The current economic environment is dynamic and the credit-worthiness of our customers and the value of collateral underlying our receivables has declined significantly and may continue to decline significantly over the near future. Our reserves may not keep pace with changes in the credit-worthiness of our customers or collateral values. If the credit quality of our customer base continues to materially decline, if the risk profile of a market, industry, or group of customers changes significantly, or if the markets for accounts receivable, equipment, real estate, or other collateral deteriorates significantly, any or all of which would adversely affect the adequacy of our reserves for credit losses, it could have a material adverse effect on our business, results of operations, and financial position.
 
In addition to customer credit risk associated with loans and leases, we are also exposed to other forms of credit risk, including counterparties to our derivative transactions, loan sales, syndications and equipment purchases. These counterparties include other financial institutions, manufacturers and our customers. If our credit underwriting processes or credit risk judgments fail to adequately identify or assess such risks, or if the credit quality of our derivative counterparties, customers, manufacturers, or other parties with which we conduct business materially deteriorates, we may be exposed to credit risk related losses that may negatively impact our financial condition, results of operations or cash flows.
 
Uncertainties related to our business may result in the loss of or decreased business with customers.
 
Our business depends upon our customers believing that we will be able to provide a wide range of quality products on a timely basis to our customers. Our ability to provide our products on a reliable and timely basis affects our ability to attract new customers. Many of our customers rely upon our products to provide them with the working capital necessary to operate their business or to fund capital improvements that allow them to maintain or expand their business. In many instances, these funding requirements are time sensitive. If our customers are uncertain as to our ability to continue to provide them with funding on a timely


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basis or to provide the same breadth and quality of products, we may be unable to attract new customers and we may experience lower business with or a loss of customers.
 
We may not be able to achieve adequate consideration for the disposition of assets or businesses.
 
As part of our business restructuring strategy, we are reviewing a number of measures designed to manage our liquidity position, including potential asset sales. There can be no assurance that we will be successful in completing all or any of these transactions, because there may not be a sufficient number of buyers willing to enter into a transaction, we may not receive sufficient consideration for such assets, the process of selling assets may take too long to be a significant component of a restructuring, or the Steering Committee under the Senior Credit Facility may not approve a sale of assets. These transactions, if completed, may reduce the size of our business and it is not currently part of our long-term strategy to replace the volume associated with these businesses. From time to time, we also receive inquiries from third parties regarding our potential interest in disposing of other types of assets, such as student lending and other commercial finance or vendor finance assets, which we may or may not choose to pursue.
 
Prices for assets were depressed due to market conditions starting in the second half of 2007 and continuing to today. In addition, potential purchasers may be unwilling to pay an amount equal to the face value of a loan or lease if the purchaser is concerned about the quality of the Company’s credit underwriting. Further, some potential purchasers will intentionally submit bids with purchase prices below the face value of a loan or lease if the purchaser suspects that the seller is distressed and cannot afford to negotiate the price. There is no assurance that we will receive adequate consideration for any asset or business dispositions. Certain dispositions in 2008 and 2009 resulted in the Company recognizing significant losses. As a result, our future disposition of businesses or asset portfolios could have a material adverse effect on our business, financial condition and results of operations and could result in the Company seeking relief under the Bankruptcy Code.
 
We are prohibited from paying dividends on our common or preferred stock or interest on our subordinated debt without prior written approval of the Federal Reserve Bank of New York.
 
Under the terms of the Written Agreement, we are prohibited from declaring dividends on our preferred stock and from paying interest on our junior subordinated notes without prior written approval of the Federal Reserve Bank of New York. In addition, under the terms of certain outstanding securities, we are also prohibited from declaring dividends on our preferred stock and from paying interest on our junior subordinated notes if we do not meet certain financial tests, provided that the limitation does not apply if we pay such dividends and interest out of net proceeds that we have received from the sale of common stock. We have suspended the payment of dividends on our common stock and we have suspended the declaration of dividends on our preferred stock and the declaration of interest on our junior subordinated notes. We cannot determine when, if ever, we will be able to pay dividends on our common or preferred stock or interest on our junior subordinated notes in the future.
 
Uncertainties related to our business may create a distraction for or cause a loss of employees and may otherwise materially adversely affect our ability to attract new employees.
 
Our future results of operations will depend in part upon our ability to retain existing highly skilled and qualified employees and to attract new employees. Failure to continue to attract and retain such individuals could materially adversely affect our ability to compete. Uncertainties about the future prospects and viability of our business and the possibility of seeking relief under the Bankruptcy Code is impacting and is likely to continue to impact our ability to attract and retain key management, technical and other personnel, and is creating a distraction for existing employees. If we are significantly limited or unable to attract and retain key personnel, or if we lose a significant number of key employees, or if employees continue to be distracted due to the uncertainties about the future prospects and viability of our business, it could have a material adverse effect on our ability to successfully operate our business or to meet our operations, risk management, compliance, regulatory, and financial reporting requirements.


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Executive compensation restrictions on TARP recipients could materially affect our ability to retain and/or recruit employees.
 
On February 17, 2009, the American Recovery and Reinvestment Act of 2009 (the “Act”) was signed into law. The Act includes an amendment and restatement of Section 111 of the EESA that significantly expands and strengthens executive compensation restrictions applicable to entities, including CIT, that participate in TARP. The Act also includes a number of other requirements, including but not limited to implementing a say-on-pay policy that allows for an annual non-binding shareholder vote on executive compensation and a policy related to the approval of excessive or luxury expenditures, as identified by the United States Department of Treasury, including corporate aircraft, office and facility renovations, entertainment and holiday parties and other activities or events that are not reasonable expenditures for staff development, performance incentives or similar measures in the ordinary course of business. The Act’s executive compensation restrictions generally will continue for so long as any obligation arising from TARP financial assistance remains outstanding, other than government-held warrants, and will likely apply to the Company for the foreseeable future. The provisions of the Act and especially the United States Department of Treasury regulations that will implement the Act could have a material adverse effect on our ability to recruit and retain individuals with the experience and skill necessary to manage successfully our business through its current difficulties and during the long term.
 
We may not be able to realize our entire investment in the equipment we lease.
 
The realization of equipment values (residual values) during the life and at the end of the term of a lease is an important element in the leasing business. At the inception of each lease, we record a residual value for the leased equipment based on our estimate of the future value of the equipment at the expected disposition date. Internal equipment management specialists, as well as external consultants, determine residual values.
 
A decrease in the market value of leased equipment at a rate greater than the rate we projected, whether due to rapid technological or economic obsolescence, unusual wear and tear on the equipment, excessive use of the equipment, recession or other adverse economic conditions, or other factors, would adversely affect the current or the residual values of such equipment. Further, certain equipment residual values, including commercial aerospace residuals, are dependent on the manufacturer’s or vendor’s warranties, reputation and other factors, including market liquidity. In addition, we may not realize the full market value of equipment if we are required to sell it to meet liquidity needs or for other reasons outside of the ordinary course of business. Consequently, there can be no assurance that we will realize our estimated residual values for equipment. Also, in our current financial condition, many potential purchasers will further discount their offering price to account for the risk that a transaction may be unwound if we seek relief under the Bankruptcy Code.
 
The degree of residual realization risk varies by transaction type. Capital leases bear the least risk because contractual payments cover approximately 90% of the equipment’s cost at the inception of the lease. Operating leases have a higher degree of risk because a smaller percentage of the equipment’s value is covered by contractual cash flows at lease inception. Leveraged leases bear the highest level of risk as third parties have a priority claim on equipment cash flows. A significant portion of our leasing portfolios are comprised of operating leases, and a portion is comprised of leveraged leases, both of which increases our residual realization risk.
 
Even if we successfully consummate the Offers, we and our subsidiaries are party to various financing arrangements, commercial contracts and other arrangements that under certain circumstances give, or in some cases may give, the counterparty the ability to exercise rights and remedies under such arrangements which, if exercised, may have material adverse consequences.
 
We and our subsidiaries are party to various financing arrangements, commercial contracts and other arrangements that give, or in some cases may give, the counterparty the ability to exercise rights and remedies upon the occurrence of a material adverse effect or material adverse change (or similar event), certain insolvency events, a default under certain specified other obligations or a failure to comply with certain


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financial covenants. Recent deteriorations in our business and that of certain of our subsidiaries may make it more likely that counterparties will seek to exercise rights and remedies under these arrangements. The counterparty could have the ability, depending on the arrangement, to, among other things, require early repayment of amounts owed by us or our subsidiaries and in some cases payment of penalty amounts. In these cases, we intend to enter into discussions with the counterparties where appropriate to seek a waiver under, or amendment of, the arrangements to avoid or minimize any potential adverse consequences. We cannot assure you that we will be successful in avoiding or minimizing the adverse consequences which may, individually or collectively, have a material adverse effect on our ability to successfully implement our restructuring plan and on our consolidated financial position and results of operations. If we are unsuccessful in avoiding or minimizing the adverse consequences discussed above, such consequences could have a material adverse effect on our business, results of operations, and financial position and will likely result in the Company seeking relief under the Bankruptcy Code.
 
The exchange of Old Notes for New Notes, New Preferred Stock, New Common Interests, or Contingent Value Rights pursuant to the Offers or the Plan of Reorganization will result in cancellation of indebtedness income to us.
 
We expect to realize a significant amount of cancellation of indebtedness (“COD”) income as a result of the Offers or the Plan of Reorganization, equal to the excess of the amount of indebtedness discharged over the sum of the issue price of the New Notes and value of the New Preferred Stock, New Common Interests, or Contingent Value Rights issued in satisfaction of the Old Notes. The exact amount of any COD income that will be realized by us will not be determinable until the consummation of the Offers or the Plan of Reorganization, as applicable.
 
If the Offers are consummated, to the extent we are considered solvent for U.S. federal income tax purposes immediately prior to the consummation of the Offers, the resulting COD income recognized by us may generally be offset by our available net operating losses (“NOL”) and certain other tax attributes. It is possible that the COD income that will be recognized by us pursuant to the Offers will be in excess of our NOLs and other tax attributes available to offset such income and, therefore, we could incur a current tax liability. The American Recovery and Reinvestment Act of 2009 permits us to elect to defer the inclusion of any portion of the COD income resulting from the Offers, with the amount of COD income so deferred becoming includible in our income ratably over a five-taxable year period beginning in 2014, at which time such income may generally be offset by any existing tax attributes to the extent of applicable limitations.
 
To the extent we are considered insolvent for U.S. federal income tax purposes immediately prior to the consummation of the Offers, or, if the Offers are not completed and we instead consummate the Plan of Reorganization pursuant to a confirmed Chapter 11 bankruptcy case, we will not be required to include COD in income.
 
If and to the extent any amount attributable to the COD is excluded from income pursuant to the insolvency or the bankruptcy exceptions, we will generally be required to reduce our tax attributes, including, but not limited to, our NOLs and tax basis in certain assets. If our COD income exceeds our available NOLs and other tax attributes, such excess is permanently excluded from income.
 
As a result, whether or not COD income is included in income or excluded from income by reason of the insolvency or bankruptcy exceptions, we expect that the Offers or the Plan of Reorganization will result in the possible elimination of our NOLs and a significant reduction in our other tax attributes.
 
Our ability to utilize our NOLs and other tax attributes to offset COD income recognized as a result of the Offers may be limited if we undergo an “ownership change” prior to the consummation of the Offers.
 
Our ability to utilize our NOLs and other tax attributes to offset COD income recognized as a result of the Offers could be limited if we undergo an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) prior to the consummation of the Offers. An ownership change is generally defined as a greater than 50 percentage point increase in equity ownership by five-percent shareholders in any three-year period. On August 12, 2009, we adopted a Tax Benefits


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Preservation Plan in order to protect our ability to utilize our NOLs and other tax attributes to offset future income. The Tax Benefits Preservation Plan is designed to reduce the likelihood of an ownership change by, among other things, discouraging any person or group from becoming a five-percent shareholder and dissuading existing five-percent shareholders from acquiring additional shares of our stock. There is no guarantee, however, that the Tax Benefits Preservation Plan will prevent us from experiencing an ownership change.
 
We will undergo an “ownership change” as a result of the Offers or the Plan of Reorganization, which is likely to limit the benefit of any remaining NOLs and other tax attributes after consummation of the Offers or the Plan of Reorganization to offset our expected future taxable income.
 
We have consolidated NOL carryforwards for U.S. federal income tax purposes of approximately $3.6 billion as of the end of 2008. In addition, as of September 30, 2009, we estimate that we have incurred additional net operating losses of approximately $2.4 billion and expect to incur additional losses for the current taxable year ending December 31, 2009. The amount of any such losses remains subject to audit and adjustment by the IRS. We believe that all or substantially all of our NOLs and certain other tax attributes could be utilized as a result of COD income realized as a result of the Offers or the Plan of Reorganization. The exact amount of any remaining NOLs and other tax attributes will not be determinable until the consummation of the Offers or the Plan of Reorganization, as applicable. The future benefits to the company of any such remaining NOLS or other tax attributes is likely to be limited as a result of our undergoing an ownership change within the meaning of Section 382 of the Tax Code. For a more detailed discussion of limitations on or loss of our NOLs and other tax attributes, see “Certain U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Consequences to the Company — Net Operating Losses-Section 382.”
 
Holders of New Notes may incur tax liabilities prior to receiving interest payments.
 
We anticipate that the New Notes will be issued with original issue discount (“OID”) for U.S. federal income tax purposes, and accordingly, U.S. Holders will be subject to special rules relating to the accrual of such OID and its inclusion in income. U.S. Holders generally must include OID in income for U.S. federal income tax purposes regardless of such holder’s regular accounting method. As a result, U.S. Holders will be required to include OID in income in advance of the receipt of cash attributable to such income. See “Certain U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Consequences to U.S. Holders — Ownership and Disposition of New Notes — Original Issued Discount.”
 
Adverse or volatile market conditions could continue to negatively impact fees and other income.
 
In 2005, we began pursuing strategies to leverage our expanded asset generation capability and diversify our revenue base in order to generate higher levels of syndication and participation income, advisory fees, servicing fees and other types of fee income to increase other income as a percentage of total revenue. These revenue streams are dependent on market conditions and, therefore, have been more volatile than interest on loans and rentals on leased equipment. Current market conditions, including lower liquidity levels in the syndication market and our strategy to manage our growth due to our own funding constraints, have significantly reduced our syndication activity, and have resulted in significantly lower fee income. In addition, if other lenders become concerned about our ability to meet our obligations on a syndicated transaction, it may become more difficult for us to syndicate transactions that we originate or to participate in syndicated transactions originated by others. If we are unable to sell or syndicate a transaction after it is originated, we will end up holding a larger portion of the transaction and assuming greater underwriting risk than we originally intended, which could increase our capital and liquidity requirements to support our business or expose us to the risk of valuation allowances for assets held for sale. In addition, we also generate significant fee income from our factoring business. If our clients become concerned about our liquidity position and our ability to provide these services going forward and reduce their amount of business with us, this could further negatively impact our fee income and have a material adverse effect on our business. Continued disruption to


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the capital markets or the failure of our initiatives to result in increased asset and revenue levels could adversely affect our financial position and results of operations.
 
Investment in and revenues from our foreign operations are subject to various risks and requirements associated with transacting business in foreign countries.
 
An economic recession or downturn, increased competition, or business disruption associated with the political or regulatory environments in the international markets in which we operate could adversely affect us.
 
In addition, while we generally hedge our translation and transaction exposures, foreign currency exchange rate fluctuations, or the inability to hedge effectively in the future, could have a material adverse effect on our investment in international operations and the level of international revenues that we generate from international financing and leasing transactions. Reported results from our operations in foreign countries may fluctuate from period to period due to exchange rate movements in relation to the U.S. dollar, particularly exchange rate movements in the Canadian dollar, which is our largest non-U.S. exposure. Recent weakness in the U.S. dollar has negatively impacted the U.S. dollar value of our revenues that are paid in other currencies. A further weakening of the U.S. dollar will further negatively impact the U.S. dollar value of our international operations.
 
U.S. generally accepted accounting principles (“GAAP”) require that income earned from foreign subsidiaries should be treated as being taxed as if they were distributed to the parent company, unless those funds are permanently reinvested outside the United States. To meet this permanent reinvestment standard, we must demonstrate that there is no foreseeable need for the funds by the parent company and that there is a specific plan for reinvestment of the undistributed earnings of the funds by the subsidiary. As of December 31, 2008, Federal income taxes have not been provided on approximately $1.5 billion of cumulative earnings of foreign subsidiaries that we have determined to be permanently reinvested. If we sell a foreign business or significant foreign assets, which has become more likely in view of our current financial condition and restructuring plan, we may not be able to redeploy some or all of the funds generated from a sale outside the United States and would be required to treat the funds as repatriated currently for purposes of GAAP. While it is not practicable to estimate the amount of tax that we would have to provide for under GAAP in such an event, the impact on us may be material.
 
Foreign countries have various compliance requirements for financial statement audits and tax filings, which are required to obtain and maintain licenses to transact business. If we are unable to properly complete and file our statutory audit reports or tax filings, regulators or tax authorities in the applicable jurisdiction may restrict our ability to do business.
 
We may be adversely affected by significant changes in interest rates.
 
Although we generally employ a matched funding approach to managing our interest rate risk, including matching the repricing characteristics of our assets with our liabilities, significant increases in market interest rates or widening of our credit spreads, or the perception that an increase may occur, could adversely affect both our ability to originate new finance receivables and our profitability. During the second half of 2007 and all of 2008 and 2009, credit spreads for almost all financial institutions, and particularly our credit spreads, widened dramatically and made it highly uneconomical for us to borrow in the unsecured debt markets to fund loans to our customers. Conversely, a decrease in interest rates could result in accelerated prepayments of owned and securitized finance receivables. In addition, the widening of our credit spreads relative to the credit spreads of many of our competitors has placed us at a competitive disadvantage and made it more difficult to maintain our interest margins. If we are unable to obtain funding, either in the capital markets or through bank deposits, at an economical rate that is competitive with other banks and lenders, we will be operating at a competitive disadvantage and it may have a material adverse effect on our business, financial condition, and results of operations.


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We may be adversely affected by further deterioration in economic conditions that is general or specific to industries, products or geographic areas.
 
A further deepening of the current recession, prolonged economic weakness, or other adverse economic or financial developments in the U.S. or global economies or affecting specific industries, geographic locations and/or products, would likely further impact credit quality as borrowers may fail to meet their debt payment obligations, particularly customers with highly leveraged loans. Adverse economic conditions have and could further result in declines in collateral values, which also decreases our ability to fund against collateral. Accordingly, higher credit and collateral related losses could impact our financial position or operating results.
 
Our business has already been materially weakened by the current credit crisis (See “— Even if the Offers are consummated, our liquidity and/or ability to issue unsecured debt in the capital markets may be limited by our capital structure and by the performance of our business, market conditions, credit ratings, or regulatory or contractual restrictions”). A continued and prolonged recession also would likely exacerbate our current difficulties in originating new business, given the resultant reduced demand for credit. In addition, a continued downturn in certain industries may result in a reduced demand for the products that we finance in that industry or negatively impact collection and asset recovery efforts. For example, decreased demand for the products of various manufacturing customers due to the current recession may adversely affect their ability to repay their loans and leases with us. Similarly, a decrease in the level of airline passenger traffic due to the current recession or fears of a swine flu epidemic, or a decline in railroad shipping volumes due to a recession in particular industries may adversely affect our aerospace or rail businesses, the value of our aircraft and rail assets and the ability of our lessees to make their lease payments.
 
Competition from both traditional competitors and new market entrants may adversely affect our returns, volume and credit quality.
 
Our markets are highly competitive and are characterized by competitive factors that vary based upon product and geographic region. We have a wide variety of competitors that include captive and independent finance companies, commercial banks and thrift institutions, industrial banks, community banks, leasing companies, hedge funds, insurance companies, mortgage companies, manufacturers and vendors.
 
We compete primarily on the basis of pricing, terms and structure. As a result of our current financial condition or further deterioration thereof, we could lose market share. Should we match competitors’ terms, it is possible that we could experience margin compression and/or increased losses. We also may be unable to match competitors’ terms as a result of our current or future financial condition.


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USE OF PROCEEDS
 
We will not receive any proceeds from the Offers. In consideration for issuing New Notes and/or shares of New Preferred Stock, as applicable, we will receive in exchange the Old Notes. The Old Notes surrendered in exchange for New Notes will be retired and canceled and cannot be reissued.
 
RATIO OF EARNINGS TO FIXED CHARGES
 
                         
    Six Months Ended
  Year Ended
    June 30,   December 31,
    2009   2008   2008
 
Actual(1)
    (2 )     (2 )     (3 )
Pro Forma
    (4 )                
 
 
(1) For purposes of determining the ratio of earnings to fixed charges, earnings consist of income before income taxes and fixed charges. Fixed charges consist of interest on indebtedness, minority interest in subsidiary trust holding solely debentures of CIT and one-third of rent expense, which is deemed representative of an interest factor.
 
(2) Earnings were insufficient to cover fixed charges by $2,061.9 million and $936.1 million for the six months ended June 30, 2009 and June 30, 2008, respectively.
 
(3) Earnings were insufficient to cover fixed charges by $1,142.2 million for the year ended December 31, 2008.
 
(4) Due to the significant losses for the six months ended June 30, 2009, earnings would continue to be insufficient after the exchange to cover fixed charges.


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CAPITALIZATION
 
The first table on the following page sets forth as of June 30, 2009 on a consolidated basis:
 
  •  our actual capitalization; and
 
  •  our As Adjusted capitalization to reflect the consummation of the exchange of 100%, which is not an expected result, of the Old Notes for New Notes and shares of New Preferred Stock. The New Notes will be issued in an initial aggregate principal amount of approximately $24.2 billion, and recorded at an estimated fair value in the As Adjusted capitalization at approximately $19.4 billion. The New Preferred Stock issued will consist of 70,009,815 shares having an aggregate liquidation preference of approximately $91 billion and representing approximately 94.0% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders.
 
The As Adjusted capitalization assumes that all exchanged Old Notes meet the requirements for gain recognition. Upon consummation of the Offers, the Company would be required to determine whether the exchanged debt meets the accounting requirements for the recording of debt extinguishment gain. The actual debt extinguishment gain, and the resulting capital, will be less if the accounting requirements for debt extinguishment gain recognition are not met. If extinguishment gains are not recognized at the exchange date, then the exchange would be considered a debt modification and would be reflected as increased margins, prospectively. The Company does not expect that all exchanged Old Notes will meet the criteria to record a debt extinguishment gain and does not expect that all Old Notes will be exchanged and thus the debt extinguishment gain will be less than is reflected in the adjusted capitalization. The value of the Series F preferred stock represents management’s best estimate of the fair value as of the exchange date.
 
The second table on the following pages sets forth as of June 30, 2009 on a consolidated basis our actual capitalization and our as adjusted capitalization to reflect the exchange of all Old Notes in the Plan of Reorganization. The As Adjusted capitalization assumes “fresh start reporting,” as defined American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code, whereby the entity’s reorganization value is allocated to assets and liabilities. The equity value of CIT is assumed to be $8 billion at the emergence date, the midpoint of a range of $5 to $11 billion of estimated values as provided by Morgan Stanley in connection with its equity valuation analysis. The estimated fair values of debt amounts are based largely on discounted cash flow analysis developed by management. The actual equity value and the allocation of fair value to debt could differ materially from amounts presented in the table.
 
These tables have been included to provide additional information regarding the anticipated impact of the restructuring transactions, including the Offers, and the Plan of Reorganization on our capitalization. These tables should be read in conjunction with the “Selected Historical Consolidated Financial Data” elsewhere in this Offering Memorandum and Disclosure Statement and the historical consolidated financial statements and related notes that are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, updated with the documents included in Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 1, 2009 and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009, each of which is incorporated by reference into this Offering Memorandum and Disclosure Statement.


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Pro Forma Capitalization Under the Offers
 
                 
    As of June 30, 2009  
    Actual     As Adjusted(A)  
    (In millions, except share data and per share amounts)  
 
Debt:
               
Bank credit facilities
  $ 3,100.0     $  
Secured borrowings
    17,635.3       17,635.3  
Senior unsecured notes-variable
    7,451.7       1,159.0  
Senior unsecured notes-fixed
    23,801.7       2,686.7  
Junior, subordinated notes and convertible equity units
    2,098.9       199.9  
New Notes offered in the Offers
          19,355.7  
                 
Total Debt
    54,087.6       41,036.6  
Deposits
    5,378.7       5,378.7  
                 
Total Debt and Deposits
    59,466.3       46,415.3  
                 
Equity
               
Stockholders’ Equity
               
Preferred stock: $0.01 par value, 100,000,000 authorized
               
Issued and outstanding:
               
Series A 14,000,000 with a liquidation preference of $25 per share
    350.0       350.0  
Series B 1,500,000 with a liquidation preference of $100 per share
    150.0       150.0  
Series C 11,500,000 with a liquidation preference of $50 per share
    575.0       575.0  
Series D 2,330,000 with a liquidation preference of $1,000 per share
    2,071.7       2,071.7  
Series F 70,009,815 Preferred Stock, issued hereby, with a liquidation preference of $1,300 per share
          4,819.7  
Common stock: $0.01 par value, 600,000,000 authorized
               
Issued: 398,289,150 (as of June 30, 2009)
    4.0       4.0  
Outstanding: 392,067,503 (as of June 30, 2009)
               
Paid-in capital, net of deferred compensation of $31.1
    11,269.8       11,269.8  
(Accumulated deficit) retained earnings
    (7,896.6 )     334.7  
Accumulated other comprehensive loss
    (134.7 )     (134.7 )
Less: treasury stock, 6,221,647 shares, at cost
    (310.3 )     (310.3 )
                 
Total Common Stockholders’ Equity
    2,932.2       11,163.5  
                 
Total Stockholders’ Equity
    6,078.9       19,129.9  
                 
Total Capitalization
  $ 65,545.2     $ 65,545.2  
                 
Book Value per Common Share(B)
  $ 7.48     $ 28.47  
                 
 
 
(A) The As Adjusted capitalization does not reflect the impact of the $3 billion Senior Credit Facility, the cash tender offer completed on August 17, 2009 for $1 billion of August 17 Notes. It also assumes 100% participation in the Offers, which is not an expected result.
 
(B) The As Adjusted book value per common share does not reflect the impact of the Recapitalization, which would significantly increase the number of common shares outstanding and cause a significant reduction in the book value per common share.


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Pro Forma Capitalization Under the Plan of Reorganization
 
                 
    As of June 30, 2009  
    Actual     As Adjusted(A)(B)  
    (In millions, except share data and per share amounts)  
 
Debt:
               
Bank credit facilities
  $ 3,100.0     $  
Secured borrowings
    17,635.3       15,601.3  
Senior unsecured notes-variable
    7,451.7       1,159.0  
Senior unsecured notes-fixed
    23,801.7       2,298.8  
Junior subordinated notes and convertible equity units
    2,098.9        
New Notes offered in the Offers
          17,947.9  
                 
Total Debt
    54,087.6       37,007.0  
Deposits
    5,378.7       5,378.7  
                 
Total Debt and Deposits
    59,466.3       42,385.7  
                 
Equity
               
Stockholders’ Equity
               
Preferred stock: $0.01 par value, 100,000,000 authorized
               
Issued and outstanding:
               
Series A 14,000,000 with a liquidation preference of $25 per share
    350.0        
Series B 1,500,000 with a liquidation preference of $100 per share
    150.0        
Series C 11,500,000 with a liquidation preference of $50 per share
    575.0        
Series D 2,330,000 with a liquidation preference of $1,000 per share
    2,071.7        
Common stock: $0.01 par value, 600,000,000 authorized
Issued: 398,289,150 (as of June 30, 2009)
    4.0        
Outstanding: 392,067,503 (as of June 30, 2009)
               
New common stock: $0.01 par value, 800,000,000 authorized Issued: 400,000,000
               
Outstanding: 400,000,000
          4.0  
Paid-in capital, net of deferred compensation of $31.1
    11,269.8       7,996.0  
Accumulated deficit
    (7,896.6 )      
Accumulated other comprehensive loss
    (134.7 )      
Less: treasury stock, 6,221,647 shares, at cost
    (310.3 )      
                 
Total Common Stockholders’ Equity
    2,932.2       8,000.0  
                 
Total Stockholders’ Equity
    6,078.9       8,000.0  
                 
Total Capitalization
  $ 65,545.2     $ 50,385.7  
                 
Book Value per Common Share
  $ 7.48     $ 20.00  
                 
 
 
(A) The As Adjusted capitalization under the Plan of Reorganization does not reflect the impact of the $3 billion Senior Credit Facility (as defined below) or the cash tender offer completed on August 17, 2009 for $1 billion of August 17 Notes.
(B) The As Adjusted includes assumed “fresh start reporting.”


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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
 
The following table sets forth selected historical financial information for CIT on a consolidated basis derived from our (i) audited consolidated financial statements for the years ended December 31, 2008, 2007 and 2006 and as of December 31, 2008 and 2007, which are incorporated into this Offering Memorandum and Disclosure Statement by reference to our Current Report on Form 8-K filed on October 1, 2009; (ii) audited consolidated financial statements for the years ended December 31, 2005 and 2004 and as of December 31, 2006, 2005 and 2004, which are not incorporated by reference into this Offering Memorandum and Disclosure Statement; and (iii) unaudited consolidated financial statements for the six months ended June 30, 2009 and 2008 and as of June 30, 2009 and 2008, which are incorporated by reference into this Offering Memorandum and Disclosure Statement. The historical information presented may not be indicative of our future performance. In addition, our results for the six months ended June 30, 2009 are not necessarily indicative of results expected for the full fiscal year ending December 31, 2009.
 
The selected historical financial information should be read in conjunction with the audited consolidated financial statements incorporated by reference from our Current Report on Form 8-K filed October 1, 2009 with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009, and our quarterly consolidated financial statements and the corresponding notes thereto, each of which is incorporated by reference in this Offering Memorandum and Disclosure Statement.
 
                                                         
    For the Six Months Ended June 30,   For the Years Ended December 31,
    2009   2008   2008   2007   2006   2005   2004
        (In millions, except percentages, share data and per share amounts)
    (Unaudited)                    
 
Results of Operations
                                                       
Net interest revenue
  $ (36.6 )   $ 327.2     $ 499.1     $ 821.1     $ 789.0     $ 874.1     $ 960.2  
Provision for credit losses
    1,123.9       398.9       1,049.2       241.8       159.8       165.3       159.5  
Total other income
    937.9       1,228.9       2,460.3       3,567.8       2,898.1       2,708.7       2,277.0  
Total other expenses
    1,717.5       1,425.2       2,986.5       3,051.1       2,319.2       1,939.4       1,889.3  
(Loss) income from continuing operations, before preferred stock dividends
    (1,960.8 )     (192.8 )     (633.1 )     792.0       925.7       918.5       742.4  
(Loss) income from discontinued operation
          (2,113.8 )     (2,166.4 )     (873.0 )     120.3       30.6       11.2  
Net (loss) income (attributable) available to common stockholders
    (2,082.6 )     (2,341.6 )     (2,864.2 )     (111.0 )     1,015.8       936.4       753.6  
Income (loss) per share from continuing operations — diluted
    (5.34 )     (1.00 )     (2.69 )     3.93       4.41       4.30       3.45  
Income (loss) per share from discontinued operation — diluted
          (9.28 )     (8.37 )     (4.50 )     0.59       0.14       0.05  
Cash dividends per common share, paid
    0.02       0.35       0.55       1.00       0.80       0.61       0.52  
Balance Sheet Data
                                                       
Loans including receivables pledged
  $ 48,730.3     $ 53,223.7     $ 53,126.6     $ 53,760.9     $ 45,203.6     $ 35,878.5     $ 29,892.1  
Allowance for loan losses
    (1,538.4 )     (780.8 )     (1,096.2 )     (574.3 )     (577.1 )     (540.2 )     (553.8 )
Operating lease equipment, net
    13,380.1       12,342.4       12,706.4       12,610.5       11,017.9       9,635.7       8,290.9  
Goodwill and intangible assets, net
          1,165.6       698.6       1,152.5       1,008.4       1,011.5       596.5  
Assets of discontinued operation
          5,568.2       44.2       9,308.6       10,387.1       8,789.8       5,811.5  
Total assets
    71,019.2       87,819.4       80,448.9       90,613.4       77,485.7       63,386.6       45,299.8  
Total debt and deposits
    59,466.3       69,913.5       66,377.5       69,161.0       60,704.8       47,864.5       37,724.8  
Total stockholders’ equity
    6,078.9       6,154.7       8,124.3       6,960.6       7,751.1       6,962.7       6,055.1  
Total owned and securitized financing and leasing assets
  $ 63,841.6     $ 71,694.4     $ 67,823.7     $ 73,428.2     $ 63,220.2     $ 53,200.7     $ 46,154.3  


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    For the Six Months Ended June 30,   For the Years Ended December 31,
    2009   2008   2008   2007   2006   2005   2004
        (In millions, except percentages, share data and per share amounts)
    (Unaudited)                    
 
Selected Data and Ratios
                                                       
Profitability (continuing operations)
                                                       
Net income (loss) before preferred dividend as a percentage of average common stockholders’ equity
    (84.7 )%     (6.3 )%     (11.0 )%     11.6 %     13.6 %     14.8 %     13.0 %
Net finance revenue as a percentage of average earning assets(1)
    1.11 %     2.31 %     2.05 %     2.71 %     3.08 %     3.38 %     3.97 %
Return on average total assets
    (5.16 )%     0.49 %     (0.85 )%     1.03 %     1.50 %     1.81 %     1.71 %
Dividend payout ratio
    N/M(2 )     N/M(2 )     N/M(2 )     25.4 %     18.1 %     14.2 %     15.1 %
Total ending equity to total ending assets
    8.6 %     7.5 %     10.1 %     7.7 %     10.0 %     11.0 %     13.4 %
Credit Quality
                                                       
Non-accrual loans as a percentage of finance receivables
    4.78 %     1.83 %     2.66 %     0.89 %     0.69 %     0.83 %     1.08 %
Net credit losses as a percentage of average finance receivables
    2.60 %     0.67 %     0.90 %     0.35 %     0.33 %     0.52 %     0.88 %
Reserve for credit losses as a percentage of finance receivables
    3.16 %     1.47 %     2.06 %     1.07 %     1.28 %     1.51 %     1.85 %
Reserve for credit losses, excluding specific reserves as a percentage of finance receivables, excluding guaranteed student loans
    2.28 %     1.34 %     1.48 %     1.21 %     1.44 %     1.53 %     1.71 %
Capital (period end)
                                                       
Tier 1 capital
    8.8 %     N/A (3)     9.4 %     N/A (3)     N/A (3)     N/A (3)     N/A (3)
Total risk-based capital
    12.8 %     N/A (3)     13.1 %     N/A (3)     N/A (3)     N/A (3)     N/A (3)
Tangible capital to owned and securitized assets
    12.9 %     9.0 %     14.3 %     8.8 %     9.4 %     9.8 %     10.7 %
 
 
(1) Net finance revenue is the sum of net interest revenue plus rentals on operating leases less depreciation on operating lease equipment.
 
(2) N/M means not meaningful given the net losses in these periods.
 
(3) N/A means not applicable to these periods.

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DESCRIPTION OF THE OFFERS
 
Terms of the Offers
 
On the terms and subject to the conditions set forth in this Offering Memorandum and Disclosure Statement and any supplements or amendments hereto and in the related Letter of Transmittal, (i) CIT is offering in exchange for any and all of the outstanding notes (including the U.S. dollar equivalent of non-U.S. dollar-denominated notes) of CIT Group Inc. listed in the table “CIT Outstanding Notes” beginning on the inside cover page each of five series of our newly issued Series A secured notes and up to approximately 70 million shares of its New Preferred Stock and (ii) Delaware Funding is offering in exchange for any and all of the outstanding notes listed in the table “Delaware Funding Outstanding Notes” beginning on the inside cover page each of five series of its newly issued Series B Notes, all on terms described in this Offering Memorandum and Disclosure Statement. Assuming the exchange of 100% of the Old Notes for the New Notes and the New Preferred Stock, the New Preferred Stock issued will consist of approximately 70 million shares having an aggregate liquidation preference of approximately $91 billion and representing approximately 94.0% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders. If we receive the minimum level of participation in the Offers required to satisfy the Liquidity and Leverage Condition, the New Preferred Stock issued will consist of approximately 48.5 million shares having an aggregate liquidation preference of approximately $63 billion and representing approximately 91.5% of the aggregate voting power of our capital stock generally entitled to vote on matters presented to our stockholders.
 
New Notes will be issued in minimum denominations of $1 and integral multiples of $1. If, under the terms of the Offers, a tendering holder is entitled to receive New Notes in a principal amount that is not an integral multiple of $1, we will round downward such principal amount of New Notes to the nearest integral multiple of $1. This rounded amount will be the principal amount of New Notes you will receive, and no additional cash will be paid in lieu of any principal amount of New Notes not received as a result of rounding down. No fractional shares of New Preferred Stock will be issued or distributed, but the number of shares of New Preferred Stock which any holder of record is entitled to receive pursuant to the CIT Offer will be rounded up to the next whole share.
 
All New Notes issued pursuant to the Offers will be denominated in U.S. dollars. For purposes of determining the principal amount of New Notes to be received in exchange for the non-U.S. dollar-denominated, Old Notes, an equivalent U.S.-dollar principal amount of each tender of such series of Old Notes will be determined by multiplying the principal amount of such tender by the weekly average of the applicable currency exchange rate in the most recent Federal Reserve Statistical Release H.10 which has become available prior to the Expiration Date. Such equivalent U.S. dollar principal amount will be used in all cases when determining the consideration to be received pursuant to the Offers per $1,000 principal amount of Old Notes tendered.
 
None of the exchange agent, the information agent, the financial advisors or any of their respective affiliates makes any recommendation as to whether or not holders of Old Notes should exchange Old Notes for New Notes and/or shares of New Preferred Stock, as applicable, in the Offers.
 
None of CIT, Delaware Funding, CIT’s subsidiaries, their respective boards of directors, the exchange agent, the information agent, the Swiss tender agent, the financial advisors or any of their respective affiliates makes any recommendation as to whether holders of Old Notes should exchange Old Notes for New Notes and/or New Preferred Stock in the Offers.
 
Accrued and Unpaid Interest
 
Holders of Old Notes accepted in the Offers will receive a cash payment (paid in the stated currency of such Old Notes) equal to the accrued and unpaid interest in respect of such Old Notes from the most recent interest payment date to, but not including, the Settlement Date. Holders who do not exchange will be paid interest according to the terms of their securities.


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Expiration Date; Extensions; Amendments; Termination
 
For purposes of each Offer, the term “Expiration Date” means 11:59 p.m., New York City time, on October 29, 2009, subject to our right to extend that time and date with respect to any Offer in our absolute discretion, in which case the Expiration Date means the latest time and date to which such Offer is extended.
 
During any extension of an Offer, all Old Notes previously tendered and not accepted for exchange thereunder will remain subject to such Offer and may, subject to the terms and conditions of such Offer, be accepted for exchange by us.
 
Any waiver, amendment or modification of an Offer will apply to all Old Notes tendered thereunder. If we make a change we determine to be material in any terms of an Offer or waive a condition to an Offer we determine to be material, we will give oral (to be confirmed in writing) or written notice of such amendment or such waiver to the exchange agent and will disseminate additional offer documents and extend such Offer as we determine necessary and to the extent required by law.
 
In addition, we may terminate any Offer if any condition thereto is not satisfied on or after the Expiration Date.
 
Subject to the applicable regulations of the SEC, we expressly reserve the right, in our sole discretion, at any time and from time to time, and regardless of whether any events preventing satisfaction of the conditions to any Offer shall have occurred or shall have been determined by us to have occurred, to extend the period during which such Offer is open by giving oral or written notice of such extension to the exchange agent and by making public disclosure by press release or other appropriate means of such extension to the extent required by law.
 
There can be no assurance that we will exercise our right to extend, terminate or amend any Offer. During any extension and irrespective of any amendment to an Offer, all Old Notes previously tendered and not accepted or withdrawn thereunder will remain subject to such Offer and may be accepted thereafter by us, subject to compliance with applicable law. In addition, we may waive conditions, other than the Liquidity and Leverage Condition, without extending an Offer in accordance with applicable law.
 
Announcements
 
Any extension, termination or amendment of an Offer will be followed as promptly as practicable by announcement thereof, such announcement in the case of an extension of an offer to be issued no later than 9:00 a.m., New York City time, on the next business day following the previously scheduled Expiration Date. In the event of such announcement, we will make an equivalent announcement in Luxembourg and United Kingdom. Without limiting the manner in which we may choose to make such announcement, we will not, unless otherwise required by law, have any obligation to publish, advertise or otherwise communicate any such announcement other than by making a release to an appropriate news agency or another means of announcement that we deem appropriate.
 
Acceptance of Old Notes for Exchange and Delivery of New Notes and/or Shares of Preferred Stock
 
On the Settlement Date, New Notes and/or shares of New Preferred Stock, as applicable, as specified in the table beginning on the inside cover page of this Offering Memorandum and Disclosure Statement, will be issued. Payment of any accrued interest or other amounts on the Old Notes will be made by deposit of funds with the applicable Clearing System (as defined herein), which will transmit those payments to the applicable tendering holders.
 
If the conditions to an Offer are satisfied, or if all of the conditions that have not been satisfied and can be waived are waived, we will accept at the Expiration Date and after we receive validly completed and duly executed letters of transmittal and consent or agent’s messages with respect to any and all of the Old Notes tendered for exchange, by notifying the exchange agent of our acceptance. The notice may be oral if we promptly confirm it in writing.


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We expressly reserve the right, in our sole discretion, to delay acceptance for exchange, or exchange of, Old Notes tendered under any offer (subject to Rule 14e-1(c) under the Exchange Act, which requires that we issue the offered consideration or return the Old Notes deposited thereunder promptly after termination or withdrawal of such offer), or to terminate such Offer and not accept for exchange any Old Notes not previously accepted, (1) if any of the conditions to such offer shall not have been satisfied or validly waived by us, or (2) in order to comply in whole or in part with any applicable law. In all cases, the Offer consideration for Old Notes tendered pursuant to an offer will be made only after timely receipt by the exchange agent of (1) certificates representing the Old Notes, or timely confirmation of a book-entry transfer (a “book-entry confirmation”) of the Old Notes into the exchange agent’s account at the applicable Clearing System, (2) the properly completed and duly executed Letter of Transmittal (or a facsimile thereof) or an agent’s message (as defined in “— Procedures for Tendering Old Notes — Tender of U.S. Dollar-Denominated Old Notes Through DTC” below) in lieu thereof, and (3) any other documents required by the Letter of Transmittal.
 
For purposes of each Offer, we will be deemed to have accepted for exchange validly tendered (and not validly withdrawn) Old Notes as provided herein when, and if, we give oral or written notice to the exchange agent of our acceptance of the Old Notes for exchange pursuant to such Offer. In all cases, the exchange of Old Notes pursuant to an offer will be made by deposit of the New Notes and/or shares of New Preferred Stock, as applicable, with the exchange agent, which will act as your agent for the purposes of receiving New Notes from us, and delivering New Notes and/or shares of New Preferred Stock, as applicable, to you. On and after the Settlement Date, the tendering holders whose Old Notes have been accepted by us will cease to be entitled to receive interest on such Old Notes. Such tendering holders will receive the applicable consideration for the Old Notes accepted for exchange. On the Settlement Date, the exchange agent will pay the applicable consideration for the Old Notes accepted for purchase for cash (i) by wire transfer to the applicable Clearing System, in the case of Old Notes accepted for purchase that were tendered by book-entry transfer as described below or (ii) in all other cases, by check payable to the tendering holders whose Old Notes have been accepted for purchase for cash (unless a different payee is indicated under the Special Payment instructions in the Letter of Transmittal). Also, as soon as practicable after the Settlement Date, the exchange agent will return to any holder who partially tendered a physical Old Note a certificate for the portion of the Old Note that was not tendered. The exchange agent will mail all such non-tendered Old Notes and checks by first-class mail unless such Old Notes and/or checks represent more than $250,000, in which case they will be mailed by registered mail and, in the case of returned Old Notes, insured separately for their replacement value.
 
If, for any reason whatsoever, acceptance for exchange of any Old Notes tendered pursuant to an offer is delayed (whether before or after our acceptance for exchange of the Old Notes) or we extend an offer or are unable to accept for exchange the Old Notes tendered pursuant to such offer, then, without prejudice to our rights set forth herein, we may instruct the exchange agent to retain tendered Old Notes and those Old Notes may not be withdrawn, subject to the limited circumstances described in “— Withdrawal of Tenders” below.
 
Tender of Old Notes pursuant to the Offers will be accepted only in principal amounts equal to permitted minimum denominations and integral multiples as specified in the terms of such Old Notes, provided that any holder may tender all Old Notes held by such holder, even if the aggregate principal amount of those Old Notes is not a permitted denomination.
 
We will pay or cause to be paid all transfer taxes with respect to the acceptance of any Old Notes unless the box entitled “Special Payment or Issuance Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal has been completed, as described in the instructions thereto.
 
Under no circumstances will any interest be payable because of any delay in the transmission of funds to you with respect to accepted Old Notes or otherwise.
 
We will pay all fees and expenses of the exchange agent, the information agent, the financial advisors and the Swiss Note Tender Agent in connection with the Offers. See “Exchange Agent, Information Agent, Swiss Note Tender Agent, Financial Advisors.”


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Market and Trading Information
 
The Old Notes are not listed on any exchange in the United States. Certain of the Old Notes are listed on the Official List of the Luxembourg Stock Exchange and trade on the Luxembourg Stock Exchange’s Euro MTF Market or are admitted to the Official List of the U.K. Listing Authority and to the London Stock Exchange plc and trade on the London Stock Exchange’s Gilt Edged and Fixed Interest Market, each as identified in the table beginning on the inside cover page of this Offering Memorandum and Disclosure Statement. Holders of the Old Notes are urged to contact their brokers or other advisors to obtain the best available information as to current market prices for the Old Notes before deciding whether to tender such Old Notes pursuant to the applicable offer.
 
Procedures for Tendering Old Notes
 
General
 
In order to participate in the Offers, you must validly tender your Old Notes to the exchange agent as described below. It is your responsibility to validly tender your Old Notes. We have the right to waive any defects. However, we are not required to waive defects and are not required to notify you of defects in your tender. If you do not elect to participate in the Offers but wish to vote on the Plan of Reorganization, see the procedures in “Procedures for Voting on the Plan of Reorganization”.
 
Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender Old Notes should contact such holder promptly and instruct such holder to tender Old Notes on such beneficial owner’s behalf.
 
Voting on the Plan of Reorganization by Noteholders
 
The “Voting Record Date” for purposes of determining noteholders that are eligible to vote on the Plan of Reorganization is the Expiration Date of the Offers and the Voting Deadline for the Plan of Reorganization (currently contemplated to be October 29, 2009). Any beneficial holder (a “Beneficial Holder”) whose Old Notes are registered or held of record in the name of his broker, dealer, commercial bank, trust company or other nominee (each a “Nominee”) and who wishes to vote on the Plan of Reorganization should provide their instructions with respect to the Offers and/or Plan of Reorganization to their Nominee. The Nominee will need to tender the underlying Old Notes on behalf of the Beneficial Holder, in accordance with the Beneficial Holder’s instructions.
 
There are three different voting choices in connection with the Offers and Plan of Reorganization, which are outlined in greater detail below. The ballot (the “Ballot”) (which is Appendix F to the Offering Memorandum) was designed to assist Beneficial Holders of Old Notes understand the voting process and provide the correct instruction to their Nominee. Beneficial Holders of Old Notes should not return the Ballot to their Nominee or the Voting Agent to cast their vote. Instead, Beneficial Holders will need to provide their instructions to their Nominee holding their Old Notes in accordance with the directions provided by their Nominee. By providing instructions to their Nominee holding their Old Notes, Beneficial Holders of Old Notes are requesting that their Nominee (1) tender the underlying Old Notes on their behalf in accordance with the instructions provided, and (2) execute a master ballot on the Beneficial Holder’s behalf that reflects their instructions with respect to the Plan of Reorganization. Beneficial Holder instructions to their Nominee will have the same effect as if such holder had completed and returned a physical ballot to indicate their vote with respect to the Plan, provide certain certifications, and consent to any other conditions contained therein, including release, injunction and exculpation provisions.
 
Beneficial holders have three voting options, as follows:
 
OPTION 1.  PARTICIPATE in the Offers; vote to ACCEPT the Plan of Reorganization.
 
OPTION 2.  NOT PARTICIPATE in the Offers; vote to ACCEPT the Plan of Reorganization.
 
OPTION 3.  NOT PARTICIPATE in the Offers; vote to REJECT the Plan of Reorganization.


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Beneficial holders may also instruct with respect to a fourth option, which is the default option for those Beneficial Holders that do not provide any instructions:
 
OPTION 4.  Take no action; not participate in Offers; not vote on the Plan of Reorganization.
 
Beneficial Holders that instruct their Nominee to take no action, or fail to provide timely instructions, may nevertheless be bound by the terms of the Plan of Reorganization and have the relevant treatment applied to their Old Notes if the Plan of Reorganization is consummated.
 
Please note that once a Beneficial Holder’s Old Notes have been tendered, the Old Notes will not be able to be traded. Withdrawals from the Offers and modifications to votes to accept or reject the Plan of Reorganization will not be permitted after the Voting Deadline. If the Offers are not successful and the company does not commence their prepackaged bankruptcy cases, any Old Notes tendered into Option 1, Option 2, or Option 3 will be returned to the broker, dealer, commercial bank, trust company or other nominee that tendered the Old Notes.
 
Soon after commencement of their prepackaged bankruptcy cases (if the Potential Debtors opt to commence such prepackaged cases), any Old Notes tendered into Option 1, Option 2, or Option 3 will be returned to the broker, dealer, commercial bank, trust company or other nominee that tendered the Old Notes.
 
Holders of Old Notes that are held in certificated form should follow the instructions on their Letter of Transmittal/Ballot.
 
If you have any questions or need help in tendering your Old Notes, please contact the Information Agent at the telephone number listed on the back cover page of this Offering Memorandum and Disclosure Statement.
 
Tenders of Old Notes held in book-entry form will be accepted at one of DTC, Euroclear, Clearstream, the Canadian Deposit for Securities Limited (“CDS”) or SIS SegaInterSettle AG (“SIS”) (each a “Clearing System” and collectively, the “Clearing Systems”). Tenders of U.S. dollar-denominated Old Notes will be accepted only at DTC. Tenders of Euro-denominated, British pound-denominated, Swiss franc-denominated and Canadian dollar-denominated Old Notes will be accepted only at Euroclear or Clearstream or in case of Swiss franc-denominated or Canadian dollar-denominated Old Notes will be accepted at SIS or CDS, respectively.
 
Valid Tender
 
Except as set forth below with respect to Old Notes held through a clearing system, for a holder to validly tender Old Notes pursuant to an offer, a properly completed and duly executed Letter of Transmittal (or a facsimile thereof), together with any signature guarantees and any other documents required by the instructions to the Letter of Transmittal must be received by the exchange agent at the address or facsimile number set forth on the Letter of Transmittal prior to the Expiration Date, together with certificates representing the Old Notes specified in such Letter of Transmittal. If you do not elect to participate in the Offers but wish to vote on the Plan of Reorganization, you will still be required to complete and return a Letter of Transmittal.
 
Tender of U.S. Dollar-Denominated Old Notes Through Applicable Clearing Systems
 
U.S. dollar-denominated Old Notes in book-entry form must be tendered through DTC. DTC participants must electronically transmit their acceptance of an offer through DTC’s Automated Tender Offers Program (“ATOP”), for which the transaction will be eligible. In accordance with ATOP procedures, DTC will then verify the acceptance of an offer and send an agent’s message (as hereinafter defined) to the exchange agent for its acceptance. An “agent’s message” is a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgement from you that you have received this Offering Memorandum and Disclosure Statement and accompanying Ballot and agree to be bound by the terms of the Ballot.


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Holders whose U.S. dollar-denominated Old Notes are held through Clearstream or Euroclear must transmit their acceptance in accordance with the requirements of Clearstream and Euroclear in sufficient time for such tenders to be timely made prior to the Expiration Date and for a Master Ballot to be prepared and transmitted to the Voting Agent.
 
We have not provided guaranteed delivery procedures in conjunction with the Offers or under any of this Offering Memorandum and Disclosure Statement or other offer materials provided therewith. Holders must timely tender their Old Notes in accordance with the procedures set forth in this Offering Memorandum and Disclosure Statement and, if appropriate, accompanying Letter of Transmittal.
 
Tender of Non-U.S. dollar-denominated Old Notes Through Applicable Clearing Systems
 
Tenders of Euro-denominated, British pound-denominated, Swiss franc-denominated and Canadian dollar-denominated Old Notes in book-entry form will be accepted only at Euroclear or Clearstream or in the case of Swiss franc-denominated or Canadian dollar-denominated Old Notes in book-entry form will be accepted at SIS or CDS, respectively. The tender of such Old Notes through the applicable Clearing System will be deemed to have occurred upon receipt by the relevant Clearing System of a valid electronic acceptance instruction in accordance with the requirements of such Clearing System. The receipt of such electronic acceptance instruction by the applicable Clearing System will be acknowledged in accordance with the standard practices of such Clearing System and will result in the blocking of such Old Notes in that Clearing System. By blocking such Old Notes in the relevant Clearing System, the holder thereof will be deemed to consent to have the relevant Clearing System provide details concerning such holder’s identity to the exchange agent, including the account number through which the Old Notes are held.
 
By participating in the offer in this manner, you will be deemed to have acknowledged that you have received this Offering Memorandum and Disclosure Statement and agree to be bound by the terms of the Offers.
 
Holders must take the appropriate steps to block Old Notes to be tendered in the applicable Clearing System so that no transfers may be effected in relation to such Old Notes at any time after such date in accordance with the requirements of the relevant Clearing System and the deadlines required by the relevant Clearing System.
 
Tender of Old Notes Held in Physical Form
 
To validly tender Old Notes held in physical form pursuant to an Offer, a holder should complete and sign the Letter of Transmittal (or a facsimile copy thereof) in accordance with the instructions to the Letter of Transmittal, have the signature thereon guaranteed if required by the instructions to the Letter of Transmittal and deliver the Letter of Transmittal, together with certificates representing such Old Notes and any other documents required by the instructions to the Letter of Transmittal, to the exchange agent at its address set forth on the back page of this Offering Memorandum and Disclosure Statement. The Letter of Transmittal and any certificates evidencing Old Notes tendered pursuant to an Offer should be sent only to the exchange agent and not to the Swiss Note Tender Agent, CIT or Delaware Funding.
 
If Old Notes are to be tendered by any person other than the person in whose name the Old Notes are registered, the Old Notes must be endorsed or accompanied by an appropriate written instrument or instruments of transfer executed exactly as the name or names of the holder or holders appear on the Old Notes, with the signature(s) on the Old Notes or instruments of transfer guaranteed as provided below, and a Letter of Transmittal must be executed and delivered either by the holder or holders, or by the tendering person pursuant to a valid proxy signed by the holder or holders (such person, an “authorized proxy holder”), which signature must, in either case, be guaranteed as provided below.
 
Effect of Letter of Transmittal
 
Subject to and effective upon the acceptance for exchange of, and exchange of, Old Notes tendered thereby, by executing and delivering a Letter of Transmittal, you (1) irrevocably sell, assign and transfer to or


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upon the order of us all right, title and interest in and to all the Old Notes tendered thereby and (2) irrevocably appoint the exchange agent as your true and lawful agent and attorney-in-fact (with full knowledge that the exchange agent also acts as our agent with respect to the tendered Old Notes, with full power coupled with an interest) to:
 
  •  deliver certificates representing the Old Notes, or transfer ownership of the Old Notes on the account books maintained by the applicable Clearing System, together with all accompanying evidences of transfer and authenticity, to or upon our order;
 
  •  present the Old Notes for transfer on the relevant security register; and
 
  •  receive all benefits or otherwise exercise all rights of beneficial ownership of the Old Notes (except that the exchange agent will have no rights to or control over, our funds, except as our agent, for an offer consideration for any tendered Old Notes that are exchanged by us), all in accordance with the terms of the Offers.
 
Signature Guarantees
 
Signatures on all letters of transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program (a “Medallion Signature Guarantor”), unless the Old Notes tendered thereby are tendered (i) by a holder of Old Notes (or by a participant in DTC whose name appears on a security position listing as the owner of such Old Notes) who has not completed either the box entitled “Special Delivery Instructions” or “Special Payment or Issuance Instructions” on the Letter of Transmittal or (ii) for the account of a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc. or a commercial bank or trust company having an office or correspondent in the United States (each of the foregoing being referred to as an “Eligible Institution”). If the Old Notes are registered in the name of a person other than the signer of the Letter of Transmittal or if Old Notes not tendered are to be returned to a person other than the holder, then the signatures on the letters of transmittal accompanying the tendered Old Notes must be guaranteed by a Medallion Signature Guarantor as described above.
 
Determination of Validity
 
All questions as to the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tendered Old Notes pursuant to any of the procedures described above, and the form and validity (including time of receipt of notices of withdrawal) of all documents will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any or all tenders of any Old Notes determined by us not to be in proper form, or if the acceptance of, or exchange of, such Old Notes may, in the opinion of our counsel, be unlawful. We also reserve the right to waive any conditions to any offer that we are legally permitted to waive.
 
Your tender will not be deemed to have been validly made until all defects or irregularities in your tender have been cured or waived. Neither we, the exchange agent, the voting agent, the information agent, the Swiss Note Tender Agent nor any other person or entity is under any duty to give notification of any defects or irregularities in any tender or withdrawal of any Old Notes, or will incur any liability for failure to give any such notification. Please send all materials to the exchange agent and not to any of: the information agent, the Swiss Note Tender Agent, CIT or Delaware Funding.
 
Withdrawal of Tenders
 
You may withdraw tenders of Old Notes at any time prior to the Expiration Date. Should CIT determine that is unable to consummate the Offers, you may withdraw previously tendered Old Notes three business days after CIT makes such an announcement.
 
A holder who validly withdraws previously tendered Old Notes and does not validly re-tender Old Notes prior to the Expiration Date will not receive the applicable offer consideration. A holder who validly


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withdraws previously tendered Old Notes and validly re-tenders Old Notes prior to the Expiration Date will receive the applicable offer consideration.
 
Subject to applicable regulations of the SEC, if, for any reason whatsoever, acceptance for exchange of, or exchange of, any Old Notes tendered pursuant to an offer is delayed (whether before or after our acceptance for exchange of Old Notes) or we extend an offer or are unable to accept for exchange, or exchange, the Old Notes tendered pursuant to an offer, we may instruct the exchange agent to retain tendered Old Notes, and those Old Notes may not be withdrawn, except to the extent that you are entitled to the withdrawal rights set forth herein.
 
If you have tendered Old Notes that are in certificated form, you may withdraw those Old Notes prior to the Expiration Date by delivering a written notice of withdrawal subject to the limitations described herein. To be effective, a written or facsimile transmission notice of withdrawal of a tender must:
 
  •  be received by the exchange agent at one of the addresses specified on the back cover of this Offering Memorandum and Disclosure Statement prior to the Expiration Date;
 
  •  specify the name of the holder of the Old Notes to be withdrawn;
 
  •  contain the description of the Old Notes to be withdrawn, the certificate numbers shown on the particular certificates representing such Old Notes (or, in the case of Old Notes tendered by book-entry transfer), the number of the account at the applicable Clearing System from which the Old Notes were tendered and the aggregate principal amount represented by such Old Notes; and
 
  •  be signed by the holder of the Old Notes in the same manner as the original signature on the Letter of Transmittal or be accompanied by documents of transfer sufficient to have the trustee for the applicable Old Notes register the transfer of the Old Notes into the name of the person withdrawing the Old Notes.
 
If the Old Notes to be withdrawn have been delivered or otherwise identified to the exchange agent, a signed notice of withdrawal is effective immediately upon receipt by the exchange agent of written or facsimile transmission of the notice of withdrawal (or receipt of a request via the applicable Clearing System) even if physical release is not yet effected. A withdrawal of Old Notes can only be accomplished in accordance with the foregoing procedures. A withdrawal of Old Notes is also a withdrawal of acceptance of the Plan of Reorganization.
 
We will have the right, which may be waived, to reject the defective tender of Old Notes as invalid and ineffective. If we waive our rights to reject a defective tender of Old Notes, subject to the other terms and conditions set forth in this Offering Memorandum and Disclosure Statement and accompanying Letter of Transmittal, you will be entitled to the applicable offer consideration.
 
If you withdraw Old Notes, you will have the right to re-tender them prior to the Expiration Date in accordance with the procedures described above for tendering outstanding Old Notes. If we amend or modify the terms of an offer or the information concerning an offer in a manner determined by us to constitute a material change to the holders, we will disseminate additional offer materials and extend the period of such Offers, including any withdrawal rights, to the extent required by law and as we determine necessary. An extension of the Expiration Date will not affect a holder’s withdrawal rights, unless otherwise provided or as required by applicable law.
 
Conditions to the Offers
 
Notwithstanding any other provisions of the Offers, we will not be required to accept for exchange, or to exchange, Old Notes validly tendered (and not validly withdrawn) pursuant to any Offer, and may terminate, amend or extend any Offer or delay or refrain from accepting for exchange, or exchanging, the Old Notes or transferring any offer consideration, if any of the following shall occur:
 
  •  there shall not have been a sufficient number of Old Notes tendered into the exchange and certain other debt instruments have been renegotiated so that, after giving effect to the Offers and such


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  renegotiations, the face amount of the Company’s total debt would be reduced by at least $5.7 billion and its remaining unsecured debt maturities (excluding foreign vendor facilities) would not exceed $500 million in 2009, $2.5 billion during the period from 2009 to 2010, $4.5 billion during the period from 2009 to 2011 and $6.0 billion during the period from 2009 to 2012, in each case on a cumulative basis (which we refer to as the “Liquidity and Leverage Condition”);