Thursday, December 10, 2009

CIT Shares Rise as Company Emerges From Bankruptcy

Posted by- Anshu Dixit
By- NEW YORK (Reuters)

CIT Group Inc's new shares rose as much as 6 percent from opening levels in their debut on the New York Stock Exchange on Thursday as the lender to small businesses emerged from one of the largest bankruptcies in U.S. history.

CIT, one of the biggest financial sector victims of the credit crisis, is also the only major firm in the sector to emerge from bankruptcy.

Others, such as Lehman Brothers, Washington Mutual and IndyMac have been unable to continue on their own.

But the comeback may not be easy.

"In the space they are working, it is a tough time trying to secure customers for a company that has gone bankrupt," said Robert Lutts, president and chief investment officer at Cabot Money Management.

"Today, executives making decisions in the financial area are making very low-risk decisions," Lutts said. "That means don't work with the problem childs of the world, and I think that is going to mean a tough sledding for CIT."

Hundreds of thousands of small and mid-sized businesses depend on CIT for financing, and company lawyers had said the company needed to get through bankruptcy quickly to avoid customer defections.

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