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| Mitch Drucker |
CIT Business Credit has set up a capital markets group and will be underwriting, syndicating and distributing credits as well as supporting them through a secondary trading platform. "Capital markets will expand our capabilities in the leveraged finance market, assisting all of our product groups and originating large deals," stated Mitch Drucker, executive v.p. with CIT Business Credit. CIT Business Credit will lend to the middle market and is looking to agent, underwrite and distribute deals up to $600 million. "It's an area we feel falls under the radar of large money center banks and we feel we really can make an impact," Drucker said. The group will also look to pursue strategic alliances with the money center banks to co-underwrite and co-syndicate large transactions over $1 billion where CIT Business Credit would take a piece up to $600 million. "We have good relationships with a number of the large money center and investment banks," Drucker noted. "Everyone from J.P. Morgan, Citigroup, Credit Suisse First Boston, Goldman Sachs, UBS. All the major players."
Drucker explained this will enhance CIT Business Credit's three core products, which are asset-based finance; cash flow financing, which is called the corporate finance group; and communications and media. On the asset-based side it will look for business from intermediaries as well as distressed M&A players such as Wilbur Ross and Cerberus Capital Management, Drucker said. The firm will also go after middle-market and large private equity sponsors on the corporate side and on the communications and media front there will be more of a direct calling model--calling end users of the financing, he added.
"Our clients continue to grow and their financing needs thus are growing," said Bill Swenson, who joined CIT Business Credit earlier this month and was previously head of corporate loans sales and trading at CIBC World Markets. "In order to service them and not lose them to competitors, we need to offer a more rigorous syndication business that can follow them as they get bigger." Swenson will serve as a managing director and head of loan distribution, sales and trading. "I will interface primarily with the investor market--distributing loans that we have arranged, organizing the syndication of those loans as well as supporting the issuer and origination business in achieving or obtaining mandates to agent deals," he said. The firm will also set up a trading business to support deals where it is an agent. "We're going to provide liquidity to investors that we bring in primary syndications on an ongoing basis," Swenson noted.
CIT Business Credit is pursuing both first- and second-lien transactions. "First-lien paper is our core business in all the products but we've also recently entered into the second-lien financing market and are addressing the needs of customers in that area," Drucker explained. "We're seeing 60-70% of our deal flow requires a second-lien piece to finalize the capital structure."
CIT Business Credit has also brought on Karen Wold, previously at GE Capital, as a senior v.p. and head of structuring and execution. Wold was in the secondary distressed bank debt market at GE Capital. The group is looking to make additional hires both internally and externally and is looking for high-end qualified originations, structuring underwriters and sales and trading personnel, Drucker said.