Goldman Sachs score one billion payday CIT Fails

In a sign that commercial real estate industry is indeed in trouble, is the largest commercial CIT bib employees who provide a Chapter 11 bankruptcy reorganization, unless the bank can extract a final debt swap deal. And as always, the investment firm Goldman Sachs stands to be helped to his feet, while the American taxpayer loses again.In the case of CIT fails, Goldman benefited from a "whole" for a payment from the beleaguered bank one billion U.S. dollars, the result of the contract of A $ 3 billion in loans last year in CIT. Save the loan over five months, it came to the U.S. saved the lender through the purchase of 2.3 billion U.S. dollars preferred shares of CIT. When CIT is running, then lose the American taxpayers to the total investment 2.3 billion U.S. dollars. But Goldman Sachs to protect his back. Terms of the transaction with CIT CIT is required to pay Goldman makes a full payment of $ 1 billion, in case the borrower defaults on the loan or bankruptcy. In addition, Goldman continues its investment by buying credit default swaps, which would come due to a failure of CIT to protect. A spokesman for Goldman said the loan was not a "directional" commitment "at CIT," but to protect against the deterioration of security.

A CIT application discloses plans to the borrower, the terms of the "make-whole" payment agreement with Goldman, as the bank tries to negotiate to survive its latest crisis.