Item 8.01 Other Events
Agreement to Sell CIT Commercial Air Business
On October 6, 2016, CIT Group Inc.,
a Delaware corporation (the “Company”) issued a press release announcing that it has agreed to sell CIT
Commercial Air, its commercial aircraft leasing business, to Avolon Holdings Limited (“Avolon”), an
international aircraft leasing company and a wholly-owned subsidiary of Bohai Capital Holding Co. Ltd. (“Bohai”),
pursuant to a Purchase and Sale Agreement by and among C.I.T. Leasing Corporation, a wholly-owned subsidiary of the Company
(“CIT Leasing”), Park Aerospace Holdings Limited, a wholly-owned subsidiary of Avolon, the Company, Bohai, and
Avolon (the “Agreement”). The Agreement provides for the acquisition of all of the capital stock or other equity
interests of C2 Aviation Capital, Inc., a Delaware corporation and wholly owned subsidiary of CIT Leasing (the
“Transaction”). A copy of the press release is attached as Exhibit 99.1 and incorporated herein by reference.
On October 6, 2016, the Company also
made a presentation to investors relating to the Transaction, a copy of which is attached as Exhibit 99.2 and incorporated herein
by reference.
Amended Capital Plan
The
Company announced today that it received a “non-objection” from the Federal Reserve Bank of New York to the
Company’s Amended Capital Plan under the 2016 Comprehensive Capital Analysis and Review (“CCAR”). The
Amended Capital Plan includes a common equity return to shareholders of $2.975 billion payable from the net proceeds of the
Transaction and dividends on common stock totaling $64 million per year after the Transaction is completed. The Amended
Capital Plan also includes an additional common equity return of up to $325 million, contingent on the issuance of Tier 1
qualifying preferred stock. The common equity returns are subject to approval of the Board of Directors of the Company (the
“Board”) and may be in the form of share repurchases, special dividends, or a combination of the two. The
Company’s quarterly dividends are subject to the Board’s approval at the customary times those dividends are
declared.
The
Company’s management and the Board will determine the timing and amount of any share repurchases and special dividends that
may be authorized based on market conditions and other considerations. Any share repurchases may be effected in the open market,
through derivative, accelerated repurchase and other negotiated transactions, and through plans designed to comply with Rule 10b5-1(c)
under the Securities Exchange Act of 1934.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This Form
8-K contains forward-looking statements within the meaning of applicable federal securities laws that are based upon our current
expectations and assumptions concerning future events, which are subject to a number of risks and uncertainties that could cause
actual results to differ materially from those anticipated. The words “expect,” “anticipate,” “estimate,”
“forecast,” “initiative,” “objective,” “plan,” “goal,” “project,”
“outlook,” “priorities,” “target,” “intend,” “evaluate,” “pursue,”
“commence,” “seek,” “may,” “would,” “could,” “should,”
“believe,” “potential,” “continue,” or the negative of any of those words or similar expressions
is intended to identify forward-looking statements. All statements contained in this press release, 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, these statements are not guarantees of any events or financial results, and our actual results may differ
materially. Important factors that could cause our actual results to be materially different from our expectations include, among
others, the risk that (i) Bohai shareholders do not approve the Transaction or that the Company does not receive or satisfy regulatory
or other approvals and conditions on a timely basis or approvals are subject to conditions that are not anticipated, (ii) modifications
to the terms of the transaction may be required in order to obtain or satisfy such approvals or conditions, (iii) the risk that
the transaction does not close or that there are changes in the anticipated timing for closing the transaction, (iv) there are
difficulties, delays or unexpected costs in separating C2 Aviation Capital, Inc. and the commercial air business from the Company
or in implementing the transaction, (v) business disruption during the pendency of or following the transaction, including diversion
of management time, (vi) the risk that the Company is unsuccessful in implementing its Amended Capital Plan on the timing and terms
contemplated, (vii) the risk that the Company is unsuccessful in implementing its strategy and business plan, (viii) the risk that
the Company is unable to react to and address key business and regulatory issues, (ix) the risk that the Company is unable to achieve
the projected revenue growth from its new business initiatives or the projected expense reductions from efficiency improvements,
and (x) the risk that the Company becomes subject to liquidity constraints and higher funding costs. We describe these and
other risks that could affect our results in Item 1A, “Risk Factors,” of our latest Annual Report on Form 10-K for
the year ended December 31, 2015, which was filed with the Securities and Exchange Commission. Accordingly, you should not
place undue reliance on the forward-looking statements contained in this press release. These forward-looking statements speak
only as of the date on which the statements were made. The Company undertakes no obligation to update publicly or otherwise revise
any forward-looking statements, except where expressly required by law.