PROSPECTUS SUPPLEMENT
(To Prospectus dated October 28, 2004)
$ 3,000,000,000 CIT InterNotes'r'
[CIT LOGO]
CIT Group Inc.
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We may offer to sell our CIT InterNotes'r' from time to time. The specific
terms of the notes will be set prior to the time of sale and described in a
pricing supplement. You should read this prospectus supplement, the accompanying
prospectus and the applicable pricing supplement carefully before you invest.
We may offer the notes to or through agents for resale. The amount we
expect to receive if all of the notes are sold to or through the agents is from
$2,905,500,000 to $2,994,000,000, after paying agent discounts and commissions
of between $6,000,000 and $94,500,000. We also may offer the notes directly. We
have not set a date for termination of our offering.
The agents have advised us that from time to time they may purchase and
sell notes in the secondary market, but they are not obligated to make a market
in the notes and may suspend or completely stop that activity without any notice
at any time. Unless otherwise specified in the applicable pricing supplement, we
will not list the notes on any stock exchange.
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Investing in the notes involves certain risks, including those described in
the "Risk Factors" section beginning on page S-5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or passed on the adequacy
or accuracy of this prospectus supplement, the accompanying prospectus or any
pricing supplement. Any representation to the contrary is a criminal offense.
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Joint Lead Managers and Lead Agents
Banc of America Securities LLC Incapital LLC
Agents
Bear, Stearns & Co. Inc. Charles Schwab & Co., Inc.
Citigroup Edward D. Jones & Co., L.P.
Merrill Lynch & Co. Morgan Stanley
Raymond James RBC Capital Markets
UBS Financial Services Inc. Wachovia Securities
Prospectus Supplement dated October 29, 2004.
InterNotes'r' is a registered servicemark of Incapital Holdings LLC
You should rely only on the information contained or incorporated by
reference in this prospectus supplement, the prospectus and the pricing
supplement. We and the agents have not authorized anyone else to provide you
with different or additional information. We are not making an offer of these
notes in any jurisdiction where the offer is not permitted. You should not
assume that the information contained or incorporated by reference in this
prospectus supplement, the prospectus or the pricing supplement is accurate as
of any date other than the date on the front of that document.
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TABLE OF CONTENTS
Prospectus Supplement
Page
----
About this Prospectus Supplement and the Pricing Supplements.................S-1
Description of CIT Group Inc.................................................S-2
Incorporation by Reference...................................................S-2
Summary......................................................................S-3
Risk Factors.................................................................S-5
Selected Consolidated Financial Information of CIT Group Inc.................S-6
Capitalization of CIT Group Inc..............................................S-9
Description of the Notes....................................................S-10
Registration and Settlement.................................................S-22
Material U.S. Federal Income Tax Considerations.............................S-25
Employee Retirement Income Security Act.....................................S-29
Plan of Distribution........................................................S-30
Other General Information...................................................S-31
Prospectus
About this Prospectus..........................................................3
Where You Can Find More Information............................................4
Forward-Looking Statements.....................................................5
Prospectus Summary.............................................................6
Use of Proceeds................................................................7
Description of Debt Securities.................................................8
Description of Capital Stock..................................................18
Description of Depositary Shares..............................................19
Description of Warrants.......................................................22
Description of Stock Purchase Contracts and Stock Purchase Units..............23
Plan of Distribution..........................................................24
Legal Matters.................................................................25
Experts.......................................................................26
ABOUT THIS PROSPECTUS SUPPLEMENT AND THE PRICING SUPPLEMENTS
Except as the context otherwise requires, or as otherwise specified or used
in this prospectus supplement or the accompanying prospectus, the terms "we,"
"our," "us," "the company," "CIT," "CIT Group" and "CIT Group Inc." refer to CIT
Group Inc. References in this prospectus supplement to "U.S. dollars" or "U.S.
$" or "$" are to the currency of the United States of America.
We may use this prospectus supplement, together with the prospectus and a
pricing supplement, to offer CIT InterNotes'r' from time to time. The total
initial public offering price of notes that may be offered by use of this
prospectus supplement is $3,000,000,000.
This prospectus supplement sets forth certain terms of the notes that we
may offer. It supplements the description of the notes contained in the
prospectus, under "Description of Debt Securities." If information in this
prospectus supplement is inconsistent with the prospectus, this prospectus
supplement will apply and you should not rely on the information in the
prospectus.
Each time we issue notes, we will attach a pricing supplement to this
prospectus supplement. The pricing supplement will contain the specific
description of the notes being offered and the terms of the offering. The
pricing supplement may also add, update or change information in this prospectus
supplement or the prospectus. Information in the pricing supplement will replace
any inconsistent information in this prospectus supplement, including any
changes in the method of calculating interest on any note.
When we refer to the prospectus, we mean the prospectus that accompanies
this prospectus supplement. When we refer to a pricing supplement, we mean the
pricing supplement that we attach to this prospectus supplement with respect to
a particular series of notes being issued.
You should read and consider all information contained or incorporated by
reference in this prospectus supplement, the prospectus and the pricing
supplement before making your investment decision.
S-1
DESCRIPTION OF CIT GROUP INC.
CIT Group Inc., a Delaware corporation, is a leading global commercial and
consumer finance company. CIT was incorporated on March 12, 2001 and the
original predecessor to CIT commenced operations on February 11, 1908. We
provide financing and leasing capital for companies in a wide variety of
industries, including many of today's leading industries and emerging
businesses. We offer vendor, equipment, commercial, factoring, consumer and
structured financing products. We have broad access to customers and markets
through our "franchise" businesses. Each business focuses on specific
industries, asset types and markets, with portfolios diversified by client,
industry and geography. At June 30, 2004, our managed assets were $49.9 billion,
owned financing and leasing assets were $41.5 billion and stockholders' equity
was $5.7 billion.
Our principal executive offices are located at 1 CIT Drive, Livingston, New
Jersey 07039. Our telephone number is (973) 740-5000.
INCORPORATION BY REFERENCE
The U.S. Securities and Exchange Commission (the "SEC") allows us to
incorporate by reference the information we file with it into the accompanying
prospectus and this prospectus supplement, which means that we can disclose
important information to you by referring you to those documents that are
already on file with the SEC. The information incorporated by reference is
considered to be part of this prospectus supplement, and information that we
file later with the SEC will automatically update and supersede the previously
filed information.
Until we have sold all of the debt securities which we are offering for
sale under this prospectus supplement and the prospectus, we will also
incorporate by reference all documents which we may file in the future pursuant
to Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as
amended, other than any portions of the respective filings that were furnished,
under applicable SEC rules, rather than filed.
S-2
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SUMMARY
This section summarizes information contained elsewhere or incorporated by
reference in this prospectus supplement and the accompanying prospectus. This
summary is not complete and does not contain all of the information you should
consider before investing in the notes. You should read the more detailed
information appearing elsewhere or incorporated by reference in this prospectus
supplement, the prospectus and in that pricing supplement, including the "Risk
Factors" section and our consolidated financial statements and the related
notes.
Issuer................................ CIT Group Inc.
Purchasing Agent...................... Incapital LLC
Joint Lead Managers and Lead Agents... Banc of America Securities LLC and
Incapital LLC
Agents................................ Bear, Stearns & Co. Inc.
Charles Schwab & Co., Inc.
Citigroup Global Markets Inc.
Edward D. Jones & Co., L.P.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Raymond James & Associates, Inc.
RBC Dain Rauscher
UBS Financial Services Inc.
Wachovia Capital Markets, LLC
Title of Notes........................ CIT InterNotes'r'
Amount................................ We may issue up to $3,000,000,000 of
InterNotes'r' pursuant to this
prospectus supplement. Additional notes
may be issued in the future without the
consent of or notice to note holders.
The notes will not contain any
limitations on our ability to issue
additional InterNotes'r' or any other
indebtedness.
Denominations......................... The notes will be issued and sold in
denominations of $1,000 and multiples
of $1,000, unless otherwise stated in
the pricing supplement.
Ranking............................... The notes will be our direct unsecured
senior obligations and will rank
equally with all of our other unsecured
senior indebtedness from time to time
outstanding. The notes will be junior
to any indebtedness of any of our
subsidiaries unless the terms of that
indebtedness provide otherwise.
Maturities............................ Each note will mature nine months or
more from its date of original
issuance.
Interest.............................. Each note will bear interest from its
date of original issuance at a fixed or
floating rate.
Interest on each note will be payable
either monthly, quarterly,
semi-annually or annually on each
interest payment date and on the stated
maturity date. Interest also will be
paid on the date of redemption or
repayment if a note is redeemed or
repurchased prior to its stated
maturity in accordance with its
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S-3
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terms.
Principal............................. The principal amount of each note will
be payable on its stated maturity date
at the corporate trust office of the
paying agent or at any other place we
may designate.
Redemption and Repayment.............. Unless otherwise stated in the
applicable pricing supplement, a note
will not be redeemable at our option or
be repayable at the option of the
holder prior to its stated maturity
date. The notes will not be subject to
any sinking fund.
Survivor's Option..................... Specific notes may contain a provision
permitting the optional repayment of
those notes prior to stated maturity,
if requested by the authorized
representative of the beneficial owner
of those notes, following the death of
the beneficial owner of the notes, so
long as the notes were owned by the
beneficial owner or his or her estate
at least six months prior to the
request. This feature is referred to as
a "Survivor's Option." Your notes will
not be repaid in this manner unless the
pricing supplement for your notes
provides for the Survivor's Option. The
right to exercise the Survivor's Option
is subject to limits set by us on:
o the permitted dollar amount of
total exercises by all holders of
notes in any calendar year; and
o the permitted dollar amount of an
individual exercise by a holder of
a note in any calendar year.
Additional details on the Survivor's
Option are described in the section
below entitled "Description of the
Notes--Survivor's Option."
Sale and Clearance.................... We will sell notes in the United States
only. Notes will be issued in
book-entry only form and will clear
through The Depository Trust Company.
We do not intend to issue notes in
certificated form.
Trustee............................... The trustee for the notes is J.P.
Morgan Trust Company, National
Association.
Selling Group......................... The agents and dealers comprising the
selling group are broker-dealers and
securities firms. The agents, including
the Purchasing Agent, will enter into a
selling agent agreement with us (the
"selling agent agreement"). Dealers who
are members of the selling group have
executed a master selected dealer
agreement with the Purchasing Agent
(the "master selected dealer
agreement"). The agents and the dealers
have agreed to market and sell the
notes in accordance with the terms of
those respective agreements and all
other applicable laws and regulations.
You may contact the Purchasing Agent at
info@incapital.com for a list of
selling group members.
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S-4
RISK FACTORS
You should carefully consider the following discussion of risks, and the
other information, provided and incorporated by reference in this prospectus
supplement and the accompanying prospectus. The notes will not be an appropriate
investment for you if you are not knowledgeable about significant features of
the notes, about our financial condition, operations and business or financial
matters in general. You should not purchase the notes unless you understand, and
know that you can bear, these risks.
The market value of the notes may be affected by factors in addition to credit
ratings.
The notes could trade at prices that may be lower than the initial offering
price of the notes. In addition to credit ratings that are assigned to the
notes, whether or not the notes will trade at lower prices depends on various
factors, including prevailing interest rates and markets for similar securities,
our financial condition and future prospects and general economic conditions.
Further, any credit ratings that are assigned to the notes may not reflect the
potential impact of all risks on the market value of the notes.
We may choose to redeem notes when prevailing interest rates are relatively low.
If your notes are redeemable at our option, as specified in the applicable
pricing supplement, we may choose to redeem your notes from time to time,
especially when prevailing interest rates are lower than the rate borne by the
notes. If prevailing rates are lower at the time of redemption, you may not be
able to reinvest the redemption proceeds in a comparable security at an
effective interest rate as high as the interest rate on the notes being
redeemed. Our redemption right also may adversely impact your ability to sell
your notes as the redemption date or period approaches.
Any Survivor's Option may be limited in amount.
We will have a discretionary right to limit the aggregate principal amount
of notes subject to any Survivor's Option that may be exercised in any calendar
year to an amount equal to the greater of $2,000,000 or 2.0% of the
outstanding principal amount of all notes outstanding as of the end of the most
recent calendar year. We also have the discretionary right to limit to
$250,000 in any calendar year the aggregate principal amount of notes subject
to the Survivor's Option that may be exercised in such calendar year on behalf
of any individual deceased beneficial owner of notes. Accordingly, no assurance
can be given that exercise of the Survivor's Option for a desired amount will be
permitted in any single calendar year.
The notes may have limited or no liquidity.
There is currently no secondary market for the notes, and there can be no
assurance that a secondary market will develop. If a secondary market does
develop, there can be no assurance that it will continue or that it will be
sufficiently liquid to allow you to resell your notes when you want or at a
price that you wish to receive for your notes.
S-5
SELECTED CONSOLIDATED FINANCIAL INFORMATION OF CIT GROUP INC.
On June 1, 2001, CIT was acquired by Tyco Capital Holding, Inc. ("TCH"), a
wholly owned subsidiary of an affiliate of Tyco International Ltd. ("Tyco"), in
a purchase business combination recorded under the "push-down" method of
accounting, resulting in a new basis of accounting for the "successor" period
beginning June 2, 2001. Information relating to all "predecessor" periods prior
to the acquisition is presented using CIT's historical basis of accounting.
Following the Tyco acquisition, we adopted Tyco's fiscal year ending September
30. To assist in the comparability of our financial results and discussions,
results of operations for the nine months ended September 30, 2001 include
results for five months of the predecessor and four months of the successor and
are designated in the following tables as "combined."
On July 8, 2002, our former parent, Tyco, completed a sale of 100% of CIT's
outstanding common stock in an initial public offering. Immediately prior to the
offering, CIT was merged with its parent TCH, a company used to acquire CIT. As
a result of the reorganization, the historical financial statements of TCH are
included in the historical consolidated CIT financial statements. Prior to the
offering on July 8, 2002, the activity of TCH consisted primarily of interest
expense to an affiliate of Tyco, and the TCH accumulated net deficit was
eliminated via a capital contribution from Tyco. There was no TCH activity
subsequent to June 30, 2002. The results for both the periods ended September
30, 2002 and September 30, 2001 include activity of TCH. Therefore, certain
previously reported CIT data may differ from the data presented below due
primarily to the inter-company debt and related interest expense of TCH.
On November 5, 2002, the CIT board of directors approved returning to a
calendar year-end from a September 30 fiscal year-end. As a result, the three
months ended December 31, 2002 constitutes a transitional fiscal period.
The following tables set forth selected consolidated financial information
regarding CIT's results of operations and balance sheets. The financial data at
December 31, 2003, December 31, 2002, September 30, 2002 and September 30, 2001,
and for the year ended December 31, 2003, the three months ended December 31,
2002, the year ended September 30, 2002, the period from June 2, 2001 through
September 30, 2001, the period from January 1, 2001 through June 1, 2001 and the
year ended December 31, 2000, were derived from the audited Consolidated
Financial Statements of CIT incorporated by reference in this prospectus
supplement. The financial data at December 31, 2000 and 1999 and for the year
ended December 31, 1999 was derived from audited financial statements that are
not incorporated by reference in this prospectus supplement. The financial data
at June 30, 2004 and June 30, 2003 and for the six month periods then ended is
derived from the unaudited consolidated financial statements of CIT that are
incorporated by reference in this prospectus supplement. In the opinion of
management, such unaudited consolidated financial statements reflect all
adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the information included therein. Certain prior period balances
have been conformed to present period presentation. To assist in the
comparability of our financial results, the financial information in the
following tables combines the "predecessor period" (January 1, 2001 through June
1, 2001) with the "successor period" (June 2, 2001 through September 30, 2001)
to present "combined" results for the nine months ended September 30, 2001. You
should read the selected consolidated financial data below in conjunction with
our consolidated financial statements. See "Where You Can Find More Information"
in the prospectus.
Six Months Ended Three Months
June 30, Year Ended Ended
------------------------- December 31, December 31,
($ in millions, except per share data) 2004 2003 2003 2002
-------------------------------------- ----------- ----------- ------------ ------------
(successor) (successor) (successor) (successor)
Results of Operations
Net finance margin............................. $ 749.3 $638.2 $1,327.8 $344.9
Provision for credit losses ................... 151.3 203.6 387.3 133.4
Operating margin .............................. 1,065.6 887.7 1,799.8 468.6
Salaries and general operating expenses ....... 507.6 446.3 912.9 232.6
Goodwill impairment ........................... -- -- -- --
Goodwill amortization ......................... -- -- -- --
Acquisition related costs...................... -- -- -- --
Interest expense--TCH ......................... -- -- -- --
Nine Months
Year Ended Ended Years Ended December 31,
September 30, September 30, -----------------------------
($ in millions, except per share data) 2002 2001 2000 1999
-------------------------------------- ------------- ------------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
($ in millions, except per share data)
Results of Operations
Net finance margin............................. $1,637.1 $1,301.7 $1,447.9 $ 906.0
Provision for credit losses ................... 788.3 332.5 255.2 110.3
Operating margin .............................. 1,781.2 1,541.8 2,104.7 1,146.5
Salaries and general operating expenses ....... 921.1 777.4 1,013.7 504.6
Goodwill impairment ........................... 6,511.7 -- -- --
Goodwill amortization ......................... -- 97.6 86.3 25.7
Acquisition related costs...................... -- 54.0 -- --
Interest expense--TCH ......................... 662.6 98.8 -- --
S-6
Six Months
Ended Three Months
June 30, Year Ended Ended
------------------------- December 31, December 31,
($ in millions, except per share data) 2004 2003 2003 2002
-------------------------------------- ----------- ----------- ------------ ------------
(successor) (successor) (successor) (successor)
Gain on redemption of debt .................... 41.8 -- 50.4 --
Net income (loss).............................. 365.9 263.9 566.9 141.3
Net income (loss) per share(1)--basic.......... 1.73 1.25 2.68 0.67
Net income (loss) per share(1)--diluted........ 1.70 1.24 2.66 0.67
Dividends per share(1)......................... 0.26 0.24 0.48 0.12
Nine Months
Year Ended Ended Years Ended December 31,
September 30, September 30, -----------------------------
($ in millions, except per share data) 2002 2001 2000 1999
-------------------------------------- ------------- ------------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Gain on redemption of debt .................... -- -- -- --
Net income (loss).............................. (6,698.7) 263.3 611.6 389.4
Net income (loss) per share(1)--basic.......... (31.66) 1.24 2.89 1.84
Net income (loss) per share(1)--diluted........ (31.66) 1.24 2.89 1.84
Dividends per share(1)......................... -- 0.25 0.50 0.31
At June 30
------------------------- At December 31, At December 31,
($ in millions) 2004 2003 2003 2002
--------------- ----------- ----------- --------------- ---------------
(successor) (successor) (successor) (successor)
Balance Sheet Data
Total finance receivables...................... $31,828.6 $28,413.6 $31,300.2 $27,621.3
Reserve for credit losses ..................... 621.0 754.9 643.7 760.8
Operating lease equipment, net ................ 7,838.8 7,560.0 7,615.5 6,704.6
Goodwill and intangible assets ................ 516.4 404.1 487.7 400.9
Total assets .................................. 46,682.5 43,184.7 46,342.8 41,932.4
Commercial paper .............................. 4,170.4 4,576.7 4,173.9 4,974.6
Variable-rate bank credit facilities .......... -- -- -- 2,118.0
Variable-rate senior notes .................... 10,931.6 6,637.3 9,408.4 4,906.9
Fixed-rate senior notes ....................... 19,330.3 21,216.8 19,830.8 19,681.8
Subordinated fixed-rate notes ................. -- -- -- --
Preferred capital securities................... 254.6 256.4 255.5 257.2
Stockholders' equity .......................... 5,691.8 5,057.6 5,394.2 4,870.7
Tangible stockholders' equity ................. 5,175.4 4,653.5 4,906.5 4,469.8
At December 31,
At September 30, At September 30, -----------------------------
($ in millions) 2002 2001 2000 1999
--------------- ---------------- ---------------- ------------- -------------
(successor) (successor) (predecessor) (predecessor)
Balance Sheet Data
Total finance receivables...................... $28,459.0 $31,879.4 $33,497.5 $31,007.1
Reserve for credit losses ..................... 777.8 492.9 468.5 446.9
Operating lease equipment, net ................ 6,567.4 6,402.8 7,190.6 6,125.9
Goodwill and intangible assets ................ 402.0 6,547.5 1,971.5 1,850.5
Total assets .................................. 42,710.5 51,349.3 48,689.8 45,081.1
Commercial paper .............................. 4,654.2 8,869.2 9,603.5 8,974.0
Variable-rate bank credit facilities .......... 4,037.4 -- -- --
Variable-rate senior notes .................... 5,379.0 9,614.6 11,130.5 7,147.2
Fixed-rate senior notes ....................... 18,385.4 17,113.9 17,571.1 19,052.3
Subordinated fixed-rate notes ................. -- 100.0 200.0 200.0
Preferred capital securities................... 257.7 260.0 250.0 250.0
Stockholders' equity .......................... 4,757.8 5,947.6(2) 6,007.2 5,554.4
Tangible stockholders' equity ................. 4,355.8 4,028.5(2) 4,035.7 3,703.9
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(1) Net income (loss) and dividend per share calculations for the periods
preceding September 30, 2002 are based on the number of common shares
outstanding (basic and diluted of 211.6 million and 211.7 million,
respectively) upon the completion of the July 2002 initial public offering.
(2) Stockholders' equity and tangible stockholder's equity excludes TCH results
due to its temporary status as a Tyco acquisition company with respect to
CIT.
At or for the
Six Months Ended At or for the At or for the
June 30, Year Ended Three Months Ended
------------------------- December 31, December 31,
($ in millions) 2004 2003 2003 2002
--------------- ----------- ----------- ------------- ------------------
(successor) (successor) (successor) (successor)
Selected Data and Ratios Profitability
Net finance margin as a percentage of
average earning assets ("AEA")(1) .......... 4.00% 3.63% 3.71% 4.22%
Ratio of earnings to fixed charges(2) ......... 1.99x 1.61x 1.68x 1.65x
Other Operating Ratios
Salaries and general operating expenses as
a percentage of average managed assets
("AMA")(3) ................................. 2.19% 1.97% 1.99% 2.10%
Efficiency ratio(4) ........................... 41.7% 40.9% 41.7% 38.6%
Credit Quality
60+ days contractual delinquency as a
percentage of finance receivables .......... 1.79% 3.26% 2.16% 3.63%
Non-accrual loans as a percentage of finance
receivables ................................ 1.47% 2.83% 1.81% 3.43%
Net credit losses as a percentage of average
finance receivables ........................ 1.15% 1.56% 1.77% 2.32%
Reserve for credit losses as a percentage of
finance receivables ........................ 1.95% 2.66% 2.06% 2.75%
At or for the At or for the At or for the
Year Ended Nine Months Ended Years Ended December 31,
September 30, September 30, -----------------------------
($ in millions) 2002 2001 2000 1999
--------------- ------------- ----------------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Selected Data and Ratios Profitability
Net finance margin as a percentage of
average earning assets ("AEA")(1) .......... 4.57% 4.29% 3.56% 3.54%
Ratio of earnings to fixed charges(2) ......... (8) 1.30x 1.39x 1.45x
Other Operating Ratios
Salaries and general operating expenses as
a percentage of average managed assets
("AMA")(3) ................................. 1.95% 2.05% 1.97% 1.71%
Efficiency ratio(4) ........................... 35.8% 41.5% 43.0% 40.1%
Credit Quality
60+ days contractual delinquency as a
percentage of finance receivables .......... 3.76% 3.46% 2.98% 2.71%
Non-accrual loans as a percentage of finance
receivables ................................ 3.43% 2.67% 2.10% 1.65%
Net credit losses as a percentage of average
finance receivables ........................ 1.67% 1.20% 0.71% 0.42%
Reserve for credit losses as a percentage of
finance receivables ........................ 2.73% 1.55% 1.40% 1.44%
S-7
At or for the
Six Months Ended At or for the At or for the
June 30, Year Ended Three Months Ended
------------------------- December 31, December 31,
($ in millions) 2004 2003 2003 2002
--------------- ----------- ----------- ------------- ------------------
(successor) (successor) (successor) (successor)
Leverage
Total debt (net of overnight deposits) to
tangible stockholders' equity(5)(6) ........ 6.09x 6.30x 6.14x 6.22x
Tangible stockholders' equity(5) to managed
assets(7) .................................. 10.9% 10.5% 10.4% 10.4%
Other
Total managed assets(7) ....................... $49,854.5 $47,865.5 $49,735.6 $46,357.1
Employees ..................................... 5,705 5,845 5,800 5,835
At or for the At or for the At or for the
Year Ended Nine Months Ended Years Ended December 31,
September 30, September 30, -----------------------------
($ in millions) 2002 2001 2000 1999
--------------- ------------- ----------------- ------------- -------------
(successor) (combined) (predecessor) (predecessor)
Leverage
Total debt (net of overnight deposits) to
tangible stockholders' equity(5)(6) ........ 6.54x 8.20x 8.78x 8.75x
Tangible stockholders' equity(5) to managed
assets(7) .................................. 9.9% 8.6% 7.8% 7.7%
Other
Total managed assets(7) ....................... $47,622.3 $50,877.1 $54,900.9 $51,433.3
Employees ..................................... 5,850 6,785 7,355 8,255
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(1) "AEA" means average earning assets, which is the average of finance
receivables, operating lease equipment, finance receivables held for sale
and certain investments, less credit balances of factoring clients.
(2) 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 the Company and one-third of
rent expense, which is deemed representative of an interest factor.
(3) "AMA" means average managed assets, which is average earning assets plus
the average of finance receivables previously securitized and still managed
by us.
(4) Efficiency ratio is the percentage of salaries and general operating
expenses to operating margin, excluding the provision for credit losses.
(5) Tangible stockholders' equity excludes goodwill and other intangible assets
and excludes TCH results due to its temporary status as a Tyco acquisition
company with respect to CIT. Tangible stockholders' equity also excludes
certain unrealized losses relating to derivative financial instruments and
other investments, as these losses are not necessarily indicative of
amounts which will be realized.
(6) Total debt excludes, and tangible stockholders' equity includes,
Company-obligated mandatorily redeemable preferred securities of subsidiary
trust holding solely debentures of the Company.
(7) "Managed assets" means assets previously securitized and still managed by
us and include (i) financing and leasing assets, (ii) certain investments
and (iii) off-balance sheet finance receivables.
(8) Earnings were insufficient to cover fixed charges by $6,331.1 million for
the year ended September 30, 2002. Earnings for the year ended September
30, 2002 included a non-cash goodwill impairment charge of $6,511.7 million
in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets."
The ratio of earnings to fixed charges included fixed charges of $1,497.1
million and a loss before provision for income taxes of $6,331.1 million
resulting in a total loss provision for income taxes and fixed charges of
$(4,834.0) million.
S-8
CAPITALIZATION OF CIT GROUP INC.
The following table sets forth our capitalization as of June 30, 2004. This
table should be read in conjunction with "Selected Consolidated Financial
Information of CIT Group Inc.," which is included elsewhere in this prospectus
supplement.
June 30, 2004
(in millions of
U.S. Dollars)
---------------
Commercial paper ............................................. $ 4,170.4
Term debt .................................................... 30,261.9
Preferred capital securities ................................. 254.6
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000 authorized;
none issued and outstanding ............................ --
Common stock, $0.01 par value, 600,000,000 authorized;
212,092,592 issued and 211,195,862 outstanding ......... 2.1
Additional paid in capital ................................ 10,672.2
Accumulated deficit ....................................... (4,831.8)
Accumulated other comprehensive loss ...................... (118.1)
Treasury stock, 896,730 shares, at cost ................... (32.6)
---------
Total stockholders' equity ................................ 5,691.8
---------
Total capitalization ......................................... 40,378.7
Goodwill and other intangible assets ......................... (516.4)
---------
Total tangible capitalization ................................ $39,862.3
=========
Total tangible stockholders' equity .......................... $ 5,175.4
=========
Other than as disclosed or contemplated in this prospectus supplement or in
the documents incorporated in this prospectus supplement by reference, since
June 30, 2004, there has been no material change in the capitalization of CIT
and its consolidated subsidiaries.
S-9
DESCRIPTION OF THE NOTES
The following description of the particular terms of the notes being
offered supplements and, to the extent inconsistent with or to the extent
otherwise specified in an applicable pricing supplement, replaces the
description of the general terms and provisions of the debt securities set forth
under the headings "Description of Debt Securities" in the prospectus. Unless
otherwise specified in an applicable pricing supplement, the notes will have the
terms described below. Capitalized terms used but not defined below have the
meanings given to them in the prospectus and in the indenture relating to the
notes.
General
The InterNotes'r', or the notes, being offered by this prospectus
supplement, the prospectus and the applicable pricing supplement will be issued
under an indenture (the "indenture") to be entered into between CIT Group Inc.
and J.P. Morgan Trust Company, National Association, as trustee (the "trustee").
Unless the pricing supplement specifies to the contrary, with respect to each
separate issue of notes issued under the indenture, the trustee will serve as
registrar, paying agent, transfer agent and authenticating agent. The terms of
the indenture are more fully described in the prospectus. The indenture may be
supplemented from time to time. The indenture does not limit the aggregate
amount of debt securities that may be issued under it and provides that the debt
securities may be issued under it from time to time in one or more series. The
following statements are summaries of the material provisions of the indenture
and the notes. These summaries do not purport to be complete and are qualified
in their entirety by reference to the indenture, including for the definitions
of certain terms. If you want to know more about the terms of any of the notes,
you should refer to the indenture. We have filed as an exhibit to our shelf
registration statement filed with the SEC (File No. 333-119172) or incorporated
by reference, the indenture pursuant to which the notes will be issued. If we
use a capitalized term in this prospectus supplement that is not defined, that
term will have the same meaning as in the prospectus and/or the indenture.
The notes constitute a single series of debt securities for purposes of the
indenture and are limited to an aggregate principal amount of up to
$3,000,000,000. We may increase the foregoing limit, however, without the
consent of any holders of the notes, by appropriate corporate action if in the
future we wish to sell additional notes.
Notes issued in accordance with this prospectus supplement, the prospectus
and the applicable pricing supplement will have the following general
characteristics:
o the notes will be our direct unsecured senior obligations and will
rank equally with all of our other unsecured senior indebtedness from
time to time outstanding;
o the notes may be offered from time to time by us through the
Purchasing Agent and each note will mature on a day that is at least
nine months from its date of original issuance;
o each note will bear interest from its date of original issuance at a
fixed or floating rate;
o the notes will not be subject to any sinking fund; and
o the minimum denomination of the notes will be $1,000 (unless otherwise
stated in the pricing supplement).
In addition, the pricing supplement relating to each offering of notes will
describe specific terms of the notes, including:
o whether the note is a fixed rate note or a floating rate note;
o the price, which may be expressed as a percentage of the aggregate
initial public offering price of the notes, at which the notes will be
issued to the public;
o the date on which the notes will be issued to the public;
S-10
o the stated maturity date of the notes;
o if the note is a fixed rate note, the rate per year at which the notes
will bear interest;
o if the note is a floating rate note, the interest rate basis, the
initial interest rate, the interest determination date, the interest
reset dates, the interest payment dates, the index maturity, the
maximum interest rate and the minimum interest rate, if any, and the
spread and/or spread multiplier, if any, and any other terms relating
to the particular method of calculating the interest rate for the note
(see "Description of the Notes--Floating Rate Notes" for an
explanation of the terms relating to floating rate notes);
o the interest payment frequency;
o the purchase price, Purchasing Agent's discount and net proceeds to
us;
o whether the authorized representative of the holder of a beneficial
interest in the note will have the right to seek repayment upon the
death of the holder as described under "--Survivor's Option";
o if the notes may be redeemed at our option or repaid at the option of
the holder prior to its stated maturity date, the provisions relating
to any such redemption or repayment;
o any special U.S. federal income tax consequences of the purchase,
ownership and disposition of the notes; and
o any other significant terms of the notes not inconsistent with the
provisions of the indenture.
We may at any time purchase notes at any price or prices in the open market
or otherwise. Notes so purchased by us may, at our discretion, be held, resold
or surrendered to the trustee for cancellation.
Payment of Principal and Interest
Principal of and interest on beneficial interests in the notes will be made
in accordance with the arrangements then in place between the paying agent and
The Depository Trust Company ("DTC") and its participants as described under
"Registration and Settlement--The Depository Trust Company." Payments in respect
of any notes in certificated form will be made as described under "Registration
and Settlement--Registration, Transfer and Payment of Certificated Notes."
Interest on each note will be payable either monthly, quarterly,
semi-annually or annually on each interest payment date and at the note's stated
maturity or on the date of redemption or repayment if a note is redeemed or
repaid prior to maturity. Interest is payable to the person in whose name a note
is registered at the close of business on the regular record date before each
interest payment date. Interest due at a note's stated maturity or on a date of
redemption or repayment will be payable to the person to whom principal is
payable.
We will pay any administrative costs imposed by banks in connection with
making payments in immediately available funds, but any tax, assessment or
governmental charge imposed upon any payments on a note, including, without
limitation, any withholding tax, is the responsibility of the holders of
beneficial interests in the note in respect of which such payments are made.
Interest and Interest Rates
The notes may bear interest at:
o a fixed rate; or
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o a floating rate, which may be based on one of the following rates (see
"Floating Rate Notes" for a further description of each of these
floating rates):
o LIBOR (a note issued with this rate is referred to in this
prospectus supplement as a "LIBOR note");
o Treasury Rate (a note issued with this rate is referred to in
this prospectus supplement as a "Treasury Rate note");
o Federal Funds Rate (a note issued with this rate is referred to
in this prospectus supplement as a "Federal Funds Rate note");
o Prime Rate (a note issued with this rate is referred to in this
prospectus supplement as a "Prime Rate note"); and
o a rate as otherwise specified in the pricing supplement.
Each note will accrue interest from its date of original issuance until its
stated maturity or earlier redemption or repayment. The applicable pricing
supplement will specify a fixed interest rate or a floating rate index or
formula. Interest will be payable monthly, quarterly, semi-annually or annually.
Interest payments on each note will include the amount of interest accrued from
and including the last interest payment date to which interest has been paid (or
from and including the date of original issuance if no interest has been paid
with respect to the note) to, but excluding, the applicable interest payment
date, stated maturity date or date of earlier redemption or repayment, as the
case may be.
The interest rate on the notes will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by U.S. law of
general application.
Interest on a note will be payable beginning on the first interest payment
date after its date of original issuance to holders of record on the
corresponding regular record date.
Payment of Interest
Unless otherwise specified in the applicable pricing supplement, interest
on the notes will be paid as follows:
Interest Payment Frequency Interest Payment Dates
-------------------------- ----------------------
Monthly................... Fifteenth day of each calendar month, beginning in
the first calendar month following the month the
note is issued.
Quarterly................. Fifteenth day of every third month, beginning in
the third calendar month following the month the
note is issued.
Semi-annually............. Fifteenth day of every sixth month, beginning in
the sixth calendar month following the month the
note is issued.
Annually.................. Fifteenth day of every twelfth month, beginning in
the twelfth calendar month following the month the
note is issued.
The regular record date for any interest payment date will be the first day
of the calendar month in which the interest payment date occurs, except that the
regular record date for interest due on the note's stated maturity date or date
of earlier redemption or repayment will be that particular date.
S-12
With respect to fixed rate notes, the term "business day" means a day other
than a Saturday or Sunday and any day that is neither a legal holiday nor a day
on which banking institutions are authorized or required by law or regulation
(including any executive order) to close in the City of New York. With respect
to LIBOR notes, a business day means any day that is neither a legal holiday nor
a day on which banking institutions are authorized or required by law or
regulation (including any executive order) to close in the City of New York and
that is also a London business day (as defined below).
Fixed Rate Notes
Each fixed rate note will bear interest from its date of original issuance
at the annual fixed interest rate stated in the applicable pricing supplement.
Unless the applicable pricing supplement specifies otherwise, interest on
fixed rate notes will be computed on the basis of a 360-day year of twelve
30-day months.
If the stated maturity date, date of earlier redemption or repayment or
interest payment date for any note is not a business day, principal and interest
for that note will be paid on the next business day, and no interest will accrue
on the amount payable from, and after, the stated maturity date, date of earlier
redemption or repayment or interest payment date.
Floating Rate Notes
Unless the applicable pricing supplement specifies otherwise, floating rate
notes will have the terms described below. Each floating rate note will bear
interest from its date of original issuance at the floating rate per year based
on the interest rate index or other interest rate formula specified in the
applicable pricing supplement. Unless the applicable pricing supplement
specifies otherwise, the interest rate on each floating rate note will be equal
to:
o an interest rate determined by reference to the interest rate index
specified in the applicable pricing supplement plus or minus the
spread, if any; and/or
o an interest rate calculated by reference to the interest rate index
specified in the applicable pricing supplement multiplied by the
spread multiplier, if any.
The "spread" is the number of basis points (one one-hundredth of a
percentage point) specified in the applicable pricing supplement as an
adjustment to the interest rate for a floating rate note. The "spread
multiplier" is the factor specified in the applicable pricing supplement as an
adjustment to the interest rate for a floating rate note.
Any floating rate note may also have either or both of the following terms:
o a maximum limitation, or ceiling, on the rate of interest which may
accrue during any interest period (the "maximum interest rate"); and
o a minimum limitation, or floor, on the rate of interest which may
accrue during any interest period (the "minimum interest rate").
The applicable pricing supplement for a floating rate note will specify the
interest rate index and the spread and/or spread multiplier, if any, or other
interest rate formula and the maximum or minimum interest rate, if any.
The calculation agent will compute interest on floating rate notes in the
manner set forth below.
If any interest payment date for any floating rate note (other than the
note's stated maturity date or the date of redemption or repayment) would
otherwise be a day that is not a business day, then the interest payment date
will be postponed to the following day which is a business day, except that in
the case of a LIBOR note, if this business day falls in the next succeeding
calendar month, then the interest payment date will be the immediately preceding
S-13
business day. If the stated maturity date (or the date of redemption or
repayment) of a floating rate note falls on a day which is not a business day,
then we will make the required payment of principal, premium, if any, and/or
interest on the following day which is a business day as if it were made on the
date this payment was due, and no interest shall accrue as a result of this
delayed payment.
We will calculate accrued interest on a floating rate note by adding the
interest factors calculated for each day in the period for which we are
calculating accrued interest. We will compute the "interest factor" for each day
by multiplying the face amount of the floating rate note by the interest rate
applicable to the day and dividing the product thereof by 360, or, in the case
of any Treasury Rate note, by the actual number of days in the year.
We will reset the rate of interest on each floating rate note daily,
weekly, monthly, quarterly, semi-annually or annually or on some other basis as
specified in the applicable pricing supplement (the first date on which the
reset interest rate becomes effective, being an "interest reset date"). If any
interest reset date for any floating rate note is not a business day, the
interest reset date for that floating rate note shall be postponed to the next
succeeding business day, except that in the case of a LIBOR note, if this
business day is in the next succeeding calendar month, that interest reset date
will be the immediately preceding business day.
The "interest determination dates" are the dates as of which the
calculation agent will determine the new interest rate that will take effect on
the interest reset date. With respect to determining an interest determination
date, unless the applicable pricing supplement specifies to the contrary:
o the interest determination date for a Federal Funds Rate note or Prime
Rate note is the second business day before the interest reset date;
o the interest determination date for a LIBOR note is the second London
business day before the interest reset date; and
o the interest determination date for a Treasury Rate note is the day of
the week in which such interest reset date falls on which direct
obligations of the United States ("Treasury bills") would normally be
auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the
auction is usually held on Tuesday. The auction, however, may be held
on the preceding Friday. If so, that Friday will be the interest
determination date for the interest reset date occurring in the next
week.
"London business day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
Unless the applicable pricing supplement specifies otherwise, the interest
rate determined with respect to any interest determination date for any floating
rate note will become effective on and as of the next succeeding interest reset
date. However, the interest rate in effect with respect to any floating rate
note for the period from the issue date to the first interest reset date will be
the "initial interest rate" as specified in the applicable pricing supplement.
The interest rate for a floating rate note will be applicable from and including
the interest reset date to which it relates to but not including the next
interest reset date or until the note's stated maturity date or date of earlier
redemption or repayment, as the case may be.
Unless otherwise specified in the applicable pricing supplement, the
trustee will be the calculation agent and will determine the applicable interest
rate on each interest determination date. The calculation agent will, upon the
request of the holder of any floating rate note and to the extent available,
provide the interest rate then in effect for the note and, if different, the
interest rate to be in effect as a result of a determination made on the most
recent interest determination date with respect to the note. Unless the pricing
supplement specifies otherwise, all percentages resulting from any calculation
of the rate of interest on floating rate notes will be rounded, if necessary, to
the nearest one hundred thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655)). All dollar amounts used in
or resulting from that calculation will be rounded to the nearest cent (with
one-half cent being rounded upward).
S-14
LIBOR Notes. Each LIBOR note will bear interest at a rate calculated using
LIBOR and the spread and/or spread multiplier, if any, specified in the
applicable pricing supplement.
Unless the applicable pricing supplement specifies otherwise, the
calculation agent will determine LIBOR with respect to any interest reset date
according to the method specified in the pricing supplement, in accordance with
the following provisions:
o if "LIBOR Telerate" is specified as the reporting service in the
applicable pricing supplement, LIBOR will be the rate for deposits in
U.S. dollars having the index maturity designated in the applicable
pricing supplement, commencing on the second London business day
immediately following the interest determination date, that appears on
the designated LIBOR page as of 11:00 a.m., London time, on that
interest determination date; and
o if "LIBOR Reuters" is specified as the reporting service in the
applicable pricing supplement, LIBOR will be the arithmetic mean of
the offered rates (unless the designated LIBOR page by its terms
provides only for a single rate, in which case such single rate shall
be used) for deposits in U.S. dollars having the index maturity
designated in the applicable pricing supplement, commencing on the
second London business day immediately following such Interest
determination date, that appear (or, if only a single rate is
required, appears) on the designated LIBOR page as of 11:00 a.m.,
London time, on that interest determination date, provided that at
least two such offered rates appear.
If, the rate index is "LIBOR Reuters," and fewer than two offered rates
appear, or LIBOR Reuters is not available, or if the rate index is "LIBOR
Telerate" and no rate appears, or LIBOR Telerate is not available, then we will
determine LIBOR as follows:
o The calculation agent will select the principal London offices of four
major banks in the London interbank market, and will request each bank
to provide its offered quotation for deposits in U.S. dollars for the
period of the index maturity designated in the applicable pricing
supplement, commencing on the second London business day immediately
following the interest determination date, to prime banks in the
London interbank market at approximately 11:00 a.m., London time, on
the interest determination date and in a principal amount equal to an
amount that is representative for a single transaction in the index
currency in the market at that time.
o If at least two of these banks provide a quotation, the calculation
agent will compute LIBOR on the interest determination date as the
arithmetic mean of the quotations.
o If fewer than two of these banks provide a quotation, the calculation
agent will select three major banks in the City of New York to provide
a rate quote. The calculation agent will compute LIBOR on the interest
determination date as the arithmetic mean of these quoted rates at
approximately 3:00 p.m., New York City time, on the interest
determination date in U.S. dollars for loans to leading European
banks, having the index maturity designated in the applicable pricing
supplement commencing on the second London business day immediately
following the interest determination date and in a principal amount
that is representative for a single transaction in the market at that
time.
o If none of these banks provides a quotation as mentioned, the rate of
interest will be the same as that in effect on the interest
determination date.
The "designated LIBOR page" means (i) if "LIBOR Telerate" is specified in
the applicable pricing supplement, the display on Moneyline Telerate (or any
successor service) on the page specified in the applicable pricing supplement
(or any other page as may replace this page on that service) for the purpose of
displaying the London interbank offered rates of major banks or (ii) if "LIBOR
Reuters" is specified in the applicable pricing supplement, the display on the
Reuters Monitor Money Rates Service (or any successor service) on the page
specified in the applicable pricing supplement (or any other page as may replace
this page on that service) for the purpose of displaying the London interbank
offered rates of major banks.
S-15
If neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable pricing supplement, LIBOR will be determined as if LIBOR Telerate had
been specified.
Treasury Rate Notes. Each Treasury Rate note will bear interest at the rate
calculated using the Treasury Rate and the spread and/or spread multiplier, if
any, specified in the applicable pricing supplement.
Unless the applicable pricing supplement specifies otherwise, "Treasury
Rate" means the rate for the auction held on the interest determination date of
Treasury bills having the index maturity specified in the applicable pricing
supplement as that rate appears on the display on Moneyline Telerate (or any
successor service) on page 56 (or any other page as may replace this page on
that service) ("Telerate Page 56") or page 57 (or any other page which replaces
this page on that service) ("Telerate Page 57") under the heading "INVESTMENT
RATE."
If the rate cannot be set as described above, the calculation agent will
use the following methods in succession:
o If the rate is not published as described above by 3:00 p.m., New York
City time, on the calculation date, the Treasury Rate will be the
auction average rate of Treasury bills (expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as the case may be, and
applied on a daily basis) as otherwise announced by the U.S.
Department of Treasury.
o In the event that the auction rate of Treasury bills having the index
maturity specified in the applicable pricing supplement is not
published by 3:00 p.m., New York City time, on the calculation date,
or if no auction is held, then the Treasury Rate will be the rate
(expressed as a bond equivalent on the basis of a year of 365 or 366
days, as the case may be, and applied on a daily basis) on the
interest determination date of Treasury bills having the index
maturity specified in the applicable pricing supplement as published
in H.15(519) under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market" or, if not yet published by 3:00 p.m., New
York City time, on the calculation date, the rate on the interest
determination date of Treasury bills as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of
displaying that rate, under the caption "U.S. Government
Securities/Treasury Bills/Secondary Market."
o If the rate is not yet published in H.15(519), H.15 Daily Update or
another recognized electronic source, then the Treasury Rate will be
calculated as a yield to maturity (expressed as a bond equivalent, on
the basis of a year of 365 or 366 days, as the case may be, and
applied on a daily basis) of the arithmetic mean of the secondary
market bid rates, as of approximately 3:30 p.m., New York City time,
on the interest determination date, of three leading primary U.S.
government securities dealers in the City of New York selected by the
calculation agent for the issue of Treasury bills with a remaining
maturity closest to the applicable index maturity.
o If fewer than three of the dealers are quoting as mentioned, then the
rate of interest will be the same as that in effect on that interest
determination date.
"Calculation date" means the earlier of:
o the business day immediately preceding the applicable interest payment
date, the stated maturity date or the date of redemption or repayment,
as the case may be; or
o the fifth business day after an interest determination date relating
to the note.
"H.15(519)" means "Statistical Release H.15(519), Selected Interest Rates,"
or any successor publication as published weekly by the Board of Governors of
the Federal Reserve System.
"H.15 Daily Update" means the daily update of H.15(519), available through
the world wide web site of the Board of Governors of the Federal Reserve System
at http://www.federalreserve.gov/releases/h15/update, or any successor site or
publication.
S-16
Federal Funds Rate Notes. Each Federal Funds Rate note will bear interest
at the rate calculated using the Federal Funds Rate and the spread and/or spread
multiplier, if any, specified in the applicable pricing supplement.
Unless the applicable pricing supplement specifies otherwise, "Federal
Funds Rate" means, for an interest determination date, the rate with respect to
that date for Federal Funds as published in H.15(519) under the heading "Federal
Funds (Effective)," as this rate is displayed on Moneyline Telerate (or any
successor service) on page 120 (or any other page as may replace this page on
that service) ("Telerate Page 120").
If the rate cannot be set as described above, the calculation agent will
use the following methods in succession:
o If the rate does not appear on Telerate Page 120 or is not yet
published by 3:00 p.m. New York City time, on the calculation date,
then the Federal Funds Rate will be the rate with respect to the
interest determination date as published in the H.15 Daily Update or
another recognized electronic source used for the purpose of
displaying this rate under the heading "Federal Funds (Effective)."
o If the rate does not appear on Telerate Page 120 or is not yet
published in H.15(519), H.15 Daily Update or another recognized
electronic source by 3:00 p.m., New York City time, on the calculation
date, then the Federal Funds Rate with respect to the interest
determination date will be the arithmetic mean of the rates, as of
3:00 p.m., New York City time, on the business day following that
interest determination date, for the last transaction in overnight
Federal Funds arranged by three leading brokers of Federal Funds
transactions in the City of New York selected by the calculation
agent.
o If fewer than three brokers are quoting as mentioned, then the rate of
interest will be the same as that in effect on that interest
determination date.
Prime Rate Notes. Each Prime Rate note will bear interest at the rate
calculated using the Prime Rate and the spread and/or spread multiplier, if any,
specified in the applicable pricing supplement.
Unless the applicable pricing supplement specifies otherwise, "Prime Rate"
means, with respect to an interest determination date, the rate set forth on
that date in H.15(519) under the heading "Bank Prime Loan" or if not published
by 3:00 p.m., New York City time, on the calculation date, the rate on the
interest determination date as published in H.15 Daily Update, or another
recognized electronic source used for the purpose of displaying this rate, under
the heading "Bank Prime Loan."
If the rate cannot be set as described above, the calculation agent will
use the following methods in succession:
o If the rate is not published in H.15(519), H.15 Daily Update or
another recognized electronic source by 3:00 p.m., New York City time,
on the calculation date, then the Prime Rate will be the arithmetic
mean of the rates of interest that appear on the Reuters Screen
USPRIME 1 page as a bank's publicly announced prime rate or base
lending rate in effect as of 3:00 p.m., New York City time, for that
interest determination date.
o If fewer than four rates appear on the Reuters Screen USPRIME 1 page
on that date, then the Prime Rate will be the arithmetic mean of the
prime rates or base lending rates quoted by three major banks in the
City of New York selected by the calculation agent on the basis of the
actual number of days in the year divided by a 360-day year as of the
close of business on the interest determination date.
o If fewer than three banks are quoting as mentioned, then the rate of
interest will be the same as that in effect on the interest
determination date.
"Reuters Screen USPRIME 1 page" means the display page designated as page
"USPRIME 1" on the Reuters Monitor Money Rates Service (or such other page as
may replace the USPRIME 1 page on that service for the purpose of displaying
prime rates or base lending rates of major U.S. banks).
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Redemption and Repayment
Unless we otherwise provide in the applicable pricing supplement, a note
will not be redeemable or repayable prior to its stated maturity date.
If the applicable pricing supplement states that the note will be
redeemable at our option prior to its stated maturity date, then on such date or
dates specified in the pricing supplement, we may redeem those notes at our
option either in whole or from time to time in part, upon not less than 30 days'
written notice to the holder of those notes.
If the pricing supplement states that your note will be repayable at your
option prior to its stated maturity date, we will require receipt of notice of
the request for repayment at least 30 but not more than 60 days prior to the
date or dates specified in the pricing supplement. We also must receive the
completed form entitled "Option to Elect Repayment." Exercise of the repayment
option by the holder of a note is irrevocable.
Since the notes will be represented by a global note, DTC or its nominee
will be treated as the holder of the notes; therefore, other than the trustee
under the indenture, DTC or its nominee will be the only entity that receives
notices of redemption of notes from us, in the case of our redemption of notes,
and will be the only entity that can exercise the right to repayment of notes,
in the case of optional repayment. See "Registration and Settlement."
To ensure that DTC or its nominee will timely exercise a right to repayment
with respect to a particular beneficial interest in a note, the beneficial owner
of the interest in that note must instruct the broker or other direct or
indirect participant through which it holds the beneficial interest to notify
DTC or its nominee of its desire to exercise a right to repayment. Because
different firms have different cut-off times for accepting instructions from
their customers, each beneficial owner should consult the broker or other direct
or indirect participant through which it holds an interest in a note to
determine the cut-off time by which the instruction must be given for timely
notice to be delivered to DTC or its nominee. Conveyance of notices and other
communications by DTC or its nominee to participants, by participants to
indirect participants and by participants and indirect participants to
beneficial owners of the notes will be governed by agreements among them and any
applicable statutory or regulatory requirements.
The redemption or repayment of a note normally will occur on the interest
payment date or dates following receipt of a valid notice. Unless otherwise
specified in the pricing supplement, the redemption or repayment price will
equal 100% of the principal amount of the note plus unpaid interest accrued to
the date or dates of redemption or repayment.
We may at any time purchase notes at any price or prices in the open market
or otherwise. We may also purchase notes otherwise tendered for repayment by a
holder or tendered by a holder's duly authorized representative through exercise
of the Survivor's Option described below. If we purchase the notes in this
manner, we have the discretion to either hold, resell or surrender the notes to
the trustee for cancellation.
Survivor's Option
The "Survivor's Option" is a provision in a note pursuant to which we agree
to repay that note, if requested by the authorized representative of the
beneficial owner of that note, following the death of the beneficial owner of
the note, so long as the note was owned by that beneficial owner or the estate
of that beneficial owner at least six months prior to the request. The pricing
supplement relating to each offering of notes will state whether the Survivor's
Option applies to those notes.
If a note is entitled to a Survivor's Option, upon the valid exercise of
the Survivor's Option and the proper tender of that note for repayment, we will,
at our option, repay that note, in whole or in part, at a price equal to 100% of
the principal amount of the deceased beneficial owner's interest in that note
plus unpaid interest accrued to the date of repayment.
To be valid, the Survivor's Option must be exercised by or on behalf of the
person who has authority to act on behalf of the deceased beneficial owner of
the note (including, without limitation, the personal representative or
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executor of the deceased beneficial owner or the surviving joint owner with the
deceased beneficial owner) under the laws of the applicable jurisdiction.
The death of a person holding a beneficial ownership interest in a note as
a joint tenant or tenant by the entirety with another person, or as a tenant in
common with the deceased holder's spouse, will be deemed the death of a
beneficial owner of that note, and the entire principal amount of the note so
held will be subject to repayment by us upon request. However, the death of a
person holding a beneficial ownership interest in a note as tenant in common
with a person other than such deceased holder's spouse will be deemed the death
of a beneficial owner only with respect to such deceased person's interest in
the note.
The death of a person who, during his or her lifetime, was entitled to
substantially all of the beneficial ownership interests in a note will be deemed
the death of the beneficial owner of that note for purposes of the Survivor's
Option, regardless of whether that beneficial owner was the registered holder of
that note, if entitlement to those interests can be established to the
satisfaction of us and the trustee. A beneficial ownership interest will be
deemed to exist in typical cases of nominee ownership, ownership under the
Uniform Transfers to Minors Act or Uniform Gifts to Minors Act, community
property or other joint ownership arrangements between a husband and wife. In
addition, a beneficial ownership interest will be deemed to exist in custodial
and trust arrangements where one person has all of the beneficial ownership
interests in the applicable note during his or her lifetime.
We have the discretionary right to limit the aggregate principal amount of
notes as to which exercises of the Survivor's Option shall be accepted by us
from authorized representatives of all deceased beneficial owners in any
calendar year to an amount equal to the greater of $2,000,000 or 2.0% of the
principal amount of all notes outstanding as of the end of the most recent
calendar year. We also have the discretionary right to limit to $250,000 in
any calendar year the aggregate principal amount of notes as to which exercises
of the Survivor's Option shall be accepted by us from the authorized
representative of any individual deceased beneficial owner of notes in such
calendar year. In addition, we will not permit the exercise of the Survivor's
Option except in principal amounts of $1,000 and multiples of $1,000.
An otherwise valid election to exercise the Survivor's Option may not be
withdrawn. Each election to exercise the Survivor's Option will be accepted in
the order that elections are received by the trustee, except for any note the
acceptance of which would contravene any of the limitations described in the
preceding paragraph. Notes accepted for repayment through the exercise of the
Survivor's Option normally will be repaid on the first interest payment date
that occurs 20 or more calendar days after the date of the acceptance. For
example, if the acceptance date of a note tendered through a valid exercise of
the Survivor's Option is May 1, 2004, and interest on that note is paid monthly,
we would normally, at our option, repay that note on the interest payment date
occurring on June 15, 2004, because the May 15, 2003 interest payment date would
occur less than 20 days from the date of acceptance. Each tendered note that is
not accepted in any calendar year due to the application of any of the
limitations described in the preceding paragraph will be deemed to be tendered
in the following calendar year in the order in which all such notes were
originally tendered. If a note tendered through a valid exercise of the
Survivor's Option is not accepted, the trustee will deliver a notice by
first-class mail to the registered holder, at that holder's last known address
as indicated in the note register, that states the reason that note has not been
accepted for repayment.
With respect to notes represented by a global note, DTC or its nominee is
treated as the holder of the notes and will be the only entity that can exercise
the Survivor's Option for such notes. To obtain repayment pursuant to exercise
of the Survivor's Option for a note, the deceased beneficial owner's authorized
representative must provide the following items to the broker or other entity
through which the beneficial interest in the note is held by the deceased
beneficial owner:
o a written instruction to such broker or other entity to notify DTC of
the authorized representative's desire to obtain repayment pursuant to
exercise of the Survivor's Option;
o appropriate evidence satisfactory to us and the trustee (i) that the
deceased was the beneficial owner of the note at the time of death and
his or her interest in the note was owned by the deceased beneficial
owner or his or her estate at least six months prior to the request
for repayment, (ii) that the death of
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the beneficial owner has occurred, (iii) of the date of death of the
beneficial owner, and (iv) that the representative has authority to
act on behalf of the beneficial owner;
o if the interest in the note is held by a nominee of the deceased
beneficial owner, a certificate satisfactory to us and the trustee
from the nominee attesting to the deceased's beneficial ownership of
such note;
o a written request for repayment signed by the authorized
representative of the deceased beneficial owner with the signature
guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent
in the United States;
o if applicable, a properly executed assignment or endorsement;
o tax waivers and any other instruments or documents that we or the
trustee reasonably require in order to establish the validity of the
beneficial ownership of the note and the claimant's entitlement to
payment; and
o any additional information we or the trustee reasonably require to
evidence satisfaction of any conditions to the exercise of the
Survivor's Option or to document beneficial ownership or authority to
make the election and to cause the repayment of the note.
In turn, the broker or other entity will deliver each of these items to the
trustee, together with evidence satisfactory to us and the trustee from the
broker or other entity stating that it represents the deceased beneficial owner.
We retain the right to limit the aggregate principal amount of notes as to
which exercises of the Survivor's Option applicable to the notes will be
accepted in any one calendar year as described above. All questions regarding
the eligibility or validity of any exercise of the Survivor's Option will be
determined by us, in our sole discretion, which determination will be final and
binding on all parties.
The broker or other entity will be responsible for disbursing payments
received from the trustee to the authorized representative. See "Registration
and Settlement."
Forms for the exercise of the Survivor's Option may be obtained from the
trustee at J.P. Morgan Trust Company, National Association, 1999 Avenue of the
Stars, 26th Floor, Los Angeles, California 90067, Attention: Corporate Trust.
If applicable, we will comply with the requirements of Section 14(e) of the
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules promulgated
thereunder, and any other securities laws or regulations in connection with any
repayment of notes at the option of the registered holders or beneficial owners
thereof.
Meeting of Noteholders
The indenture contains provisions for calling meetings of the holders of
the notes and other debt securities issued pursuant to the indenture to consider
matters affecting their interests, including, without limitation, the
modification of the terms of the notes or the waiver of any default under the
terms of the notes or the indenture. CIT or the holders of at least 10% in
aggregate principal amount of the notes then outstanding of any series or all
series may request that the trustee call a meeting of the holders of the notes
of that series or all series, respectively. The quorum for any meeting of the
holders of the notes is the presence of the holders of notes who are entitled to
vote in aggregate principal amount sufficient to take action upon the business
for which such meeting was called. A resolution passed at a duly called and
constituted meeting of debt securityholders will be binding on the holders of
all debt securities issued pursuant to the indenture, whether or not they are
present at the meeting.
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Replacement of Notes
If any mutilated note is surrendered to the trustee, we will execute and
the trustee will authenticate and deliver in exchange for such mutilated note a
new note of the same series and principal amount. If the trustee and we receive
evidence to our satisfaction of the destruction, loss or theft of any note and
such security or indemnity as may be required by them, then we shall execute and
the trustee shall authenticate and deliver, in lieu of such destroyed, lost or
stolen note, a new note of the same series and principal amount. All expenses
(including counsel fees and expenses) associated with issuing the new note shall
be borne by the owner of the mutilated, destroyed, lost or stolen note.
Reopening of Issue
We may, from time to time, without the consent of existing noteholders,
reopen an issue of notes and issue additional notes with the same terms
(including maturity and interest payment terms) as notes issued on an earlier
date, except for the issue date, issue price and the first payment of interest.
After such additional notes are issued, they will be fungible with the
previously issued notes to the extent specified in the applicable pricing
supplement.
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REGISTRATION AND SETTLEMENT
The Depository Trust Company
All of the notes we offer will be issued in book-entry only form. This
means that we will not issue certificates for notes, except in the limited cases
described below. Instead, we will issue global notes in registered form. Each
global note will be held through DTC and will be registered in the name of Cede
& Co., as nominee of DTC. Accordingly, Cede & Co. will be the holder of record
of the notes. Each note represented by a global note evidences a beneficial
interest in that global note.
Beneficial interests in a global note will be shown on, and transfers are
effected through, records maintained by DTC or its participants. In order to own
a beneficial interest in a note, you must be an institution that has an account
with DTC or have a direct or indirect account with such an institution.
Transfers of ownership interests in the notes will be accomplished by making
entries in DTC participants' books acting on behalf of beneficial owners.
So long as DTC or its nominee is the registered holder of a global note,
DTC or its nominee, as the case may be, will be the sole holder and owner of the
notes represented thereby for all purposes, including payment of principal and
interest, under the indenture. Except as otherwise provided below, you will not
be entitled to receive physical delivery of certificated notes and will not be
considered the holder of the notes for any purpose under the indenture.
Accordingly, you must rely on the procedures of DTC and the procedures of the
DTC participant through which you own your note in order to exercise any rights
of a holder of a note under the indenture. The laws of some jurisdictions
require that certain purchasers of notes take physical delivery of such notes in
certificated form. Those limits and laws may impair the ability to transfer
beneficial interests in the notes.
Each global note representing notes will be exchangeable for certificated
notes of like tenor and terms and of differing authorized denominations in a
like aggregate principal amount, only if (1) DTC notifies us that it is
unwilling or unable to continue as depositary for the global notes or we become
aware that DTC has ceased to be a clearing agency registered under the Exchange
Act and, in any such case we fail to appoint a successor to DTC within 90
calendar days, (2) we, in our sole discretion, determine that the global notes
shall be exchangeable for certificated notes or (3) an event of default has
occurred and is continuing with respect to the notes under the indenture. Upon
any such exchange, the certificated notes shall be registered in the names of
the beneficial owners of the global note representing the notes.
The following is based on information furnished by DTC:
DTC will act as securities depositary for the notes. The notes will be
issued as fully-registered notes registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized
representative of DTC. Generally, one fully registered global note will be
issued for all of the principal amount of the notes. If, however, the aggregate
principal amount of the notes exceeds $500,000,000, one certificate will be
issued with respect to each $500,000,000 of principal amount, and an additional
certificate will be issued with respect to any remaining principal amount of
such note.
DTC, the world's largest depositary, is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds and provides asset servicing for over 2
million issues of U.S. and non-U.S. equity issues, corporate and municipal debt
issues and money market instruments from 85 countries that DTC's direct
participants deposit with DTC.
DTC also facilitates the post-trade settlement among direct participants of
sales and other securities transactions in deposited securities through
electronic computerized book-entry transfers and pledges between direct
participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct participants include both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation
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("DTCC"). DTCC, in turn, is owned by a number of direct participants of DTC and
members of the National Securities Clearing Corporation, Government Securities
Clearing Corporation, MBS Clearing Corporation, and Emerging Markets Clearing
Corporation, as well as by The New York Stock Exchange, Inc., the American Stock
Exchange LLC, and the National Association of Securities Dealers, Inc. Access to
the DTC system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies and clearing corporations
that clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly. DTC has Standard & Poor's highest
rating: AAA. The DTC rules applicable to its participants are on file with the
SEC. More information about DTC can be found at www.dtcc.com.
Purchases of the notes under the DTC system must be made by or through
direct participants, which will receive a credit for the notes on DTC's records.
The beneficial interest of each actual purchaser of each note is in turn to be
recorded on the direct and indirect participants' records. Beneficial owners
will not receive written confirmation from DTC of their purchase. Beneficial
owners are, however, expected to receive written confirmations providing details
of the transaction, as well as periodic statements of their holdings, from the
direct or indirect participant through which the beneficial owner entered into
the transaction. Transfers of beneficial interests in the notes are to be
accomplished by entries made on the books of direct and indirect participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their beneficial interests in notes, except in the
event that use of the book-entry system for the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC will be registered in the name of DTC's partnership
nominee, Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of the notes with DTC and their registration
in the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the notes; DTC's records reflect only the identity of the direct participants to
whose accounts such notes will be credited, which may or may not be the
beneficial owners. The direct and indirect participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. Beneficial owners of the notes may wish to
take certain steps to augment the transmission to them of notices of significant
events with respect to the notes, such as redemption, tenders, defaults, and
proposed amendments to the security documents. For example, beneficial owners of
the notes may wish to ascertain that the nominee holding the notes for their
benefit has agreed to obtain and transmit notices to beneficial owners. In the
alternative, beneficial owners may wish to provide their names and addresses to
the registrar of the notes and request that copies of the notices be provided to
them directly. Any such request may or may not be successful.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote
with respect to the notes unless authorized by a direct participant in
accordance with DTC's procedures. Under its usual procedures, DTC mails an
Omnibus Proxy to us as soon as possible after the regular record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
We will pay principal and or interest payments on the notes in same-day
funds directly to Cede & Co., or such other nominee as may be requested by an
authorized representative of DTC. DTC's practice is to credit direct
participants' accounts on the applicable payment date in accordance with their
respective holdings shown on DTC's records upon DTC's receipt of funds and
corresponding detail information. Payments by participants to beneficial owners
will be governed by standing instructions and customary practices, as is the
case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of these
participants and not of DTC or any other party, subject to any statutory or
regulatory requirements that may be in effect from time to time. Payment of
principal and interest to Cede & Co., or such other nominee as may be requested
by an authorized representative of DTC, is our responsibility, disbursement of
such payments to direct participants is the responsibility of DTC, and
disbursement of such payments to the beneficial owners is the responsibility of
the direct or indirect participant.
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We will send any redemption notices to DTC. If less than all of the notes
are being redeemed, DTC's practice is to determine by lot the amount of the
interest of each direct participant in such issue to be redeemed.
A beneficial owner, or its authorized representative, shall give notice to
elect to have its notes repaid by us, through its direct or indirect
participant, to the trustee, and shall effect delivery of such notes by causing
the direct participant to transfer that participant's interest in the global
note representing such notes, on DTC's records, to the trustee. The requirement
for physical delivery of notes in connection with a demand for repayment will be
deemed satisfied when the ownership rights in the global note representing such
notes are transferred by the direct participants on DTC's records.
DTC may discontinue providing its services as securities depository for the
notes at any time by giving us reasonable notice. Under such circumstances, if a
successor securities depositary is not obtained, we will print and deliver
certificated notes. We may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depositary). In that event, we
will print and deliver certificated notes.
The information in this section concerning DTC and DTC's system has been
obtained from sources that we believe to be reliable, but neither we, the
Purchasing Agent nor any agent takes any responsibility for its accuracy.
Registration, Transfer and Payment of Certificated Notes
We do not intend to issue certificated notes. If we ever issue notes in
certificated form, those notes may be presented for registration, transfer and
payment at the office of the registrar or at the office of any transfer agent
designated and maintained by us. We have originally designated J.P. Morgan Trust
Company, National Association to act in those capacities for the notes. The
registrar or transfer agent will make the transfer or registration only if it is
satisfied with the documents of title and identity of the person making the
request. There will not be a service charge for any exchange or registration of
transfer of the notes, but we may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the
exchange. At any time, we may change transfer agents or approve a change in the
location through which any transfer agent acts. We also may designate additional
transfer agents for any notes at any time.
We will not be required to: (1) issue, exchange or register the transfer of
any note to be redeemed for a period of 15 days after the selection of the notes
to be redeemed; (2) exchange or register the transfer of any note that was
selected, called or is being called for redemption, except the unredeemed
portion of any note being redeemed in part; or (3) exchange or register the
transfer of any note as to which an election for repayment by the holder has
been made, except the unrepaid portion of any note being repaid in part.
We will pay principal of and interest on any certificated notes at the
offices of the paying agents we may designate from time to time. Generally, we
will pay interest on a note by check on any interest payment date other than at
stated maturity or upon earlier redemption or repayment to the person in whose
name the note is registered at the close of business on the regular record date
for that payment. We will pay principal and interest at stated maturity or upon
earlier redemption or repayment in same-day funds against presentation and
surrender of the applicable notes.
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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain material U.S. Federal income tax
consequences of the purchase, ownership and disposition of the notes is based
upon laws, regulations, rulings and decisions now in effect, all of which are
subject to change (including changes in effective dates) and/or possible
differing interpretations. It deals only with notes held as capital assets for
U.S. Federal income tax purposes (generally properly held for investment) and
does not purport to deal with persons in special tax situations, such as
financial institutions, insurance companies, regulated investment companies,
dealers in securities or currencies, partnerships or other flow-through entities
for U.S. Federal income tax purposes, persons holding notes as a hedge against
currency risks or as a position in a "straddle" for tax purposes, persons whose
functional currency is not the U.S. dollar, or persons who are not U.S. Holders
(as defined below). It also does not deal with holders other than initial
purchasers (except where otherwise specifically noted). Persons considering the
purchase of the notes should consult their own tax advisors concerning the
application of U.S. Federal income tax laws to their particular situations as
well as any consequences of the purchase, ownership and disposition of the notes
arising under the laws of any other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a note
that is for U.S. Federal income tax purposes (1) a citizen or resident of the
United States, (2) a corporation (including an entity treated as a corporation
for U.S. Federal income tax purposes) created or organized in or under the laws
of the United States, any state thereof or the District of Columbia, (3) an
estate whose income is subject to U.S. federal income tax regardless of its
source, or (4) a trust if a court within the U.S. is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the trust.
Notwithstanding the preceding clause (4), to the extent provided in regulations,
certain trusts in existence on August 20, 1996 and treated as U.S. persons prior
to such date that elect to continue to be so treated also shall be considered
U.S. Holders.
Payments of Interest
Payments of interest on a note generally will be taxable to a U.S. Holder
as ordinary income at the time such payments are accrued or are received (in
accordance with the U.S. Holder's regular method of tax accounting).
Original Issue Discount
The following summary is a general discussion of the material U.S. Federal
income tax consequences to U.S. Holders of the purchase, ownership and
disposition of notes issued with original issue discount ("original issue
discount notes"). The following summary is based upon Treasury regulations (the
"OID Regulations") released by the Internal Revenue Service ("IRS") under the
original issue discount provisions of the Internal Revenue Code of 1986, as
amended (the "Code").
For U.S. Federal income tax purposes, original issue discount is the excess
of the stated redemption price at the stated maturity of a note over its issue
price, if such excess equals or exceeds a de minimis amount (generally 1/4 of 1%
of the note's stated redemption price at maturity multiplied by the number of
complete years to its stated maturity from its issue date. The issue price of
each note in an issue of notes equals the first price at which a substantial
amount of such notes has been sold for cash (ignoring sales to bond houses,
brokers, or similar persons or organizations acting in the capacity of
underwriters, placement agents, or wholesalers). The stated redemption price at
maturity of a note is the sum of all payments provided by the note other than
"qualified stated interest" payments. The term "qualified stated interest"
generally means stated interest that is unconditionally payable in cash or
property (other than debt instruments of the issuer) at least annually at a
single fixed rate or, generally, at a rate (a "Variable Rate") that varies among
payment periods:
o if that rate can reasonably be expected to measure contemporaneous
variations in the cost of newly borrowed funds or
o that is based upon the changes in the yield or price of certain
actively traded personal property.
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In addition, under the OID Regulations, if a note bears interest for one or more
accrual periods at a rate below the rate applicable for the remaining term of
such note (e.g., notes with teaser rates or interest holidays), and if the
greater of either the resulting foregone interest on such note or any "true"
discount on such note (i.e., the excess of the note's stated principal amount
over its issue price) equals or exceeds a specified de minimis amount, then all
or a portion of the stated interest on the note would be treated as original
issue discount rather than qualified stated interest. In cases where notes that
bear interest are deemed instead to be original issue discount notes for U.S.
Federal income tax purposes, the OID Regulations provide rules for determining
whether payments pursuant to a note with a Variable Rate will be treated as
payments of qualified stated interest. The pricing supplement for any series of
notes will specify whether they are original issue discount notes and, in the
case of notes with a Variable Rate, will describe the applicable rules for
inclusion of original issue discount in income of a U.S. Holder.
Payments of qualified stated interest on a note are taxable to a U.S.
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the U.S. Holder's regular method of tax
accounting). A U.S. Holder of an original issue discount note having a maturity
upon issuance of more than one year must include original issue discount in
income as ordinary interest for U.S. Federal income tax purposes as it accrues
under a constant yield method in advance of receipt of the cash payments
attributable to such income, regardless of such U.S. Holder's regular method of
tax accounting. In general, the amount of original issue discount included in
income by the initial U.S. Holder of an original issue discount note is the sum
of the daily portions of original issue discount with respect to such original
issue discount note for each day during the taxable year (or portion of the
taxable year) on which such U.S. Holder held such original issue discount note.
The "daily portion" of original issue discount on any original issue discount
note is determined by allocating to each day in any accrual period a ratable
portion of the original issue discount allocable to that accrual period. An
"accrual period" may be of any length and the accrual periods may vary in length
over the term of the original issue discount note, provided that each accrual
period is no longer than one year and each scheduled payment of principal or
interest occurs either on the final day of an accrual period or on the first day
of an accrual period. The amount of original issue discount allocable to each
accrual period is generally equal to the difference between (1) the product of
the original issue discount note's adjusted issue price at the beginning of such
accrual period and its yield to maturity (determined on the basis of compounding
at the close of each accrual period and appropriately adjusted to take into
account the length of the particular accrual period) and (2) the amount of any
qualified stated interest payments allocable to such accrual period. The
"adjusted issue price" of an original issue discount note at the beginning of
any accrual period is the sum of the issue price of the original issue discount
note plus the amount of original issue discount allocable to all prior accrual
periods minus the amount of any prior payments on the original issue discount
note that were not qualified stated interest payments. Under these rules, U.S.
Holders generally will have to include in income increasingly greater amounts of
original issue discount in successive accrual periods.
A U.S. Holder who purchases an original issue discount note for an amount
that is greater than its adjusted issue price as of the purchase date and less
than or equal to the sum of all amounts payable on the original issue discount
note after the purchase date other than payments of qualified stated interest,
will be considered to have purchased the original issue discount note at an
"acquisition premium." Under the acquisition premium rules, the amount of
original issue discount which such U.S. Holder must include in its gross income
with respect to such original issue discount note for any taxable year (or
portion thereof in which the U.S. Holder holds the original issue discount note)
will be reduced (but not below zero) by the portion of the acquisition premium
properly allocable to the period.
Certain of the notes (1) may be redeemable at our option prior to their
stated maturity (a "call option") and/or (2) may be repayable at the option of
the holder prior to their stated maturity (a "put option"). Notes containing
such features (including the Survivor's Option) may be subject to rules that
differ from the general rules discussed above. Investors intending to purchase
notes with such features should consult their own tax advisors, since the
original issue discount consequences will depend, in part, on the particular
terms and features of the purchased notes.
U.S. Holders may generally, upon election, include in income all interest
(including stated interest, acquisition discount, original issue discount, de
minimis original issue discount, market discount, de minimis market discount,
and unstated interest, as adjusted by any amortizable bond premium or
acquisition premium) that accrues on a debt instrument by using the constant
yield method applicable to original issue discount, subject to certain
limitations and exceptions. U.S. Holders should consult with their own tax
advisors about this election.
S-26
Short-Term Notes
Notes that have a fixed maturity of one year or less ("short-term notes")
will be treated as having been issued with original issue discount. In general,
an individual or other cash method U.S. Holder is not required to include
accrued original issue discount with respect to a short-term note in such U.S.
Holder's income currently unless the U.S. Holder elects to do so. If such an
election is not made, any gain recognized by the U.S. Holder on the sale,
exchange or retirement of the short-term note will be ordinary income to the
extent of the original issue discount accrued on a straight-line basis, or upon
election under the constant yield method (based on daily compounding), through
the date of sale, exchange or retirement, and a portion of the deductions
otherwise allowable to the U.S. Holder for interest on borrowings allocable to
the short-term note will be deferred until a corresponding amount of income is
realized. U.S. Holders who report income for U.S. Federal income tax purposes
under the accrual method, and certain other holders including banks and dealers
in securities, are required to accrue original issue discount on a short-term
note on a straight-line basis unless an election is made to accrue the original
issue discount under a constant yield method (based on daily compounding).
Market Discount
If a U.S. Holder purchases a note (other than an original issue discount
note) subsequent to its original issuance for an amount that is less than its
stated redemption price at maturity (or, in the case of an original issue
discount note, for an amount that is less than its adjusted issue price as of
the purchase date) such U.S. Holder will be treated as having purchased such
note at a "market discount," unless such market discount is less than a
specified de minimis amount.
Under the market discount rules, a U.S. Holder will be required to treat
any partial principal payment (or, in the case of an original issue discount
note, any payment that does not constitute qualified stated interest) on, or any
gain realized on the sale, exchange, retirement or other disposition of, a note
as ordinary income to the extent of the lesser of (1) the amount of such payment
or realized gain or (2) the market discount which has not previously been
included in income and is treated as having accrued on such note at the time of
such payment or disposition. Market discount will be considered to accrue
ratably during the period from the date of acquisition to the stated maturity
date of the note, unless the U.S. Holder elects to accrue market discount on the
constant interest method.
A U.S. Holder may be required to defer the deduction of all or a portion of
the interest paid or accrued on any indebtedness incurred or maintained to
purchase or carry a note with market discount until the stated maturity of the
note or certain earlier dispositions, because a current deduction is only
allowed to the extent the interest expense exceeds an allocable portion of
market discount. A U.S. Holder may elect to include market discount in income
currently as it accrues (on either a ratable or constant interest basis), in
which case the rules described above regarding the treatment as ordinary income
of gain upon the disposition of the note and upon the receipt of certain cash
payments and regarding the deferral of interest deductions will not apply.
Generally, such currently included market discount is treated as ordinary
interest for U.S. Federal income tax purposes. Such an election will apply to
all debt instruments acquired by the U.S. Holder on or after the first day of
the first taxable year to which such election applies and may be revoked only
with the consent of the IRS.
Premium
If a U.S. Holder purchases a note for an amount that is greater than the
sum of all amounts payable on the note after the purchase date other than
payments of qualified stated interest, such U.S. Holder will be considered to
have purchased the note with "amortizable bond premium" equal in amount to such
excess. A U.S. Holder may elect to amortize such premium using a constant yield
method over the remaining term of the note and may offset interest otherwise
required to be included in respect of the note during any taxable year by the
amortized amount of such excess for the taxable year. However, if the note may
be optionally redeemed after the U.S. Holder acquires it at a price in excess of
its stated redemption price at maturity, special rules would apply which could
result in a deferral of the amortization of some bond premium until later in the
term of the note. Any election to amortize bond premium applies to all taxable
debt instruments held by the U.S. Holder on or after the first day of the first
taxable year to which such election applies and may be revoked only with the
consent of the IRS.
S-27
Disposition of a Note
Upon the sale, exchange or retirement of a note, a U.S. Holder generally
will recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (other than amounts representing
accrued and unpaid interest, which will be taxable as such) and such U.S.
Holder's adjusted tax basis in the note. A U.S. Holder's adjusted tax basis in a
note generally will equal such U.S. Holder's initial investment in the note
increased by any original issue discount included in income (and accrued market
discount, if any, if the U.S. Holder has included such market discount in
income) and decreased by the amount of any payments, other than qualified stated
interest payments, received and amortizable bond premium taken with respect to
such note. Such gain or loss generally will be long-term capital gain or loss if
the note was held for more than one year. Non-corporate taxpayers (including
individuals) are subject to reduced maximum rates on long-term capital gains and
are generally subject to tax at ordinary income rates on short-term capital
gains. The deductibility of capital losses is subject to certain limitations.
Prospective investors should consult their own tax advisors concerning these tax
law provisions.
If a U.S. Holder disposes of only a portion of a note pursuant to a
redemption or repayment (including the Survivor's Option, if applicable), such
disposition may be treated as a pro rata prepayment in retirement of a portion
of a debt instrument. Generally, the resulting gain or loss would be calculated
by assuming that the original note being tendered consists of two instruments,
one that is retired (or repaid), and one that remains outstanding. The adjusted
issue price and the U.S. Holder's adjusted tax basis, determined immediately
before the pro rata prepayment, would be allocated between these two instruments
based on the portion of the instrument that is treated as retired by the pro
rata prepayment.
Backup Withholding and Information Reporting
Backup withholding of U.S. Federal income tax at the applicable rate may
apply to payments of principal, premium and interest (including OID) on a note,
and to payments of proceeds of the sale or other disposition of a note, to U.S.
Holders who are not "exempt recipients" and who fail to provide certain
identifying information (such as the registered owner's taxpayer identification
number) in the required manner. Generally, individuals are not exempt
recipients, whereas corporations and certain other entities generally are exempt
recipients. The backup withholding rate is currently 28%. Payments made in
respect of the notes to a U.S. Holder must be reported to the IRS, unless the
U.S. Holder is an exempt recipient or otherwise establishes an exemption from
the backup withholding rules.
Any amounts withheld under the backup withholding rules will be allowed as
a credit against the U.S. Holder's U.S. Federal income tax liability and may
entitle the U.S. Holder to a refund, provided that the required information is
timely furnished to the IRS.
S-28
EMPLOYEE RETIREMENT INCOME SECURITY ACT
A fiduciary of a pension plan or other employee benefit plan (including a
governmental plan, an individual retirement account or a Keogh plan) proposing
to invest in the notes should consider this section carefully.
A fiduciary of an employee benefit plan subject to the Employee Retirement
Income Security Act of 1974, as amended (commonly referred to as "ERISA") should
consider the fiduciary standards under ERISA in the context of the particular
circumstances of such plan before authorizing an investment in the notes. Such
fiduciary should consider whether the investment is in accordance with the
documents and instruments governing the plan.
In addition, ERISA and the Code prohibit certain transactions (referred to
as "prohibited transactions") involving the assets of a plan subject to ERISA or
the assets of an individual retirement account or plan subject to Section 4975
of the Code (referred to as an "ERISA plan"), on the one hand, and persons who
have certain specified relationships to such plan ("parties in interest" within
the meaning of ERISA or "disqualified persons" within the meaning of the Code),
on the other. If we (or an affiliate) are considered a party in interest or
disqualified person with respect to an ERISA plan, then the investment in notes
by the ERISA plan may give rise to a prohibited transaction.
By purchasing and holding the notes, the person making the decision to
invest on behalf of an ERISA plan is representing that the purchase and holding
of the notes will not result in a prohibited transaction under ERISA or the
Code. Therefore, an ERISA plan should not invest in the notes unless the plan
fiduciary or other person acquiring securities on behalf of the ERISA plan
determines that neither we nor an affiliate is a party in interest or a
disqualified person or, alternatively, that an exemption from the prohibited
transaction rules is available. If an ERISA plan engages in a prohibited
transaction, the transaction may require "correction" and may cause the ERISA
plan fiduciary to incur certain liabilities and the parties in interest or
disqualified persons to be subject to excise taxes.
Governmental plans and certain church plans, while not subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of ERISA and Section 4975 of the Code, may nevertheless be subject to
state or other federal laws or regulations that are substantially similar to the
foregoing provisions of ERISA and the Code. Fiduciaries of any such plans should
consult with their counsel before investing in the notes to determine the need
for, and the availability, if necessary, of any exemptive relief under any such
laws or regulations.
If you are the fiduciary of an employee benefit plan or other ERISA plan,
or an insurance company that is providing investment advice or other features to
an employee benefit plan or other ERISA plan, and you propose to invest in the
notes with the assets of the ERISA plan, you should consult your own legal
counsel for further guidance.
S-29
PLAN OF DISTRIBUTION
Under the terms of the selling agent agreement, the notes will be offered
from time to time by us to the Purchasing Agent for subsequent resale to the
agents and other dealers who are broker-dealers and securities firms. The
agents, including the Purchasing Agent, are parties to the selling agent
agreement. The notes will be offered for sale in the United States only. Dealers
who are members of the selling group have executed a master selected dealer
agreement with the Purchasing Agent. We also may appoint additional agents to
sell the notes. Any sale of the notes through those additional agents, however,
will be on the same terms and conditions to which the original agents have
agreed. The Purchasing Agent will purchase the notes at a discount ranging from
0.20% to 3.15% of the non-discounted price for each note sold. However, we also
may sell the notes to the Purchasing Agent at a discount greater than or less
than the range specified above. The discount at which we sell the notes to the
Purchasing Agent will be set forth in the applicable pricing supplement. The
Purchasing Agent also may sell notes to dealers at a concession not in excess of
the discount it received from us. In certain cases, the Purchasing Agent and the
other agents and dealers may agree that the Purchasing Agent will retain the
entire discount. We will disclose any particular arrangements in the applicable
pricing supplement.
Following the solicitation of orders, each of the agents, severally and not
jointly, may purchase notes as principal for its own account from the Purchasing
Agent. Unless otherwise set forth in the applicable pricing supplement, these
notes will be purchased by the agents and resold by them to one or more
investors at a fixed public offering price. After the initial public offering of
notes, the public offering price (in the case of notes to be resold at a fixed
public offering price), discount and concession may be changed.
We have the sole right to accept offers to purchase notes and may reject
any proposed offer to purchase notes in whole or in part. Each agent also has
the right, in its discretion reasonably exercised, to reject any proposed offer
to purchase notes in whole or in part. We reserve the right to withdraw, cancel
or modify any offer without notice. We also may change the terms, including the
interest rate we will pay on the notes, at any time prior to our acceptance of
an offer to purchase.
Each agent, including the Purchasing Agent, may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). We have agreed to indemnify the agents against certain
liabilities, including liabilities under the Securities Act, or to contribute to
any payments they may be required to make in respect of such liabilities. We
also have agreed to reimburse the agents for certain expenses.
No note will have an established trading market when issued. We do not
intend to apply for the listing of the notes on any securities exchange.
However, we have been advised by the agents that they may purchase and sell
notes in the secondary market as permitted by applicable laws and regulations.
The agents are not obligated to make a market in the notes, and they may
discontinue making a market in the notes at any time without notice. Neither we
nor the agents can provide any assurance regarding the development, liquidity or
maintenance of any trading market for any notes. All secondary trading in the
notes will settle in same-day funds. See "Registration and Settlement."
In connection with certain offerings of notes, the rules of the SEC permit
the Purchasing Agent to engage in transactions that may stabilize the price of
the notes. The Purchasing Agent will conduct these activities for the agents.
These transactions may consist of short sales, stabilizing transactions and
purchases to cover positions created by short sales. A short sale is the sale by
the Purchasing Agent of a greater amount of notes than the amount the Purchasing
Agent has agreed to purchase in connection with a specific offering of notes.
Stabilizing transactions consist of certain bids or purchases made by the
Purchasing Agent to prevent or retard a decline in the price of the notes while
an offering of notes is in process. In general, these purchases or bids for the
notes for the purpose of stabilization or to reduce a syndicate short position
could cause the price of the notes to be higher than it might otherwise be in
the absence of those purchases or bids. Neither we nor the Purchasing Agent
makes any representation or prediction as to the direction or magnitude of any
effect that these transactions may have on the price of any notes. In addition,
neither we nor the Purchasing Agent makes any representation that, once
commenced, these transactions will not be discontinued without notice. The
Purchasing Agent is not required to engage in these activities and may end any
of these activities at any time.
The agents or dealers to or through which we may sell notes may engage in
transactions with us and perform services for us in the ordinary course of
business.
S-30
OTHER GENERAL INFORMATION
The notes, the indenture, and the selling agent agreement are governed by,
and are to be construed in accordance with, the laws of the state of New York
and of the United States, applicable to agreements made and to be performed
wholly within those jurisdictions.
This prospectus supplement and the prospectus may be used only for the
purposes for which they were published. This prospectus supplement and the
prospectus together represent an offer to sell the notes but only under
circumstances and in jurisdictions where it is lawful to do so.
We will identify in the applicable pricing supplement whether the notes
have been accepted for clearance through the DTC. The CUSIP or the
identification number for any other relevant clearing system for each series of
notes will be set out in the relevant pricing supplement.
S-31
================================================================================
********************************************************************************
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities, and it is not soliciting an offer to buy these
securities in any state where the offer and sale is not permitted.
********************************************************************************
================================================================================
PROSPECTUS
[CIT Group Inc. LOGO]
$15,000,000,000
Common Stock
Preferred Stock
Depositary Shares
Senior Debt Securities
Subordinated Debt Securities
Warrants
Stock Purchase Contracts
Stock Purchase Units
----------
The securities covered by this prospectus may be sold from time to time by
CIT Group Inc. We may offer the securities independently or together in any
combination, called "units," for sale directly to purchasers or through
underwriters, dealers or agents to be designated at a future date.
We will provide the specific terms and prices of these securities in
supplements to this prospectus. The prospectus supplements may also add to,
update or change information contained in this prospectus. This prospectus may
not be used to offer or sell any securities unless accompanied by a prospectus
supplement. You should read this prospectus and the applicable prospectus
supplement carefully before you invest in the securities.
Our common stock is listed on the New York Stock Exchange under the symbol
"CIT."
----------
We may sell securities to or through underwriters, dealers or agents. For
additional information on the method of sale, you should refer to the section
entitled "Plan of Distribution." The names of any underwriters, dealers or
agents involved in the sale of any securities and the specific manner in which
they may be offered will be set forth in the prospectus supplement covering the
sale of those securities.
----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
THE DATE OF THIS PROSPECTUS IS OCTOBER 28, 2004.
TABLE OF CONTENTS
Page
----
About this Prospectus.........................................................3
Where You Can Find More Information...........................................4
Forward-Looking Statements....................................................5
Prospectus Summary............................................................6
Use of Proceeds...............................................................7
Description of Debt Securities................................................8
Description of Capital Stock.................................................18
Description of Depositary Shares.............................................19
Description of Warrants......................................................22
Description of Stock Purchase Contracts and Stock Purchase Units.............23
Plan of Distribution.........................................................24
Legal Matters................................................................25
Experts......................................................................26
2
ABOUT THIS PROSPECTUS
The information contained in this prospectus is not complete and may be
changed. You should rely only on the information provided in or incorporated by
reference in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of any securities in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front cover of
those documents and that any information we have incorporated by reference is
accurate as of any date other than the date of the document incorporated by
reference or such other date referred to in such document, regardless of the
time of delivery of this prospectus or any sale or issuance of a security.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC") using a "shelf" registration
process. Under this shelf registration process, we may sell or issue, in one or
more offerings up to a total amount of $15,000,000,000 of our:
o common stock;
o preferred stock;
o depositary shares;
o debt securities, in one or more series, which may be senior debt
securities or subordinated debt securities;
o warrants;
o stock purchase contracts;
o stock purchase units; and
o units consisting of any combination of these securities.
This prospectus provides you with a general description of the securities
we may offer. Each time we sell or issue securities, we will provide a
prospectus supplement that will contain specific information about the terms of
that specific offering of securities and the specific manner in which they may
be offered. The prospectus supplement may also add to, update or change any of
the information contained in this prospectus. The prospectus supplement may also
contain information about any material federal income tax considerations
relating to the securities described in the prospectus supplement. You should
read both this prospectus and the applicable prospectus supplement together with
the additional information described under "Where You Can Find More
Information." This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
This prospectus contains summaries of provisions of certain documents that
are described herein, but reference is made to the actual documents for complete
information. All of the summaries are qualified in their entirety by the actual
documents. Copies of some of the documents referred to herein have been filed or
will be filed or incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those
documents as described below under "Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about us
and the securities offered under this prospectus. That registration statement
can be read at the SEC web site (www.sec.gov) or at the SEC offices mentioned
under the heading "Where You Can Find More Information."
3
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our SEC filings are available to the public over the
Internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Such information may also be inspected
at The New York Stock Exchange, 20 Broad Street, New York, New York 10005. You
can also find information about us by visiting our website at www.cit.com. We
have included our web site address as an inactive textual reference only.
Information on our web site is not incorporated by reference into and does not
form a part of this prospectus.
The SEC allows us to incorporate by reference into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents that have been filed with
the SEC. The information incorporated by reference is considered to be part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede the previously filed information. We
incorporate by reference the documents listed below and any future filings made
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"), other than any portions
of the respective filings that were furnished, under applicable SEC rules,
rather than filed, until we complete our offerings of the securities registered
under this registration statement:
o our Annual Report on Form 10-K for the year ended December 31, 2003;
o our Definitive Proxy Statement filed with the SEC on April 5, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2004;
o our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2004;
o our Current Reports on Form 8-K filed with the SEC on January 22,
2004, April 22, 2004, July 22, 2004, August 17, 2004, September 9,
2004, September 14, 2004, September 21, 2004 and October 21, 2004;
and
o the description of our common stock contained in Form 8-A filed on
June 26, 2002, and any amendment or report filed under the Exchange
Act for the purpose of updating such description.
You may request a copy of these filings at no cost by writing or
telephoning us at the following address or phone number:
Glenn Votek
Executive Vice President and Treasurer
CIT Group Inc.
1 CIT Drive
Livingston, New Jersey 07039
(973) 740-5000
4
FORWARD-LOOKING STATEMENTS
This prospectus, prospectus supplements to this prospectus, the documents
incorporated by reference in this prospectus and other written reports and oral
statements made from time to time by the company may contain "forward-looking
statements" within the meaning of the Securities Litigation Reform Act of 1995.
Forward-looking statements relate to expectations or forecasts of future events.
They use words such as "anticipate," "believe," "could," "estimate," "expect,"
"forecast," "project," "intend," "plan," "potential," "will," and other words
and terms of similar meaning in connection with a discussion of potential future
events, circumstances or future operating or financial performance. You can also
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts. Any forward-looking statements contained in this
prospectus, prospectus supplements to this prospectus and the documents
incorporated by reference in this prospectus are subject to unknown risks,
uncertainties and contingencies. Forward-looking statements are included, for
example, in the discussions about:
o our liquidity risk management;
o our credit risk management;
o our funding, borrowing costs and net finance margin;
o our capital, leverage and credit ratings;
o our operational and legal risks;
o our commitments to extend credit or purchase equipment; and
o how we may be affected by legal proceedings.
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. Also, forward-looking statements are based upon management's
estimates of fair values and of future costs, using currently available
information. Therefore, actual results may differ materially from those
expressed or implied in those statements. Factors that could cause such
differences include, but are not limited to:
o risks of economic slowdown, downturn or recession;
o industry cycles and trends;
o risks inherent in changes in market interest rates and quality
spreads;
o funding opportunities and borrowing costs;
o changes in funding markets, including commercial paper, term debt and
the asset-backed securitization markets;
o uncertainties associated with risk management, including credit
prepayment, asset/liability, interest rate and currency risks;
o adequacy of reserves for credit losses;
o risks associated with the value and recoverability of leased equipment
and lease residual values;
o changes in laws or regulations governing our business and operations;
o changes in competitive factors; and
o future acquisitions and dispositions of businesses or asset
portfolios.
Any or all of our forward-looking statements here or in other publications
may turn out to be wrong, and there are no guarantees about the performance of
the company. The company does not assume the obligation to update any
forward-looking statement for any reason.
5
--------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere or incorporated by reference in this prospectus.
Because this is a summary, it may not contain all the information that is
important to you. You should read the entire prospectus and the applicable
prospectus supplement, including the information incorporated by reference,
before making an investment decision. As used in this prospectus, the terms "CIT
Group Inc.," "CIT Group," "we," "us," "our" and "the company" refer to CIT Group
Inc., unless the context clearly indicates otherwise.
CIT Group Inc.
CIT Group Inc., a Delaware corporation, is a leading global commercial and
consumer finance company. Founded in 1908, we provide financing and leasing
capital for companies in a wide variety of industries, including many of today's
leading industries and emerging businesses. We offer factoring and vendor,
equipment, commercial, consumer and structured financing products.
We have broad access to customers and markets through our "franchise"
businesses. Each business focuses on specific industries, asset types and
markets, with portfolios diversified by client, industry and geography. Managed
assets were $49.9 billion, owned financing and leasing assets were $41.5 billion
and stockholders' equity was $5.7 billion at June 30, 2004.
We provide a wide range of financing and leasing products to small, midsize
and larger companies across a wide variety of industries, including
manufacturing, retailing, transportation, aerospace, construction, technology,
communication, and various service-related industries. Our secured lending,
leasing and factoring products include direct loans and leases, operating
leases, leveraged and single investor leases, secured revolving lines of credit
and term loans, credit protection, accounts receivable collection, import and
export financing, debtor-in-possession and turnaround financing, and acquisition
and expansion financing. Consumer lending, conducted in our Specialty Finance
segment, consists primarily of home equity lending to consumers originated
largely through a network of brokers and correspondents.
Transactions are generated through direct calling efforts with borrowers,
lessees, equipment end-users, vendors, manufacturers and distributors and
through referral sources and other intermediaries. In addition, our strategic
business units work together in referring transactions to other CIT units to
best meet our customers' overall financing needs. We also buy and sell
participations in and syndications of finance receivables and/or lines of
credit. From time to time, in the normal course of business, we purchase finance
receivables on a wholesale basis to supplement our origination volume and sell
certain finance receivables and equipment under operating leases to reduce
concentrations, for other balance sheet management purposes, or to improve
profitability.
----------
Our principal executive offices are located at 1 CIT Drive, Livingston, New
Jersey 07039. Our telephone number is (973) 740-5000.
--------------------------------------------------------------------------------
6
USE OF PROCEEDS
Unless the applicable prospectus supplement indicates otherwise, we
currently intend to use the net proceeds from any sale of the offered securities
to provide additional working funds for us and our subsidiaries. Generally, we
use the proceeds from sales of our securities primarily to originate and
purchase receivables in the ordinary course of our business. We have not yet
determined the amounts that we may use in connection with our business or that
we may furnish to our subsidiaries. From time to time, we may also use the
proceeds to finance the bulk purchase of receivables and/or the acquisition of
other finance-related businesses.
7
DESCRIPTION OF DEBT SECURITIES
This section contains a description of the general terms and provisions of
the debt securities that may be offered by this prospectus and to which any
prospectus supplement may relate. The particular terms of the debt securities
offered will be described in the applicable prospectus supplement. The
prospectus supplement relating to a series of debt securities being offered
pursuant to this prospectus will be attached to this prospectus.
We may issue senior debt securities and subordinated debt securities. The
senior debt securities are to be issued under an indenture (the "senior
indenture") to be entered into between us and J.P. Morgan Trust Company,
National Association, as trustee, the form of which is filed as an exhibit to
the registration statement of which this prospectus forms a part. The
subordinated debt securities are to be issued under an indenture (the
"subordinated indenture") to be entered into between us and J.P. Morgan Trust
Company, National Association, as trustee, the form of which is filed as an
exhibit to the registration statement of which this prospectus forms a part. The
senior indenture and the subordinated indenture are sometimes referred to in
this prospectus collectively as the "indentures" and each individually as an
"indenture." The indentures may be supplemented from time to time.
This prospectus briefly outlines some of the indenture provisions. The
following summary of the material provisions of the indentures is qualified in
its entirety by the provisions of the indentures, including definitions of
certain terms used in the indentures. Wherever we refer to particular sections
or defined terms of the indentures, those sections or defined terms are
incorporated in this prospectus and the applicable prospectus supplement by
reference. You should review the indentures that are filed as exhibits to the
registration statement for additional information.
In addition, the material specific financial, legal and other terms as well
as federal income tax consequences particular to securities of each series will
be described in the prospectus supplement relating to the securities of that
series. The prospectus supplement may or may not modify the general terms found
in this prospectus and will be filed with the SEC. For a complete description of
the terms of a particular series of debt securities, you should read both this
prospectus and the prospectus supplement relating to that particular series.
General
The indenture provisions do not limit the amount of debt that we may issue
under the indentures or otherwise, and we may issue the securities in one or
more series with the same or various maturities, at par or a premium, or with
original issue discount.
Unless otherwise specified in the prospectus supplement, the debt
securities covered by this prospectus will be our direct unsecured obligations.
Senior debt securities will rank equally with our other unsecured and
unsubordinated indebtedness. Subordinated debt securities will be unsecured and
subordinated in right of payment to the prior payment in full of all of our
unsecured and senior indebtedness. See "--Subordination" below. Any of our
secured indebtedness will rank ahead of the debt securities to the extent of the
assets securing such indebtedness.
We conduct operations primarily through our subsidiaries and substantially
all of our consolidated assets are held by our subsidiaries. Accordingly, our
cash flow and our ability to meet our obligations under the debt securities will
be largely dependent on the earnings of our subsidiaries and the distribution or
other payment of these earnings to us in the form of dividends, loans or
advances and repayment of loans and advances from us. Our subsidiaries are
separate and distinct legal entities and have no obligation to pay the amounts
that will be due on our debt securities or to make any funds available for
payment of amounts that will be due on our debt securities. Because we are a
holding company, our obligations under our debt securities will be effectively
subordinated to all existing and future liabilities of our subsidiaries.
Therefore, our rights, and the rights of our creditors, including the rights of
the holders of the debt securities to participate in any distribution of assets
of any of our subsidiaries, if such subsidiary were to be liquidated or
reorganized, are subject to the prior claims of the subsidiary's creditors. To
the extent that we may be a creditor with recognized claims against our
subsidiaries, our claims will still be effectively subordinated to any security
interest in, or mortgages or other liens on, the assets of the subsidiary that
are senior to us.
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The prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include, among other terms, some or all of the following, as applicable:
o the title and series of such debt securities, which may include
medium-term notes;
o the total principal amount of the series of debt securities and
whether there shall be any limit upon the aggregate principal amount
of such debt securities;
o the date or dates, or the method or methods, if any, by which such
date or dates will be determined, on which the principal of the debt
securities will be payable;
o the rate or rates at which such debt securities will bear interest, if
any, which rate may be zero in the case of certain debt securities
issued at an issue price representing a discount from the principal
amount payable at maturity, or the method by which such rate or rates
will be determined (including, if applicable, any remarketing option
or similar method), and the date or dates from which such interest, if
any, will accrue or the method by which such date or dates will be
determined;
o the date or dates on which interest, if any, on such debt securities
will be payable and any regular record dates applicable to the date or
dates on which interest will be so payable;
o the place or places where the principal of or any premium or interest
on such debt securities will be payable, where any of such debt
securities that are issued in registered form may be surrendered for
registration of or transfer or exchange, and where any such debt
securities may be surrendered for conversion or exchange;
o if such debt securities are to be redeemable at our option, the date
or dates on which, the period or periods within which, the price or
prices at which and the other terms and conditions upon which such
debt securities may be redeemed, in whole or in part, at our option;
o provisions specifying whether we will be obligated to redeem or
purchase any of such debt securities pursuant to any sinking fund or
analogous provision or at the option of any holder of such debt
securities and, if so, the date or dates on which, the period or
periods within which, the price or prices at which and the other terms
and conditions upon which such debt securities will be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such debt securities so redeemed or
purchased;
o if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any debt securities to be issued
in registered form will be issuable and, if other than a denomination
of $5,000, the denominations in which any debt securities to be issued
in bearer form will be issuable;
o provisions specifying whether the debt securities will be convertible
into other securities of CIT and/or exchangeable for securities of CIT
or other issuers and, if so, the terms and conditions upon which such
debt securities will be so convertible or exchangeable;
o if other than the principal amount, the portion of the principal
amount (or the method by which such portion will be determined) of
such debt securities that will be payable upon declaration of
acceleration of the maturity thereof;
o if other than U.S. dollars, the currency of payment, including
composite currencies, of the principal of, and any premium or interest
on any of such debt securities;
o provisions specifying whether the principal of, and any premium or
interest on such debt securities will be payable, at the election of
CIT or a holder of debt securities, in a currency other than that in
which such debt securities are stated to be payable and the date or
dates on which, the period or periods within which, and the other
terms and conditions upon which, such election may be made;
o any index, formula or other method used to determine the amount of
payments of principal of, any premium or interest on such debt
securities;
o provisions specifying whether such debt securities are to be issued in
the form of one or more global securities and, if so, the identity of
the depositary for such global security or securities;
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o provisions specifying whether such debt securities are senior debt
securities or subordinated debt securities and, if subordinated debt
securities, the specific subordination provisions applicable thereto;
o in the case of subordinated debt securities, provisions specifying the
relative degree, if any, to which such subordinated debt securities of
the series will be senior to or be subordinated in right of payment to
other series of subordinated debt securities or other indebtedness of
CIT, as the case may be, whether such other series of subordinated
debt securities or other indebtedness is outstanding or not;
o any deletions from, modifications of or additions to the events of
default or covenants of CIT with respect to such debt securities;
o terms specifying whether the provisions described below under
"--Discharge; Defeasance and Covenant Defeasance" will be applicable
to such debt securities;
o terms specifying whether any of such debt securities are to be issued
upon the exercise of warrants, and the time, manner and place for such
debt securities to be authenticated and delivered; and
o any other terms of such debt securities and any other deletions from
or modifications or additions to the applicable indenture in respect
of such debt securities.
We will have the ability under the indentures to "reopen" a previously
issued series of debt securities and issue additional debt securities of that
series or establish additional terms of that series. We also are permitted to
issue debt securities with the same terms as previously issued debt securities.
We may in the future issue debt securities other than the debt securities
described in this prospectus. There is no requirement that any other debt
securities that we issue be issued under the indentures described in this
prospectus. Thus, any other debt securities that we may issue may be issued
under other indentures or documentation containing provisions different from
those included in the indentures or applicable to one or more issues of the debt
securities described in this prospectus.
Negative Pledge
The indentures do not limit the amount of other securities that we or our
subsidiaries may issue. However, an indenture provision, which we refer to in
this prospectus as the "Negative Pledge," provides that we will not pledge or
otherwise subject any of our property or assets to any lien to secure
indebtedness for money borrowed that is incurred, issued, assumed or guaranteed
by us, subject to certain exceptions.
The terms of the Negative Pledge do nevertheless permit us to create:
o liens in favor of any of our subsidiaries;
o purchase money liens;
o liens existing at the time of any acquisition that we may make;
o liens in favor of the United States, any state or governmental agency
or department to secure obligations under contracts or statutes;
o liens securing the performance of letters of credit, bids, tenders,
sales contracts, purchase agreements, repurchase agreements, reverse
repurchase agreements, bankers' acceptances, leases, surety and
performance bonds and other similar obligations incurred in the
ordinary course of business;
o liens upon any real property acquired or constructed by us primarily
for use in the conduct of our business;
o arrangements providing for our leasing of assets, which we have sold
or transferred with the intention that we will lease back these
assets, if the lease obligations would not be included as liabilities
on our consolidated balance sheet;
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o liens to secure non-recourse debt in connection with our leveraged or
single-investor or other lease transactions;
o consensual liens created in our ordinary course of business that
secure indebtedness that would not be included in total liabilities as
shown on our consolidated balance sheet;
o liens created by us in connection with any transaction that we intend
to be a sale of our property or assets;
o liens on property or assets financed through tax-exempt municipal
obligations;
o liens arising out of any extension, renewal or replacement, in whole
or in part, of any financing permitted under the Negative Pledge, so
long as the lien extends only to the property or assets, with
improvements, that originally secured the lien; and
o liens that secure certain other indebtedness which, in an aggregate
principal amount then outstanding, does not exceed 10% of our
consolidated net worth.
In addition, under the indenture pursuant to which any of our senior
subordinated debt is issued, we have agreed not to permit:
o the aggregate amount of senior subordinated indebtedness outstanding
at any time to exceed 100% of the aggregate amount of the par value of
our capital stock plus our consolidated surplus (including retained
earnings); or
o the aggregate amount of senior subordinated indebtedness and junior
subordinated indebtedness outstanding at any time to exceed 150% of
the aggregate amount of the par value of the capital stock plus our
consolidated surplus (including retained earnings).
Under the more restrictive of these tests, as of June 30, 2004, we could
issue up to approximately $5.7 billion of additional senior subordinated
indebtedness.
Consolidation, Merger or Sale
Subject to the provisions of the Negative Pledge described above, we will
not be prevented from consolidating or merging with any other person or selling
our assets as, or substantially as, an entirety. However, we have agreed not to
consolidate with or merge into any other person or convey or transfer or lease
substantially all of our properties and assets to any person, unless, among
other things:
o the successor entity (if other than the company) expressly assumes by
a supplemental indenture the due and punctual payment of the principal
of, and any premium and any interest on, all the debt securities then
outstanding and the performance and observance of every covenant in
the indenture that we would otherwise have to perform as if it were an
original party to the indenture; and
o the person to which our properties and assets are sold expressly
assumes, as a part of the purchase price, by a supplemental indenture
the due and punctual payment of the principal of, and any premium and
any interest on, all the debt securities then outstanding and the
performance and observance of every covenant in the indenture that we
would otherwise have to perform as if it were an original party to the
indenture.
The successor entity or purchaser of our properties and assets, as
applicable, will assume all our obligations under the indentures as if it were
an original party to such indentures. After assuming the obligations, the
successor entity will have all our rights and powers under such indentures.
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Events of Default
An "event of default" means any one of the following events that occurs
with respect to a series of debt securities issued under the indenture:
o we fail to pay interest on any debt security of such series for 30
days after payment was due;
o we fail to make the principal or any premium payment on any debt
security of such series when due;
o we fail to make any sinking fund payment or analogous obligation when
due in respect of any debt securities of such series;
o we fail to perform any other covenant in the indenture and this
failure continues for 30 days after we receive written notice of it
(other than any failure to perform in respect of a covenant included
in the indenture solely for the benefit of another series of debt
securities);
o any event of default shall have occurred in respect of our
indebtedness (including guaranteed indebtedness but excluding any
subordinated indebtedness), and, as a result, an aggregate principal
amount exceeding $25.0 million of such indebtedness is accelerated
prior to its scheduled maturity and such acceleration is not
rescinded or annulled within 30 days after we receive written
notice; or
o we or a court take certain actions relating to the bankruptcy,
insolvency or reorganization of our company.
A supplemental indenture or the form of security for a particular series of
debt securities may include additional events of default or changes to the
events of default described above. The events of default applicable to a
particular series of debt securities will be discussed in the prospectus
supplement relating to such series. Other than as specified above, a default
under our other indebtedness will not be a default under the indenture for the
debt securities covered by this prospectus, and a default under one series of
debt securities will not necessarily be a default under another series.
If an event of default with respect to outstanding debt securities of any
series occurs and is continuing, then the trustee or the holders of at least 25%
in principal amount of outstanding debt securities of that series may declare,
in a written notice, the principal amount (or specified amount) on all debt
securities of that series to be immediately due and payable. In the case of
certain events of bankruptcy or insolvency of CIT, all unpaid principal amount
(or specified amount) of and all accrued and unpaid interest on the outstanding
debt securities of such series shall automatically become immediately due
and payable.
The trustee may withhold notice to the holders of our debt securities of
any default (except for defaults that involve our failure to pay principal of,
premium, if any or interest, if any, or any sinking fund payment, if applicable,
on any series of debt securities) if the trustee considers that withholding
notice is in the interests of the holders of that series of debt securities.
At any time after a declaration of acceleration with respect to debt
securities of any series has been made, the holders of a majority in principal
amount (or specified amount) of the outstanding debt securities of that series,
by written notice to us and the trustee, may rescind and annul such declaration
and its consequences if:
o we have paid or deposited with the trustee a sum sufficient to pay
overdue interest and overdue principal other than the accelerated
interest and principal; and
o we have cured or the holders have waived all events of default, other
than the non-payment of accelerated principal and interest with
respect to debt securities of that series, as provided in the
indenture.
We refer you to the prospectus supplement relating to any series of debt
securities that are discount securities for the particular provisions relating
to acceleration of a portion of the principal amount of the discount securities
upon the occurrence of an event of default.
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If a default in the performance or breach, of an indenture shall have
occurred and be continuing, the holders of not less than a majority in principal
amount of the outstanding securities of all series, by notice to the trustee,
may waive any past event of default or its consequences under the applicable
indenture. However, an event of default cannot be waived with respect to any
series of securities in the following two circumstances:
o a failure to pay the principal of, and premium, if any, or interest
on, any security; or
o a covenant or provision that cannot be modified or amended without the
consent of each holder of outstanding securities of that series.
Other than its duties in case of a default, the trustee is not obligated to
exercise any of its rights or powers under an indenture at the request, order or
direction of any holders, unless the holders offer the trustee reasonable
indemnity. If they provide this reasonable indemnity, the holders of a majority
in principal amount outstanding of any series of debt securities may, subject to
certain limitations, direct the time, method and place of conducting any
proceeding or any remedy available to the trustee, or exercising any power
conferred upon the trustee, for any series of debt securities.
We are required to deliver to the trustee an annual statement as to our
fulfillment of all of our obligations under each existing indenture.
Modification of Indenture
The indenture provisions permit us and the trustee to amend, modify or
supplement an indenture and any supplemental indenture under which a series of
debt securities is issued. Generally, these changes require the consent of the
holders of at least 66 2/3% of the outstanding principal amount of each series
of debt securities affected by the change.
However, no modification of the maturity date or principal or interest
payment terms, no modification of the currency for payment, no impairment of the
right to sue for the enforcement of payment at the maturity of the debt
security, no modification of any conversion rights and no modification reducing
the percentage required for modifications or modifying the foregoing
requirements or reducing the percentage required to waive certain specified
covenants is effective against any holder without its consent. In addition, no
supplemental indenture shall adversely affect the rights of any holder of senior
indebtedness with respect to subordination without the consent of such holder.
In computing whether the holders of the requisite principal amount of
outstanding debt securities have taken action under an indenture or supplemental
indenture:
o for an original issue discount security, we will use the amount of the
principal that would be due and payable as of that date, as if the
maturity of the debt had been accelerated due to a default; and
o for a debt security denominated in a foreign currency or currencies,
we will use the U.S. dollar equivalent of the outstanding principal
amount as of that date, using the exchange rate in effect on the date
of original issuance of the debt security.
Subordination
The extent to which a particular series of subordinated debt securities may
be subordinated to our unsecured and unsubordinated indebtedness will be set
forth in the prospectus supplement for any such series and any indenture may be
modified by a supplemental indenture to reflect such subordination provisions.
Payment and Transfer
Unless otherwise specified in the related prospectus supplement, we will
pay principal, interest and any premium on fully registered securities at the
place or places designated by us for such purposes. We will make
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payment to the persons in whose names the debt securities are registered on the
close of business on the day or days specified by us. Any other payments will be
made as set forth in the applicable prospectus supplement.
All paying agents initially designated by us with respect to payments on
the debt securities will be named in the related prospectus supplement. We may
at any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts, except that we will be required to maintain a paying agent in each place
where the principal of and any premium or interest on any debt securities are
payable.
Unless otherwise provided in the related prospectus supplement, holders may
transfer or exchange debt securities at the corporate trust office of the
trustee or at any other office or agency maintained by us for such purposes. We
will not charge a service fee for any transfer or exchange of certificated
securities, but we may require payment of a sum sufficient to cover any stamp
tax or other governmental charge and any other reasonable expenses (including
fees and expenses of the trustee) that we are required to pay in connection
with a transfer or exchange.
You may effect the transfer of certificated securities and the right to
receive the principal, premium and interest on certificated securities only by
surrendering the certificate representing those certificated securities and
either reissuance by us or the trustee of the certificate to the new holder or
the issuance by us or the trustee of a new certificate to the new holder.
We are not required to:
o register the transfer of or exchange securities of any series during a
period beginning at the opening of business 15 days before the day we
transmit a notice of redemption of securities of the series selected
for redemption and ending at the close of business on the day of the
transmission; or
o register the transfer of or exchange any security so selected for
redemption in whole or in part, except the unredeemed portion of any
security being redeemed in part.
All transfer agents initially designated by us will be named in the related
prospectus supplement. We may at any time rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that we will be required to maintain a transfer agent in each
place where the principal of and any premium or interest on any debt securities
are payable.
We have initially appointed the trustee as security registrar, transfer
agent and paying agent for the debt securities.
Global Securities
We may issue the global securities in either registered or bearer form, in
either temporary or permanent form. Where any debt securities of any series are
issued in bearer form, the restrictions and considerations applicable to such
debt securities and with respect to the payment, transfer and exchange of such
debt securities will be described in the related prospectus supplement. Debt
securities that are represented in whole or in part by one or more global
securities will be registered in the name of a depositary or its nominee
identified in the applicable prospectus supplement, and such global securities
will be deposited with, or on behalf of, the depositary. The applicable
prospectus supplement will describe the specific terms of the depositary
arrangement with respect to the applicable securities of that series. We
anticipate that the following provisions will apply to all depositary
arrangements.
Once a global security is issued, the depositary will credit on its
book-entry system the respective principal amounts of the individual securities
represented by that global security to the accounts of institutions that have
accounts with the depositary. These institutions are known as participants. The
underwriters for the securities will designate the accounts to be credited.
However, if we have offered or sold the securities either directly or through
agents, we or the agents will designate the appropriate accounts to be credited.
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Ownership of beneficial interest in a global security will be limited to
participants or persons that may hold beneficial interests through participants.
Ownership of beneficial interest in a global security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the depositary's participants or persons that hold through participants. The
laws of some states require that certain purchasers of securities take physical
delivery of securities. Such limits and such laws may limit the market for
beneficial interests in a global security.
So long as the depositary for a global security, or its nominee, is the
registered owner of a global security, the depositary or nominee will be
considered the sole owner or holder of the securities represented by the global
security for all purposes under the indenture. Except as provided in the
applicable prospectus supplement, owners of beneficial interests in a global
security:
o will not be entitled to have securities represented by global
securities registered in their names;
o will not receive or be entitled to receive physical delivery of
securities in definitive form; and
o will not be considered owners or holders of these securities under the
indenture.
Payments of principal, any premium and interest on the individual
securities registered in the name of the depositary or its nominee will be made
to the depositary or its nominee as the holder of that global security. Neither
we nor the trustee will have any responsibility or liability for any aspect of
the records relating to, or payments made on account of, beneficial ownership
interests of a global security, or for maintaining, supervising or reviewing any
records relating to beneficial ownership interests, and each of us and the
trustee may act or refrain from acting without liability on any information
provided by the depositary.
We expect that the depositary, after receiving any payment of principal,
any premium or interest in respect of a global security, will immediately credit
the accounts of the participants with payment in amounts proportionate to their
respective holdings in principal amount of beneficial interest in a global
security as shown on the records of the depositary. We also expect that payments
by participants to owners of beneficial interests in a global security will be
governed by standing customer instructions and customary practices, as is now
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such
participants.
Debt securities represented by a global security will be exchangeable for
debt securities in definitive form of like tenor in authorized denominations
only if the depositary notifies us that it is unwilling or unable to continue as
the depositary and a successor depositary is not appointed by us within 90 days
or we, in our discretion, determine not to require all of the debt securities of
a series to be represented by a global security and notify the trustee of our
decision.
Discharge; Defeasance and Covenant Defeasance
We may discharge certain obligations to the holders of any debt securities
of any series that have not already been delivered to the trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) if we
deposit with the trustee, in trust, funds in the currency in which such debt
securities are payable in an amount sufficient to pay the entire indebtedness on
such debt securities with respect to principal and any premium and interest to
the date of such deposit (if such debt securities have then become due and
payable) or to the maturity date of such debt securities, as the case may be.
We also may, at our option, elect to:
o discharge any and all of our obligations with respect to the debt
securities of such series, except for, among other things, our
obligation to register the transfer of or exchange such debt
securities and to maintain an office or agency with respect to such
debt securities (which we refer to in this prospectus as
"defeasance"); or
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o release ourselves from our obligation to comply with certain
restrictive covenants under the indenture, and to provide that any
failure to comply with such obligations shall not constitute a default
or an event of default with respect to such series of debt securities
(which we refer to in this prospectus as "covenant defeasance").
Defeasance or covenant defeasance, as the case may be, shall be conditioned
upon the irrevocable deposit by us with the trustee, in trust, of an amount in
U.S. dollars or in the foreign currency in which such debt securities are
payable at stated maturity, or government obligations, or both, applicable to
such debt securities which, through the scheduled payment of principal and
interest in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such debt
securities on the scheduled due dates.
Such trust may only be established if, among other things:
o the applicable defeasance or covenant defeasance does not result in a
breach or violation of, or constitute a default under, the applicable
indenture or any other material agreement or instrument to which we
are a party or by which we are bound;
o no event of default or event which with notice or lapse of time or
both would become and an event of default with respect to the debt
securities to be defeased shall have occurred and be continuing on the
date of establishment of such trust; and
o we shall have delivered to the trustee an opinion of counsel to the
effect that the deposit and related defeasance or covenant defeasance,
as the case may be, would not cause the holders of the securities to
recognize income, gain or loss for U.S. federal income tax purposes.
In the case of a defeasance, we must also deliver any ruling to such effect
received from or published by the United States Internal Revenue Service.
Concerning the Trustee
J.P. Morgan Trust Company, National Association, a national banking
association, will act as trustee under our senior indenture and our subordinated
indenture, as permitted by the terms thereof. At all times, the trustee must be
organized and doing business under the laws of the United States, any state
thereof or the District of Columbia, and must comply with all applicable
requirements under the Trust Indenture Act.
The trustee may resign at any time by giving us written notice or may be
removed:
o by act of the holders of a majority in principal amount of a series of
outstanding debt securities; or
o if it (i) fails to comply with the obligations imposed upon it under
the Trust Indenture Act; (ii) is not organized and doing business
under the laws of the United States, any state thereof or the District
of Columbia; (iii) becomes incapable of acting as trustee; or (iv) or
a court takes certain actions relating to bankruptcy, insolvency or
reorganization.
If the trustee resigns, is removed or becomes incapable of acting, or if a
vacancy occurs in the office of the trustee for any cause, we, by or pursuant to
a board resolution, will promptly appoint a successor trustee or trustees with
respect to the debt securities of such series. We will give written notice to
holders of the relevant series of debt securities, of each resignation and each
removal of the trustee with respect to the debt securities of such series and
each appointment of a successor trustee. Upon the appointment of any successor
trustee, we, the retiring trustee and such successor trustee, will execute and
deliver a supplemental indenture in which each successor Trustee will accept
such appointment and which will contain such provisions as necessary or
desirable to transfer to such successor trustee all the rights, powers, trusts
and duties of the retiring trustee with respect to the relevant series of debt
securities.
The trustee may be contacted at the following address: J.P. Morgan Trust
Company, National Association, 611 Woodward Ave. 11th Floor Detroit, Michigan
48226. The form of senior indenture and the form of
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subordinated indenture are filed as exhibits to this registration statement.
Holders of any series of debt securities may obtain an indenture or any other
documents relating to a series of debt securities by contacting us or the
trustee or by accessing the SEC's web site. See "Where You Can Find More
Information".
J.P. Morgan Trust Company, National Association and certain of its
affiliates have in the past and may in the future provide banking, investment
and other services to us. A trustee under a senior indenture or a senior
subordinated indenture may act as trustee under any of our other indentures.
New York Law to Govern
The indentures will be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made or instruments
entered into and, in each case, performed in that state.
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DESCRIPTION OF CAPITAL STOCK
This section contains a description of our capital stock. The following
summary of the terms of our capital stock is not meant to be complete and is
qualified by reference to our certificate of incorporation, as amended, and our
by-laws, as amended, which are incorporated by reference as exhibits into the
registration statement of which this prospectus is a part.
As of June 30, 2004, our authorized capital stock consisted of: (1)
600,000,000 shares of common stock, par value $0.01 per share, of which
212,092,592 were issued and 211,195,862 were outstanding, 896,730 were issued
and held in treasury; and (2) 100,000,000 shares of preferred stock, par value
$0.01 per share, none of which have been issued.
Common Stock
Each share of our common stock entitles the holder thereof to one vote on
all matters, including the election of directors, and, except as otherwise
required by law or provided in any resolution adopted by our board of directors
with respect to any series of preferred stock, the holders of the shares of
common stock will possess all voting power. Our certificate of incorporation
does not provide for cumulative voting in the election of directors. Generally,
all matters to be voted on by the stockholders must be approved by a majority,
or, in the case of the election of directors, by a plurality, of the votes cast,
subject to state law and any voting rights granted to any of the holders of
preferred stock. Notwithstanding the foregoing, approval of the following three
matters requires the vote of holders of 66 2/3% of our outstanding capital stock
entitled to vote in the election of directors: (1) amending, repealing or
adopting of by-laws by the stockholders; (2) removing directors (which is
permitted for cause only); and (3) amending, repealing or adopting any provision
that is inconsistent with certain provisions of our certificate of
incorporation. The holders of common stock do not have any preemptive rights.
There are no subscription, redemption, conversion or sinking fund provisions
with respect to the common stock.
Subject to any preferential rights of any outstanding series of preferred
stock that our board of directors may create, from time to time, the holders of
common stock will be entitled to dividends as may be declared from time to time
by the board of directors from funds available therefor. Upon liquidation of
CIT, subject to the rights of holders of any preferred stock outstanding, the
holders of common stock will be entitled to receive our assets remaining after
payment of liabilities proportionate to their pro rata ownership of the
outstanding shares of common stock.
Preferred Stock
Our board of directors has the authority, without further action of our
stockholders, to issue up to 100,000,000 shares of preferred stock, par value
$0.01 per share, in one or more series and to fix the powers, preferences,
rights and qualifications, limitations or restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences and the number of shares constituting any series or the
designations of the series. The issuance of preferred stock could adversely
affect the holders of common stock. The potential issuance of preferred stock
may have the effect of discouraging, delaying or preventing a change of control
of CIT, may discourage bids for the common stock at a premium over market price
of the common stock and may adversely affect the market price of the common
stock. As of the date of this prospectus, we do not have any shares of preferred
stock outstanding, and we have no current plans to issue any shares of preferred
stock.
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DESCRIPTION OF DEPOSITARY SHARES
General
We may elect to offer fractional shares of preferred stock rather than full
shares of preferred stock. In that event, we will issue receipts for depositary
shares, and each of these depositary shares will represent a fraction (to be set
forth in the applicable prospectus supplement) of a share of a particular series
of preferred stock.
The shares of any series of preferred stock underlying the depositary
shares will be deposited under a deposit agreement between us and a bank or
trust company selected by us. The depositary will have its principal office in
the United States and a combined capital and surplus of at least $50,000,000.
Subject to the terms of the deposit agreement, each owner of a depositary
share will be entitled, in proportion to the applicable fraction of a share of
preferred stock underlying the depositary share, to all the rights and
preferences of the preferred stock underlying that depositary share. Those
rights may include dividend, voting, redemption, conversion and liquidation
rights.
The depositary shares will be evidenced by depositary receipts issued under
a deposit agreement. Depositary receipts will be distributed to those persons
purchasing the fractional shares of preferred stock underlying the depositary
shares, in accordance with the terms of the offering. The following description
of the material terms of the deposit agreement, the depositary shares and the
depositary receipts is only a summary, and you should refer to the forms of the
deposit agreement and depositary receipts that will be filed with the SEC in
connection with the offering of the specific depositary shares for more complete
information.
Pending the preparation of definitive engraved depositary receipts, the
depositary may, upon our written order, issue temporary depositary receipts
substantially identical to the definitive depositary receipts but not in
definitive form. These temporary depositary receipts entitle their holders to
all the rights of definitive depositary receipts. Temporary depositary receipts
will then be exchangeable for definitive depositary receipts at our expense.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received with respect to the underlying stock to the record
holders of depositary shares in proportion to the number of depositary shares
owned by those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary shares
that are entitled to receive the distribution, unless the depositary determines
that it is not feasible to make the distribution. If this occurs, the depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
Withdrawal of Underlying Preferred Stock
Unless we say otherwise in a prospectus supplement, holders may surrender
depositary receipts at the principal office of the depositary and, upon payment
of any unpaid amount due to the depositary, be entitled to receive the number of
whole shares of underlying preferred stock and all money and other property
represented by the related depositary shares. We will not issue any partial
shares of preferred stock. If the holder delivers depositary receipts evidencing
a number of depositary shares that represent more than a whole number of shares
of preferred stock, the depositary will issue a new depositary receipt
evidencing the excess number of depositary shares to that holder.
Redemption of Depositary Shares
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in
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part, of that series of underlying stock held by the depositary. The redemption
price per depositary share will be equal to the applicable fraction of the
redemption price per share payable with respect to that series of underlying
stock. Whenever we redeem shares of underlying stock that are held by the
depositary, the depositary will redeem, as of the same redemption date, the
number of depositary shares representing the shares of underlying stock so
redeemed. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or proportionately or
by other equitable method, as may be determined by the depositary.
Voting
Upon receipt of notice of any meeting at which the holders of the
underlying stock are entitled to vote, the depositary will mail the information
contained in the notice to the record holders of the depositary shares
underlying the preferred stock. Each record holder of the depositary shares on
the record date (which will be the same date as the record date for the
underlying stock) will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the amount of the underlying stock
represented by that holder's depositary shares. The depositary will then try, as
far as practicable, to vote the number of shares of preferred stock underlying
those depositary shares in accordance with those instructions, and we will agree
to take all reasonable actions which may be deemed necessary by the depositary
to enable the depositary to do so. The depositary will not vote the underlying
shares to the extent it does not receive specific instructions with respect to
the depositary shares representing the preferred stock.
Conversion or Exchange of Preferred Stock
If the deposited preferred stock is convertible into or exchangeable for
other securities, the following will apply. The depositary shares, as such, will
not be convertible into or exchangeable for such other securities. Rather, any
holder of the depositary shares may surrender the related depositary receipts,
together with any amounts payable by the holder in connection with the
conversion or the exchange, to the depositary with written instructions to cause
conversion or exchange of the preferred stock represented by the depositary
shares into or for such other securities. If only some of the depositary shares
are to be converted or exchanged, a new depositary receipt or receipts will be
issued for any depositary shares not to be converted or exchanged.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding. The deposit agreement may be
terminated by us upon not less than 60 days' notice whereupon the depositary
shall deliver or make available to each holder of depositary shares, upon
surrender of the depositary receipts held by such holder, the number of whole or
fractional shares of preferred stock represented by such receipts. The deposit
agreement will automatically terminate if (a) all outstanding depositary shares
have been redeemed or converted into or exchanged for any other securities into
or for which the underlying preferred stock are convertible or exchangeable or
(b) there has been a final distribution of the underlying stock in connection
with our liquidation, dissolution or winding up and the underlying stock has
been distributed to the holders of depositary receipts.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will also pay
charges of the depositary in connection with its duties in accordance with the
deposit agreement. Holders of depositary receipts will pay transfer and other
taxes and governmental and other charges, including a fee for any permitted
withdrawal of shares of underlying stock upon surrender of depositary receipts,
as are expressly provided in the deposit agreement to be for their accounts.
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Reports
The depositary will forward to holders of depositary receipts all reports
and communications from us that we deliver to the depositary and that we are
required to furnish to the holders of the underlying stock.
Limitation on Liability
Neither we nor the depositary will be liable if either of us is prevented
or delayed by law or any circumstance beyond our control in performing our
respective obligations under the deposit agreement. Our obligations and those of
the depositary will be limited to performance in good faith of our respective
duties under the deposit agreement. Neither we nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or underlying stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting underlying stock
for deposit, holders of depositary receipts or other persons believed to be
competent and on documents believed to be genuine.
In the event the depositary receives conflicting claims, requests or
instructions from any holders of depositary shares, on the one hand, and us, on
the other, the depositary will act on our claims, requests or instructions.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering notice to us of its
election to resign. We may remove the depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of the appointment. The successor depositary must be appointed within
60 days after delivery of the notice of resignation or removal and must be a
bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
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DESCRIPTION OF WARRANTS
The following is a general description of the terms of the warrants we may
issue from time to time. This description is subject to the detailed provisions
of a warrant agreement to be entered into between us and a warrant agent we
select at the time of issue and the description in the prospectus supplement
relating to the applicable series of warrants.
General
We may issue warrants to purchase debt securities, preferred stock,
depositary shares, common stock or any combination thereof. Such warrants may be
issued independently or together with any such securities and may be attached or
separate from such securities. We may issue each series of warrants under a
separate warrant agreement to be entered into between a warrant agent and us.
The warrant agent will act solely as our agent and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
warrants.
A prospectus supplement will describe the particular terms of any series of
warrants we may issue, including the following:
o the title of such warrants;
o the aggregate number of such warrants;
o the price or prices at which such warrants will be issued;
o the currency or currencies, including composite currencies, in which
the price of such warrants may be payable;
o the designation and terms of the securities purchasable upon exercise
of such warrants and the number of such securities issuable upon
exercise of such warrants;
o the price at which and the currency or currencies, including composite
currencies, in which the securities purchasable upon exercise of such
warrants may be purchased;
o the date on which the right to exercise such warrants shall commence
and the date on which such right will expire;
o whether such warrants will be issued in registered form or bearer
form;
o if applicable, the minimum or maximum amount of such warrants which
may be exercised at any one time;
o if applicable, the designation and terms of the securities with which
such warrants are issued and the number of such warrants issued with
each such security;
o if applicable, the date on and after which such warrants and the
related securities will be separately transferable;
o information with respect to book-entry procedures, if any;
o if applicable, a discussion of certain U.S. federal income tax
considerations; and
o any other terms of such warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
Amendments and Supplements to Warrant Agreement
We and the warrant agent may amend or supplement the warrant agreement for
a series of warrants without the consent of the holders of the warrants issued
thereunder to effect changes that are not inconsistent with the provisions of
the warrants and that do not materially and adversely affect the interests of
the holders of the warrants.
22
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The following is a general description of the terms of the stock purchase
contracts and stock purchase units we may issue from time to time.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid stock
purchase contracts. The description in the prospectus supplement will be
qualified in its entirety by reference to (1) the stock purchase contracts, (2)
the collateral arrangements and depositary arrangements, if applicable, relating
to such stock purchase contracts or stock purchase units and (3) if applicable,
the prepaid stock purchase contracts and the document pursuant to which such
prepaid stock purchase contracts will be issued.
Stock Purchase Contracts
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and obligating us to sell to holders, a fixed or
varying number of common stock, preferred stock or depositary shares at a future
date or dates. The consideration per share of common stock, preferred stock or
depositary shares may be fixed at the time that the stock purchase contracts are
issued or may be determined by reference to a specific formula set forth in the
stock purchase contracts. Any stock purchase contract may include anti-dilution
provisions to adjust the number of shares issuable pursuant to such stock
purchase contract upon the occurrence of certain events.
Stock Purchase Units
The stock purchase contracts may be issued separately or as a part of units
("stock purchase units"), consisting of a stock purchase contract and debt
securities, preferred securities or debt or equity obligations of third parties,
including U.S. Treasury securities, in each case securing holders' obligations
to purchase common stock, preferred stock or depositary shares under the stock
purchase contracts. The stock purchase contracts may require us to make periodic
payments to holders of the stock purchase units, or vice versa, and such
payments may be unsecured or prefunded and may be paid on a current or on a
deferred basis. The stock purchase contracts may require holders to secure their
obligations thereunder in a specified manner and in certain circumstances we may
deliver newly issued prepaid stock purchase contracts upon release to a holder
of any collateral securing such holder's obligations under the original stock
purchase contract. Any one or more of the above securities, common stock or the
stock purchase contracts or other collateral may be pledged as security for the
holders' obligations to purchase or sell, as the case may be, the common stock,
preferred stock or depositary shares under the stock purchase contracts. The
stock purchase contracts may also allow the holders, under certain
circumstances, to obtain the release of the security for their obligations under
such contracts by depositing with the collateral agent as substitute collateral
treasury securities with a principal amount at maturity equal to the collateral
so released or the maximum number of shares deliverable by such holders under
stock purchase contracts requiring the holders to sell common stock, preferred
stock or depositary shares to us.
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PLAN OF DISTRIBUTION
We may sell the securities covered by this prospectus in any of the
following three ways (or in any combination):
o through underwriters, dealers or remarketing firms;
o directly to one or more purchasers, including to a limited number of
institutional purchasers; or
o through agents.
Any such dealer or agent, in addition to any underwriter, may be deemed to
be an underwriter within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"). Any discounts or commissions received by an underwriter,
dealer, remarketing firm or agent on the sale or resale of securities may be
considered by the SEC to be underwriting discounts and commissions under the
Securities Act.
In addition, we may enter into derivative transactions with third parties,
or sell securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates, in
connection with such a transaction, the third parties may, pursuant to this
prospectus and the applicable prospectus supplement, sell securities covered by
this prospectus and the applicable prospectus supplement. If so, the third party
may use securities borrowed from us or others to settle such sales and may use
securities received from us to close out any related short positions. We may
also loan or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus supplement.
The terms of the offering of the securities with respect to which this
prospectus is being delivered will be set forth in the applicable prospectus
supplement and will include, among other things:
o the type of and terms of the securities offered;
o the price of the securities;
o the proceeds to us from the sale of the securities;
o the names of the securities exchanges, if any, on which the securities
are listed;
o the name of any underwriter, dealer, remarketing firm or agent and the
amount of securities underwritten or purchased by each of them;
o any over-allotment options under which underwriters may purchase
additional securities from us;
o any underwriting discounts, agency fees or other compensation to
underwriters or agents; and
o any discounts or concessions which may be allowed or reallowed or paid
to dealers.
If underwriters are used in the sale of securities, such securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by one or more
underwriters acting alone. Unless otherwise set forth in the applicable
prospectus supplement, the obligations of the underwriters to purchase the
securities described in the applicable prospectus supplement will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all such securities if any are purchased by them. Any public offering price and
any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers acting as principals are used in the sale of any securities,
such securities will be acquired by the dealers, as principals, and may be
resold from time to time in one or more transactions at varying prices to be
24
determined by the dealer at the time of resale. The name of any dealer and the
terms of the transaction will be set forth in the prospectus supplement with
respect to the securities being offered.
Securities may also be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms, which we refer to herein as the "remarketing firms,"
acting as principals for their own accounts or as our agents, as applicable. Any
remarketing firm will be identified and the terms of its agreement, if any, with
us and its compensation will be described in the applicable prospectus
supplement. Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act in connection with the securities remarketed
thereby.
The securities may be sold directly by us or through agents designated by
us from time to time. In the case of securities sold directly by us, no
underwriters or agents would be involved. Any agents involved in the offer or
sale of the securities in respect of which this prospectus is being delivered,
and any commissions payable by us to such agents, will be set forth in the
applicable prospectus supplement. Unless otherwise indicated in the applicable
prospectus supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
We may authorize agents, underwriters or dealers to solicit offers by
certain specified institutions to purchase the securities to which this
prospectus and the applicable prospectus supplement relates from us at the
public offering price set forth in the applicable prospectus supplement, plus,
if applicable, accrued interest, pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the future. Such
contracts will be subject only to those conditions set forth in the applicable
prospectus supplement, and the applicable prospectus supplement will set forth
the commission payable for solicitation of such contracts.
Agents, dealers, underwriters and remarketing firms may be entitled, under
agreements entered into with us to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
to payments they may be required to make in respect thereof. Agents, dealers,
underwriters and remarketing firms may be customers of, engage in transactions
with, or perform services for us or our subsidiaries in the ordinary course of
business.
Unless otherwise indicated in the applicable prospectus supplement, all
securities offered by this prospectus, other than our common stock that is
listed on the New York Stock Exchange, will be new issues with no established
trading market. We may elect to list any series of securities on an exchange,
and, in the case of our common stock, on any additional exchange, but, unless
otherwise specified in the applicable prospectus supplement, we shall not be
obligated to do so. In addition, underwriters will not be obligated to make a
market in any securities. No assurance can be given regarding the activity of
trading in, or liquidity of, any securities.
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Short covering transactions involve purchases of the
securities in the open market after the distribution is completed to cover short
positions. Penalty bids permit the underwriters to reclaim a selling concession
from a dealer when the securities originally sold by the dealer are purchased in
a covering transaction to cover short positions. Those activities may cause the
price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
LEGAL MATTERS
Unless otherwise indicated in a supplement to this prospectus, the validity
of the securities will be passed upon for us by Shearman & Sterling LLP, New
York, New York.
25
EXPERTS
The consolidated balance sheets of CIT Group Inc. and its subsidiaries as
of December 31, 2003, December 31, 2002 and September 30, 2002 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended December 31, 2003, the three months ended December 31, 2002, the year
ended September 30, 2002, the period from June 2, 2001 through September 30,
2001 and the period from January 1, 2001 through June 1, 2001 included in the
Current Report on Form 8-K dated September 21, 2004, incorporated by reference
herein and in the registration statement of which this prospectus forms a part,
have been so incorporated by reference in reliance on the reports of
PricewaterhouseCoopers LLP, independent registered public accounting firm, given
on the authority of said firm as experts in auditing and accounting.
26
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CIT Group Inc.
U.S. $3,000,000,000
CIT InterNotes'r'
Prospectus Supplement
October 29, 2004
[GRAPHIC]
[CIT LOGO]
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STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as....................... 'r'