-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H4Yfw5nzwo9FcDigdkELXj3McJK8ydHh3nXy9ScnsLvzc3y4jX8SdkSiouAL001T xJVj82Ey9RDS5p+TuUK6yg== 0000891092-99-000046.txt : 19990212 0000891092-99-000046.hdr.sgml : 19990212 ACCESSION NUMBER: 0000891092-99-000046 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990211 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIT GROUP INC CENTRAL INDEX KEY: 0000020388 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 132994534 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-71361 FILM NUMBER: 99529525 BUSINESS ADDRESS: STREET 1: 1211 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2125361390 MAIL ADDRESS: STREET 1: 1211 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 FORMER COMPANY: FORMER CONFORMED NAME: CIT GROUP HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CIT FINANCIAL CORP/OLD/ DATE OF NAME CHANGE: 19860512 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 As filed with the Securities and Exchange Commission on February 11, 1999 Registration No. 333-71361 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- AMENDMENT NO. 1 to FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 ---------- The CIT Group, Inc. (Exact name of registrant as specified in its charter) Delaware 13-2994534 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 1211 Avenue of the Americas New York, New York 10036 (212) 536-1390 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ---------- ERNEST D. STEIN Executive Vice President, General Counsel & Secretary The CIT Group, Inc. 650 CIT Drive Livingston, New Jersey 07039 (973) 740-5013 (Name, address, including zip code, and telephone number, including area code, of agent for service) ---------- Please send copies of all communications to: ANDRE WEISS Schulte Roth & Zabel LLP 900 Third Avenue New York, New York 10022 ---------- Approximate date of commencement of proposed sale to the public: When market conditions warrant after the effective date of this Registration Statement. ---------- If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] (continued on following page) (continued from previous page) CALCULATION OF REGISTRATION FEE ================================================================================ Proposed maximum Proposed Title of each offering maximum Amount of class of securities Amount to be price per aggregate registration to be registered registered unit offering price fee ================================================================================ Senior/Senior Subordinated Debt Securities .. $5,000,000,000(1)(2) 100%(3) $5,000,000,000(2)(3) $1,389,722(2) ================================================================================ (1) If any Debt Securities are issued (i) with a principal amount denominated in a foreign currency, such principal amounts as shall result in an aggregate initial offering price the equivalent of U.S. $5,000,000,000 at the time of initial offering, or (ii) at an original issue discount, such greater principal amount as shall result in an aggregate initial offering price of $5,000,000,000. (2) The amount of Debt Securities to be registered hereunder includes $1,000,000 of Debt Securities registered pursuant to the initial filing of this Registration Statement on January 28, 1999 for which a registration fee of $278.00 was previously paid by the Registrant. (3) Estimated solely for the purpose of determining the registration fee. ---------- The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ 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 or sale is not permitted. SUBJECT TO COMPLETION, DATED FEBRUARY 11, 1999 PROSPECTUS The CIT Group, Inc. Debt Securities ---------- We may issue up to an aggregate of $5.0 billion of debt securities in one or more series with the same or different terms. These debt securities may be either senior or senior subordinated in priority of payment and will be direct unsecured obligations. The terms that apply to the debt securities will be set forth in a supplement that accompanies this Prospectus when any of the debt securities are offered. Such information will also include the names of agents, dealers or underwriters involved in the sale, if any, and any applicable agent's commission, dealer's purchase price or underwriter's discount, if any, and the net proceeds from the sale after any agent's commission, dealer's purchase price or underwriter's discount. The terms of any debt securities offered to the public will depend on market conditions at the time of sale. We reserve the sole right to accept or reject, in whole or in part, any proposed purchase of any offered debt securities. For a description of possible indemnification arrangements with agents, dealers, and underwriters, see "Plan of Distribution." We urge you to carefully read this Prospectus and the Prospectus Supplement which will describe the specific terms of the offering before you make your investment decision. ---------- 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 , 1999. AVAILABLE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. We have also filed with the SEC a Registration Statement on Form S-3, to register the debt securities (the "Debt Securities") being offered in this Prospectus. This Prospectus, which forms part of the Registration Statement, does not contain all of the information included in the Registration Statement. For further information about us and the debt securities offered in this Prospectus, you should refer to the Registration Statement and its exhibits. You may read and copy any document we file with the SEC 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 operation of the Public Reference Room. We file our SEC materials electronically with the SEC, so you can also review our filings by accessing the web site maintained by the SEC at http://www.sec.gov. This site contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. Certain of our securities are listed on the New York Stock Exchange and reports and other information concerning us can also be inspected at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. You can also obtain more information about us by visiting our web site at http://www.citgroup.com. You should rely only on the information contained or incorporated by reference in this Prospectus. We have not authorized anyone to provide you with information different from that contained or incorporated by reference in this Prospectus. This Prospectus is an offer to sell, or a solicitation of offers to buy, Debt Securities only in jurisdictions where offers and sales are permitted. The information contained in this Prospectus is accurate only as of the date of this Prospectus, regardless of the time of delivery of this Prospectus or of any sale of Debt Securities. In this Prospectus, "the Company," "CIT," "we," "us" and "our" refer to The CIT Group, Inc. and its subsidiaries. DOCUMENTS INCORPORATED BY REFERENCE The SEC allows us to "incorporate by reference" the information we file with them, which means we can disclose important information to you by referring you to those documents. The information included in the following documents is incorporated by reference and is considered to be a part of this Prospectus. The most recent information that we file with the SEC automatically updates and supersedes more dated information. We have previously filed the following documents with the SEC and are incorporating them by reference into this Prospectus: 1. Our Annual Report on Form 10-K for the year ended December 31, 1997; 2. Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998, June 30, 1998 and September 30, 1998; and 3. Our current Reports on Form 8-K dated January 15, 1998, January 28, 1998, March 24, 1998, April 22, 1998, June 5, 1998, July 22, 1998, July 29, 1998, August 27, 1998, October 15, 1998, December 2, 1998 and January 28, 1999. We also incorporate by reference all documents subsequently filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until all of the Debt Securities being offered in this Prospectus are sold. We will provide without charge to each person to whom a Prospectus is delivered, including any beneficial owner, a copy of any or all of the information that has been incorporated by reference in this Prospectus but not delivered with this Prospectus. If you would like to obtain this information from us, please direct your request, either in writing or by telephone, to Jeffrey Simon, Senior Vice President-Investor Relations, The CIT Group, Inc., 1211 Avenue of the Americas, New York, New York 10036, telephone (212) 536-1390. 2 THE COMPANY The Company is a leading diversified finance organization offering secured commercial and consumer financing primarily in the United States to smaller, middle-market and larger businesses and to individuals through a nationwide distribution network. The Company commenced operations in 1908 and has developed a broad array of "franchise" strategic business units that focus on specific industries, asset types and markets, which are balanced by client, industry and geographic diversification. The Company believes that its strong credit risk management expertise and long-standing commitment to its markets and its customers provides it with a competitive advantage. The Company's principal executive offices are at 1211 Avenue of the Americas, New York, New York 10036 and the telephone number is (212) 536-1390. In November 1997, the Company issued 36,225,000 shares of Class A Common Stock in an initial public offering. In November 1998, the Company filed a Registration Statement on behalf of its largest stockholder, The Dai-Ichi Kangyo Bank, Limited ("DKB"), to offer 49,000,000 shares of Class A Common Stock. Prior to the offering, DKB held approximately 94% of the combined voting power and approximately 77% of the economic interest of all of the Company's outstanding Common Stock. Following the offering, DKB now holds approximately 44% of the voting power and economic interest of the Company's outstanding Common Stock. DKB continues to be the Company's largest stockholder and will be able to exercise significant influence over us. The Company operates through three business segments: two commercial segments, Equipment Financing and Leasing and Commercial Finance and a consumer segment. Each segment conducts its operations through strategic business units. Commercial The Company's commercial operations are diverse and provide a wide range of financing and leasing products to small, midsize and larger companies across a wide variety of industries, including aerospace, retailing, construction, rail, machine tool, business aircraft, apparel, textiles, electronics and technology, chemicals, manufacturing and transportation. The secured lending, leasing and factoring products of the Company's commercial operations 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 and factoring, debtor-in-possession and turnaround financing and acquisition and expansion financing. Equipment Financing and Leasing The Company's Equipment Financing and Leasing operations are conducted through two strategic business units: (i) The CIT Group/Equipment Financing ("Equipment Financing"), which focuses on the broad distribution of its products through manufacturers, dealers/distributors, intermediaries and direct calling primarily with the construction, transportation and machine tool industries; and (ii) The CIT Group/Capital Finance ("Capital Finance"), which focuses on the direct marketing of customized transactions relating primarily to commercial aircraft and rail equipment. Equipment Financing and Capital Finance personnel have extensive expertise in managing equipment over its full life cycle. For example, Capital Finance has the expertise to repossess commercial aircraft, if necessary, to obtain required maintenance and repairs for such aircraft, and to recertify such aircraft with appropriate authorities. Equipment Financing's and Capital Finance's equipment and industry expertise enable them to evaluate effectively residual value risk and to manage equipment and residual value risks by locating alternative equipment users and/or purchasers in order to minimize such risk and/or the risk of equipment remaining idle for extended periods of time or in amounts that could materially impact profitability. Equipment Financing Equipment Financing is the largest of the Company's strategic business units with total financing and leasing assets of $8.7 billion at September 30, 1998, representing 38.3% of the Company's total financing and leasing assets. Equipment Financing offers secured equipment financing and leasing products, including direct secured loans, leases, revolving lines of credit, operating leases, sale and leaseback arrangements, vendor financing and specialized wholesale and retail financing for distributors and manufacturers. 3 Equipment Financing is a leading nationwide asset-based equipment lender. At September 30, 1998, its portfolio included significant outstandings to customers in a number of different industries, with manufacturing being the largest as a percentage of financing and leasing assets, followed by construction and transportation. The Equipment Financing portfolio at September 30, 1998 included many different types of equipment, including construction, transportation and manufacturing equipment and business aircraft. Equipment Financing originates its products through direct calling on customers and through its relationships with manufacturers, dealers/distributors and intermediaries that have leading or significant marketing positions in their respective industries. This provides Equipment Financing with efficient access to equipment end-users in many industries across a variety of equipment types. Capital Finance Capital Finance had financing and leasing assets of $3.9 billion at September 30, 1998, which represented 16.9% of the Company's total financing and leasing assets. Capital Finance specializes in customized secured financing, including leases, loans, operating leases, single investor leases, debt and equity portions of leveraged leases, and sale and leaseback arrangements relating primarily to end-users of commercial aircraft and railcars. Typical Capital Finance customers are middle-market to larger-sized companies. Capital Finance has provided financing to commercial airlines for over 30 years. The Capital Finance aerospace portfolio includes most of the leading U.S. and foreign commercial airlines. Capital Finance has developed strong relationships with most major airlines and all major aircraft and aircraft engine manufacturers, which provide Capital Finance with access to technical information. Such access supports customer service, and provides opportunities to finance new business. Capital Finance has over 25 years experience in financing the rail industry, contributing to its knowledge of asset values, industry trends, product structuring and customer needs. To strengthen its position in the rail financing market, Capital Finance formed a dedicated rail equipment group in 1994 and currently maintains relationships with several leading railcar manufacturers in the United States. The Capital Finance rail portfolio includes all of the U.S. and Canadian Class I railroads and numerous shippers. The Capital Finance operating lease fleet includes primarily covered hopper cars used to ship grain and agricultural products and plastic pellets, gondola cars for coal, steel coil and mill service, open hopper cars for coal and aggregates, center beam flat cars for lumber, and boxcars for paper and auto parts. New business is generated by Capital Finance through (i) direct calling efforts with equipment end-users and borrowers, including major airlines, railroads and shippers, (ii) relationships with aerospace, railcar and other manufacturers and (iii) intermediaries and other referral sources. Commercial Finance The Company's Commercial Finance operations are conducted through three strategic business units: (i) The CIT Group/Business Credit ("Business Credit"), which provides secured financing primarily to middle-market to larger-sized borrowers; (ii) The CIT Group/Credit Finance ("Credit Finance"), which provides secured financing primarily to smaller-sized to middle-market borrowers; and (iii) The CIT Group/Commercial Services which offers secured lending and receivables/collection management products to small and mid-size companies. Business Credit Financing and leasing assets of Business Credit totaled $1.5 billion at September 30, 1998 and represented 6.8% of the Company's total financing and leasing assets. Business Credit offers senior revolving and term loans secured by accounts receivable, inventories and fixed assets to middle-market and larger-sized companies. Such loans are used by clients primarily for growth, expansion, acquisitions, refinancings and debtor-in-possession and turnaround financings. Business Credit sells and purchases participation interests in such loans to and from other lenders. Through its variable interest rate senior revolving and term loan products, Business Credit meets its customers' financing needs for working capital, growth, acquisition and other financing situations otherwise not met through bank or other unsecured financing alternatives. Business Credit typically structures financings 4 on a fully secured basis, though, from time to time, it may look to a customer's cash flow to support a portion of the credit facility. Revolving and term loans are made on a variable interest rate basis based on published indexes such as LIBOR or a prime rate of interest. Business is originated through direct calling efforts and intermediary and referral sources. Business Credit has focused on increasing the proportion of direct business origination to improve its ability to capture or retain refinancing opportunities and to enhance finance income. Credit Finance Financing and leasing assets of Credit Finance totaled $1.0 billion at September 30, 1998 and represented 4.6% of the Company's total financing and leasing assets. Credit Finance offers revolving and term loans to smaller-sized and middle-market companies secured by accounts receivable, inventories and fixed assets. Such loans are used by clients for working capital, refinancings, acquisitions, leveraged buyouts, reorganizations, restructurings, turnarounds and Chapter 11 financing and confirmation plans. Credit Finance sells participation interests in such loans to other lenders and purchases participation interests in such loans originated by other lenders. Credit Finance borrowers are generally smaller and cover a wider range of credit quality than those of Business Credit. While both Business Credit and Credit Finance offer financing secured by accounts receivable, inventories and fixed assets, Credit Finance places a higher degree of reliance on collateral and is generally more focused on credit monitoring in its business. Business is originated through the sales and regional offices and is also developed through intermediaries and referral relationships and through direct calling efforts. Credit Finance has developed long-term relationships with selected finance companies, banks and other lenders and with many diversified referral sources. Commercial Services The CIT Group/Commercial Services ("Commercial Services") factoring operation had total financing and leasing assets of $2.8 billion at September 30, 1998, which represented 12.1% of the Company's total financing and leasing assets. Commercial Services offers a full range of domestic and international customized credit protection and lending services that include factoring, working capital and term loans, receivable management outsourcing, bulk purchases of accounts receivable, import and export financing and letter of credit programs. Commercial Services provides financing to its clients through the purchase of accounts receivables owed to clients by their customers, usually on a non-recourse basis, as well as by guaranteeing amounts due under letters of credit issued to the clients' suppliers which are collateralized by accounts receivable and other assets. The purchase of accounts receivable is traditionally known as "factoring" and results in the payment by the client of a factoring fee, generally a percentage of the factored sales volume. When Commercial Services "factors" (i.e., purchases) a customer invoice from a client, it records the customer receivable as an asset and also establishes a liability for the funds due to the client ("credit balances of factoring clients"). Commercial Services also may advance funds to its clients prior to collection of receivables, typically in an amount up to 80% of eligible accounts receivable (as defined for that transaction), charging interest on such advances (in addition to any factoring fees) and satisfying such advances from receivables collections. Clients use Commercial Services' products and services for various purposes, including improving cash flow, mitigating or reducing the risk of bad debt chargeoffs, increasing sales, improving management information and converting the high fixed cost of operating a credit and collection department into a lower and variable expense based on sales volume. Commercial Services generates business regionally from a variety of sources, including direct calling and referrals from existing clients and other referral sources. Consumer The Company's consumer business is focused primarily on home equity lending through The CIT Group/Consumer Finance ("Consumer Finance") and on retail sales financing secured by recreation vehicles, manufactured housing and recreational boats through The CIT Group Sales Financing ("Sales Financing"). 5 Sales Financing also provides contract servicing for securitization trusts and other third parties through a centralized Asset Service Center ("ASC"). Additionally, in the ordinary course of business, Consumer Finance and Sales Financing purchase loans and portfolios of loans from banks, thrifts and other originators of consumer loans. Consumer Finance Financing and leasing assets of Consumer Finance, which aggregated $2.1 billion at September 30, 1998, represented 9.3% of the Company's total financing and leasing assets. The managed assets of Consumer Finance were $2.8 billion at September 30, 1998, or 11.0% of total managed assets. Consumer Finance commenced operations in December 1992. Its products include both fixed and variable rate closed-end loans and variable rate lines of credit. The lending activities of Consumer Finance consist primarily of originating, purchasing and selling loans secured by first or second liens on detached, single family residential properties. Such loans are primarily made for the purpose of consolidating debts, refinancing an existing mortgage, funding home improvements, paying education expenses and, to a lesser extent, purchasing a home, among other reasons. Consumer Finance originates loans through brokers and correspondents as well as on a direct marketing basis. The Company believes that its network of Consumer Finance offices, located in most major U.S. markets, enables it to provide a competitive, extensive product offering complemented by high levels of service delivery. Through experienced lending professionals and automation, Consumer Finance provides rapid turnaround time from application to loan funding, a characteristic considered to be critical by its broker and correspondent relationships. Sales Financing The financing and leasing assets of Sales Financing, which aggregated $2.7 billion at September 30, 1998, represented 11.7% of the Company's total financing and leasing assets. The managed assets of Sales Financing were $4.6 billion at September 30, 1998, or 18.1% of total managed assets. The lending activities of Sales Financing consist primarily of providing nationwide retail financing for the purchase of new and used recreation vehicles, manufactured housing and recreational boats. During 1997, Sales Financing began providing wholesale manufactured housing and recreational boat inventory financing directly to dealers. Sales Financing originates loans predominately through recreation vehicle, manufactured housing and recreational boat dealer, manufacturer and broker relationships. Servicing The ASC centrally services and collects substantially all of the Company's consumer finance receivables including loans originated or purchased by Sales Financing or Consumer Finance, as well as loans originated or purchased and subsequently securitized with servicing retained. The servicing portfolio also includes loans owned by third parties that are serviced by Sales Financing for a fee on a "contract" basis. At September 30, 1998, the consumer finance servicing portfolio aggregated approximately 285,600 loans, including $1.1 billion of finance receivables serviced for third parties. Securitization Program The Company funds its balance sheet assets using its access to the commercial paper, medium-term note and capital markets. In an effort to broaden its funding sources and to provide an additional source of liquidity, the Company, in 1992, established a program to opportunistically access the public and private asset backed securitization markets. Current products utilized in the Company's program include consumer loans secured by recreation vehicles, recreational boats and residential real estate. The Company has sold $4.0 billion of finance receivables since the inception of the Company's asset backed securitization program and the remaining pool balance at September 30, 1998 was $2.6 billion or 10.2% of the Company's total managed assets. Under a typical asset backed securitization, the Company sells a "pool" of secured loans to a special purpose entity, that, in turn, issues certificates and/or notes that are collateralized by the loan pool and that entitle the holders thereof to participate in certain loan pool cash flows. The Company retains the servicing of the securitized loans, for which it is paid a fee, and also participates in certain "residual" loan pool cash flows (cash flows after payment of principal and interest to certificate and/or note holders and after credit losses). At the date of securitization, the Company estimates the "residual" cash flows to be received over the life of the 6 securitization, records the present value of these cash flows as an interest-only receivable, or I/O (a retained interest in the securitization), and recognizes a gain. The I/O is then amortized over the estimated life of the related loan pool. The Company, in its estimation of residual cash flows and related I/Os, inherently employs a variety of financial assumptions, including loan pool credit losses, prepayment speeds and discount rates. These assumptions are empirically supported by both the Company's historical experience and anticipated trends relative to the particular products securitized. Subsequent to the recognition of I/Os, the Company regularly reviews such assets for valuation impairment. These reviews are performed on a disaggregated basis. Fair values of I/Os are calculated utilizing current and anticipated credit losses, prepayment speeds and discount rates and are then compared to the Company's carrying values. Carrying value of the Company's I/O's at September 30, 1998 was $165.4 million and approximated fair value. Equity Investments The CIT Group/Equity Investments and its subsidiary The CIT Group/Venture Capital (together "Equity Investments") originate and participate in merger and acquisition transactions, purchase private equity and equity-related securities and arrange transaction financing. Equity Investments also invests in emerging growth opportunities in selected industries, including the life sciences, information technology, communications and consumer products industries. Equity Investments made its first investment in 1991 and had total investments of $87.3 million at September 30, 1998. Competition The Company's markets are highly competitive and are characterized by competitive factors that vary based upon product and geographic region. The Company's competitors include captive and independent finance companies, commercial banks and thrift institutions, industrial banks, leasing companies, manufacturers and vendors. Substantial national financial services networks have been formed by insurance companies and bank holding companies that compete with the Company. On a local level, community banks and smaller independent finance and/or mortgage companies are a competitive force. Some competitors have substantial local market positions. Many of the competitors of the Company are large companies that have substantial capital, technological and marketing resources. Some of these competitors are larger than the Company and may have access to capital at a lower cost than the Company. Also, the Company's competitors include businesses that are not related to bank holding companies and, accordingly, may engage in activities such as short-term equipment rental and servicing, which currently are prohibited to the Company. Competition has been enhanced in recent years by an improving economy and growing marketplace liquidity. The markets for most of the Corporation's products are characterized by a large number of competitors. However, with respect to some of the Corporation's products, competition is more concentrated. The Company competes primarily on the basis of pricing, terms, and structure, with other primary competitive factors including industry experience and client service and relationships. From time to time, competitors of the Company seek to compete aggressively on the basis of these factors and the Company may lose market share to the extent it is unwilling to match its competitors' pricing and terms in order to maintain its interest margins and/or credit standards. Other primary competitive factors include industry experience and client service and relationships. In addition, demand for the Company's products with respect to certain industries, such as the commercial airline industry, will be affected by demand for such industry's services and products and by industry regulations. Regulation DKB is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the "Act"), and is registered as such with the Federal Reserve. As a result, the Company is subject to certain provisions of the Act and is subject to examination by the Federal Reserve. In general, the Act limits the activities in which a bank holding company and its subsidiaries may engage to those of banking or managing or controlling banks or performing services for their subsidiaries and to continuing activities which the Federal 7 Reserve has determined to be "so closely related to banking or managing or controlling banks as to be a proper incident thereto." The Company's current principal business activities constitute permissible activities for a nonbank subsidiary of a bank holding company. In addition to being subject to the Act, DKB is subject to Japanese banking laws, regulations, guidelines and orders that affect permissible activities of the Company. DKB and the Company have entered into an agreement in order to facilitate DKB's compliance with applicable U.S. and Japanese banking laws, or the regulations, interpretations, policies, guidelines, requests, directives and orders of the applicable regulatory authorities or the staffs thereof or a court (collectively, the "Banking Laws"). That agreement prohibits the Company from engaging in any new activity or entering into any transaction for which prior approval, notice or filing is required under Banking Laws without the required prior approval having been obtained, prior notice having been given or made by DKB and accepted or such filings having been made. The Company is also prohibited from engaging in any activity as would cause DKB, the Company or any affiliate of DKB or the Company to violate any Banking Laws. In the event that, at any time, it is determined by DKB that any activity then conducted by the Company is prohibited by any Banking Law, the Company is required to take all reasonable steps to cease such activity. Under the terms of that agreement, DKB is responsible for making all determinations as to compliance with applicable Banking Laws. Two of the subsidiaries of the Company are investment companies organized under Article XII of the New York Banking Law and, as a result, the activities of these subsidiaries are restricted by state banking laws and these subsidiaries are subject to examination by state banking examiners. Also, any person or entity seeking to purchase "control" of the Company would be required to apply for and obtain the prior approval of the Superintendent of Banks of the State of New York. "Control" is presumed to exist if a person or entity would, directly or indirectly, own, control or hold (with power to vote) 10% or more of the voting stock of the Company. The operations of the Company are subject, in certain instances, to supervision and regulation by state and federal governmental authorities and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which, among other things, (i) regulate credit granting activities, (ii) establish maximum interest rates, finance charges and other charges, (iii) regulate customers' insurance coverages, (iv) require disclosures to customers, (v) govern secured transactions and (vi) set collection, foreclosure, repossession and claims handling procedures and other trade practices. The Company's consumer finance business is subject to detailed enforcement and supervision by state authorities under legislation and regulations which generally require licensing of the lender. Licenses are renewable and may be subject to suspension or revocation for violations of such laws and regulations. Applicable state laws generally regulate interest rates and other charges and require certain disclosures. In addition, most states have other laws, public policies and general principles of equity relating to the protection of consumers, unfair and deceptive practices and practices that may apply to the origination, servicing and collection of consumer finance loans. Depending on the provision of the applicable law and the specific facts and circumstances involved, violations of these laws, policies and principles may limit the Company's ability to collect all or part of the principal of or interest on consumer finance loans, may entitle the borrower to a refund of amounts previously paid and, in addition, could subject the Company to damages and administrative sanctions. Federal laws preempt state usury ceilings on first mortgage loans and state laws which restrict various types of alternative dwelling secured receivables, except in those states which have specifically opted out, in whole or in part, of such preemption. Loans may also be subject to other federal laws, including: (i) the Federal Truth-in-Lending Act and Regulation Z promulgated thereunder, which require certain disclosures to borrowers and other parties regarding loan terms; (ii) the Real Estate Settlement Procedures Act and Regulation X promulgated thereunder, which require certain disclosures to borrowers and other parties regarding certain loan terms and regulates certain practices with respect to such loans; (iii) the Equal Credit Opportunity Act and Regulation B promulgated thereunder, which prohibit discrimination in the extension of credit and administration of loans on the basis of age, race, color, sex, religion, marital status, national origin, receipt of public assistance or the exercise of any right under the Consumer Credit Protection Act; (iv) the Fair Credit Reporting Act, which regulates the use and reporting of information related to a borrower's credit experience; and (v) the Fair Housing Act, which prohibits discrimination on the basis of, among other things, familial status or handicap. 8 Depending on the provisions of the applicable law and the specific facts and circumstances involved, violations of these laws may limit the ability of the Company to collect all or part of the principal of or interest on applicable loans, may entitle the borrower to rescind the loan and any mortgage or to obtain a refund of amounts previously paid and, in addition, could subject the Company to damages and administrative sanctions. The above federal and state regulation and supervision could limit the Company's discretion in operating its businesses. For example, state laws often establish maximum allowable finance charges for certain consumer and commercial loans. Noncompliance with applicable statutes or regulations could result in the suspension or revocation of any license or registration at issue, as well as the imposition of civil fines and criminal penalties. No assurance can be given that applicable laws or regulations will not be amended or construed differently, that new laws and regulations will not be adopted or that interest rates the Company charges will not rise to state maximum levels, the effect of any of which could be to adversely affect the business or results of operations of the Company. Under certain circumstances, the Federal Reserve has the authority to issue orders which could restrict the ability of the Company to engage in new activities or to acquire additional businesses or to acquire assets outside of the normal course of business. SUMMARY OF FINANCIAL INFORMATION The following is a summary of certain financial information of the Company and its subsidiaries. The data for the years ended December 31, 1997, 1996 and 1995 were obtained from the Company's audited consolidated financial statements contained in the Company's 1997 Annual Report on Form 10-K. The data for the years ended December 31, 1994 and 1993 were obtained from audited consolidated statements of the Company that are not incorporated by reference in this Prospectus. The data for the quarters ended September 30, 1998 and 1997 were obtained from the Company's unaudited condensed consolidated financial statements contained in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. This summary should be read in conjunction with the financial information of the Company included in the reports referred to under "Documents Incorporated By Reference." Results for the nine-month period ended September 30, 1998 are not necessarily indicative of operating results that may be expected for a full year.
Nine Months Ended September 30, Years Ended December 31, ------------------- ------------------------------------------------------- 1998 1997 1997 1996 1995 1994 1993 -------- -------- -------- -------- -------- -------- -------- (Dollar Amounts in Millions) Finance income ................ $1,481.4 $1,352.0 $1,824.7 $1,646.2 $1,529.2 $1,263.8 $1,111.9 Interest expense .............. 766.2 693.7 937.2 848.3 831.5 614.0 508.0 -------- -------- -------- -------- -------- -------- -------- Net finance income ........... 715.2 658.3 887.5 797.9 697.7 649.8 603.9 Fees and other income ......... 196.1 186.0 247.8 244.1 184.7 174.4 133.8 Gain on Sale of Equity interest acquired in loan workout ... -- 58.0 58.0 -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Operating revenue ............ 911.3 902.3 1,193.3 1,042.0 882.4 824.2 737.7 -------- -------- -------- -------- -------- -------- -------- Salaries and employee benefits 184.4 185.3 253.5 223.0 193.4 185.8 152.1 General operating expenses .... 126.6 128.8 174.9 170.1 152.3 152.1 130.1 -------- -------- -------- -------- -------- -------- -------- Salaries and general operating expenses ................... 311.0 314.1 428.4 393.1 345.7 337.9 282.2 Provision for credit losses ... 75.0 91.8 113.7 111.4 91.9 96.9 104.9 Depreciation on operating lease equipment ............ 121.4 108.3 146.8 121.7 79.7 64.4 39.8 Minority interest in subsidiary trust holding solely debentures of the company .. 14.4 11.5 16.3 -- -- -- -- -------- -------- -------- -------- -------- -------- -------- Operating expenses ......... 521.8 525.7 705.2 626.2 517.3 499.2 426.9 -------- -------- -------- -------- -------- -------- -------- Income before provision for income taxes ............... 389.5 376.6 488.1 415.8 365.1 325.0 310.8 Provision for income taxes .... 138.0 137.5 178.0 155.7 139.8 123.9 128.5 -------- -------- -------- -------- -------- -------- -------- Net income ................. $ 251.5 $ 239.1 $ 310.1 $ 260.1 $ 225.3 $ 201.1 $ 182.3 ======== ======== ======== ======== ======== ======== ========
9 The following table sets forth the ratio of earnings to fixed charges for each of the periods indicated. Ratios of Earnings to Fixed Charges
Nine Months Ended September 30, Years Ended December 31, ------------------ ------------------------------------------------ 1998 1997 1997 1996 1995 1994 1993 ------ ------ ------ ------ ------ ------ ------ Ratio of earnings to fixed charges 1.49 1.53 1.51 1.49 1.44 1.52 1.60
The ratios of earnings to fixed charges have been computed in accordance with requirements of the Commission's Regulation S-K. Earnings consist of income from continuing operations 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 the portion of rentals considered to represent an appropriate interest factor. USE OF PROCEEDS The net proceeds from the sale of the Debt Securities offered hereby will provide additional working funds for the Company and its subsidiaries and will be used initially to reduce short-term borrowings (currently represented by commercial paper) incurred primarily for the purpose of originating and purchasing receivables in the ordinary course of business. The amounts which the Company itself may use in connection with its business and which the Company may furnish to particular subsidiaries are not now determinable. From time to time the Company may also use the proceeds to finance the bulk purchase of receivables and/or the acquisition of other finance-related businesses. DESCRIPTION OF DEBT SECURITIES General The Debt Securities will constitute either Superior Indebtedness or Senior Subordinated Indebtedness of the Company. The senior debt securities (the "Senior Securities") may be issued from time to time in one or more separate, unlimited series under one or more separate indentures, each substantially in the form of a global indenture (each such indenture and indentures supplemental thereto are hereinafter referred to as a "Senior Indenture", and collectively as the "Senior Indentures"), in each case between the Company and a banking institution organized under the laws of the United States or one of the states thereof (each such banking institution is hereinafter referred to as a "Senior Trustee", and collectively as the "Senior Trustees"). The senior subordinated debt securities (the "Senior Subordinated Securities") may be issued from time to time as either (i) one or more separate, unlimited series of Debt Securities constituting senior subordinated indebtedness under one or more separate indentures, each substantially in the form of a global indenture (each such indenture and indentures supplemental thereto are hereinafter referred to as a "Senior Subordinated Indenture", and collectively as the "Senior Subordinated Indentures"), in each case between the Corporation and a banking institution organized under the laws of the United States or one of the states thereof (each such banking institution is hereinafter referred to as a "Senior Subordinated Trustee", and collectively as the "Senior Subordinated Trustees"), or (ii) one or more separate, unlimited series of Debt Securities constituting senior subordinated indebtedness under the Senior Subordinated Indentures which is intended to qualify as "Tier II Capital" under the rules and regulations of the Ministry of Finance of Japan and the risk-based capital guidelines of the Federal Reserve Board, if such series have the limited rights of acceleration described under "Description of Debt Securities--Senior Subordinated Securities" and "Description of Debt Securities--Events of Default". The Senior Indentures and the Senior Subordinated Indentures are sometimes herein referred to as the "Indentures", and the Senior Trustees and the Senior Subordinated Trustees are sometimes herein referred to as the "Trustees". The statements under this heading are subject to the detailed provisions of each Indenture. A form of global Senior Indenture and a form of global Senior Subordinated Indenture are filed as exhibits to the Registration Statement of which this Prospectus is a part. Wherever particular provisions of an Indenture or terms defined therein are referred to, such provisions or definitions are incorporated by reference as a part of the statements made and the statements are qualified in their entirety by such reference. The Debt Securities to be issued pursuant to this Prospectus, comprised of the Senior Securities and the Senior Subordinated Securities, are limited to an aggregate initial offering price of $5.0 billion (or (i) if the principal of the Debt Securities is denominated in a foreign currency, the equivalent thereof at the time of 10 offering, or (ii) if the Debt Securities are issued at an original issue discount, such greater principal amount as shall result in an aggregate initial offering price of $5.0 billion). The Senior Indentures do not limit the amount of Debt Securities or other unsecured Superior Indebtedness which may be issued thereunder or limit the amount of subordinated debt, secured or unsecured, which may be issued by the Company. Except as described herein under "Description of Debt Securities--Certain Restrictive Provisions", the Senior Subordinated Indentures do not limit the amount of Debt Securities or other unsecured Senior Subordinated Indebtedness which may be issued thereunder or limit the amount of Junior Subordinated Indebtedness, secured or unsecured, which may be issued by the Company. At September 30, 1998, approximately $200 million of Senior Subordinated Indebtedness was issued and outstanding. At September 30, 1998, under the most restrictive provisions of the Senior Subordinated Indentures, the Company could issue up to approximately $2.4 billion of additional Senior Subordinated Indebtedness. The Debt Securities will be issued in fully registered form and, with regard to each issue of securities in respect of which this Prospectus is being delivered, in the manner and in the denominations set forth in the accompanying Prospectus Supplement. The Debt Securities may be issued in one or more separate series of Senior Securities and/or one or more separate series of Senior Subordinated Securities, in each case with the same or various maturities at par or at a discount. Offered Debt Securities bearing no interest or interest at a rate which at the time of issuance is below market rates ("Original Issue Discount Securities") will be sold at a discount (which may be substantial) below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such Original Issue Discount Securities will be described in the Prospectus Supplement relating thereto. Reference is made to the Prospectus Supplement for the following terms of the Offered Debt Securities: (i) the designation, aggregate principal amount, and authorized denominations of the Offered Debt Securities; (ii) the percentage of their principal amount at which such Offered Debt Securities will be issued; (iii) the date or dates on which the Offered Debt Securities will mature; (iv) the rate or rates (which may be fixed or variable) per annum, if any, at which the Offered Debt Securities will bear interest, or the method of determining such rate or rates, or the original issue discount, if applicable; (v) the times at which any such interest will be payable and the date from which any such interest shall accrue; (vi) provisions for a sinking, purchase, or other analogous fund, if any; (vii) any redemption terms; (viii) the designation of the office or agency of the Company in the Borough of Manhattan, The City of New York, where the Offered Debt Securities may be presented for payment and may be transferred or exchanged by the registered holders thereof or by their attorneys duly authorized in writing; (ix) if other than U.S. dollars, the currency (including composite currencies) in which the principal of, premium, if any, and/or interest on the Offered Debt Securities will be payable; (x) any currency (including composite currencies) other than the stated currency of the Offered Debt Securities in which the principal of, premium, if any, and/or interest on the Offered Debt Securities may, at the election of the Company or the holders, be payable, and the periods within which, and terms and conditions upon which, such election may be made; (xi) if the amount of payments of principal of, premium, if any, and/or interest on the Offered Debt Securities may be determined with reference to an index, the manner in which such amounts will be determined; (xii) whether the Offered Debt Securities are Senior Securities or Senior Subordinated Securities, or include both; and (xiii) other specific terms. Principal, premium, if any, and interest, if any, less applicable withholding taxes, if any, will be payable at the office or agency of the Company maintained for such purpose in the Borough of Manhattan, The City of New York, provided that payment of interest, if any, less applicable withholding taxes, if any, may be made at the option of the Company by check mailed to the address of the person entitled thereto as it appears on the register of the Company. (Section 2.04 of the Indentures.) The Indentures provide that the Debt Securities will be transferable by the registered holders thereof, or by their attorneys duly authorized in writing, at the office or agency of the Company maintained for such purpose in such cities as will be designated in the Prospectus Supplement, in the manner and subject to the limitations provided in the Indentures, and upon surrender of the Debt Securities. No service charge will be made for any registration of transfer or exchange of the Debt Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in connection therewith. (Section 2.06 of the Indentures.) 11 "Indebtedness", when used in the definition of the terms "Superior Indebtedness", "Senior Subordinated Indebtedness", and "Junior Subordinated Indebtedness", means all obligations which in accordance with generally accepted accounting principles should be classified as liabilities upon a balance sheet and in any event includes all debt and other similar monetary obligations, whether direct or guaranteed. "Superior Indebtedness" means all Indebtedness of the Company that is not by its terms subordinate or junior to any other indebtedness of the Company. As discussed below, the Senior Securities constitute Superior Indebtedness. "Senior Subordinated Indebtedness" means all Indebtedness of the Company that is subordinate only to Superior Indebtedness. As discussed below, the Senior Subordinated Securities constitute Senior Subordinated Indebtedness. "Junior Subordinated Indebtedness" means all Indebtedness of the Company that is subordinate to both Superior Indebtedness and Senior Subordinated Indebtedness. Senior Securities The Senior Securities will be direct, unsecured obligations of the Company, and will constitute Superior Indebtedness issued on a parity with the other Superior Indebtedness of the Company. At September 30, 1998, approximately $17.6 billion of outstanding Superior Indebtedness was reflected in the Company's consolidated unaudited balance sheet. The Senior Securities will be senior to all Senior Subordinated Indebtedness, including the Senior Subordinated Securities, which at September 30, 1998, totaled $200 million outstanding, and Junior Subordinated Indebtedness, none of which was outstanding at September 30, 1998. The subordination provisions applicable to the Senior Subordinated Securities are discussed below under "Description of Debt Securities--Senior Subordinated Securities". Senior Subordinated Securities The Senior Subordinated Securities will be direct, unsecured obligations of the Company subordinated as to principal, premium, if any, and interest to the prior payment in full of all Superior Indebtedness of the Company, including the Senior Securities. In the event of any insolvency, bankruptcy, receivership, liquidation, reorganization, or similar proceedings or proceedings for voluntary liquidation, dissolution, or other winding up of the Company, whether or not involving insolvency or bankruptcy proceedings, the holders of Superior Indebtedness will first be paid in full before any payment on account of principal, premium, if any, or interest is made on the Senior Subordinated Securities. An event of default under and/or acceleration of Superior Indebtedness does not in itself result in the suspension of payments on Senior Subordinated Securities. However, in the event the Senior Subordinated Securities are declared due and payable before their expressed maturity because of the occurrence of one of the events of default specified in the Senior Subordinated Indentures, holders of the Senior Subordinated Securities will be entitled to payment only after payment in full of Superior Indebtedness or provision for such payment is made. By reason of the foregoing subordination, in the event of insolvency, holders of Superior Indebtedness may recover more, ratably, than the holders of the Senior Subordinated Securities. The Senior Subordinated Securities are intended to rank in all respects on a parity with all other Senior Subordinated Indebtedness, including the Company's outstanding Senior Subordinated Securities, and superior in right of payment to all Junior Subordinated Indebtedness and all outstanding capital stock. Senior Subordinated Securities of certain series may meet the requirements necessary for such series to be considered "Tier II Capital" under the rules and regulations of the Ministry of Finance of Japan and the risk-based capital guidelines of the Federal Reserve Board. If it is intended that any series be considered Tier II Capital, such series of the Senior Subordinated Securities may provide that the maturity date of any such series so designated by the Company in a supplement hereto will be subject to acceleration only in the event of certain circumstances related to the insolvency of the Company. 12 Certain Restrictive Provisions Except as set forth in the next sentence, no Indenture limits the amount of other securities which may be issued by the Company or its subsidiaries, but each contains a covenant that the Company will not pledge or otherwise subject to any lien ("Liens") any of its property or assets to secure indebtedness for money borrowed, incurred, issued, assumed or guaranteed by the Company, except Liens in favor of any subsidiary of the Company; purchase money Liens existing on property, assets, shares of capital stock or indebtedness hereafter acquired; Liens on any property or assets existing at the time of acquisition by the Company; 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; Liens upon any real property acquired or constructed by the Company primarily for use in the conduct of its business; arrangements providing for the leasing by the Company of any property or assets, which property or assets have been or will be sold or transferred by the Company with the intention that such property or assets will be leased back to the Company, if the obligations in respect of such lease would not be included as liabilities on a consolidated balance sheet of the Company; Liens to secure non-recourse debt in connection with the Company engaging in any leveraged or single-investor or other lease transactions; consensual Liens in the ordinary course of business of the Company that secure indebtedness that would not be included in total liabilities as shown on the Company's consolidated balance sheet; Liens created by the Company in connection with any transaction intended by the Company to be a sale of property or assets of the Company; Liens on property or assets financed through tax-exempt municipal obligations; any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any of the foregoing, provided that any such extension, renewal or replacement is limited to all or a part of the property or assets which secured the Lien so extended, renewed or replaced (plus improvements on such property); Liens that secure certain other indebtedness which, in an aggregate principal amount then outstanding, does not exceed 10% of the Company's consolidated net worth; and certain other minor exceptions. (Section 6.04 of the Indentures.) In addition, the Senior Subordinated Indentures provide that the Company will not permit (i) the aggregate amount of Senior Subordinated Indebtedness outstanding at any time to exceed 100% of the aggregate amount of the par value of the capital stock plus the surplus (including retained earnings) of the Company and its consolidated subsidiaries or (ii) 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 the surplus (including retained earnings) of the Company and its consolidated subsidiaries. (Senior Subordinated Indenture Section 6.05.) Under the more restrictive of such tests in the Senior Subordinated Indentures, as of September 30, 1998, the Company could issue up to approximately $2.4 billion of additional Senior Subordinated Indebtedness. For information as to restrictions in other agreements on the Company's ability to issue Senior Subordinated Indebtedness, see "Description of Debt Securities--General" above. The holders of at least a majority in principal amount of the outstanding Debt Securities of any series may, on behalf of the holders of all Debt Securities of that series, waive, insofar as that series is concerned, compliance by the Company with the foregoing restrictions. (Senior Indenture Section 6.06, Senior Subordinated Indenture Section 6.07.) Each Indenture provides that, subject to the restrictions described in the first sentence of the first paragraph under this caption, nothing contained in such Indenture will prevent the consolidation or merger of the Company with or into any other corporation, or the merger into the Company of any other corporation, or the sale by the Company of its property and assets as, or substantially as, an entirety, or otherwise. Notwithstanding the foregoing: (i) in the event of any such consolidation or merger in which the Company is not the surviving corporation, the surviving corporation must succeed to and be substituted for the Company and must expressly assume by an indenture executed and delivered to the applicable Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all Debt Securities then outstanding and the performance and observance of every covenant and condition of such Indenture which is required to be performed or observed by the Company, and (ii) as a condition to any sale of the property and assets of the Company as, or substantially as, an entirety, the corporation to which such property and assets will be sold must (a) expressly assume, as part of the purchase price thereof, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all Debt Securities and the performance and observance of every covenant and condition of such Indenture which is required to be performed or observed 13 by the Company, and (b) simultaneously with the delivery to it of the conveyances or instruments of transfer of such property and assets, execute and deliver to the applicable Trustee a proper indenture in form satisfactory to such Trustee, pursuant to which such purchasing corporation will assume the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all Debt Securities then outstanding and the performance and observance of every covenant and condition of such Indenture which is required to be performed or observed by the Company, to the same extent that the Company is bound and liable. (Senior Indenture Section 15.01, Senior Subordinated Indenture Section 16.01.) Compliance by the Company with the foregoing restrictions may be waived by or on behalf of the holders of the outstanding Debt Securities. For information as to the modification of each Indenture, see "Description of Debt Securities--Modification of Indenture" below. Other than the foregoing restrictions, no Indenture contains covenants of the Company or provisions which afford additional protection to holders of outstanding Debt Securities in the event of a highly leveraged transaction involving the Company. Modification of Indenture Each Indenture contains provisions permitting the Company and the Trustee thereunder to add any provisions to or change in any manner or eliminate any of the provisions of such Indenture or any indenture supplemental thereto or to modify in any manner the rights of the holders of any series of Debt Securities with the consent of the holders of not less than 66 2/3% in aggregate principal amount of such series of Debt Securities at the time outstanding, except that no such amendment or modification may (i) extend the fixed maturity of any Debt Security, reduce the rate or extend the time of payment of interest thereon, reduce the amount of the principal thereof, or premium, if any, payable with respect thereto, or reduce the amount of an Original Issue Discount Security payable upon the acceleration of the stated maturity thereof, without the consent of the holder of such Debt Security, or (ii) reduce the aforesaid percentage of any series of Debt Securities, the holders of which are required to consent to any such amendment or modification, without the consent of the holders of all the Debt Securities of such series then outstanding. (Section 14.02 of the Indentures.) Outstanding Debt Securities In determining whether the holders of the requisite principal amount of outstanding Debt Securities have given any request, demand, authorization, direction, notice, consent, or waiver under any Indenture, (i) the principal amount of an Original Issue Discount Security that will be deemed to be outstanding for such purposes will be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof upon an event of default and (ii) the principal amount of a Debt Security denominated in a foreign currency or currencies will be the U.S. dollar equivalent, determined on the date of original issuance of such Debt Security, of the principal amount. (Section 1.02 of the Indentures.) Events of Default Each Indenture defines an "event of default" with respect to any series of Debt Securities as being any one of the following events and such other events as may be established for the Debt Securities of a particular series: (i) default for thirty days in any payment of interest on such series; (ii) default in any payment of principal of, and premium, if any, on such series when due; (iii) default in the payment of any sinking fund installment of such series when due; (iv) default for thirty days after appropriate notice in performance of any other covenant in such Indenture (other than a covenant included in the Indenture solely for the benefit of another series of Debt Securities); (v) certain events in bankruptcy, insolvency, or reorganization; or (vi) default in the payment of any installment of interest on any evidence of indebtedness of, or assumed or guaranteed by, the Company (other than indebtedness subordinated to such series), or in the payment of any principal of any such evidence of indebtedness, and with respect to which any period of grace shall have expired, after appropriate notice. (Section 7.01 of the Indentures.) Each Indenture provides that the Trustee may withhold notice of any default (except in the payment of principal of, premium, if any, or interest, if any, on any series of Debt Securities) if it considers such withholding in the interests of the holders of such series of Debt Securities issued thereunder. (Section 11.03 of the Indentures.) 14 Except as set forth below, each Indenture provides that the Trustee thereunder or the holders of not less than 25% in principal amount of any series of Debt Securities then outstanding may declare the principal of all Debt Securities of such series to be due and payable on an event of default. (Section 7.02 of the Indentures.) Notwithstanding the foregoing, any series of Senior Subordinated Securities which will be considered "Tier II" may provide that the Senior Subordinated Trustee or the holders of at least 25% in aggregate principal amount of the Senior Subordinated Securities of that series which are then outstanding may declare the principal of all Senior Subordinated Securities of that series to be due and payable immediately only if an event of default pursuant to (v) above shall have occurred and be continuing. Any such series will be designated by the Company in a supplement hereto. Reference is made to the Prospectus Supplement relating to any series of Offered Debt Securities which are Original Issue Discount Securities for the particular provisions relating to acceleration of the maturity of a portion of the principal amount of such Original Issue Discount Securities upon the occurrence of an event of default and the continuation thereof. Within 120 days after the close of each fiscal year, the Company must file with each Trustee a statement, signed by specified officers, stating whether or not such officers have knowledge of any default, and, if so, specifying each such default, the nature thereof and what action, if any, has been taken to cure such default. (Senior Indenture Section 6.05, Senior Subordinated Indenture Section 6.06.) Subject to provisions relating to its duties in case of default, no Trustee is under any obligation to exercise any of its rights or powers thereunder at the request, order, or direction of any holders of any series of Debt Securities, unless such holders shall have offered to such Trustee reasonable indemnity. (Section 11.01 of the Indentures.) Subject to such provisions for indemnification, the holders of a majority in principal amount of any series of Debt Securities outstanding may direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee thereunder, or of exercising any trust or power conferred upon such Trustee. (Section 7.08 of the Indentures.) Defeasance of the Indenture and Debt Securities The Company at any time may satisfy its obligations with respect to payments of principal of the Debt Securities, and premium, if any, and interest, if any, on the Debt Securities of any series by irrevocably depositing in trust with the Trustee money or U.S. Government Obligations (as defined in the Indenture) or a combination thereof sufficient to make such payments when due. If such deposit is sufficient, as verified by a written report of a nationally recognized, independent public accounting firm, to make all payments of (i) interest, if any, on the Debt Securities of such series prior to and on their redemption or maturity, as the case may be, and (ii) principal of the Debt Securities, and premium, if any, on the Debt Securities of such series when due upon redemption or at the designated maturity date, as the case may be, then all the obligations of the Company with respect to the Debt Securities of such series and the Indenture insofar as it relates to the Debt Securities of such series will be satisfied and discharged (except as otherwise provided in the Indenture). In the event of any such defeasance, holders of the Debt Securities of such series would be able to look only to such trust fund for payment of principal of, premium, if any, and interest, if any, on the Debt Securities of such series until the designated maturity date or redemption. (Sections 12.01, 12.02 and 12.03 of the Indentures.) Such a trust may only be established if, among other things, (i) the Company has obtained an opinion of legal counsel (which may be based on a ruling from, or published by, the Internal Revenue Service) to the effect that holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred and (ii) at that time, with respect to any series of Debt Securities then listed on The New York Stock Exchange, the rules of The New York Stock Exchange do not prohibit such deposit with the Trustee. 15 Information Concerning the Trustees The Company from time to time may borrow from each of the Trustees, and the Company and certain of its subsidiaries maintain deposit accounts and conduct other banking transactions with some of the Trustees. A Trustee under a Senior Indenture or a Senior Subordinated Indenture may act as trustee under any of the Company's other indentures. PLAN OF DISTRIBUTION The Company may sell the Debt Securities being offered hereby (i) directly to purchasers, (ii) through agents, (iii) to dealers, or (iv) through an underwriter or a group of underwriters. Offers to purchase Offered Debt Securities may be solicited directly by the Company or by agents designated by the Company from time to time. Unless otherwise indicated in the Prospectus Supplement, any such agent will be acting on a best efforts basis for the period of its appointment (ordinarily five business days or less). Agents may be entitled under agreements which may be entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). If a dealer is utilized in the sale of the Offered Debt Securities in respect of which this Prospectus is delivered, the Company will sell such Offered Debt Securities to the dealer, as principal. The dealer may then resell such Offered Debt Securities to the public at varying prices to be determined by such dealer at the time of resale. Dealers may be entitled under agreements which may be entered into with the Company to indemnification by the Company against certain civil liabilities, including liabilities under the Securities Act. If an underwriter or underwriters are utilized in the sale, the Company may enter into an arrangement with such underwriters at the time of sale to them providing for their indemnification against certain liabilities, including liabilities under the Securities Act. The names of the underwriters and the terms of the transaction will be set forth in the Prospectus Supplement which is intended for use by the underwriters to make resales of the Offered Debt Securities in respect of which this Prospectus is delivered to the public. The underwriters, dealers, and agents may be deemed to be underwriters and any discounts, commissions, or concessions received by them from the Company or any profit on the resale of Offered Debt Securities by them may be deemed to be underwriting discounts and commissions under the Securities Act. Any such person who may be deemed to be an underwriter and any such compensation received from the Company will be described in the Prospectus Supplement. Underwriters, dealers, and agents may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. If so indicated in the Prospectus Supplement, the Company will authorize underwriters and agents to solicit offers by certain institutions to purchase Offered Debt Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to contracts providing for payment and delivery on the date stated in the Prospectus Supplement ("Contracts"). Each Contract will be for an amount not less than, and unless the Company otherwise agrees the aggregate principal amount of Offered Debt Securities sold pursuant to Contracts will be not less nor more than, the respective amounts stated in the Prospectus Supplement. Institutions with whom Contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but shall in all cases be subject to the approval of the Corporation. Contracts will not be subject to any conditions except that the purchase by an institution of the Offered Debt Securities covered by its Contract must not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which such institution is subject. A commission indicated in the Prospectus Supplement will be granted to underwriters and agents soliciting purchases of Offered Debt Securities pursuant to Contracts accepted by the Company. Underwriters and agents will have no responsibility in respect of the delivery or performance of Contracts. The place and time of delivery for the Offered Debt Securities in respect of which this Prospectus is delivered will be set forth in the Prospectus Supplement. 16 EXPERTS The consolidated balance sheets of the Company as of December 31, 1997 and 1996 and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 1997 has been incorporated by reference herein and in the Registration Statement in reliance upon the report of KPMG LLP, independent certified public accountants, also incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. LEGAL OPINIONS Schulte Roth & Zabel LLP, New York, New York, our counsel, is passing for us on the validity of the Debt Securities to which this Prospectus relates. Paul N. Roth, a director of the Company, is a partner of Schulte Roth & Zabel LLP. 17 ================================================================================ No salesman or any other person has been authorized by the Company or any dealer, agent, or underwriter to give any information or to make any representation, other than as contained in this Prospectus or the documents incorporated by reference, in connection with the offer contained in this Prospectus and, if given or made, such information or representation must not be relied upon. This Prospectus does not constitute an offer by any dealer, agent or underwriter to sell, or a solicitaion of an offer to buy, securities in any state to any person to whom it is unlawful for such dealer, agent or underwriter to make such offer or solicitation in such state. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company and its subsidiaries since the date of the information contained herein. ---------- TABLE OF CONTENTS Page ---- Available Information ..................................................... 2 Documents Incorporated by Reference ....................................... 2 The Company ............................................................... 3 Summary of Financial Information .......................................... 9 Use of Proceeds ........................................................... 10 Description of Debt Securities ............................................ 10 Plan of Distribution ...................................................... 16 Experts ................................................................... 17 Legal Opinions ............................................................ 17 ================================================================================ ================================================================================ [LOGO] THE CIT GROUP The CIT Group, Inc. Debt Securities ---------- Prospectus ---------- , 1999 ================================================================================ PART II. INFORMATION NOT REQUIRED IN PROSPECTUS. Item 14. Other Expenses of Issuance and Distribution. The following table sets forth all expenses payable by the Registrant in connection with the issuance and distribution of the securities being registered. All the amounts shown are estimates, except for the registration fee. Registration fee .......................................... $1,390,000 Fees and expenses of accountants .......................... 209,000 Fees and expenses of counsel .............................. 500,000 Fees and expenses of Trustees and paying and authenticating agents .................................... 450,000 Printing and engraving expenses ........................... 50,000 Rating Agencies ........................................... 600,000 Blue Sky fees and expenses ................................ 22,500 Miscellaneous ............................................. 12,000 ---------- Total ................................................ $3,233,500 ========== Item 15. Indemnification of Directors and Officers Subsection (a) of Section 145 of the General Corporation Law of Delaware empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Subsection (b) of Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation except that no indemnification may be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 further provides that to the extent a director, officer, employee, or agent of a corporation has been successful in the defense of any action, suit, or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith; that indemnification provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and empowers the corporation to purchase and maintain insurance on behalf of any person acting in any of the capacities set forth in the second preceding paragraph against any liability asserted against him or incurred by him in any such capacity or arising out of his status as such whether or not the corporation would have the power to indemnify him against such liabilities under Section 145. II-1 Article X of the By-laws of the Registrant provides, in effect, that, in addition to any rights afforded to an officer, director or employee of the Registrant by contract or operation of law, the Registrant may indemnify any person who is or was a director, officer, employee, or agent of the Registrant, or of any other corporation which he served at the request of the Registrant, against any and all liability and reasonable expense incurred by him in connection with or resulting from any claim, action, suit, or proceeding (whether brought by or in the right of the Registrant or such other corporation or otherwise), civil or criminal, in which he may have become involved, as a party or otherwise, by reason of his being or having been such director, officer, employee, or agent of the Registrant or such other corporation, whether or not he continues to be such at the time such liability or expense is incurred, provided that such person acted in good faith and in what he reasonably believed to be the best interests of the Registrant or such other corporation, and, in connection with any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Article X further provides that any person who is or was a director, officer, employee, or agent of the Registrant or any direct or indirect wholly-owned subsidiary of the Registrant shall be entitled to indemnification as a matter of right if he has been wholly successful, on the merits or otherwise, with respect to any claim, action, suit, or proceeding of the type described in the foregoing paragraph. In addition, the Registrant maintains directors' and officers' reimbursement and liability insurance pursuant to standard form policies with aggregate limits of $90,000,000. The risks covered by such policies include liabilities under the Securities Act of 1933. Item 16. Exhibits. (g)1.1 -- Form of Underwriting Agreement. (d)1.2 -- Form of Selling Agency Agreement. (a)4.1a -- Proposed form of Debt Securities (Note). (a)4.1b -- Proposed form of Debt Securities (Debenture). (a)4.1c -- Proposed form of Debt Securities (Deep Discount Debenture). (a)4.1d -- Proposed form of Debt Securities (Zero Coupon Debenture). (a)4.1e -- Proposed form of Debt Securities (Extendible Note). (b)4.1f -- Proposed form of Debt Securities (Floating Rate Renewable Note). (b)4.1g -- Proposed form of Debt Securities (Floating Rate Note). (c)4.1h -- Proposed form of Debt Securities (Medium-Term Senior Fixed Rate Note). (c)4.1i -- Proposed form of Debt Securities (Medium-Term Senior Floating Rate Note). (c)4.1j -- Proposed form of Debt Securities (Medium-Term Senior Subordinated Fixed Rate Note). (c)4.1k -- Proposed form of Debt Securities (Medium-Term Senior Subordinated Floating Rate Note). (e)4.2a -- Form of Global Indenture between the Registrant and each Senior Trustee. (e)4.2b -- Form of Global Indenture between the Registrant and each Senior Subordinated Trustee. (e)4.2c -- Standard Multiple-Series Indenture Provisions dated as of September 24, 1998. (g)5 -- Opinion of Schulte Roth & Zabel LLP in respect of the legality of the Debt Securities registered hereunder, containing the consent of such counsel. II-2 Item 16. Exhibits. (continued) (g)12 -- Computation of Ratios of Earnings to Fixed Charges. (g)23.1 -- Consent of KPMG LLP. (g)23.2 -- Consent of Counsel. The consent of Schulte Roth & Zabel LLP is included in its opinion filed herewith as Exhibit 5 to this Registration Statement. (f)24.1 -- Powers of Attorney. (f)24.2 -- Board Resolutions. (g)25.1 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York. (g)25.2 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The First National Bank of Chicago. (g)25.3 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Harris Trust and Savings Bank. - ---------- (a) Incorporated by reference to Registration Statement No. 2-93960 on Form S-3 filed October 25, 1984. (b) Incorporated by reference to Registration Statement No. 33-30047 on Form S-3 filed July 24, 1989. (c) Incorporated by reference to the Registrant's Current Report on Form 8-K dated July 21, 1992. (d) Incorporated by reference to Registration Statement No. 33-58418 on Form S-3 filed February 16, 1993. (e) Incorporated by reference to Registration Statement No. 333-63793 on Form S-3 filed September 18, 1998. (f) Previously filed. (g) Filed herewith. Item 17. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"); (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; II-3 provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the provisions described under Item 15 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim of indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned Registrant hereby undertakes (1) to use its best efforts to distribute prior to the opening of bids, to prospective bidders, underwriters, and dealers, a reasonable number of copies of a prospectus which at the time meets the requirements of Section 10(a) of the Securities Act, and relating to the securities offered at competitive bidding, as contained in the registration statement, together with any supplements thereto, and (2) to file an amendment to the registration statement reflecting the results of bidding, the terms of the reoffering and related matters to the extent required by the applicable form, not later than the first use, authorized by the issuer after the opening of bids, of a prospectus relating to the securities offered at competitive bidding, unless no further public offering of such securities by the issuer and no reoffering of such securities by the purchasers is proposed to be made. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in The City of Livingston and State of New Jersey, on the 10th day of February, 1999. THE CIT GROUP, INC. By /s/ ERNEST D. STEIN ----------------------------------------- Ernest D. Stein Executive Vice President, General Counsel and Secretary Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated: Signature and Title Date ------------------- ---- ALBERT R. GAMPER, JR.* - -------------------------------------- Albert R. Gamper, Jr. President, Chief Executive Officer, and Director (principal executive officer) DANIEL P. AMOS* - -------------------------------------- Daniel P. Amos Director YOSHIRO AOKI* - -------------------------------------- Yoshiro Aoki Director ______________________________________ Anthea Disney Director TAKASUKE KANEKO* - -------------------------------------- Takasuke Kaneko Director HISAO KOBAYASHI* - -------------------------------------- Hisao Kobayashi Director *By /s/ ERNEST D. STEIN February 10, 1999 ------------------- JOSEPH A. POLLICINO* Ernest D. Stein - -------------------------------------- Attorney-in-fact Joseph A. Pollicino Director PAUL N. ROTH* - -------------------------------------- Paul N. Roth Director PETER J. TOBIN* - -------------------------------------- Peter J. Tobin Director TOHRU TONOIKE* - -------------------------------------- Tohru Tonoike Director ALAN F. WHITE* - -------------------------------------- Alan F. White Director /s/ JOSEPH M. LEONE* February 10, 1999 - -------------------------------------- Joseph M. Leone Executive Vice President and Chief Financial Officer (principal financial and accounting officer) Original powers of attorney authorizing Albert R. Gamper, Jr., Ernest D. Stein, and Anne Beroza and each of them to sign this Amendment No. 1 to the Registration Statement and amendments hereto on behalf of the directors and officers of the Registrant indicated above are held by the Registrant and available for examination pursuant to Item 302(b) of Regulation S-T. II-5 EX-1.1 2 UNDERWRITING AGREEMENT Exhibit 1.1 THE CIT GROUP, INC. Debt Securities Underwriting Agreement New York, New York TO the Representative(s) named in Schedule I hereto of the Underwriters named in Schedule II hereto Dear Sirs: The CIT Group, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to you and the other underwriters named in Schedule II hereto (the "Underwriters"), for whom you are acting as representatives (the "Representatives"), the principal amount of its debt securities identified in Schedule I hereto (the "Securities") to be issued under an indenture identified in Schedule I hereto (the "Indenture") between the Company and the trustee specified in Schedule I hereto (the "Trustee"). If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "Underwriters" and "Representatives", as used herein, shall each be deemed to refer to such firm or firms. 1. Purchase and Sale. Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of the Securities set forth opposite such Underwriter's name in Schedule II hereto. 2. Delivery and Payment. Delivery of and payment for the Securities shall be made at the office, on the date and at the time specified in Schedule I hereto (or such later date not later than five business days after such specified date as the representatives shall designate), which date and time may be postponed by agreement between the Representatives and the Company or as provided in Section 7 hereof (such date and time of delivery and payment for the Securities being herein called the "Closing Date"). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by certified or official bank check or checks payable in Federal or otherwise immediately available funds. Certificates for the Securities shall be registered in such names and in such denominations as the Representatives may request not less than three full business days in advance of the Closing Date. The Company agrees to have the Securities available for inspection, checking and packaging by the Representatives in New York, New York, not later than 1:00 p.m. on the business day prior to the Closing Date. 3. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Underwriters that: (a) Registration statement(s) (the file number(s) of which is (are) set forth in Schedule I hereto), including a prospectus, relating to the Securities has (have) been filed with the Securities and Exchange Commission ("Commission") and has (have) become effective. "Registration Statement" hereinafter refers respectively to each such registration statement as such registration statement is amended to the date of this Agreement. The prospectus used in connection with the Registration Statement, as supplemented to reflect the terms of the Securities and terms of offering thereof, including all material incorporated by reference therein, is hereinafter referred to as the "Prospectus". (b) On its effective date, the Registration Statement and the prospectus included therein conformed in all respects to the requirements of the Securities Act of 1933 ("Act"), the Trust Indenture Act of 1939 ("Trust Indenture Act") and the rules and regulations of the Commission ("Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and on the date of this Agreement the Registration Statement and the Prospectus conform, and on the Closing Date the Registration Statement and the Prospectus and any supplement thereto will conform, in all respects to the requirements of the Act, the Trust Indenture Act and the Rules and Regulations and neither of such documents includes, or on the Closing Date will include, any untrue statement of a material fact or omits to state, or on the Closing Date will omit to state, any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from any such documents based upon, and in conformity with, written information furnished to the Company by any Underwriter through the Representatives, if any, specifically for use therein. (c) The documents incorporated by reference in the Prospectus, when they were filed with the Commission, conformed in all material respects to the requirements of the Securities Exchange Act of 1934 ("Exchange Act") and the Rules and Regulations and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the Rules and Regulations and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 4. Covenants of the Company. The Company covenants and agrees with the several Underwriters that it has previously furnished to Simpson Thacher & Bartlett one signed 2 copy of the registration statement relating to the Securities, including all exhibits, in the form it became effective and of all amendments thereto and that: (a) The Company will advise the Representatives promptly of any proposal to amend or supplement the Registration Statement or the Prospectus during the period of the distribution of the Securities, will provide the Representatives with a reasonable opportunity to comment thereon and will advise the Representatives promptly of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (b) If, at any time when a Prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Registration Statement or the Prospectus to comply with the Act, the Company promptly will prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. (c) As soon as practicable, but not later than 16 months after the date of this Agreement, the Company will make generally available to its security holders an earnings statement which will satisfy the provisions of Section 11(a) of the Act. (d) The Company will furnish to the Underwriters or the Representatives copies of the Registration Statement, including all exhibits, each preliminary prospectus supplement, the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as are reasonably requested. (e) The Company will use its best efforts to qualify the Securities for sale under the laws of such jurisdictions as the Representatives may reasonably request, will continue such qualifications in effect so long as required for the distribution of the Securities and will provide the Representatives with a "blue sky" memorandum and legal investment memorandum relating to the Securities; provided, however, that the Company shall not be obligated (i) to qualify as a foreign corporation or as a dealer in securities or to execute or file any consents to service of process under the laws of any such state or (ii) to prepare more than one legal investment memorandum per year relating to its debt securities registered under the Registration Statement. (f) The Company agrees that until the Closing Date it will not, without the prior consent of the Representatives, offer, sell, contract to sell or otherwise dispose of in the United States any debt securities substantially similar to the securities. (g) The Company will pay all expenses incident to the performance of its obligations under this Agreement. 3 5. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Securities will be subject to the accuracy as of the Closing Date of the representations and warranties on the part of the Company herein, to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions precedent: (a) No stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Company or any Underwriter, shall be contemplated by the Commission. (b) (i) There shall not have occurred any change, or any development involving a prospective change, in or affecting the business, properties, financial condition or results of operations of the Company or its subsidiaries the effect of which is, in the judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the Securities as contemplated by the Registration Statement and the Prospectus, (ii) no public announcement shall have been given of any intended or potential downgrading in the rating accorded any of the Company's debt securities, or no rating of any debt securities of the Company shall have been lowered, by Moody's Investors Service, Inc., Standard & Poor's Corporation or Duff & Phelps, Inc., (iii) trading of securities generally on the New York Stock Exchange or the NASD shall not have been suspended or materially limited, (iv) a general moratorium on commercial banking activities in New York shall not have been declared by either Federal or New York State authorities, (v) trading of any securities of the Company shall not have been suspended on any exchange or in any over-the-counter market and (vi) there shall not have occurred any outbreak or escalation of hostilities or national emergency the effect of which on the financial markets of the United States is, in the judgment of the Representatives, such as to make it impracticable to market the Securities. (c) The Representatives shall have received, on behalf of the Underwriters, a letter, dated the Closing Date, of KPMG LLP confirming that they are independent public accountants within the meaning of the Act and the published Rules and Regulations and to the effect that (i) in their opinion, the financial statements and financial schedules examined by them and included in the Prospectus comply in form in all material respects with the applicable accounting requirements of the Act, the Exchange Act and the related published Rules and Regulations, (ii) on the basis of their review (which does not constitute an examination of financial statements in accordance with generally accepted auditing standards) of the financial statements and schedules referred to below, inquiries of officials of the Company responsible for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that (x) the unaudited consolidated condensed financial statements included in the Prospectus do not comply in form in all material respects with the applicable accounting requirements of the Exchange Act as it applies to Form 10-Q and the related published Rules and Regulations or are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited consolidated financial statements included in the Prospectus or (y) with respect to the period after 4 the date of the most recent financial statements incorporated in the Registration Statement and the Prospectus, there were any changes, at a specified date not more than five business days prior to the date of the letter, in the consolidated paid-in capital, variable rate notes, fixed rate notes, subordinated fixed rate notes or commercial paper of the Company or any decreases in the consolidated net finance receivables, total assets, retained earnings, finance receivables or reserve for credit losses on finance receivables of the Company as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated in the Registration Statement and the Prospectus or (z) for the period from the date of the most recent financial statements incorporated in the Registration Statement and the Prospectus to such specified date there were any decreases, as compared with the corresponding period in the preceding year, in consolidated finance income or net income, of the Company, except in all instances for changes or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter and (iii) they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information included in the Prospectus (in each case to the extent that such dollar amounts or percentages or other financial information are derived from the general accounting records of the Company and consolidated subsidiaries which are subject to the internal controls of the accounting systems of the Company and consolidated subsidiaries or are derived directly from such records by analysis or computation, and are not directly traceable to the publicly available audited consolidated financial statements of the Company or unaudited condensed financial statements contained in its reports on Form 10-Q) with the results obtained from inquiries, a reading of such general accounting records of the Company and consolidated subsidiaries and other procedures specified in such letter and have found such dollar amounts and percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter. All financial statements included in material incorporated by reference into the Prospectus shall be deemed included in the Prospectus for purposes of this subsection. (d) The Representatives shall have received, on behalf of the Underwriters, an opinion or opinions, dated the Closing Date, of Schulte Roth & Zabel LLP or of the General Counsel of the Company or, with the consent of the Representatives, the Associate General Counsel of the Company, to the effect that: (i) the Company is a corporation validly existing and in good standing under the laws of the State of Delaware, with corporate power and authority to conduct its business as described in the Prospectus, and is duly qualified or licensed and in good standing as a foreign corporation in each jurisdiction where its business requires such qualification or licensing; (ii) the Indenture has been duly authorized, executed and delivered and is a valid instrument legally binding upon the Company, enforceable in accordance with its terms (except as enforcement thereof may be subject to (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity and the discretion of the court before which any proceeding therefor may be brought); 5 (iii) the Securities have been duly authorized and executed and, when authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, will constitute legal, valid and binding obligations of the Company (except as enforcement thereof may be subject to (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) general principles of equity and the discretion of the court before which any proceeding therefor may be brought and will be entitled to the benefits provided by the Indenture; (iv) the descriptions of the Securities and the Indenture in the Registration Statement and the Prospectus are accurate in all material respects, and the Indenture has been duly qualified under the Trust Indenture Act; (v) the Registration Statement and any amendment thereto have become effective under the Act; and, to the best of such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement, as amended, or of any part thereof has been issued and no proceedings for that purpose have been instituted or are pending or contemplated under the Act; (vi) the Registration Statement and the Prospectus, and any amendment or supplement thereto, (other than the financial statements and related schedules and other financial and statistical data included or incorporated by reference therein, as to which such counsel expresses no opinion) comply as to form in all material respects with the requirements of the Act and the Rules and Regulations; the Indenture complies as to form in all material respects with the requirements of the Trust Indenture Act and the Rules and Regulations; (vii) the descriptions in the Registration Statement and Prospectus of statutes and other documents insofar as such descriptions purport to constitute a summary of the terms of the statutes or documents referred to therein, constitute accurate summaries of the matters described therein in all material respects, and such counsel does not know of any legal or governmental proceedings required to be described in the Registration Statement or Prospectus which are not described as required, or of any contracts or documents of a character required to be described in the Registration Statement or Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required; (viii) the documents incorporated by reference in the Prospectus, when they were filed with the Commission, complied as to form in all material respects with the requirements of the Exchange Act and the Rules and Regulations; it being understood that such counsel need express no opinion as to the financial statements and related schedules and other financial or statistical data included or incorporated by reference in such documents; 6 (ix) no consent, approval, authorization, order, license, registration or qualification of or with any court or governmental agency or body is required in connection with the execution and delivery of the Indenture, the issuance and sale of the Securities by the Company pursuant to this Agreement or consummation by the Company of the transactions contemplated by the Indenture, the Securities and this Agreement, except such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Act and the Trust Indenture Act and as may be required under state securities laws, as to which such counsel need express no opinion; (x) the issue and sale of the Securities and the compliance by the Company with the provisions of the Securities and the Indenture will not conflict with or constitute or result in a breach of or a default under (or an event which with notice or passage of time or both would constitute a default under) or a violation of (a) any of the terms or provisions of any contract filed as an exhibit to the Company's most recent annual or quarterly reports or other 1934 Act filings with the Commission except for any such conflict, breach, default, event or violation which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole, or (b) any statute, judgment, decree, order, rule or regulation known to such counsel to be applicable to the Company or any of its properties or assets, except for any such conflict, breach, default, event or violation which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the business of the Company and its subsidiaries, taken as a whole (except that such counsel need express no opinion with respect to state securities laws), nor will such action result in a violation of the provisions of the Restated Certificate of Incorporation or the By-laws of the Company; and (xi) this Agreement has been duly authorized, executed and delivered by the Company. (e) The Representatives shall have received, on behalf of the Underwriters, from Simpson Thacher & Bartlett, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the incorporation of the Company, the validity of the Securities, the Registration Statement, the Prospectus and other related matters as they may require and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. (f) The Representatives shall have received, on behalf of the Underwriters, a certificate, dated the Closing Date, of the principal financial or accounting officer or the treasurer of the Company in which such officer shall state, to the best of his knowledge after reasonable investigation, that the representations and warranties of the Company in this Agreement are true and correct as of the Closing Date, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, that no stop order suspending the effectiveness of the Registration 7 Statement or any part thereof has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission and that, subsequent to the date of the most recent financial statements in the Prospectus, there has been no material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, financial condition or results of operations of the Company or its subsidiaries, except as set forth in or contemplated by the Prospectus or as described in such certificate. The Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as they reasonably request. 6. Indemnification and Contribution. (a) The Company agrees to indemnify, defend and hold harmless each Underwriter and any person who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any loss, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, such Underwriter or controlling person may incur under the Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, any amendment or supplement thereto or any related preliminary prospectus supplement, or arises out of or is based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as any such loss, expense, liability or claim arises out of or is based upon any alleged untrue statement of a material fact contained therein in conformity with information furnished in writing by any Underwriter through the Representatives, if any, to the Company expressly for use in any of such documents or arises out of or is based upon any alleged omission to state therein a material fact in connection with such information required to be stated therein or necessary to make such information not misleading. The Company's agreement to indemnify any such Underwriter or controlling person as aforesaid is expressly conditioned upon its being notified of the action in connection therewith brought against such Underwriter or controlling person by letter or telegram addressed to the Company with reasonable promptness after the first legal process which discloses the nature of the liability or claim shall have been served upon such Underwriter or controlling person (or after it shall have received notice of such service upon any agent designated by it), but failure so to notify the Company shall not relieve the Company from any liability which it may have to such Underwriter or controlling person otherwise than on account of the indemnity agreement contained in this Section 6. The Company shall assume the defense of any suit brought to enforce any such liability or claim, including the employment of counsel satisfactory to the Underwriters and the payment of all expenses. Any Underwriter or controlling person against whom such suit is brought shall have the right to employ separate counsel in any such suit and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Underwriter or controlling person unless (i) the employment of such counsel has been specifically authorized by the Company or (ii) the named parties to any such suit (including any impleaded parties) include such Underwriter or controlling person and the Company, and such Underwriter or controlling person shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to 8 the Company, in which case the Company shall not have the right to assume the defense of such action on behalf of such Underwriter or controlling person, it being understood, however, that the Company shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for all such Underwriters and controlling persons, which firm shall be designated in writing by the Underwriters or the Representatives, if any. The Company shall not be liable for any settlement of any such action effected without its consent (which will not be unreasonably withheld or delayed). The Company agrees promptly to notify the Underwriters of the commencement of any litigation or proceedings against the Company or any of its officers or directors in connection with the issue and sale of the Securities or with the Registration Statement or Prospectus. (b) Each Underwriter represents and warrants that the information furnished in writing by such Underwriter through the Representatives, if any, to the Company expressly for use with reference to such Underwriter in the Registration Statement or the Prospectus does not contain any untrue statement of a material fact and does not omit to state a material fact in connection with such information required to be stated in the Registration Statement or the Prospectus or necessary to make such information not misleading. Each Underwriter severally agrees to indemnify, defend and hold harmless the Company and its directors and officers from and against any loss, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Company or any such person may incur under the Act or otherwise, insofar as such loss, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, any amendment or supplement thereto or any related preliminary prospectus supplement which is in reliance on and in conformity with information furnished in writing by such Underwriter through the Representatives, if any, to the Company expressly for use with reference to such Underwriter, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in any of such documents or necessary to make such information not misleading. Each Underwriter's agreement to indemnify the Company and any such person as aforesaid is expressly conditioned upon such Underwriter's being notified of the action in connection therewith brought against the Company or any such person by letter or telegram addressed to such Underwriter or the Representatives, if any, at its address furnished to the Company for the purpose, with reasonable promptness after the first legal process which discloses the nature of the liability or claim shall have been served upon the Company or any such person (or after the Company or any such person shall have received notice of such service on any agent designated by the Company or any such person), but failure so to notify such Underwriter shall not relieve such Underwriter from any liability which it may have to the Company or any such person otherwise than on account of the indemnity agreement contained in this Section 6. 9 Such Underwriter shall assume the defense of any suit brought to enforce any such liability or claim, including the employment of counsel and the payment of all expenses. The Company or such person against whom such suit is brought shall have the right to employ separate counsel in any such suit and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Company or such person unless (i) the employment of such counsel has been specifically authorized by such Underwriter or the Representatives, if any, or (ii) the named parties to any such suit (including any impleaded parties) include the Company or such person and such Underwriter, and the Company or such person shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to such Underwriter, in which case such Underwriter shall not have the right to assume the defense of such action on behalf of the Company or such person, it being understood, however, that the Underwriters shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for the Company and such person, which firm shall be designated in writing by the Company. Such Underwriter shall not be liable for any settlement of any such action effected without its consent (which will not be unreasonably withheld or delayed). (c) If the indemnification provided for in this Agreement is unavailable to or insufficient to hold harmless an indemnified party under subsections (a) and (b) above for any reason other than as specified therein in respect of any losses, expenses, liabilities or claims referred to therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided in clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, expenses, liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company bear to the underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any claim or action. 10 The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Agreement were determined by pro rata allocation (even if the Underwriters are treated as one entity) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Agreement, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of the damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Agreement are several in proportion to their respective underwriting commitments and not joint. The obligations of the Company and the Underwriters under this Section 6 shall be in addition to any liability that each of them may otherwise have. 7. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Securities agreed to be purchased by such Underwriter or Underwriters hereunder and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Securities, the Underwriters or the Representatives may make arrangements satisfactory to the Company for the purchase of such Securities by other persons, including any of the Underwriters, but if no such arrangements are made by the Closing Date, the nondefaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Securities which such defaulting Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of Securities with respect to which such default or defaults occur exceeds 10% of the total principal amount of Securities and arrangements satisfactory to the Underwriters or the Representatives and the Company for the purchase of such Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any nondefaulting Underwriter or the Company, except as provided in Section 8. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default. 8. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the Company or any of their respective representatives or officers or directors or any controlling person and will survive delivery of and payment for the Securities. If for any reason the purchase of the Securities by the Underwriters pursuant to this Agreement is not consummated, the Company shall remain responsible for the expenses to be paid by it pursuant to Section 4 and the respective obligations of the Company and the Underwriters pursuant to Section 6 shall remain in effect. 11 9. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to them at their addresses furnished to the Company in writing for the purpose of communications hereunder or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 650 CIT Drive, Livingston, New Jersey 07039, Attention: Senior Vice President and Treasurer. 10. Successors. This Underwriting Agreement will inure to the benefit of and be binding upon the parties hereto, the officers and directors and controlling persons referred to in Section 6 and their respective heirs, executors, administrators, successors and assigns, and no other person will have any right or obligation hereunder. 11. Governing Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. This Agreement may be executed in counterparts and the executed counterparts shall together constitute a single instrument. Very truly yours, THE CIT GROUP, INC. By: ____________________________________ Name: Title: 12 The foregoing Agreement is hereby confirmed and accepted as of the date specified in Schedule I hereto. [NAME OF REPRESENTATIVES] By: _________________________________ Name: Title: For themselves and the other several Underwriters, if any, named in Schedule II to the foregoing Agreement. 13 SCHEDULE I [ ] notes Underwriting Agreement dated [ ] Registration Statement No. 333-[ ] Representative (Name and address for notices): [ ] Indenture dated as of [ ], between The CIT Group, Inc. and [ ], as Trustee. Description of Securities: Title: [ ] Notes Due [ ] Aggregate Principal Amount: $[ ] Interest: [ ] Maturity Date: [ ] Redemption: [ ] Purchase Price to Public: [ ] Proceeds to Corporation: [ ] Underwriting Discount: [ ] Form and Denomination: The Notes will be issued in fully registered form only, without coupons, in denominations of $1,000 and integral multiples thereof. The Notes will be 2 initially represented by one permanent global Note registered in the name of The Depositary Trust Company or its nominee. Settlement: [ ] Closing Date: [ ] SCHEDULE II [ ] Notes due [ ] Underwriter Principal Amount ----------- ---------------- [Name(s) of Underwriter(s)] ........................... $ [ ] Total $ [ ] EX-5 3 OPINION OF SCHULTE ROTH & ZABEL LLP Exhibit 5 February 11, 1999 The CIT Group, Inc. 1211 Avenue of the Americas New York, New York 10036 Ladies and Gentlemen: We are special counsel to The CIT Group, Inc., a Delaware corporation (the "Corporation"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") of the Corporation covering $5,000,000,000 aggregate principal amount of the Corporation's senior/senior subordinated debt securities (the "Debt Securities"), which is being filed with the Securities and Exchange Commission (the "Commission") on the date hereof, relating to the issuance from and after the date hereof of up to $5,000,000,000 in aggregate principal amount of the Debt Securities pursuant to the following indentures (each, an "Indenture"): (i) the Indenture dated as of September 24, 1998, between the Corporation and The First National Bank of Chicago, as Trustee; (ii) the Indenture dated as of September 24, 1998, between the Corporation and Harris Trust and Savings Bank, as Trustee; (iii) the Indenture dated as of September 24, 1998, between the Corporation and The Bank of New York, as Trustee; and (iv) the Indenture dated as of September 24, 1998, between the Corporation and The Bank of New York, as Senior Subordinated Trustee. In this capacity, we have examined a signed copy of the Registration Statement and originals, telecopies or copies, certified or otherwise identified to our satisfaction, of such records of the Corporation and all such agreements, certificates of public officials, certificates of officers or representatives of the Corporation and others, and such other documents, certificates and corporate or other records as we have deemed necessary or appropriate as a basis for this opinion. As to all matters of fact (including, without limitation, matters of fact set forth in this opinion), we have relied upon and assumed the accuracy of statements and representations of officers and other representatives of the Corporation and others. In our examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons signing or delivering any instrument, the authority of all persons signing the Registration Statement, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. We have also assumed that each Indenture has been duly authorized, executed and delivered by the trustee named therein and constitutes a valid and binding agreement of such trustee. We are attorneys admitted to practice in the State of New York and the opinion set forth below is limited to the laws of the State of New York and the Delaware General Corporation Law. Paul N. Roth, a member of this firm, is a director of the Corporation. Based upon the foregoing and having regard for such legal considerations as we deem relevant, we are of the opinion that the Debt Securities have been duly authorized and, when duly executed by the Corporation and authenticated in accordance with the terms of an Indenture and issued and delivered in accordance with the terms of such Indenture against payment therefor as contemplated by the Registration Statement, will constitute valid and binding obligations of the Corporation. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm appearing under the heading "Legal Opinions" in the Registration Statement and the Prospectus which forms a part of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the General Rules and Regulations of the Commission thereunder. Very truly yours, EX-12 4 COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES Exhibit 12 THE CIT GROUP, INC. AND SUBSIDIARIES COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
Nine Months Ended September 30, Years Ended December 31, ----------------- ----------------------------------------------- 1998 1997 1997 1996 1995 1994 1993 ----- ----- ----- ---- ----- ----- ----- (Dollar Amounts in Millions) Net Income $ 251.5 $ 239.1 $ 310.1 $ 260.1 $ 225.3 $201.1 $182.3 Provision for income taxes 138.0 137.5 178.0 155.7 139.8 123.9 128.5 ------- ------- ------- ------- ------- ------ ------ Earnings before provision for income taxes 389.5 376.6 488.1 415.8 365.1 325.0 310.8 ------- ------- ------- ------- ------- ------ ------ Fixed Charges: Interest and debt expenses on indebtedness 766.2 693.7 937.2 848.3 831.5 614.0 508.0 Interest factor-one third of rentals on real and personal properties 7.4 6.7 8.5 8.1 7.9 7.9 8.0 Minority interest in subsidiary trust holding solely debentures of the company 14.4 11.5 16.3 -- -- -- -- -------- -------- -------- -------- -------- ------ ------ Total fixed charges 788.0 711.9 962.0 856.4 839.4 621.9 516.0 -------- -------- -------- -------- -------- ------ ------ Total earnings before provisions for income taxes and fixed charges $1,177.5 $1,088.5 $1,450.1 $1,272.2 $1,204.5 $946.9 $826.8 ======== ======== ======== ======== ======== ====== ====== Ratio of Earnings to Fixed Charges 1.49 1.53 1.51 1.49 1.44 1.52 1.60
EX-23.1 5 CONSENT OF KPMG LLP Exhibit 23.1 Independent Auditors' Consent The Board of Directors The CIT Group, Inc.: We consent to the use of our report dated January 28, 1998 relating to the consolidated balance sheets of The CIT Group, Inc. and subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1997, incorporated by reference in Amendment No. 1 to Registration Statement No. 333-71361 on Form S-3 of The CIT Group, Inc. which report appears in the December 31, 1997 Annual Report on Form 10-K of The CIT Group, Inc. and to the reference to our firm under the heading "Experts" in the Registration Statement. KPMG LLP Short Hills, New Jersey February 10, 1999 EX-25.1 6 FORM T-1 Exhibit 25.1 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- The CIT Group, Inc. (Exact name of obligor as specified in its charter) Delaware 13-2994534 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1211 Avenue of the Americas 10036 New York, New York (Zip code) (Address of principal executive offices) --------------------------- Senior/Senior Subordinated Debt Securities (Title of the indenture securities) ================================================================================ 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 31st day of January, 1999. THE BANK OF NEW YORK By: /s/ MICHELE L. RUSSO ------------------------------ Name: MICHELE L. RUSSO Title: Assistant Treasurer - 3 - Exhibit 7 - -------------------------------------------------------------------------------- Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 1998, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ........ $ 7,301,241 Interest-bearing balances ................................. 1,385,944 Securities: Held-to-maturity securities ............................... 1,000,737 Available-for-sale securities ............................. 4,240,655 Federal funds sold and Securities purchased under agreements to resell ..................................... 971,453 Loans and lease financing receivables: Loans and leases, net of unearned income ...................................... 38,788,269 LESS: Allowance for loan and lease losses................................. 632,875 LESS: Allocated transfer risk reserve...................................... 0 Loans and leases, net of unearned income, allowance, and reserve .................................. 38,155,394 Assets held in trading accounts .............................. 1,307,562 Premises and fixed assets (including capitalized leases) ................................................... 670,445 Other real estate owned ...................................... 13,598 Investments in unconsolidated subsidiaries and associated companies ...................................... 215,024 Customers' liability to this bank on acceptances ............. 974,237 outstanding Intangible assets ............................................ 1,102,625 Other assets ................................................. 1,944,777 ------------ Total assets ................................................. $ 59,283,692 ============ LIABILITIES Deposits: In domestic offices ....................................... $ 26,930,258 Noninterest-bearing............................ 11,579,390 Interest-bearing............................... 15,350,868 In foreign offices, Edge and Agreement subsidiaries, and IBFs ................................. 16,117,854 Noninterest-bearing............................. 187,464 Interest-bearing................................ 15,930,390 Federal funds purchased and Securities sold under agreements to repurchase ................................. 2,170,238 Demand notes issued to the U.S.Treasury ...................... 300,000 Trading liabilities .......................................... 1,310,867 Other borrowed money: With remaining maturity of one year or less ............... 2,549,479 With remaining maturity of more than one year through three years ..................................... 0 With remaining maturity of more than three years .......... 46,654 Bank's liability on acceptances executed and outstanding ............................................... 983,398 Subordinated notes and debentures ............................ 1,314,000 Other liabilities ............................................ 2,295,520 ------------ Total liabilities ............................................ 54,018,268 ------------ EQUITY CAPITAL Common stock ................................................. 1,135,284 Surplus ...................................................... 731,319 Undivided profits and capital reserves ....................... 3,385,227 Net unrealized holding gains (losses) on available-for-sale securities ............................. 51,233 Cumulative foreign currency translation adjustments .......... (37,639) ------------ Total equity capital ......................................... 5,265,424 ------------ Total liabilities and equity capital ......................... $ 59,283,692 ============ I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Robert E. Keilman We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. J. Carter Bacot | Thomas A. Renyi | Directors Alan R. Griffith | - -------------------------------------------------------------------------------- EX-25.2 7 FORM T-1 Exhibit 25.2 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(B)(2) __________________ THE FIRST NATIONAL BANK OF CHICAGO (Exact name of trustee as specified in its charter) A National Banking Association 36-0899825 (I.R.S. employer identification number) One First National Plaza, Chicago, Illinois 60670-0126 (Address of principal executive offices) (Zip Code) The First National Bank of Chicago One First National Plaza, Suite 0286 Chicago, Illinois 60670-0286 Attn: Lynn A. Goldstein, Law Department (312) 732-6919 (Name, address and telephone number of agent for service) THE CIT GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 13-2994534 (State or other jurisdiction of (I.R.S.employer incorporation or organization) Identification number) 1211 Avenue of the Americas 10036 New York, New York (Zip Code) (Address of Principal Executive Offices) Senior Debt Securities (Title of the indenture securities) Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervision authority to which it is subject. Comptroller of Currency, Washington, D. C., Federal Deposit Insurance Corporation, Washington, D. C., The Board of Governors of the Federal Reserve System, Washington, D. C.. (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. No such affiliation exists with the trustee. Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the articles of association of the trustee now in effect.* 2. A copy of the certificates of authority of the trustee to commence business.* 3. A copy of the authorization of the trustee to exercise corporate trust powers.* 4. A copy of the existing by-laws of the trustee.* 5. Not applicable. 6. The consent of the trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. * Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing identical numbers in Item 16 of the Form T-1 of The First National Bank of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on May 6, 1998 (Registration No. 333-51907-01). 2 Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, The First National Bank of Chicago, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, and State of Illinois, on the 28th day of January, 1999. The First National Bank of Chicago, Trustee, By: /s/ Steven M. Wagner ---------------------------------- Steven M. Wagner First Vice President 3 EXHIBIT 6 THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION 321(b) OF THE ACT January 28, 1999 Securities and Exchange Commission Washington, D. C. 20549 Gentlemen: In connection with the qualification of an indenture between The CIT Group, Inc. and The First National Bank of Chicago, as trustee, the undersigned, in accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents that the reports of examinations of the undersigned, made by Federal or State Authorities authorized to make such examinations, may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Very truly yours, THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Steven M. Wagner -------------------------------- Steven M. Wagner First Vice President 4 EXHIBIT 7 Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-1 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for September 30, 1998 All schedules are to be reported in thousands of dollars. Unless otherwise indicated, report the amount outstanding of the last business day of the quarter. Schedule RC--Balance Sheet Dollar Amounts in Thousands C400 RCFD BIL MIL THOU ------ ---- ------------ ASSETS 1. Cash and balances due from depository institutions (from Schedule RCFD RC-A): ---- a. Noninterest-bearing balances and currency and coin(1)........... 0081 4,898,646 1.a. b. Interest-bearing balances(2).................................... 0071 4,612,143 1.b. 2. Securities a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a. b. Available-for-sale securities (from Schedule RC-B, column D).... 1773 9,817,318 2.b. 3. Federal funds sold and securities purchased under agreements to resell 1350 6,071,229 3. 4. Loans and lease financing receivables: RCFD a. Loans and leases, net of unearned income (from Schedule ---- RC-C)..................................................... 2122 26,327,215 4.a. b. LESS: Allowance for loan and lease losses....................... 3123 412,850 4.b. c. LESS: Allocated transfer risk reserve........................... 3128 0 4.c. RCFD d. Loans and leases, net of unearned income, allowance, and ---- reserve (item 4.a minus 4.b and 4.c)............................ 2125 25,914,365 4.d. 5. Trading assets (from Schedule RD-D)................................ 3545 6,924,064 5. 6. Premises and fixed assets (including capitalized leases)........... 2145 731,747 6. 7. Other real estate owned (from Schedule RC-M)....................... 2150 6,424 7. 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M)..................................... 2130 153,385 8. 9. Customers' liability to this bank on acceptances outstanding....... 2155 352,324 9. 10. Intangible assets (from Schedule RC-M)............................. 2143 295,823 10. 11. Other assets (from Schedule RC-F).................................. 2160 2,193,803 11. 12. Total assets (sum of items 1 through 11)........................... 2170 61,971,271 12. - ---------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading.
6 Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/98 ST-BK: 17-1630 FFIEC 031 Address: One First National Plaza, Ste 0460 Page RC-2 City, State Zip: Chicago, IL 60670 FDIC Certificate No.: 0/3/6/1/8 Schedule RC-Continued Dollar Amounts in Thousands ----------------- LIABILITIES 13. Deposits: RCON a. In domestic offices (sum of totals of columns A and C ---- from Schedule RC-E, part 1)............................... 2200 20,965,124 13.a (1) Noninterest-bearing(1)................................ 6631 9,191,662 13.a1 (2) Interest-bearing...................................... ` 6636 11,773,462 13.a2 RCFN b. In foreign offices, Edge and Agreement subsidiaries, and ---- IBFs (from Schedule RC-E, part II)........................ 2200 15,912,956 13.b (1) Noninterest bearing................................... 6631 475,182 13.b1 (2) Interest-bearing...................................... 6636 15,437,774 13.b2 14. Federal funds purchased and securities sold under agreements to repurchase: RCFD 2800 4,245,925 14. 15. a. Demand notes issued to the U.S. Treasury.................. RCON 2840 359,381 15.a b. Trading Liabilities (from Schedule RC-D).................. RCFD 3548 5,614,049 15.b RCFD 16. Other borrowed money: ---- a. With original maturity of one year or less................ 2332 4,603,402 16.a b. With original maturity of more than one year............. A547 328,001 16.b c. With original maturity or more than three years .......... A548 324,984 16.c 17. Not applicable 18. Bank's liability on acceptance executed and outstanding...... 2920 352,324 18. 19. Subordinated notes and debentures............................ 3200 2,400,000 19. 20. Other liabilities (from Schedule RC-G)....................... 2930 1,833,935 20. 21. Total liabilities (sum of items 13 through 20)............... 2948 56,940,081 21. 22. Not applicable EQUITY CAPITAL 23. Perpetual preferred stock and related surplus................ 3838 0 23. 24. Common stock......................................... 3230 200,858 24. 25. Surplus (exclude all surplus related to preferred stock)..... 3839 3,192,857 25. 26. a. Undivided profits and capital reserves.................... 3632 1,614,511 26.a b. Net unrealized holding gains (losses) on available-for-sale securities............................................. 8434 27,815 26.b 27. Cumulative foreign currency translation adjustments........... 3284 (4,851) 27. 28. Total equity capital (sum of items 23 through 27)............. 3210 5,031,190 28. 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28)......................... 3300 61,971,271 29. Memorandum To be reported only with the March Report of Condition. 1. Indicate in the box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external --------------- Number auditors as of any date during 1996..................................................RCFD 6724........ N/A M.1. ---------------
1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately) 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority) 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority) 5 = Review of the bank's financial statements by external auditors 6 = Compilation of the bank's financial statements by external auditors 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work - ---------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits. EX-25.3 8 FORM T-1 Exhibit 25.3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 Statement of Eligibility Under the Trust Indenture Act of 1939 of a Corporation Designated to Act as Trustee Check if an Application to Determine Eligibility of a Trustee Pursuant to Section 305(b)(2) ______ HARRIS TRUST AND SAVINGS BANK (Name of Trustee) Illinois 36-1194448 (State of Incorporation) (I.R.S. Employer Identification No.) 111 West Monroe Street, Chicago, Illinois 60603 (Address of principal executive offices) Carolyn Potter, Harris Trust and Savings Bank, 311 West Monroe Street, Chicago, Illinois, 60606 312-461-2531 phone 312-461-3525 facsimile (Name, address and telephone number for agent for service) The CIT Group, Inc. (Name of obligor) Delaware 13-2994534 (State of Incorporation) (I.R.S. Employer Identification No.) 1211 Avenue of the Americas New York, New York 10036 (Address of principal executive offices) Debt Securities (Title of indenture securities) 1. GENERAL INFORMATION. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. Commissioner of Banks and Trust Companies, State of Illinois, Springfield, Illinois; Chicago Clearing House Association, 164 West Jackson Boulevard, Chicago, Illinois; Federal Deposit Insurance Corporation, Washington, D.C.; The Board of Governors of the Federal Reserve System, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Harris Trust and Savings Bank is authorized to exercise corporate trust powers. 2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an affiliate of the Trustee, describe each such affiliation. The Obligor is not an affiliate of the Trustee. 3. thru 15. NO RESPONSE NECESSARY 16. LIST OF EXHIBITS. 1. A copy of the articles of association of the Trustee is now in effect which includes the authority of the trustee to commence business and to exercise corporate trust powers. A copy of the Certificate of Merger dated April 1, 1972 between Harris Trust and Savings Bank, HTS Bank and Harris Bankcorp, Inc. which constitutes the articles of association of the Trustee as now in effect and includes the authority of the Trustee to commence business and to exercise corporate trust powers was filed in connection with the Registration Statement of Louisville Gas and Electric Company, File No. 2-44295, and is incorporated herein by reference. 2. A copy of the existing by-laws of the Trustee. A copy of the existing by-laws of the Trustee was filed in connection with the Registration Statement of Commercial Federal Corporation, File No. 333-20711, and is incorporated herein by reference. 3. The consents of the Trustee required by Section 321(b) of the Act. (included as Exhibit A on page 2 of this statement) 4. A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority. (included as Exhibit B on page 3 of this statement) 1 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the laws of the State of Illinois, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Chicago, and State of Illinois, on the 29th day of January, 1999. HARRIS TRUST AND SAVINGS BANK By: /s/ J. Bartolini ------------------------------ J. Bartolini Vice President EXHIBIT A The consents of the trustee required by Section 321(b) of the Act. Harris Trust and Savings Bank, as the Trustee herein named, hereby consents that reports of examinations of said trustee by Federal and State authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. HARRIS TRUST AND SAVINGS BANK By: /s/ J. Bartolini ----------------------------- J. Bartolini Vice President 2 EXHIBIT B Attached is a true and correct copy of the statement of condition of Harris Trust and Savings Bank as of September 30, 1998, as published in accordance with a call made by the State Banking Authority and by the Federal Reserve Bank of the Seventh Reserve District. [LOGO] HARRIS BANK Harris Trust and Savings Bank 111 West Monroe Street Chicago, Illinois 60603 of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at the close of business on September 30, 1998, a state banking institution organized and operating under the banking laws of this State and a member of the Federal Reserve System. Published in accordance with a call made by the Commissioner of Banks and Trust Companies of the State of Illinois and by the Federal Reserve Bank of this District. Bank's Transit Number 71000288 THOUSANDS ASSETS OF DOLLARS Cash and balances due from depository institutions: Non-interest bearing balances and currency and coin ...... $ 1,097,714 Interest bearing ......................................... $ 213,712 balances Securities: a. Held-to-maturity securities ................................. $ 0 b. Available-for-sale securities ............................... $ 5,036,734 Federal funds sold and securities purchased under agreements to resell ..................................................... $ 48,950 Loans and lease financing receivables: Loans and leases, net of unearned income .... $ 9,111,098 LESS: Allowance for loan and lease losses .. $ 104,900 ----------- Loans and leases, net of unearned income, allowance, and reserve (item 4.a minus 4.b) .................................... $ 9,006,198 Assets held in trading accounts ........................................................ $ 202,008 Premises and fixed assets (including capitalized leases) ........ $ 245,290 Other real estate owned ......................................... $ 365 Investments in unconsolidated subsidiaries and associated companies .................................................... $ 41 Customer's liability to this bank on acceptances outstanding .... $ 34,997 Intangible assets .............................................. $ 260,477 Other assets .................................................... $ 1,148,163 ----------- TOTAL ASSETS .................................................... $17,294,649 =========== 3 LIABILITIES Deposits: In domestic offices ............................................ $ 9,467,895 Non-interest bearing ......................... $ 2,787,471 Interest bearing ............................. $ 6,680,424 In foreign offices, Edge and Agreement subsidiaries, and IBF's . $ 1,268,759 Non-interest bearing ......................... $ 23,329 Interest bearing ............................. $ 1,245,430 Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds purchased & securities sold under agreements to repurchase ....... $ 3,118,548 Trading Liabilities .............................................. 110,858 Other borrowed money: a. With remaining maturity of one year or less .................. $ 1,202,050 b. With remaining maturity of more than one year ................ $ 0 Bank's liability on acceptances executed and outstanding ......... $ 34,997 Subordinated notes and debentures ............................... $ 225,000 Other liabilities ................................................ $ 530,224 ----------- TOTAL LIABILITIES ................................................ $15,958,331 =========== EQUITY CAPITAL Common stock .................................................... $ 100,000 Surplus ......................................................... $ 604,834 a. Undivided profits and capital reserves ...................... $ 580,271 b. Net unrealized holding gains (losses) on available-for-sale securities ........................... $ 51,213 ----------- TOTAL EQUITY CAPITAL ............................................ $ 1,336,318 =========== Total liabilities, limited-life preferred stock, and equity capital ......................................................... $17,294,649 =========== I, Pamela Piarowski, Vice President of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. PAMELA PIAROWSKI 10/29/98 We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and, to the best of our knowledge and belief, has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and the Commissioner of Banks and Trust Companies of the State of Illinois and is true and correct. EDWARD W. LYMAN, ALAN G. McNALLY, CHARLES SHAW Directors. 4 -----END PRIVACY-ENHANCED MESSAGE-----