Death Of A Salespitch

CIT Group is facing its final hours on the Deal or No Deal clock.

CIT Group was in talks with a bondholder group over the weekend as the lender tried to hammer out a rescue financing deal before markets opened and avoid bankruptcy, a source close to the situation said.

Talks with the bondholder group, advised by investment bank Houlihan Lokey, for a $2 billion to $3 billion financing, took place through Saturday and were expected to continue today with the aim of announcing a deal by Monday morning, the source said.

If a deal is not reached, the 101-year-old lender that services nearly one million small- and mid-sized businesses could file for bankruptcy protection as soon as Monday, according to the source, who did not want to be identified because talks are private.

That however doesn't mean being snapped up by a couple other megabanks is off the table. On the contrary, those ghoulish fellows would rather dine off a fresh corpse than worry about a live company.

Talks are also going on a parallel track for debtor-in-possession (DIP) financing if the lender has to file for bankruptcy, the source said. CNBC first reported on the possibility of such funding Friday.

JPMorgan Chase, Goldman Sachs, Barclays and Morgan Stanley, which is also advising the company, might take part in a DIP financing, the source said.

Ahh, DIP financing. Rhymes with RIP financing, which is both a clever warning to the soon to be demised and the noise the assets make when the vultures tear into the corpse, leaving the debt behind. The banks will try to buy the good stuff, only after making a generous reorginization loan to get the company back on its feet...minus a few choice assets bought at pennies on the dollar, of course. After all, these banks are salivating to get at CIT Group's customer base, thousands of various businesses that would become customers of the big guys.

What offer will the megabanks make CIT Group that they can't refuse, I wonder? We'll see shortly. The clock is ticking.