Snap-on and CIT were partners in Snap-on Credit LLC, which provided financing to Snap-on’s U.S. franchisees and customers.
In recent weeks, however, CIT’s financial condition has deteriorated. Yesterday, however, it secured a $3 billion loan from its bondholders and plans a comprehensive restructuring of its liabilities. The emergency loan should help keep CIT, a major lender to small- and medium-sized businesses, out of bankruptcy, analysts said.
The Snap-on-CIT joint venture was established in 1999 and CIT has been the exclusive purchaser of the financing contracts originated by Snap-on Credit.
With the termination, Snap-on will acquire CIT’s interest in the joint venture for approximately $8.2 million, Snap-on Credit will become a wholly owned subsidiary of Snap-on Inc., and Snap-on Credit will continue to service the existing portfolio of contracts owned by CIT. The approximate outstanding balance of this portfolio is $834 million. (Tire Review/Akron)