Rule 424(b)(3)
Registration Statement No. 333-119172
CUSIP 12560PDT5
PRICING SUPPLEMENT NO. 10
Dated April 22, 2005 to
Prospectus, dated October 28, 2004 and
Prospectus Supplement, dated October 29, 2004
CIT GROUP INC.
GLOBAL MEDIUM-TERM FLOATING RATE NOTES
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(X) Senior Note ( ) Subordinated Note
Principal Amount: $330,000,000
Proceeds to Corporation: 99.875% or $329,587,500
Agent's Commission: 0.125% or $412,500, payable on the Original
Issue Date.
Issue Price: 100% or $330,000,000
Form: Global Note
Original Issue Date: April 27, 2005
Initial Maturity Date: April 27, 2007, provided that if such day is
not a Business Day, the payment of principal
and interest may be made on the next succeeding
Business Day as if it were made on the date
that the payment was due and no interest on
such principal will accrue for the period from
and after the Initial Maturity Date if the
maturity of all or any portion of the principal
amount of the Notes is not extended in
accordance with the procedures described below.
Final Maturity Date: April 27, 2015, provided that if such day is
not a Business Day, the payment of principal
and interest may be made on the next succeeding
Business Day as if it were made on the date
that the payment was due, and no interest on
such principal will accrue for the period from
and after the Final Maturity Date.
Actual Maturity Date: Each April 27 and October 27, beginning April
27, 2007, provided that if such day is not a
Business Day, the payment of principal and
interest may be made on the next succeeding
Business Day as if it were made on the date
that the payment was due, and no interest on
such principal will accrue for the period from
and after the Actual Maturity Date.
Election Dates: The Election Dates will be each April 27 and
October 27, provided that if any such day is
not a Business Day, the Election Date will be
extended to the next succeeding Business Day.
Election Notice Period: The Election Notice Period for each Election
Date will begin ten Business Days prior to an
Election Date, and end two Business Days
immediately preceding the Election Date.
Interest Rate Basis: LIBOR Telerate (page 3750)
Index Maturity: Three months
Goldman, Sachs & Co.
Interest Reset Dates: Quarterly on January 27, April 27, July 27, and
October 27 of each year, commencing on July 27,
2005, provided that if any such day would
otherwise fall on a day that is not a Business
Day, then the Interest Reset Date will be the
next succeeding Business Day, except that if
such Business Day is in the next succeeding
calendar month, such Interest Reset Date will
be the immediately preceding Business Day.
Interest Payment Dates: Interest will be paid (i) on the Actual
Maturity Date, and (ii) quarterly on January
27, April 27, July 27 and October 27,
commencing on July 27, 2005, provided that if
any such day (other than a maturity date or
the date of redemption) is not a Business Day,
then the Interest Payment Date will be
postponed to the following day which is a
Business Day, except that if such Business Day
is in the next succeeding calendar month, such
Interest Payment Date will be the immediately
preceding Business Day.
Interest Determination Dates: Two London Business Days prior to each Interest
Reset Date.
Interest Rate Calculation: LIBOR Telerate determined on the Interest
Determination Date plus the applicable Spread
(as described below).
Initial Interest Rate: LIBOR Telerate determined two London Business
Days prior to the Original Issue Date plus the
applicable Spread.
Spread: Information relating to the Spread is set forth
below under "Spread" on page 3 of this Pricing
Supplement.
Accrual of Interest: Accrued interest on the Notes will be computed
by adding the Interest Factors (as described
below) calculated for each day from the
Original Issue Date or from the last date to
which interest has been paid or duly provided
for up to but not including the applicable
Interest Payment Date, or Maturity Date, as the
case may be. The "Interest Factor" for any Note
for each such day will be computed by
multiplying the face amount of the Note by the
interest rate applicable to such day and
dividing the product thereof by 360.
Optional Redemption: We may redeem the Notes, in whole or in part,
on April 27, 2011 and on any Interest Payment
Date thereafter, at a redemption price equal to
the principal amount of Notes being redeemed
plus accrued and unpaid interest through the
redemption date. We will provide you with at
least 20 business days' prior notice of any
such redemption.
Day Count Convention: Actual/360
Specified Currency: U.S. Dollars ($)
Denominations: The Notes will be issued in denominations of
$100,000 and integral multiples of $1,000
Delivery: The Notes are expected to be delivered in
book-entry form only, to purchasers through the
Depository Trust Company ("DTC") on or about
April 27, 2005.
Maximum Interest Rate: Maximum rate permitted by New York law.
Minimum Interest Rate: 0.0%
Exchange Listing: None.
Trustee, Registrar, J.P. Morgan Trust Company, National Association
Authenticating Agent, U.S.
Calculation Agent and U.S.
Paying Agent:
CUSIP: 12560PDT5. In the event you do not elect to
extend the maturity of all or any portion of
your Notes, the principal amount of the Notes
for which you do not exercise such election
will be assigned a new CUSIP number.
Agent: Goldman, Sachs & Co.
2
Other Provisions: "LIBOR Telerate" means the rate for deposits in
U.S. dollars having the Index Maturity
specified above which appears on the Telerate
Page 3750 (defined below) as of 11:00 a.m.,
London time, on the applicable Interest
Determination Date.
"Telerate Page 3750" means the display page
designated as page 3750 on the Moneyline
Telerate service (or such other page as may
replace page 3750 on that service for the
purpose of displaying London Interbank Offered
Rates).
"Business Day" means any day, other than a
Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions
are authorized or required by law or regulation
(including any executive order) to close in the
City of New York and that is also a London
Business Day.
"London Business Day" means any day on which
dealings in deposits in U.S. dollars are
transacted in the London interbank market.
SPREAD
The table below indicates the applicable Spread to be added to the
Interest Rate Basis for the Interest Reset Dates occurring during each of the
indicated interest periods:
For the issue date and Interest Reset Dates occurring: Spread:
------------------------------------------------------------ ----------------
From and including the issue date to but excluding the April plus .09%
2006 Interest Reset Date
From and including the April 2006 Interest Reset Date to but plus .10%
excluding the April 2007 Interest Reset Date
From and including the April 2007 Interest Reset Date to but plus .11%
excluding the April 2008 Interest Reset Date
From and including the April 2008 Interest Reset Date to but plus .12%
excluding the April 2009 Interest Reset Date
From and including the April 2009 Interest Reset Date to but plus .13%
excluding the April 2010 Interest Reset Date
From and including the April 2010 Interest Reset Date to but plus .14%
excluding the Final Maturity Date
EXTENSION ELECTION
The Notes will mature on the Initial Maturity Date, unless the maturity
of all or any portion of the principal amount of the Notes is extended in
accordance with the procedures described below. In no event will the maturity of
the Notes be extended beyond the Final Maturity Date.
During an Election Notice Period you may elect to extend the maturity
of all or any portion of the principal amount of your Notes (in any multiple of
$1,000) so that the maturity of your Notes will be extended to the date opposite
the listed Election Date. The Election Dates and the corresponding Actual
Maturity Dates are:
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ELECTION DATE ACTUAL MATURITY DATE
------------------------------- ---------------------------------
October 2005 Election Date October 2007 Actual Maturity Date
April 2006 Election Date April 2008 Actual Maturity Date
October 2006 Election Date October 2008 Actual Maturity Date
April 2007 Election Date April 2009 Actual Maturity Date
October 2007 Election Date October 2009 Actual Maturity Date
April 2008 Election Date April 2010 Actual Maturity Date
October 2008 Election Date October 2010 Actual Maturity Date
April 2009 Election Date April 2011 Actual Maturity Date
October 2009 Election Date October 2011 Actual Maturity Date
April 2010 Election Date April 2012 Actual Maturity Date
October 2010 Election Date October 2012 Actual Maturity Date
April 2011 Election Date April 2013 Actual Maturity Date
October 2011 Election Date October 2013 Actual Maturity Date
April 2012 Election Date April 2014 Actual Maturity Date
October 2012 Election Date October 2014 Actual Maturity Date
April 2013 Election Date April 2015 Actual Maturity Date
To make an effective election, you must deliver a notice of election
during the Election Notice Period. Your notice of election must be delivered to
J.P. Morgan Trust Company, National Association, the Paying Agent for the Notes,
through the normal clearing system channels described in more detail below, no
later than the close of business in New York City on the last Business Day in
the applicable Election Notice Period, at which time such notice becomes
irrevocable.
If, with respect to any Election Date, a holder does not make an
election to extend the maturity of all or a portion of the principal amount of
such holder's Notes, the principal amount of the Notes for which such holder has
failed to make such an election will become due and payable on the earlier of
the Initial Maturity Date or such later Actual Maturity Date listed above,
opposite the relevant Election Date on which the Notes were extended. The
principal amount of the Notes for which such election is not exercised will be
represented by a new Global Note issued on such Election Date. The Global Note
so issued will have the same terms as the Notes, except that it will not be
extendible, will have a separate CUSIP number, will have the Spread as specified
above, and its maturity date will be the earlier of the Initial Maturity Date or
such later corresponding Actual Maturity Date listed opposite the relevant
Election Date on which the Notes were extended. The failure to elect to extend
the maturity of all or any portion of the Notes will be irrevocable and will be
binding upon any subsequent holder of such Notes.
The Notes are issued in registered global form and remain on deposit
with DTC, the depositary for the Notes. Therefore, you must exercise the option
to extend the maturity of your Notes through DTC. To ensure that DTC receives
timely notice of your election to extend the maturity of all or a portion of
your Notes, so that it can deliver notice of your election to the Paying Agent
prior to the close of business in New York City on the last Business Day in the
Election Notice Period, you must instruct the direct or indirect DTC participant
through which you hold an interest in the Notes in accordance with the then
applicable operating procedures of the DTC.
The DTC must receive any notice of election from its DTC participants
no later than 12:00 noon (New York City time) on the last Business Day in the
Election Notice Period for the DTC to deliver timely notice of your election to
the Paying Agent. Different DTC direct or indirect participants have different
deadlines for accepting instructions from their customers. You should consult
the direct or indirect DTC participant through which you hold an interest in the
Notes to ascertain the deadline for ensuring that timely notice will be
delivered to DTC.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
This section supplements and incorporates the discussion of material
U.S. federal income tax consequences under the caption "Material U.S. Federal
Income Tax Consequences" in the accompanying Prospectus Supplement, dated
October 29, 2004, with respect to U.S. Holders (as defined therein), and is
subject to the limitations and qualifications therein.
There are no Treasury regulations, administrative rulings or other
authorities directly addressing the U.S. federal income tax treatment of debt
instruments with terms that are substantially similar to the Notes, and
therefore, the U.S. federal income tax treatment of the Notes is uncertain. In
the absence of further guidance, we intend to take the position that the
election by a holder to extend the maturity of a Note will not be a taxable
event for U.S. federal income tax purposes. This position is based on our
interpretation of the Treasury regulations governing original issue discount
("OID") on debt instruments (the "OID Regulations") and the Treasury regulations
dealing with modifications to the terms of debt instruments (the "Modification
Regulations").
Pursuant to the Modification Regulations, the exercise of an option by
a holder of a debt instrument to defer the timing of any scheduled payment due
under the debt instrument is a taxable event if, based on all the facts and
circumstances, the deferral is considered to be material. In this regard, a safe
harbor is provided under which a deferral that extends the maturity of a debt
instrument for the lesser of 5 years or 50% of the original term to maturity of
the debt instrument does not give rise to a taxable event (the "50% Safe
Harbor"). The Modification Regulations do not specifically address, however,
debt instruments with features such as the Notes, including the economic
equivalence of the Notes to a ten-year debt instrument containing put and call
options.
Under the OID Regulations, in considering the effect of a holder or
issuer option on the determination of the yield and maturity of a debt
instrument, a holder is deemed to exercise or not exercise an option in a manner
that maximizes yield, and an issuer is deemed to exercise or not exercise an
option so as to minimize yield. As applied to the Notes, a holder can be
presumed, as of the issue date, to exercise the option to extend the maturity of
the Notes, likely until the final maturity date, because the spread for
computing the coupon rates on the Notes will periodically increase from an
initial amount equal to .09% to an amount equal to .14%. However, although the
spread for computing the coupon rates of the Notes will not increase after April
27, 2010, the overall yield of the Notes can be viewed as being reduced if our
option to call the Notes for redemption is exercised on April 27, 2011.
Accordingly, we will treat the Notes as having a 6-year term to maturity based
upon the OID Regulations.
Assuming a 6-year term to maturity for the Notes, we believe that a
holder's election to extend the maturity of all or any portion of the principal
amount of the Notes (in accordance with the procedures described herein)
reasonably can be treated as not giving rise to a taxable event for U.S. federal
income tax purposes. The 50% Safe Harbor would allow for an extension of the
Notes for up to 3 years (or 50% of their assumed 6-year term to maturity), and
we intend to take the position that additional extensions of the maturity of the
Notes for up to 1 year until April 2015 would not be material based on all the
facts and circumstances. Based on such treatment, the election by a holder to
extend the maturity of a Note to its final maturity date in April 2015 would not
constitute a taxable event under the Modification Regulations.
Prospective investors should be aware that the interrelationship of the
OID Regulations and the Modification Regulations is not clear, so there can be
no assurance that the IRS will accept, or that the courts will uphold, our
treatment of the Notes under the Modification Regulations. In particular, the
IRS might view the Notes as having a 2-year maturity with an election to extend
the maturity of the Notes beyond April 27, 2008 (i.e., applying the 50% Safe
Harbor to a 2-year note) constituting a taxable event for U.S. federal income
tax purposes. Even if the IRS treats the Notes as having a 6-year term, the IRS
may view any extension of the Notes' maturity beyond April 2014 as resulting in
a taxable event. If an election to extend the maturity of the Notes is
considered a taxable event for U.S. federal income tax purposes under the
Modification Regulations, a holder generally would be required to recognize any
gain inherent in the Notes at the time of such an extension, and might be
required to accrue OID on the Notes following the election.
If the Notes are treated in accordance with our intended position
described above, the Notes would be treated as having been issued with only a de
minimis amount of OID for U.S. federal income tax purposes and, therefore, would
not constitute Original Issue Discount Notes, as such term is defined in the
Prospectus Supplement, dated October 29, 2004, under the caption "Material U.S.
Federal Income Tax Consequences." It is possible, however, that the IRS could
assert that the Notes are subject to special rules governing "contingent payment
debt instruments." If the IRS were successful in making this assertion, holders
might be required to accrue OID on the Notes in advance of their receipt of
actual interest payments, and any gain recognized with respect to the Notes
generally would be treated as ordinary income.
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Prospective investors should consult their own tax advisors regarding
the U.S. federal income tax treatment and the tax consequences to them of the
acquisition, ownership and disposition of the Notes, including the tax
consequences of an election to extend the maturity date of the Notes.
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