Transcript Document

Introduction to CIT Energy
January 16, 2007
IPAA
Confidential. For discussion purposes only.
1
The World’s Largest Independent Finance Company
 Headquartered
 Over
in New York City
$80 billion in managed assets
 Rated A/A2
 Market
Capitalization of $4 Billion
 Fortune
500 Company; member of the S&P 500
 80%
of clients are Fortune 1000 companies
 Over
7,000 employees worldwide
Confidential. For discussion purposes only.
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The World’s Largest Independent Finance Company
CIT is not…


…a commercial bank – we are not regulated like a bank
allowing us to invest across the entire capital spectrum
… a hedge fund - we are an arranger, underwriter and
distributor of both 1st and 2nd Lien paper, as well as junior
capital investments.
CIT is…

…an Energy Merchant Bank with a unique ability to
arrange and underwrite solutions across the entire
capital spectrum.
Confidential. For discussion purposes only.
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CIT Energy - Overview
Industry Sub-Vertical Focus
Houston
Upstream
New York
Midstream
CIT Energy provides advice
and financial solutions for
clients that operate throughout
the energy industry value
chain
Power/Renewables
Power Generation
E&P
Gathering &
Service
Transmission &
Services
Oil Field Services
Transmission
Alternative Energy
Sources
Conversion
Confidential. For discussion purposes only.
Delivery
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U.S. Middle Market Lead Arranger
“Traditional Middle Market” = Deal size $100-500 million
2004 U.S. Traditional Middle Market Lead Arranger
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Bank Holding Company
Bank of America
JP Morgan
Wachovia Securities
Wells Fargo & Company
PNC Bank
ABN AMRO Bank N.V.
General Electric Capital Corporation
Antares Capital Corporation
KeyBank
National City Corporation
Harris Nesbitt
Ableco Finance/Dymas Capital
U.S. Bancorp
BNP Paribas
Merrill Lynch & Company
Madison Capital Funding LLC
CIT Group
Goldman Sachs & Company
SunTrust Bank
Credit Suisse First Boston
Bank of New York Company
GMAC Commercial Finance
CIBC World Markets
Citigroup
Fifth Third Bank
Comerica
M&T Bank
Scotia Capital
Citizens Bank
Rabobank
Lead Arranger Volume
10,514,708,519
7,246,041,164
5,151,032,500
4,453,867,338
3,507,517,000
2,750,350,192
2,563,580,000
1,599,000,000
1,581,954,999
1,556,351,425
1,358,430,000
1,311,600,000
1,123,515,000
1,082,216,370
961,048,824
949,255,689
932,000,000
877,500,000
791,000,000
755,000,000
654,875,000
432,000,000
381,000,000
376,000,000
314,900,000
305,900,000
302,000,000
301,535,149
262,500,000
258,760,000
# of Deals
232
157
94
90
124
52
58
33
37
33
27
26
22
22
18
21
25
11
15
14
15
7
7
8
7
7
5
7
6
5
2006 U.S. Traditional Middle Market Lead Arranger
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Bank Holding Company
Bank of America
JP Morgan
General Electric Capital Corporation
PNC Bank
Wells Fargo & Company
ABN AMRO Bank N.V.
National City Corporation
Wachovia Securities
CIT Group Inc
BMO Capital Markets
Madison Capital Funding LLC
Merrill Lynch & Company
CapitalSource Finance LLC
KeyBank
Credit Suisse
U.S. Bancorp
BNP Paribas
SunTrust Bank
Fifth Third Bank
Bank of New York Company
Royal Bank of Scotland Plc
Ableco Finance/Dymas Capital
Citigroup
CIBC World Markets
RBC Capital Markets
Freeport Financial LLC
GMAC Commercial Finance
Union Bank of California
Credit Agricole SA
AC Finance LLC
Lead Arranger Volume
7,759,692,230
5,532,200,000
4,387,626,067
3,898,504,497
3,793,489,465
2,961,120,500
1,768,660,000
1,742,343,000
1,580,700,000
1,497,307,043
1,474,920,000
1,077,051,000
967,850,000
920,603,851
835,500,000
751,900,000
723,297,337
711,000,000
492,100,000
431,592,000
418,000,000
390,000,000
330,000,000
267,500,000
263,500,000
260,000,000
255,600,000
238,100,000
236,500,000
236,200,000
# of Deals
153
109
80
120
76
54
38
41
28
29
32
20
20
21
12
14
12
13
10
10
6
5
7
5
7
6
5
7
5
7
Source: Reuters Loan Pricing Corporation
Confidential. For discussion purposes only.
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CIT Energy – Life Cycle Solution
Life Cycle Example
Initial
CapitalizationEquity
Financing
Stage
of Growth
Company
Acreage
acquired, drilling
begins; reserve
mix of some
PDPs, but mostly
PUDs
CIT provides
$10 million
Stretch 1st Lien
CIT
Solution
Additional
drilling; more
PDPs, some
PDNPs & PUDs;
large acreage
position
CIT provides
$25 million
Stretch 1st Lien
Refinancing 6
months later;
1st & 2nd Lien
structure now
available
CIT provides
$25 million
Conforming 1st Lien
&
$15 million 2nd Lien
$100 million
Acquisition
CIT arranges,
underwrites and
syndicates
$100 million 1st Lien
&
$40 million 2nd Lien
CIT begins initial
dialogue
Time
Confidential. For discussion purposes only.
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CIT Energy: Start-Up Acquisition Financing
Profile
Former executive of major oil companies making a $15 million
start-up acquisition
Situation
Start-up acquisition with drop dead date
CIT Energy to underwrite debt (Unitranche equivalent to 1st, 2nd,
and Mezz)
Equity bows out of transaction at 5:00 p.m. on Friday with deal set
to close the following Wednesday
CIT Solution
CIT Energy obtains approval to bridge the equity (based on soft
circle from new equity provider) on the following Tuesday and the
deal closes on Wednesday as scheduled
Confidential. For discussion purposes only.
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CIT Energy: Early Development Financing
Profile
Early Stage Development Financing - $12 million
Situation
Very small producer in business for two years
No PDPs and in need of development capital
Use of proceeds: 1) buy out other 50% owner, 2) lay gathering
line, 3) refinance existing debt, 4) fund drilling and acquisition of
additional acreage
CIT Solution
Arranged and hold both 1st ($0 outstanding) and 2nd Lien facility
Debt facilities structured to grow with the company with appropriate
pricing for 1st and 2nd Lien risks
Confidential. For discussion purposes only.
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CIT Energy: Gulf of Mexico
Profile
Gulf of Mexico - $34 million development capital
Situation
Producer seeking financing for additional development capital
Positioning company for sale
CIT Solution
CIT Energy arranged $16 million 1st Lien and $18 million 2nd Lien
Use of proceeds: $30 million refinancing and $4 million for new
drilling capital
Noteworthy 2nd Lien underwriting and hold on GOM properties
Confidential. For discussion purposes only.
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CIT Energy Overview – Sample Transactions
$25,000,000
$15,000,000
$18,000,000
$18,000,000
Senior Secured 2nd Lien
Credit Facility
Senior Secured 2nd Lien
Credit Facility
Senior Secured Revolving
Credit Facility
Senior Secured Revolving
Credit Facility
Ascent Oil and Gas, Inc.
ERG Resources, LLC
Corkran Energy, LP
TransEnergy, Inc.
July 2007
October 2007
June 2007
June 2007
Co-Lead Arranger
Sole Lead Arranger
Sole Lead Arranger
Sole Lead Arranger
$15,000,000
$400,000,000
$65,000,000
$38,000,000
Senior Secured Credit Facility
Senior Revolving Facility
Term Financing
Senior Secured Revolving Credit Facility
and 2nd Lien Credit Facility
Natural Gas Compression
August 2007
March 2007
Sole Lead Arranger
Co-Syndication Agent
September 2007
Sole Lead Arranger
Confidential. For discussion purposes only.
Sole Lead Arranger
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Questions and Follow-Up
Confidential. For discussion purposes only.
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