Rule 424(b)(3)
Registration Statement No. 333-119172
CUSIP: 12560PDK4
PRICING SUPPLEMENT NO. 3
Dated November 30, 2004 to
Prospectus, dated October 28, 2004 and
Prospectus Supplement, dated October 29, 2004
$50,000,000
[LOGO]
CIT Group Inc.
Consumer Price Index Linked Floating Rate Notes
Due December 14, 2016
Wachovia Securities
(X) Senior Note ( ) Subordinated Note
Principal Amount: $50,000,000
Proceeds to Corporation: 98.25% or $49,125,000
Underwriters' Commission: 1.75% or $875,000
Issue Price: 100.00% or $50,000,000
Original Issue Date: December 14, 2004
Form: Global Note
Maturity Date: December 14, 2016, 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, and no interest on
such principal will accrue for the
period from and after the Maturity
Date.
Business Day: Any day 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.
Interest Rate: From and including December 14, 2004 to
but excluding January 14, 2005, the
Notes will bear interest at 5.39%;
thereafter, the interest rate for the
Notes for each Interest Reset Period
will be the Consumer Price Index
Adjustment Rate, which will be derived
from a formula based on the Consumer
Price Index ("CPI") (as described
below), plus the Spread.
Spread: +220 basis points (2.20%)
Interest Reset Period: Monthly. Each period from and including
an Interest Reset Date to but excluding
the next succeeding Interest Reset Date.
Interest Reset Dates: The 14th calendar day of each month,
commencing on January 14, 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.
Interest Determination Dates: Each Interest Reset Date.
Interest Payment Dates: Interest will be paid on the Maturity
Date and on the 14th calendar day of
each month, commencing on January 14,
2005, provided that if any such day is
not a Business Day, then the interest
payment will be made on the next
succeeding Business Day as if it were
made on the date that the interest
payment was due, and no interest will
accrue on the amount payable for the
period from and after such Interest
Payment Date or the Maturity Date, as
the case may be.
Calculation of Interest: The interest rate for the Notes for each
Interest Reset Period from and including
January 14, 2005 to but excluding the
Maturity Date will be the sum of the
Consumer Price Index Adjustment Rate (as
described below) and the Spread (2.20%).
The Consumer Price Index Adjustment Rate
will be determined as of the applicable
Interest Determination Date pursuant to
the following formula:
[(CPIt - CPIt-12) / CPIt-12]
Where:
"CPI" is the non-seasonally adjusted
U.S. City Average All Items Consumer
Price Index for All Urban Consumers,
published monthly by the Bureau of
Labor Statistics of the U.S. Department
of Labor, as reported on Bloomberg page
CPURNSA or any successor service.
"CPIt" is the CPI for the second
calendar month prior to an Interest
Reset Date as published and reported on
Bloomberg CPURNSA in the calendar month
prior to such Interest Reset Date.
"CPIt-12" is the Index Level of CPI
for the month 12 months prior to CPIt.
For example, for the Interest Period
from and including December 14, 2004 to
but excluding January 14, 2005, CPIt
will be the CPI for October 2004 and
CPIt-12 will be the CPI for October
2003. The CPI for October 2004 was
published by the Bureau of Labor
Statistics of the U.S. Department of
Labor and reported on Bloomberg CPURNSA
in November 2004 and the CPI for October
2003 was published and reported in
November 2003.
Intermediate calculations will be
rounded to five decimal places and
coupon calculations will be rounded to
three decimal places.
Minimum Interest Rate: 0.00%
Maximum Interest Rate: Maximum rate permitted by New York law.
Day Count Convention: Actual/Actual
Specified Currency: U.S. Dollars ($)
Denominations: The Notes will be issued in
denominations of $1,000 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, on
or about December 14, 2004.
Exchange Listing: None
Trustee, Registrar, Calculation J.P. Morgan Trust Company, National
Agent, Authenticating Agent Association
and U.S. Paying Agent:
CUSIP: 12560PDK4
2
ADDITIONAL RISK FACTORS
You should carefully consider the following discussion of risks, and the
other information provided and incorporated by the accompanying reference in
this pricing supplement and the accompanying Prospectus, dated October 28, 2004
and the accompanying Prospectus Supplement, dated October 29, 2004. The Notes
will not be an appropriate investment for you if you are not knowledgeable about
significant features of the Notes, about our financial condition, operations and
business or financial matters in general. You should not purchase the Notes
unless you understand, and know that you can bear, these risks.
Historical changes in the Consumer Price Index ("CPI") are not necessarily
indicative of future changes.
Movements in the CPI that have occurred in the past are not necessarily
indicative of changes that may occur in the future, which may be wider or more
confined than those that have occurred historically. As reported by the Bureau
of Labor Statistics of the U.S. Department of Labor, the CPI is a measure of the
average change in consumer prices over time in a fixed market basket of goods
and services. In calculating the CPI, price changes for the various items are
averaged together with weights that represent their relative importance in the
spending of urban households in the United States. The contents of the market
basket of goods and services and the weights assigned to the various items are
updated periodically to take into account changes in consumer expenditure
patterns. Changes in the level of the CPI are a function of the changes in
specified consumer prices over time, which result from the interaction of many
factors that we, the agents and their affiliates do not control and cannot
foresee. In addition, changes in the way the CPI is calculated could reduce the
level of the CPI and lower the interest payments with respect to the Notes.
Investors should not rely on any historical changes or trends in the CPI as an
indicator of future changes in the CPI. Changes in the CPI will impact the rate
of interest payable on the Notes but it is impossible to predict whether the
level of the CPI will rise or fall.
During periods of reduced inflation or during periods of deflation, the
interest rate applicable to the Notes for any interest payment period may be
less than the Spread and could be as low as zero.
During periods of reduced inflation, the amount of interest payable on the
Notes will decrease. If the CPI does not increase during a relevant measurement
period, which is likely to occur when there is little or no inflation, owners of
the Notes will receive interest payments for that interest period equal to
2.20%, which is referred to as the Spread. If the CPI decreases during a
relevant measurement period, which is likely to occur when there is deflation,
owners of the Notes will receive interest payments for that interest period less
than the Spread. In some cases, owners of the Notes could receive only the
minimum interest rate, which is 0.00%.
The yield on the Notes may be lower than the yield on a standard debt
security of comparable maturity.
The amounts we will pay you on Interest Payment Dates and the Maturity
Date may be less than the return you could have earned on other investments.
Because the level of the CPI as of each Interest Payment Date may be less than,
equal to or only somewhat greater than its value as of the previous Interest
Payment Date, and because interest payments after January 14, 2005 are
determined by the level of the CPI, the effective yield to maturity on the Notes
may be less than that which would be payable on a conventional fixed-rate,
non-callable debt security of CIT Group Inc. of comparable maturity. In
addition, any such return may not fully compensate you for any opportunity cost
to you when other factors relating to the time value of money are taken into
account.
Changes in the CPI may not correlate with changes in interest rate indices
applicable to other notes issued by us.
Changes in the CPI may bear little or no relationship to changes in
interest rate indices (such as those described in the Prospectus Supplement,
dated October 29, 2004) that may be applicable to other floating rate notes that
we issue. As a result, at any time, your interest rate may be below the interest
rates payable on other non-callable floating rate debt securities of similar
maturity issued by us.
3
THE CONSUMER PRICE INDEX
The amount of interest payable on the Notes on each Interest Payment
Date will be linked to changes in the Consumer Price Index. The Consumer Price
Index for purposes of the Notes is the non-seasonally adjusted U.S. City Average
All Items Consumer Price Index for All Urban Consumers ("CPI"), published
monthly by the Bureau of Labor Statistics of the U.S. Department of Labor and
reported on Bloomberg CPURNSA or any successor service. The CPI for a particular
month is published during the following month. The CPI is a measure of the
average change in consumer prices over time for a fixed market basket of goods
and services, including food, clothing, shelter, fuels, transportation, charges
for doctors and dentists services, and drugs. In calculating the CPI, price
changes for the various items are averaged together with weights that represent
their importance in the spending of urban households in the United States. The
contents of the market basket of goods and services and the weights assigned to
the various items are updated periodically by the Bureau of Labor Statistics of
the U.S. Department of Labor to take into account changes in consumer
expenditure patterns. The CPI is expressed in relative terms in relation to a
time based reference period for which the level is set at 100.0. The base
reference period for the Notes is the 1982-1984 average.
The following table sets forth the CPI from January 1999 to October
2004, as reported by the Bureau of Labor Statistics of the U.S. Department of
Labor.
Month 2004 2003 2002 2001 2000 1999
-------- ----- ----- ----- ----- ----- -----
January 185.2 181.7 177.1 175.1 168.8 164.3
February 186.2 183.1 177.8 175.8 169.8 164.5
March 187.4 184.2 178.8 176.2 171.2 165.0
April 188.0 183.8 179.8 176.9 171.3 166.2
May 189.1 183.5 179.8 177.7 171.5 166.2
June 189.7 183.7 179.9 178.0 172.4 166.2
July 189.4 183.9 180.1 177.5 172.8 166.7
August 189.5 184.6 180.7 177.5 172.8 167.1
September 189.9 185.2 181.0 178.3 173.7 167.9
October 190.9 185.0 181.3 177.7 174.0 168.2
November -- 184.5 181.3 177.4 174.1 168.3
December -- 184.3 180.9 176.7 174.0 168.3
As stated in the "Additional Risk Factors--Historical Changes in the
Consumer Price Index ("CPI") are not necessarily indicative of future changes",
movements in the CPI that have occurred in the past are not necessarily
indicative of changes that may occur in the future, which may be wider or more
confined than those that have occurred historically.
If a previously reported CPI is revised, the Calculation Agent will
continue to use the previously reported CPI in calculating floating amounts. If
the CPI is rebased to a different year, the Calculation Agent will continue to
use the CPI based on the base reference year in effect on November 30, 2004.
If, while an inflation-indexed security issued by the United States
Treasury ("Treasury Inflation-Protection Security") is outstanding, the
applicable CPI is (1) discontinued, (2) in the judgment of the Secretary of the
U.S. Treasury, fundamentally altered in a manner materially adverse to the
interests of an investor in Treasury Inflation-Protection Securities, or (3) in
the judgment of the Secretary of the U.S. Treasury, altered by legislation or
executive order in a manner materially adverse to the interests of an investor
in Treasury Inflation-Protection Securities (each, a "Material Alteration"), the
U.S. Treasury has announced that, after consulting with the Bureau of Labor
Statistics of the U.S. Department of Labor, or any successor agency, the U.S.
Treasury will substitute an appropriate alternative index and will notify the
public of the substitute index and how it will be applied (the "Substitute Index
and Methodology"). Determinations of the Secretary of the U.S. Treasury in this
regard will be final. If the U.S. Treasury announces a Substitute Index and
Methodology for determining the CPI while a Treasury Inflation-Protection
Security is outstanding, the Consumer Price Index Adjustment Rate will be
calculated based on such
4
Substitute Index and Methodology. Determination of the Calculation Agent of the
Consumer Price Index Adjustment Rate utilizing the Substitute Index and
Methodology will be final.
For any date in respect of which the Consumer Price Index Adjustment
Rate is determined (a "Reference Date"), if (i) while a Treasury
Inflation-Protection Security that requires a determination of the CPI for such
Reference Date (the "Reference TIP") is outstanding, a Material Alteration has
occurred, and the U.S. Treasury has not notified the public of a Substitute
Index and Methodology or (ii) while a Reference TIP is not outstanding, and in
the judgment of the Calculation Agent the CPI is (A) discontinued, (B)
fundamentally altered in a manner materially adverse to the interests of an
investor in bonds the interest on which is calculated based upon the CPI for
such Reference Date ("Reference CPI Bonds"), or (C) altered by legislation or
executive order in a manner materially adverse to the interests of an investor
in Reference CPI Bonds, then the Calculation Agent will substitute an
appropriate alternative index and will determine how it will be applied, which,
in the judgment of the Calculation Agent, will result in payments which are
substantially the same as those which would have been calculated utilizing the
methodology for determining CPI applicable on November 30, 2004. Determinations
of the Calculation Agent in this regard will be final.
If the CPI for a particular month is not reported by the last day of
the following month, the U.S. Treasury has indicated that it will announce an
index number based on the last twelve-month change in the CPI available (the
"Substitute Index Number"). Any calculations that rely on that month's CPI will
be based on the Substitute Index Number.
In the event that the Secretary of the U.S. Treasury has not announced
a Substitute Index Number pursuant to the immediately preceding paragraph, then
the Calculation Agent will determine the Substitute Index Number in accordance
with general market practice at the time.
5
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following summary discusses certain material U.S. federal
income tax consequences of the acquisition, ownership and disposition of the
Notes by U.S. Holders (as defined in the accompanying Prospectus Supplement,
dated October 29, 2004). This summary is applicable only to investors who
purchase the Notes in the initial offering at their original issue price and
hold the Notes as capital assets for U.S. federal income tax purposes
(generally, property held for investment). This summary does not address
investors that are subject to special tax rules (including financial
institutions, tax-exempt organizations, dealers in securities, partnerships or
other pass-through entities for U.S. federal income tax purposes and persons
subject to alternative minimum tax) or that hold the Notes as part of an
integrated investment. This summary supplements, and should be read in
conjunction with, the section entitled "Material U.S. Federal Income Tax
Consequences" in the accompanying Prospectus Supplement, dated October 29, 2004.
CIT intends to treat the Notes for U.S. federal income tax
purposes as "variable rate debt instruments" that provide for a stated interest
at a "single objective rate." Assuming the Notes are so treated, a U.S. Holder
will, under the applicable Treasury regulations, be required to include in gross
income, as ordinary interest income, the stated interest on a Note at the time
such interest accrues or is received, in accordance with the U.S. Holder's
regular method of accounting for U.S. federal income tax purposes. In the case
of a U.S. Holder that uses the accrual method of tax accounting, the amount of
interest accrued during an accrual period would be determined by assuming that
the Notes bear interest at a fixed interest rate that reflects the yield that is
reasonably expected for the Notes, and the interest allocable to the accrual
period would be adjusted to reflect the interest actually paid during the
accrual period.
U.S. Holders are urged to 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.
6
PLAN OF DISTRIBUTION
We have entered into a terms agreement, dated as of November 30, 2004,
with Wachovia Capital Markets, LLC ("Wachovia"). Subject to the terms and
conditions set forth in the terms agreement, we have agreed to sell to Wachovia,
and Wachovia has agreed to purchase, the entire principal amount of the Notes
being offered pursuant to this pricing supplement.
We have been advised by Wachovia that it proposes initially to offer
the Notes to the public at the public offering price set forth on page one of
this pricing supplement, and to certain dealers at a price less a concession not
in excess of 1.25% of the principal amount of the Notes. Wachovia may allow, and
the dealers may reallow, a concession to certain other dealers not in excess of
1.25% of the principal amount of the Notes. After the initial public offering,
the public offering prices and these concessions may be changed from time to
time.
The Notes are a new issue of securities with no established trading
market. Wachovia has advised us that they intend to make a market in the Notes,
but Wachovia is not obligated to do so and may discontinue any market making at
any time without notice. The trading market for the Notes may not be liquid.
The terms agreement provides that the obligations of Wachovia are
subject to certain conditions precedent and Wachovia will purchase all the Notes
if any are purchased.
In connection with this offering, Wachovia and its respective
affiliates may engage in transactions that stabilize, maintain, or otherwise
affect the market price of the Notes. Those transactions may include
stabilization transactions effected in accordance with Rule 104 of Regulation M
under the Securities Exchange Act of 1934, pursuant to which Wachovia and its
affiliates may bid for or purchase Notes for the purpose of stabilizing the
market price. Wachovia also may create a short position for its own account by
selling more Notes in connection with this offering than they are committed to
purchase from us. In that case, Wachovia may purchase Notes in the open market
following completion of this offering to cover its short position. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the Notes at a level above that which might otherwise prevail in the
open market. None of the transactions described in this paragraph is required,
and, if they are undertaken, they may be discontinued at any time.
Wachovia and its affiliates have provided and will in the future
continue to provide banking and/or other financial services to CIT and its
subsidiaries.
The terms agreement provides that CIT will indemnify Wachovia against
certain liabilities, including liabilities under the Securities Act of 1933, or
contribute to payments Wachovia may be required to make in respect thereof.
7