Mutual Reliance Review System for Exemptive Relief Applications - U.S. companyassuming unlisted Canadian public debt deemed to be a reporting issuer.
Continuous Disclosure - Reporting issuer exempted from continuous disclosurerequirements, subject to certain conditions. Disclosure required to be provided bythese provisions would not be meaningful to security holders.
Cease to be a Reporting Issuer - Issuer deemed to have ceased to be reporting issuerpursuant to the Legislation.
Applicable Ontario Statutory Provisions
Securities Act, R.S.O. 1990, c.S.5, as am., ss.75, 77, 78, 80(b)(iii), 81(2), 83,83.1(1)(a), 107, 108, 109, 121(2), Reg. 1015: Sch. I: 59(1).
IN THE MATTER OF
THE MUTUAL RELIANCE REVIEW SYSTEM FOR EXEMPTIVE RELIEF APPLICATIONS
IN THE MATTER OF
THE CIT GROUP, INC. , CIT CREDIT GROUP INC. AND CIT HOLDINGS, LLC
MRRS DECISION DOCUMENT
WHEREAS the local securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia(collectively, the "Jurisdictions") has received an application from The CIT Group, Inc.("CIT"), Newcourt Credit Group Inc., now CIT Credit Group Inc. ("Newcourt") and CITHoldings, LLC ("Holdings") (collectively, the "Filer") for a decision pursuant to thesecurities legislation of the Jurisdictions (the "Legislation") that:
a) Holdings be deemed to be a reporting issuer;
b) Holdings be exempt from the requirements of the Legislation to report materialchanges, to file interim and annual financial statements, to file information circularsand annual information forms (including management's discussion and analysis ofthe financial condition and results of operation of Holdings) and each "insider" (assuch term is defined in the Legislation) of Holdings be exempt from the insiderreporting requirements of the Legislation (the "Continuous DisclosureRequirements"), all subject to certain conditions;
c) Holdings be exempt from the requirements of the legislation to pay any fees relatingto documents filed by CIT pursuant to this Decision; and
d) Newcourt be deemed to cease to be a reporting issuer.
AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission ("OSC") is theprincipal regulator for this application;
AND WHEREAS the Filer has represented to the Decision Makers that:
1. Newcourt is a corporation incorporated under the laws of the Province of Ontario,is a reporting issuer or the equivalent in each Jurisdiction and is not in default ofany requirements of the Legislation. All of Newcourt's common shares are held byCIT Exchangeco Inc. ("Exchangeco") which is an indirect subsidiary of CIT.
2. CIT is a corporation incorporated under the laws of the State of Delaware, is subjectto the reporting requirements of the United States Securities Exchange Act of 1934(the "Exchange Act"), is a reporting issuer or the equivalent in each Jurisdiction andis not in default of any requirements of the Legislation.
3. Holdings is a limited liability company formed under the laws of the State ofDelaware, all of its membership interests are held by CIT, and it is not a reportingissuer or the equivalent in any Jurisdiction.
4. On November 15, 1999, Newcourt and CIT combined by way of a plan ofarrangement (the "Arrangement") pursuant to section 182 of the BusinessCorporations Act (Ontario). Pursuant to the Arrangement, common shareholdersof Newcourt received either exchangeable shares ("Exchangeable Shares") ofExchangeco or shares of CIT Common Stock. The Exchangeable Shares and theshares of CIT Common Stock are both listed on The Toronto Stock Exchange.Upon completion of the Arrangement, Exchangeco held all the outstanding sharesin the capital of Newcourt and Newcourt became an indirect subsidiary of CIT.Immediately following the completion of the Arrangement, Newcourt's commonshares were delisted from The Toronto Stock Exchange, the Montreal Exchangeand the New York Stock Exchange ("NYSE").
5. As part of the Arrangement, pursuant to a mutual reliance review system decisiondocument issued by, among others, the Jurisdictions In the Matter of The CITGroup, Inc., 3026192 Nova Scotia Company and CIT Exchangeco Inc. datedNovember 1, 1999 (the "November Decision Document"), CIT and Exchangecowere granted, amongst other things, exemptive relief from certain continuousdisclosure requirements of the Legislation, subject to certain conditions.Exchangeco's and CIT's filing requirements (aside from material change reportsand press releases relating to Exchangeco alone) are to be satisfied through CIT'sfiling with all Canadian securities regulators copies of all documents required to befiled by CIT with the United States Securities and Exchange Commission (the"SEC") under the Exchange Act. Furthermore CIT must comply with therequirements of the NYSE with respect to public disclosure of timely information,and all disclosure material furnished to holders of CIT Common Stock must beconcurrently sent to holders of Exchangeable Shares.
6. At the time of the completion of the Arrangement, Newcourt had outstandingunlisted public debt securities in Canada ("Canadian Public Debt") pursuant to atrust indenture dated June 1, 1995 between The R-M Trust Company (now CIBCMellon Trust Company) (the "Trustee") and Newcourt and supplemental indenturesthereto (collectively, the "Indenture"). The debt securities were issued under theIndenture in five series (pursuant to three shelf prospectuses).
7. On November 15, 1999, CIT provided an unconditional, absolute and irrevocableguaranty of full and prompt payment of all principal and interest on the CanadianPublic Debt (the "Guaranty").
8. On January 1, 2000, CIT reorganized certain of its subsidiaries in order to achieveefficiencies within the CIT group of companies. Two of the principal aspects of thereorganization were (i) the interposition of Holdings in the chain of ownershipbetween CIT and Newcourt such that Newcourt became an indirect subsidiary ofHoldings, and (ii) the transfer by Newcourt of all the outstanding shares of its directsubsidiary, Newcourt Credit Group USA Inc. ("NUSA"), to Holdings.
9. As the sale of NUSA may be considered under the terms of the Indenture to be asale of substantially all of Newcourt's assets, Holdings and Newcourt entered intoa supplemental indenture to the Indenture whereby Holdings expressly assumedall Newcourt's obligations under the outstanding Canadian Public Debt andHoldings became the primary obligor thereunder. Upon such assumption, Newcourtwas expressly relieved of any further obligations under the Indenture and thesecurities issued thereunder. The Guaranty of CIT continues to operate in favourof Holdings' obligations under the Canadian Public Debt. The holders of all theCanadian Public Debt were notified in writing as to the assumption by Holdings ofall Newcourt's obligations under the outstanding Canadian Public Debt.
10. The Indenture requires that the successor company (Holdings) provide to theTrustee, on behalf of securityholders, copies of the documents, information andreports that Holdings is required to file with the Ontario Securities Commission.The Indenture does not require that any such documents or information be mailedor delivered to holders of the Canadian Public Debt.
11. It is the intention of CIT, Newcourt and Holdings that once the Canadian PublicDebt is no longer outstanding then Holdings will forthwith apply to the Jurisdictionsto cease to be a reporting issuer.
12. Newcourt has less than 15 security holders.
AND WHEREAS pursuant to the System, this MRRS Decision Document evidencesthe decision of each Decision Maker (collectively, the "Decision");
AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make the Decisionhas been met;
THE DECISION of the Decision Makers pursuant to the Legislation is:
1. Holdings shall be deemed to be a reporting issuer for the purposes of theLegislation.
2. The Continuous Disclosure Requirements shall not apply to Holdings, providedthat, at the time that any such requirement would otherwise apply:
(a) CIT shall be in compliance with the relevant provisions of the NovemberDecision Document such that:
(i) CIT files with the Decision Makers copies of all documents requiredto be filed by it with the SEC under the Exchange Act including, butnot limited to, copies of any Form 10-K, Form 10-Q, Form 8-K andproxy statements prepared in connection with CIT's annual meetings,which documents will include financial statements prepared solely inaccordance with United States generally accepted accountingprinciples; and
(ii) CIT complies with the requirements of the NYSE in respect of makingpublic disclosure of material information on a timely basis andforthwith issue in the Jurisdictions and file with the Decision Makersany press release that discloses a material change in CIT's affairs;
(b) Notwithstanding that the Continuous Disclosure Requirements shall notapply to Holdings, Holdings shall comply with the requirements of theLegislation to issue a press release and file a report with the DecisionMakers upon the occurrence of a material change in the affairs of Holdingsthat is not a material change in the affairs of CIT;
(c) CIT remains the direct or indirect beneficial owner of all of the issued andoutstanding membership interests of Holdings;
(d) Holdings has not sought or obtained public financing by way of an offeringof securities; and
(e) CIT has continued to provide an unconditional, absolute and irrevocableguaranty of full and prompt payment of all principal and interest on theCanadian Public Debt.
3. Holdings shall be exempt from any fee payments under the Legislation, except inBritish Columbia and Saskatchewan, relating to filings made by CIT pursuant to thisDecision.
4. Newcourt shall be deemed to have ceased to be a reporting issuer for the purposesof the Legislation.
September 29th, 2000.
"J. A. Geller" "Howard I. Wetston"