Rule 424(b)(3)
Registration Statement No. 333-119172
CUSIP: 12560PDR9
PRICING SUPPLEMENT NO. 7
Dated February 24, 2005 to
Prospectus, dated October 28, 2004 and
Prospectus Supplement, dated October 29, 2004
$50,000,000
[CIT LOGO] [GRAPHIC OMITTED]
CIT Group Inc.
Consumer Price Index Linked Floating Rate Notes
Due March 15, 2017
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: March 15, 2005
Form: Global Note
Maturity Date: March 15, 2017, 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 March 15, 2005 to
but excluding April 15, 2005, the Notes
will bear interest at 4.82%;
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: +185 basis points (1.85%)
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 15th calendar day of each month,
commencing on April 15, 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 15th calendar day of
each month, commencing on April 15,
2005, provided that if any such day
(other than the Maturity Date) is not a
Business Day, then the Interest Payment
Date will be postponed to the following
day which is a Business Day. If the
Maturity Date falls on a day which is
not a Business Day, then the required
payment of principal, premium, if any,
and/or interest will be made on the
following day which is a Business Day
as if it were made on the date such
payment was due, and no interest shall
accrue as a result of such delayed
payment.
Calculation of Interest: The interest rate for the Notes for
each Interest Reset Period from and
including April 15, 2005 to but
excluding the Maturity Date will be the
sum of the Consumer Price Index
Adjustment Rate (as described below)
and the Spread (1.85%).
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 March 15, 2005 to
but excluding April 15, 2005, CPIt will
be the CPI for January 2005 and CPIt-12
will be the CPI for January 2004. The
CPI for January 2005 was published by
the Bureau of Labor Statistics of the
U.S. Department of Labor and reported
on Bloomberg CPURNSA in February 2005
and the CPI for January 2004 was
published and reported in February
2004.
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 March 15, 2005.
Exchange Listing: None
Trustee, Registrar, Calculation Agent, J.P. Morgan Trust Company, National
Authenticating Agent and U.S. Association
Paying Agent:
CUSIP: 12560PDR9
2
ADDITIONAL RISK FACTORS
You should carefully consider the following discussion of risks, and
the other information provided and incorporated by 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 1.85%, 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 April 15, 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 January
2005, as reported by the Bureau of Labor Statistics of the U.S. Department of
Labor.
Month 2005 2004 2003 2002 2001 2000 1999
----- ---- ---- ---- ---- ---- ---- ----
January 190.7 185.2 181.7 177.1 175.1 168.8 164.3
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 -- 191.0 184.5 181.3 177.4 174.1 168.3
December -- 190.3 184.3 180.9 176.7 174.0 168.3
As stated in "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 February 28, 2005.
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
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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 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 February 28, 2005. 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 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 February 24, 2005,
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