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Financial Sector Update for 10/07/2016: CIT,NSA,UEPS

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Financial stocks were falling Friday, with the NYSE Financial Sector Index sinking about 0.6% while financial companies in the S&P 500 Index were declining by about 0.4%.

In company news, shares of the CIT Group ( CIT ) surged earlier Friday after the specialty lender late yesterday announced a deal to sell its CIT Commercial Air unit to Avolon Holding Ltd for $10 billion.

The deal included operations and forward order commitments as well as around $11.1 billion in assets and $1.7 billion in liabilities. Based on the $9.4 billion adjusted net asset value, CIT received a 6.7% premium from the sale.

CIT also said the Federal Reserve issued a non-objection notice to its revised capital plan to return $2.975 billion of common equity to its shareholders and paying $64 million in dividends on its common stock using proceeds from the Commercial Air sale. It also plans to return $325 million in common equity, contingent on the issue of an equal amount of Tier 1 qualifying preferred stock.

Following the CIT announcement, analysts at Stifel Nicolaus today cut their investment recommendation to hold from buy but raised their price target for the company's stock by $1 to $41 a share.

CIT shares were up more than 1% at $36.82 apiece this afternoon, previously climbing to a session high of $37.98 a share.

In other sector news,

(+) NSA, (+1.3%) Closes on $630 mln purchase of iStorage portfolio of 66 properties with an estimated 4.5 mln square feet of rentable space in 12 states.

(-) UEPS, (-4.0%) Prices $45 mln private placement of 2.5 mln shares each to N2 Partners and Draper Gain Technologies at $9 apiece, an 18.4% discount to Thursday's closing price.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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