CIT $3B Rescue Financing Split Into Two Parts 1 minute ago NEW YORK (Dow Jones)--CIT Group Inc. (CIT)'s $3 billion rescue financing, agreed
on by bondholders over the weekend, is split into two parts, according to two
people familiar with the situation.
A first part, for $2 billion, was committed Monday, while the second, $1 billion,
piece will be made available to the company in the near future, they said.
An announcement detailing the arrangement is expected to be released Monday. The
company wasn't immediately available for comment.
CIT reached the agreement with its bondholders Sunday. The new loan will act like
a "bridge" to a series of debt-exchange offers that CIT would launch to get
bondholders to swap some of their bonds for equity in the company or for new debt
that matures later.
CIT, founded in 1908, is a lender to around 1 million mostly small and midsize
businesses ranging from restaurants and private schools to clothing makers. It
also leases railcars, aircraft and equipment, and it has a large business
providing cash to manufacturers and collecting on their invoices.
For years, CIT funded its activities largely by selling bonds - only to find
itself in trouble when credit markets froze up a year or so ago.
Six of CIT's largest bondholders, including Pacific Investment Management Co.,
Oaktree Capital, Silver Point Capital and Centerbridge Partners, agreed to rescue
financing and also committed to other steps to help strengthen CIT's financial
position. Other bondholders, including Capital Research & Management and Baupost
Group, are also part of the deal.
-By Joe Bel Bruno and Kate Haywood, Dow Jones Newswires; 212-416-2469;
joe.belbruno@dowjones.com
(Jeffrey McCracken and Serena Ng at The Wall Street Journal contributed to this
report.)
Sentiment : Strong Buy
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