CIT Group Inc. appeared to have reached an agreement securing $3 billion in last-minute rescue financing from its bondholders Sunday in a deal that should keep the struggling lender out of bankruptcy court, people familiar with the matter say.
An announcement detailing the arrangement was expected to be released Monday morning.
The deal, which was reviewed by CIT’s board Sunday night, charges CIT high interest rates, and it doesn’t permanently fix the company’s long-term financing needs, say people involved in the transaction. But it buys time for the lender to restructure itself, and minimizes bondholders’ losses. Bondholders calculated they would lose more if CIT filed for bankruptcy and sold assets at fire-sale prices than if they offered the rescue.
New York-based CIT Group is set to get $3 billion in rescue financing from its largest bondholders in a deal that should keep it out of bankruptcy court.
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