CIT to redeem all of Series A 2014 bonds, renew trade finance conduit facility
16 Sep 2011
CIT Group Inc, a leading provider of finance to small businesses and middle market companies, today announced plans to redeem the balance of its 7 per cent Series A second lien notes maturing in 2014, totaling approximately $460 million.
Post redemption, CIT said, most of the restrictive covenants granted under the Series A second lien notes, as part of its restructuring in 2009, will be eliminated. Separately, CIT also announced renewal of the trade finance conduit facility, at a lower cost and with a longer term.
The $550 million facility has a committed revolving period that expires in September 2013 and has a final maturity in November 2013, CIT said.
"We continue to advance our strategic roadmap," said John A Thain, chairman and chief executive. "By redeeming these 2014 Series A notes, we will be able to realise the benefits of our recently completed exchange and consent offers and provide CIT greater financing and operating flexibility," he added.
Including this redemption, CIT will have eliminated or refinanced $15 billion of first lien and second lien debt since the beginning of 2010, including $7.5 billion of first lien debt, approximately $5.4 billion of Series A notes and its entire $2.1 billion of Series B notes.
CIT said it has provided redemption notice to the trustee and intends to complete the redemption on 13 October 2011. The redemption price will be 102 per cent of the aggregate principal amount redeemed and the notes will be redeemed on a pro-rata basis among all of the 2014 Series A notes, as per terms, CIT said.
