CIT raises $4.5 billion more in secured credit, rejects Icahn offer

CIT Group Inc, a leading provider of financing to small businesses and middle market companies, today said it has expanded its current $3 billion senior secured credit facility by an additional $4.5 billion.

CIT also announced a modification of its amended offering memorandum that will accelerate changes to its board of directors in a potential prepackaged plan of reorganisation scenario.

The new $4.5 billion tranche, which is being provided by a diverse group of lenders, including many of the company's bondholders, will be secured by substantially the same assets as the existing $3 billion tranche and any additional collateral that becomes available as a result of the company's refinancing of certain existing secured credit facilities, CIT said in a release.

"We believe this secured financing will serve the best interests of all stakeholders and will allow us to better position CIT for the future," said Jeffrey M Peek, chairman and CEO. "This expanded credit facility will allow us to continue to serve our existing small business and middle market customers as we advance our restructuring plan," he added.

CIT said the new $4.5 billion tranche will mature in January 2012, and the company has an option to extend all or a portion of the new tranche for an additional year. The issue, which closes today, will be used to refinance a portion of the company's existing secured indebtedness, which may come due as a result of the restructuring, and for general corporate purposes.

CIT said although it received a commitment letter from Carl Icahn to provide it a new $4.5 billion term loan, discussions with Icahn and his advisors has not yielded any results as the deadline passed. CIT said it has yet to receive a signed credit agreement and evidence of Icahn's ability to fund the commitment.