CIT privately places $3.25 billion in secured bonds
03 February 2012
CIT Group Inc today announced the private placement of $3.25 billion in secured bonds, which, it said, will be used for refinancing existing debt.
CIT, a leading provider of financing to small businesses and middle market companies, said the $3.25 billion of Series C second-priority secured notes consist of $1.5 billion 2015 notes and $1.75 billion 2019 notes.
The 2015 notes are priced at par and will bear interest at a rate of 4.75 per cent and the 2019 notes priced at par will bear interest at a rate of 5.50 per cent, CIT said in a release.
The notes will be secured by the same collateral that secures CIT's outstanding Series A second-priority secured notes and its other Series C second-priority secured notes,'' the company said.
In addition, the notes will be guaranteed by the same subsidiaries of CIT that guarantee CIT's outstanding Series A second-priority secured notes and its other Series C second-priority secured notes. The collateral and guarantees for the notes will be automatically released when the Series A notes have been paid off in full.
CIT expects the offering to close on or about 7 February 2012, subject to customary closing conditions.
CIT plans to use the net proceeds from the offering for general corporate purposes and the refinancing of outstanding indebtedness.