CIT Group receives financing from Goldman Sachs

Source: Exec Digital USA

Date :09/06/2008 07:03:04

The commercial lender CIT Group Inc. secures US$3 billion long-term financing facility with Goldman Sachs; shares rise 15 percent in New York trading.

CIT said the facility, which has a 15-year average life, provides it with funding flexibility since it is available to finance both existing assets and new originations denominated in a variety of currencies.

The lender said last week it had US$8.1 billion in unsecured term debt and US$2.1 billion in bank borrowings due by the end of this year. The lender has been hit by four straight quarterly losses totaling more than US$538 million tied to subprime mortgages and student lending.

Chief Executive Officer Jeffrey Peek has already sold stock and assets, cut the dividend and drawn down US$7.3 billion of emergency credit lines to quell speculation that the company faced bankruptcy.

“Milestone”

In a release, Peek said “(CIT) view the transactions as another important milestone in achieving our desired financing profile."

Following the announcement, the lender advanced 92 cents to US$10.11 a share at 11:03 a.m. in New York Stock Exchange composite trading and sold for as much as US$10.56. Since the beginning of the year, CIT's shares had dropped 62 percent.