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Pacific Investment Management Co – PIMCO Left CIT Group Bondholder Steering Committee

By Germaine Lombardo for CEOWORLD Magazine Updated:October 7, 2009

Pacific Investment Management Co- PIMCO, one of six members of a steering committee of CIT Group Inc’s (NYSE: CIT) largest bondholders that put in place $3 billion of financing for the struggling lender at the end of July, has sold its position, a source familiar with the matter told Dow Jones on Wednesday.

PIMCO, Centerbridge Partners LP, Oaktree Capital Mngmt, Baupost Group, Capital Research & Mngmt Co and Silver Point Capital were part of a group that provided the multi-billion dollar loan to New York commercial lender CIT Group (NYSE:CIT) this summer. According to the DJ’s report, a provision in the loan agreement requires members of the steering committee to hold a certain amount the debt. The amount of the position PIMCO sold triggered that provision and forced it off the committee.

This new twist in the CIT saga — which launched a debt-exchange plan on Oct. 1, aiming to cut its debt by at least $5.7 billion and to extend debt maturities — comes as the struggling lender tries to end months of uncertainty about its future. It is unclear how this new development will impact the result of the co.’s restructuring plan.

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