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CIT Group amends debt exchange offer, Icahn May Become Top CIT Shareholder
By Robert J. Steiner for CEOWORLD Magazine Updated:October 26, 2009
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Troubled lender CIT Group Inc (CIT.N) has extended and sweetened its debt exchange offer for some of its bondholders, the lender said in a regulatory filing on Monday.
The extension applies to investors holding debt that funded CIT business in Canada, who are entitled to recover money from both Canadian assets and the parent company in the United States.
In the new offer, CIT raised the interest rate payable on its $2.15 billion series B notes to 10.25 percent a year from 9 percent, and extended the closing date of the exchange offer to Nov. 5 from Oct. 29.
The changes were made on Friday, according to the filing. The company said in the filing that it was in discussions to boost a $3 billion secured credit facility by an additional $4.5 billion and alter a senior credit facility.
New York-based CIT is trying to restructure its debt by getting debtholders to exchange their notes or to agree to a prepackaged bankruptcy.
Investor Carl Icahn will become the largest shareholder in CIT, if the lender’s proposed restructuring plan is accepted, The Wall Street Journal reports. Icahn claims to be the largest bondholder and would thus emerge as the restructured company’s biggest shareholder.
The billionaire has opposed the prepackaged bankruptcy plan in a letter to bondholders. CIT has added $4.5 billion to a $3 billion emergency loan put forward by a group of its largest bondholders.
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