CIT Group Inc obtained $4.5 billion of additional financing from its creditors as it seeks to complete a debt exchange. The new financing, which adds to a $3 billion loan arranged in July, is being provided by a group of lenders including some of CIT's bondholders.
The funds represent an expansion of its existing senior secured credit facility and will be secured by much the same assets as the original $3 billion loan, plus any additional collateral generated by refinancing existing secured credit facilities, according to the statement.
CIT's Chief Executive Jeff Peek said in the statement that it will use the funds to continue its business of lending to small and medium-sized companies as it tries to restructure.
The lender is battling to restructure its debt by getting debtholders to exchange their notes, or by agreeing to a prepackaged bankruptcy plan.
CIT said it made the new arrangements after it was unable to determine whether billionaire investor Carl Icahn, who had offered to provide the company with a $4.5 billion term loan on Tuesday, had arranged sufficient funding.
Icahn, who has snapped up CIT debt in the past few months and claims to be the lender's largest bondholder, has criticized CIT's restructuring plan, arguing that the company's debt would be worth more if its assets were allowed to run off under bankruptcy protection.
