CIT Group Inc. (CIT) Climbs 16% in Premarket
CIT Group Inc. (NYSE: CIT), the 101-year-old commercial lender, is seeking to cut at least $5.7 billion of debt to help it avoid collapse and return to profitability after nine quarters of losses.
CIT asked bondholders to exchange unsecured obligations for new secured debt maturing in four to eight years and preferred shares, according to a statement from the New York-based company. Investors holding bonds closest to maturity will get more new debt, while those with notes due later will receive proportionately more equity, according to a filing to the Securities and Exchange Commission today.
Should the exchange fail, CIT will seek court protection through a pre-packaged bankruptcy, it said yesterday in a statement distributed by Business Wire. Its bonds and credit- default swaps yesterday showed investors were growing increasingly concerned that the company, led by Chief Executive Officer Jeffrey Peek, will be unable to restructure out of court as $1.15 billion of debt comes due by year-end.
In the two previous trading sessions shares of CIT fell over 52% and today it is up 16% at $1.23 in premarket.
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