CIT to Reduce High Cost Debt by Additional $500 Million
CIT Group Inc. announced that it will redeem an additional $500 million of 7% Series A second lien notes maturing in 2016 with cash on hand. Following this redemption, approximately $1 billion principal amount of the notes maturing in 2016 and approximately $2.9 billion principal amount of the notes maturing in 2017 will remain outstanding.
“Our decision to eliminate another $500 million of high cost debt will further reduce our funding costs and benefit our net interest margin and profitability,” said John A. Thain, chairman and CEO.
Including the Series A redemption, CIT will have eliminated or refinanced approximately $18 billion of first lien and second lien debt since the beginning of 2010, including $7.5 billion of first lien debt, approximately $8.3 billion of Series A notes and its entire $2.1 billion of Series B notes.
The company has provided a redemption notice for the Series A notes to the trustee and intends to complete the Series A redemption on February 21, 2012. As provided under the terms of the Series A notes, the notes will be redeemed at par and will be redeemed on a pro-rata basis among all of the 2016 Series A notes.