CIT accepts $1 billion credit line from Icahn
October 30, 2009,
New York — CIT Group, which could be headed for bankruptcy court soon, said today it has entered into an agreement with investor Carl Icahn for a $1 billion line of credit to use as it pursues its restructuring plans.
That financing, along with a new $4.5 billion loan announced two days ago, and other credit sources "will further enhance CIT's liquidity during the execution of its restructuring plan and ensure its ability to serve its existing small business and middle market customer," the company said in a news release.
Earlier this week, CIT rebuffed a $4.5 billion financing offer from billionaire investor Icahn, a CIT creditor, saying it saw no evidence that Icahn could fund the loan commitment. Icahn said CIT was overpaying for the announced competing credit facility as a way to win favor with existing lenders by providing them millions in related fees.
The deadline for a $30 billion debt swap offer that CIT floated to bondholders last month expired at midnight, and the lender said early today it was still tabulating results.
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