As part of an ongoing effort to refinance and reduce its debt post-bankruptcy, CIT Group, a leading provider of financing to small businesses and middle market companies, announced Dec. 22 that it will redeem an additional $2 billion of 7% Series A Second Lien Notes, including the $1.6 billion remaining balance of its Notes maturing in 2015 and approximately $400 million of its Notes maturing in 2016.
Following this redemption, approximately $1.5 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.
CIT also announced that in the fourth quarter it used existing secured borrowing facilities to fund a portion of its railcar, commercial aircraft and student lending portfolios. The student loans were primarily sourced from a 2003 student lending securitization, Education Funding Capital Trust-II, with a remaining balance of $500 million that the company redeemed at par on December 20, 2011.
"These actions highlight our continued progress lowering our funding costs and positioning CIT for the future," said CEO John Thain in a statement. "As we advance our strategic roadmap we will continue to provide much needed working capital to the small business and middle market sectors."
With this transaction, CIT will have eliminated or refinanced over $17 billion of first lien and second lien debt since the beginning of 2010, including $7.5 billion of first lien debt, approximately $7.8 billion of Series A Notes and its entire $2.1 billion of Series B Notes.