CIT Group has entered into a $3 billion loan facility provided by a group of the company’s major bondholders, CIT said yesterday in a release.

The lender also said it intends to begin a comprehensive restructuring of its liabilities to provide liquidity and strengthen capital.

The loan — a $3 billion secured term loan with a two and a half year maturity — and the efforts to recapitalize are aimed at giving CIT liquidity so it could provide its small and middle market customers access to credit.

Term loan proceeds of $2 billion are committed and available today, with an additional $1 billion expected to be committed and available within 10 days, the group said.

Jeffrey Peek, chairman and CEO of CIT, said the pact and restructuring plan will better position the company for the long term.

Peek is expected to remain in his current role throughout the deal, according to a source familiar with the matter, as there have been no calls to replace him.

To initiate the recapitalization plan, CIT has begun a cash tender offer for its outstanding floating rate senior notes due Au. 17 of this year for $825 for each $1,000 principal amount of notes tendered on or before July 31, 2009.

Lenders in the term loan financing have agreed to tender all of their Aug. 17 notes. CIT Group and the term loan financing steering committee will work together on the balance of the recapitalization plan.

Various firms are involved in the loan facility and recapitalization. Evercore Partners and Morgan Stanley advised CIT, while Barclays Capital was the arranger and administrative agent for the term loan financing.

Skadden, Arps, Slate, Meagher & Flom and Wachtell, Lipton, Rosen & Katz are legal counsel to CIT, and Latham & Watkins is legal counsel to Barclays Capital.

More information will be available in a Form 8-K CIT will file with the Securities and Exchange Commission.

Additionally, the company said it canceled the release of its second-quarter earnings which were set to be published on Thursday. The company will report its results for the quarter when it files its 10-Q.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.