(Upates with Goldman statement, stock price)
CIT Group Inc. (CIT) said it has reached an agreement with
Goldman Sachs Group Inc. (GS) to amend a $3 billion loan, ending
weeks of strained negotiations over a $1 billion payment Goldman
was poised to receive if CIT files for bankruptcy.
CIT shares fell 8.4% in recent premarket action to 87 cents.
CIT's stock was down 79% for the year through Thursday.
The deal calls for the loan size to fall to $2.13 billion,
effectively eliminating the unused portion of the financing. Also,
the struggling lender paid Goldman nearly $285 million as a
termination fee as required under the deal's original terms. In
addition, $250 million of collateral has been posted.
In return, Goldman has agreed to not exercise its rights to
terminate the financing if a bankruptcy filing is made.
Goldman spokesman Michael DuVally said, "We are pleased that CIT
is moving forward with its restructuring and refinancing and that
Goldman Sachs is able to continue to support the company with a
sound and workable facility that will assist CIT in keeping credit
flowing to small- and medium-sized businesses."
Friday's announcement, made in a filing with the U.S. Securities
and Exchange Commission, comes two days after the lender said it
raised an extra $4.5 billion as it presses ahead with its
restructuring plan. In the process, it brushed aside billionaire
investor Carl Icahn's 11th-hour effort to scupper the process.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com