DOW JONES NEWSWIRES
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 9.4% in recent premarket action to 86 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.
Friday's announcement, made in a filing with the 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
