US Finance firm CIT has a new restructuring plan

THE STRUGGLING US commercial finance company CIT and a group representing its bondholders have agreed on changes to the company&rsquo;s proposed restructuring plan as it looks to shore up its finances.<br /><br />The changes, announced by CIT over the weekend, included a mechanism to accelerate the repayment of new notes and the shortening of maturities by six months for all new notes and junior credit facilities. It will also offer more equity to subordinated debt holders.<br /><br />The changes would include notes maturing after 2018 in the company&rsquo;s exchange offer and increase the interest paid on Series B notes being offered by CIT Delaware Funding to nine per cent from seven per cent. They would also provide preferred stockholders contingent value rights in the reorganisation and modify the allocation of common stock in the company&rsquo;s recapitalisation after the exchange offers, as part of an agreement with the Treasury Department.<br /><br />On October 1, CIT, founded more than a century ago, launched a debt-exchange plan as it looked to cut its debt by at least $5.7bn (&pound;3.5 bn).<br /><br />The company, which is one of the largest lenders to small and mid-sized companies, also asked bondholders to approve a prepackaged plan of reorganisation that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange failed.