CIT taps $7.3 billion credit line

AP ^ | 20 Mar 2008 | AP

[BGHater]

Lender says it can't get capital to pay off debt and finance commercial lending from other sources due to crippled credit market.

Commercial and consumer lender CIT Group Inc. said Thursday it tapped its $7.3 billion credit lines to repay debt and finance its commercial lending and is seeking additional funding sources as access to capital has dried up.

CIT Group said it cannot get capital from other sources amid continued deterioration of the credit markets. Aside from looking for new funding, CIT Group said it would also consider selling non-strategic assets and business lines to help raise cash.

Shares of CIT Group (CIT, Fortune 500) tumbled in Thursday afternoon trading, falling $4.39, or 37.7%, to $7.25. Earlier in the session, shares hit a 52-week low of $6.75.

"Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies," Jeffrey Peek, CIT Group's chairman and chief executive, said in a statement.

Earlier this week, both Moody's Investors Service and Standard & Poor's cut some of CIT Group's credit ratings because of the company's reduced financial flexibility due to the credit market turmoil. On Wednesday, Fitch Ratings put its ratings for CIT on review for possible downgrade.

Moody's cut CIT Group's issuer rating, while S&P cut its counterparty rating. Both the ratings remained investment grade.

[Terabitten]

Is CIT Group the same as CITIGroup? IE, CitiBank, the biggest bank in the country?

[Content Provider]

Nope. Citibank is ticker symbol “C”, this one is “CIT”.

[rednesss]

Geee, I’d like to consolidate all of my debt at 3.25% as well. Where do I sign up???? Oh yeah, I forgot, individual citizens are only entitled to the shaft.

[bjs1779]

CIT taps $7.3 billion credit line

Tapped it or drained it?

[lonevoice]

Gosh, Maybe the Federal Reserve can finance JP Morgan’s buyout of CIT too?