CIT Group, Apparel Industry's Largest Factor, to Prepay $750 Million in Debt

CIT Group Inc., the largest factor to apparel and retail industry, said on Monday that it will voluntarily prepay $750 million of principal on a $7.5 billion credit agreement, using available cash to pay the high-cost debt.

The announcement came the day after the commercial lender named former Merrill Lynch CEO John Thain to become its chairman and chief executive, just two months after emerging from banruptcy.

In a release, New York-based CIT Group said its board approved the $750 million prepayment on its $7.5 billion first lien credit facility.

CIT Group said its available holding company cash position stands at more than $5 billion.

The repayment is set to be made from those cash holdings today.

CIT Group who is one of the nation's largest lenders to small and mid-sized businesses, navigated through its 2009 bankruptcy re-organization in just six weeks as its key bondholders approved a plan to reorganize the company.

The company had been forced into bankruptcy after failing to raise cash to pay off outstanding debt. CIT was also impacted by mounting loan losses as more customers fell behind on repaying loans amid the global economic meltdown.
This ad will auto-close in 10 seconds