NEW YORK — Commercial lender CIT Group said Monday its offer to repurchase outstanding debt at a discount — a crucial step to help stave off bankruptcy — was successful.
The embattled New York- based lender offered to buy $1 billion in debt that was set to mature Monday. CIT warned that if not enough bondholders were willing to sell the debt back to the company, it would likely have to file for bankruptcy protection.
The company said nearly 60 percent of the debt was tendered for purchase; 58 percent minimum was needed to complete the offer. CIT is paying $875 for every $1,000 tendered as part of the offer.
CIT will pay off the remaining notes that matured Monday but were not tendered for purchase as part of the offer.
“The completion of this tender offer is another important milestone as the company continues to make progress on the development and execution of a comprehensive restructuring plan,” CIT said in a statement.
Despite the completion of the tender offer, CIT is still facing some challenges. It could continue to struggle with liquidity issues as more debt is due to mature next year.
Last week, CIT reached an agreement with the Federal Reserve Bank of New York that puts the company under the oversight of federal regulators. The agreement requires CIT to submit a plan for how it will maintain sufficient cash.
