CIT amends tender offer for floaters, upping early delivery payment

By Jennifer Chiou

New York, July 20 - CIT Group Inc. announced changes to its tender offer for its floating-rate senior notes due Aug. 17, 2009.

CIT is still offering $825 per $1,000 principal amount for any of its floating-rate notes tendered by 5 p.m. ET on July 31, but the company has increased the early delivery payment to $50.00.

As a result, holders who tender after July 31 will receive $775, instead of $800, per $1,000 principal amount.

The offer expires at midnight ET on Aug. 14. It began on July 20.

CIT will also pay accrued interest up to but excluding the settlement date.

The tender is subject to holders of at least 90% of the notes tendering.

If this condition is met, borrowings on the new company's term loan will be used to fund the tender offer. CIT previously said that the lenders on the term loan have agreed to tender all their notes.

Other changes include:

• The clarification that each member of the steering committee for the senior secured term loan facility has committed to tender, and each initial new term loan lender participating in the incremental $1 billion portion of the term loan financing is required to commit to tender, its floaters;

• The permission for CIT to accept tendered notes prior to the scheduled expiration date, provided that the minimum tender condition is satisfied;

• The clarification that if the offer is successfully completed, the company and the steering committee do not intend for CIT to seek relief under the U.S. Bankruptcy Code but rather to pursue restructuring efforts through other means; and

• The clarification that if the offer is not successfully completed, the terms of the term loan financing do not permit the company to use the proceeds to make the upcoming maturity payment on the notes, which, unless CIT is able to obtain alternative financing, would result in an event of default under the terms of the term loan financing.

Morgan Stanley & Co. Inc. (800 624-1808 or call collect 212 761-5384) and BofA Merrill Lynch (980 388-4813, attention debt advisory services) are the dealer managers. D.F. King & Co., Inc. (800 758-5880 or call collect 212 269-5550) is the depositary and information agent.

CIT is a New York-based lender to small businesses and middle market companies.

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