CIT announces agreement with bondholders

From Reuters:

CHICAGO (Reuters) - Commercial finance company CIT Group Inc and a group representing its bondholders have agreed on changes to the company's proposed restructuring plan as it looks shore up its finances. The agreement could include a prepackaged bankruptcy filing.

The changes, announced by CIT late Friday, include a mechanism to accelerate the repayment of new notes; the shortening of maturities by six months for all new notes and junior credit facilities; and offering more equity to subordinated debt holders.

The changes would include notes maturing after 2018 in the company's exchange offer and increase the interest paid on Series B notes being offered by CIT Delaware Funding to 9 percent from 7 percent. They would also provide preferred stockholders contingent value rights in the reorganization and modify the allocation of common stock in the company's recapitalization after the exchange offers, as part of an agreement with the Treasury Department.

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