CIT Group Barely Meets Deadline After Last Minute Bondholder Negotiations

The changes were announced in a statement released about 40 minutes before the midnight deadline. The amendments have been approved by CIT's Board of Directors and the bondholder steering committee.

The aim of the debt exchange, announced Oct. 1, is to get holders of about $31 billion in bonds to cut this debt by at least $5.7 billion and to extend the debt maturities. At the same time, CIT is asking bondholders to vote on a prepackaged bankruptcy plan.

Under the exchange, owners of CIT's bonds would get new secured debt worth as much as 90 cents on the dollar if they currently own bonds that mature this year, but would end up with less new debt and more equity if they own bonds maturing later.

The amended terms of the restructuring plan include, among others: a comprehensive cash sweep mechanism to accelerate the repayment of the new notes; the shortening of maturities by six months for all new notes and junior credit facilities; an increased amount of equity offered to subordinated debt holders reflecting agreements with holders of the majority of its senior and subordinated debt; the inclusion of the notes maturing after 2018 that had previously not been solicited as part of the exchange offer or plan of reorganization; an increase in the coupon on Series B Notes, to 9% from 7%, being issued by CIT Delaware Funding; and provided preferred stock holders contingent value rights in the plan of reorganization, and modified the allocation of common stock in the recapitalization after the exchange offers, as part of an agreement with the United States Department of Treasury.