UPDATE 1-Fitch, S&P see CIT bankruptcy in near-term

(Adds Moody's cut to Ca)

NEW YORK, July 16 (Reuters) - Ratings on lender CIT Group Inc (CIT.N) were cut further into junk status by all three major rating agencies on Thursday on growing bankruptcy concerns.

Fitch Ratings and Standard & Poor's said there is a strong likelihood the corporate lender will declare bankruptcy in the near-term after failing to secure government support.

Fitch downgraded CIT by eight notches to C, or highly speculative, and said that a default appears "imminent or inevitable."

Standard & Poor's cut CIT by three notches to CC, 10 notches into junk. It was the second downgrade by S&P this week.

"The downgrade reflects our belief that there is an increased risk that CIT may declare bankruptcy in the near term or take other actions that will be detrimental to debt holders," said S&P analyst Rian Pressman in a statement.

CIT has very limited time in which to raise additional liquidity after drawing on outstanding commitments in the past few days, said Pressman.

"In our view, the compressed timeline makes it very difficult for CIT to pursue other liquidity initiatives successfully, such as secured borrowings, asset sales, or debt restructuring," Pressman said.

Moody's Investors Service also cut CIT's ratings, lowering the company's ratings by four levels to Ca, or 10 steps below investment grade, from B3, for similar reasons.

CIT, a key lender to small- and medium-sized businesses, has suffered a liquidity crisis because of concerns about its viability. The 101-year-old company has about $40 billion in long-term debt. <For related news click [ID:nN16402649]>.

The company's 5 percent notes due 2014 fell to 52 cents on the dollar early Thursday from 61.5 cents late Wednesday, according to MarketAxess.

The cost of insuring its debt against potential default surged. Credit default swaps widened to about 47 percent as an upfront cost, from 34 percent late Wednesday, according to Phoenix Partners data. (Reporting by Tom Ryan and Walden Siew; Editing by Leslie Adler)