CIT suspends preferred dividends

NEW YORK (Reuters) - Troubled lender CIT Group (CIT.N) on Friday said it is suspending payment of dividends on its preferred stock to preserve capital during its restructuring effort.

In an update on its progress, CIT also said it has met conditions for a planned tender offer for its $1 billion floating-rate notes due on August 17, 2009, after it passed the 58 percent mark for the minimum tender.

The lender, which is hoping to avoid bankruptcy by restructuring its debt, said it has received the final $1 billion of a $3 billion credit facility offered by major bondholders.

"CIT will use a substantial amount of the loan proceeds to support its small-business and middle-market customers," the company said in the statement.

Shares in CIT climbed 6 percent to $1.72 in morning trading on the New York Stock Exchange.

(Reporting by Elinor Comlay; Editing by Steve Orlofsky)