CIT secures $3 bln financing from Goldman

NEW YORK (Reuters) - CIT Group, (CIT.N) a commercial finance company struggling to secure funding for billions of dollars of debt maturing this year, said on Monday it has secured $3 billion of financing from Goldman Sachs (GS.N).

The company's share price climbed 11 percent on the announcement to $10.20.

The company said the facility has a 15-year average life and is tied to securities originated by CIT.

Vince Breitenbach, analyst at Barclays Capital, said the cost of the facility "looks a bit expensive" at $85 million a year whether or not CIT uses the funding.

Breitenbach noted the transaction was not one of the many financing options the company had previously discussed.

"I think they are trying to show that there are lenders out there that have confidence in the company," he said.

In March, CIT drew down on its entire $7.3 billion of bank lines, $2 billion of which come due in October.

At a conference last week, Chief Financial Officer Joseph Leone said CIT was just over halfway toward selling its railcar leasing business and was also considering the sale of part of its portfolio of subprime mortgages.

Breitenbach said he expects the railcar business to be sold in the third quarter.

The $3 billion financing, coupled with the railcar business sale "probably gets them pretty far in to next year," he said.

Lease financing company GATX Corp is understood to be among the parties looking at buying CIT's railcar leasing business. GATX, based in Chicago, controls one of the largest railcar fleets in the world.

(Reporting by Elinor Comlay, editing by Dave Zimmerman)