October 5, 2009 / 6:45 PM / 10 years ago

CIT plans to increase $3 billion bondholder loan: source

A general view of the Cit offices in New York, July 13, 2009. REUTERS/Brendan McDermid

NEW YORK (Reuters) - CIT Group Inc (CIT.N) is looking at increasing the size of a $3 billion loan it took in July to meet funding needs as the troubled commercial lender restructures, a source familiar with the matter said on Monday.

The exact size of the additional facility has not been decided as CIT negotiates with various parties after last week’s launch of a debt exchange offer and solicitation of votes for a prepackaged bankruptcy, the source said.

CIT hopes to put the new facility in place before the exchange offer expires on October 29, the source said.

The new facility would work in or out of bankruptcy court, the source said, declining to be identified because talks are private.

The lenders who gave the company the loan in July would make up the core of a new facility, with additional parties to be brought in depending on the size, the source said.

Sources previously told Reuters that the lender was eyeing a debtor-in-possession loan of $5 billion to $7 billion, should the exchange offer fail and it has to file for prepackaged bankruptcy.

Bond giant Pacific Investment Management Co, Centerbridge Partners LP, Oaktree Capital Management, Baupost Group, Capital Research & Management Co and Silver Point Capital were part of a group that provided the $3 billion loan to CIT this summer.

CIT declined to comment.

Reporting by Paritosh Bansal; Editing by Richard Chang

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