CIT privately places $2 billion of high-yielding bonds

CIT Group Inc has privately placed $2 billion of second-priority secured bonds (Series C), consisting of $1.3 billion of bonds due to mature in 2014 and $700 million due to mature in 2018.

The 2014 bonds are priced at par and will bear interest at a rate of 5.250 per cent and the 2018 bonds priced at par will bear interest at a rate of 6.625 per cent, CIT said in a release today.

The bonds will be secured by the same collateral that secures CIT's outstanding Series A second-priority secured bonds. In addition, the notes will be guaranteed by the same subsidiaries of CIT that guarantee CIT's outstanding Series A second-priority secured notes.

CIT expects the offer to close on or about 30 March 2011, subject to customary closing conditions.

CIT plans to use the net proceeds from the offer to retire all of its remaining Series A second-priority secured notes maturing in 2013 and a portion of its Series A second-priority secured notes maturing in 2014 and pay related premiums, fees and expenses in connection therewith.

The notes will be sold to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933, as amended and outside the United States only to non-US investors in accordance with Regulation S under the Securities Act. The notes have not been registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the US absent registration or an applicable exemption from registration requirements, CIT said.