(Source: Business Wire)CIT Group Inc. (NYSE: CIT), a leading provider of financing to small businesses and middle market companies, today announced that it has commenced a restructuring of its capital structure that has been approved by the Company's Board of Directors and by the Steering Committee of CIT's bondholders. Today's announcement is an important step in a comprehensive restructuring plan to enhance CIT's capital levels, improve its liquidity and return the Company to profitability.

Under the plan, CIT Group Inc. and CIT Group Funding Company of Delaware LLC (Delaware Funding) are launching exchange offers for certain unsecured notes. If the Company does not achieve the objectives of the exchange offers, it may decide to initiate a voluntary filing under Chapter 11 of the U.S. Bankruptcy Code. Therefore, the Company is concurrently soliciting bondholders and other holders of CIT debt to approve a prepackaged plan of reorganization. The Company has been informed by advisors to the Steering Committee that, subject to review of the offering memorandum, approximately $10 billion of outstanding unsecured indebtedness have already indicated their intention to participate in the exchange offer or vote for the prepackaged plan of reorganization.

"Over the last several months, CIT's management, together with its Board of Directors and outside advisors, has developed a comprehensive plan to position CIT for future success," said Jeffrey M. Peek, Chairman and CEO. "We believe this plan maximizes franchise value and can be executed quickly and effectively through a series of voluntary debt exchange offers or an expedited in-court restructuring process. Upon completion of either alternative, CIT will be a well-funded bank holding company with a strong capital position and market leading franchises.

"We have the liquidity to serve our small business and middle market clients throughout this process," Mr. Peek continued. "On behalf of CIT, I want to thank our clients for their continued support during this process and also thank our employees whose commitment is crucial to the future of CIT."

Jeff Werbalowsky of Houlihan Lokey, the financial advisor to the Steering Committee, commented, "The Committee has worked very constructively with the Company and has approved its plan. Through the restructuring and substantial deleveraging featured in this plan, whether completed in or out of court, we are very confident that CIT will emerge as a strong bank holding company with renewed earnings and profitability potential."

Comprehensive Series of Exchange Offers

CIT has initiated a series of voluntary exchange offers designed to recapitalize its balance sheet and significantly reduce its debt in an out-of-court restructuring.