Source: CIT, Bondholders Reach Tentative Deal

NEW YORK (Reuters) – CIT Group Inc (CIT.N) has reached a tentative deal with a bondholder group for $3 billion in rescue financing, which the lender hopes will help it avoid bankruptcy, a source close to the situation said on Sunday.

The bondholder group, which includes Pacific Investment Management Company (Pimco) and some other top CIT holders, is expected to provide the financing with a 2 1/2-year term, the sources said.

CIT’s board plans to meet later on Sunday to discuss the terms of the deal, and the lender is expected to announce the deal on Monday if the board approves it, according to the source, who declined to be identified because talks are private.

The deal is part of a larger restructuring plan, the source said.

CIT Chief Executive Jeffrey Peek, who was initially surprised when the lender did not get government help, led the company’s efforts to get the funds from private sources, the source said.

CIT was not immediately available for comment. (Reporting by Paritosh Bansal; Editing Bernard Orr)