CIT debt deal successful, bankruptcy avoided for now


Last month CIT Group was close to bankruptcy, but thanks to a successful offer to repurchase outstanding debt, the company will be able to avoid bankruptcy -- at least for now. In July the company failed to get bailout funds from the U.S. government, so some of its bondholders gave CIT (CIT) emergency funding of $3 billion to help it avoid bankruptcy.

Those funds were partially used to offer to buy $1 billion in outstanding debt due to mature Monday. CIT told bondholders if they would not sell the debt back at $875 per $1,000, the company was likely to file bankruptcy. At first CIT said 90 percent of bondholders must agree to the deal, but in the end only 59 percent agreed to the deal, which now CIT says is enough to avoid bankruptcy.