CIT (CIT) has reached an agreement with lenders to stave of bankruptcy, reports WSJ.
The company will get a $3 billion lifeline, allowing it to restructure outside of court. No word yet on whether shareholders will be left with anything more than a couple pennies.
WSJ: The final term sheet still needs to be reviewed by the various financial and legal advisers, said the people familiar with the matter. And there is the chance that a final deal could falter over last-minute negotiations.
Under the proposal, CIT would likely pay interest rates 10 percentage points above the London interbank offered rate, said these people. (As of Friday, three-month Libor stood around 0.5%.) CIT has also agreed to pledge some of its highest-quality loans as collateral on the $3 billion package.
The new loan could act like a “bridge” to a series of debt-exchange offers that CIT would launch in order to get bondholders to swap some of their bonds for equity in the company or for new debt that matures later.
Business Insider Emails & Alerts
Site highlights each day to your inbox.