CIT is selling its mortgage lending and manufactured-housing portfolio for $1.8 billion, the WSJ says.
Hedge fund Lone Star is buying home-lending business for $1.5 billion. Vanderbilt Mortgage and Finance bought the manufactured-housing unit for $300 million.
Perhaps as important, Lone Star agreed to take $4.4 billion of debt off CIT’s balance sheet in the deal. CIT has seen its stock price tumble more than 80% from its peak a year ago and has struggled to remain solvent.
In CIT’s most recent quarter, it reported over $78 billion in long-term debt on its balance sheet, up from $68 billion from the previous quarter and $63 billion in the same quarter last year. Offloading $4.4 billion certainly doesn’t hurt, but CIT has a long way to go before its balance sheet can be given a clean bill of health.