While many big financial institutions are having to beg for money from private-equity funds and overseas investors, CIT Group got a break: Goldman Sachs Group came to the cash-strapped New York commercial lender offering a $3 billion credit line.
Why the atypical route? Deal Journal talked to people familiar with the deal and traced how it came about and how it was structured.
It seems CIT was so in need of capital this year that it drew down its $7.3 billion emergency credit lines in March. Since then, it has been focused on shoring up its cash position; in the news release this week announcing the Goldman agreement, it touted “raising $1.6 billion in new capital, while retiring approximately $5 billion in debt; completing financings of approximately $1.5 billion and selling more than $2 billion of assets at approximately book value.”
CIT started another quest after March.
