CIT: Bankruptcy Filing Still a Possibility

Pedestrians past the the CIT Group Inc. building in New York, July 15, 2009.
AP Photo/Bebeto Matthews
CIT Group says it might have to file for bankruptcy protection if not enough bondholders participate in an upcoming debt exchange.

The commercial lender offered the grim assessment only a day after major bondholders agreed to provide it with a $3 billion loan. However, CIT says the loan might not provide enough relief to cover upcoming debt maturities.

CIT Group says it still needs to pay off about $7 billion in debt maturing over the next year, including $1 billion in August. It has launched an offer to repay that $1 billion in maturing debt at a discount.

CIT shares are down 23 cents, or 18 percent, at $1.02, in early trading.

CIT turned to bondholders for help after the government refused to save the company last week.