NEW YORK - CIT Group, the 101-year-old lender trying to avert collapse, received a $4.5 billion loan from a “diverse group of lenders’’ and called billionaire investor Carl Icahn’s competing offer “unfunded.’’
The financing group included some of CIT’s existing bondholders, who had supplied $3 billion in July, the company said yesterday. CIT has faced possible bankruptcy since the government refused to provide a second bailout in July.
CIT lost $5 billion in nine quarters after the collapse of the subprime mortgage market cut its access to short-term funding. The lender has been enticing bondholders to swap their claims to cut debt by at least $5.7 billion or vote on a prepackaged bankruptcy, leading Icahn to assert that CIT was trying to “purchase votes’’ and to offer $4.5 billion himself.
“Despite several requests from the company for information and multiple deadline extensions, the company has yet to receive a signed credit agreement and evidence of Mr. Icahn’s ability to fund the commitment,’’ CIT said.
Icahn, 73, said Tuesday the investments are worth more in a traditional bankruptcy than in a prepackaged workout. He is proposing to buy “smaller’’ holders’ bonds for 60 cents on the dollar in a tender offer lasting 30 days if they reject CIT’s plans, he said.
CIT said the $4.5 billion loan comes due in January 2012 and “will be used to finance a portion of the company’s existing secured indebtedness, which may come due as a result of restructuring.’’
