By  on October 2, 2009

CIT Group Inc. laid out a debt exchangethat would right its capital structure, but the lender said it is also preparingfor a prepackaged bankruptcy filing should the offer fail to attract enoughbondholder support by its Oct. 29 deadline.

Should CIT could file for Chapter11 protection, the company said its operating entities would not, allowing themto continue to work with their customers.

The 101-year-old lender accountsfor about 60 percent of fashion’s factoring volume and lent the apparel industryabout $4 billion last year, according to estimates.

“We believe this planmaximizes franchise value and can be executed quickly and effectively through aseries of voluntary debt exchange offers or an expedited in-court restructuringprocess,” said Jeffrey Peek, chairman and chief executive officer. “Uponcompletion of either alternative, CIT will be a well-funded bank holding companywith a strong capital position and market leading franchises.”

Debt holdersaccepting the exchange offer would receive either new debt maturing in four toeight years, newly issued preferred stock or a combination of the two.

Forcomplete coverage, see Monday’s WWD.


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