(Upates with Goldman statement, stock price)
DOW JONES NEWSWIRES
CIT Group Inc. (CIT) said it has reached an agreement with Goldman Sachs Group Inc. (GS) to amend a $3 billion loan, ending weeks of strained negotiations over a $1 billion payment Goldman was poised to receive if CIT files for bankruptcy.
CIT shares fell 8.4% in recent premarket action to 87 cents. CIT's stock was down 79% for the year through Thursday.
The deal calls for the loan size to fall to $2.13 billion, effectively eliminating the unused portion of the financing. Also, the struggling lender paid Goldman nearly $285 million as a termination fee as required under the deal's original terms. In addition, $250 million of collateral has been posted.
In return, Goldman has agreed to not exercise its rights to terminate the financing if a bankruptcy filing is made.
Goldman spokesman Michael DuVally said, "We are pleased that CIT is moving forward with its restructuring and refinancing and that Goldman Sachs is able to continue to support the company with a sound and workable facility that will assist CIT in keeping credit flowing to small- and medium-sized businesses."
Friday's announcement, made in a filing with the U.S. Securities and Exchange Commission, comes two days after the lender said it raised an extra $4.5 billion as it presses ahead with its restructuring plan. In the process, it brushed aside billionaire investor Carl Icahn's 11th-hour effort to scupper the process.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; kevin.kingsbury@dowjones.com