Item 1.01 Entry into a Material Definitive Agreement
On February 27, 2017 (the “
Effective
Date
”), CIT Group Inc. (the “
Company
”) and certain of its subsidiaries entered into Amendment No.
1 to the Second Amended and Restated Revolving Credit and Guaranty Agreement, dated as of February 27, 2017 (the “
Amendment
”),
by and among the Company, as borrower, certain subsidiaries of the Company, as guarantors, the lenders party thereto from time
to time, and Bank of America, N.A., as administrative agent and letter of credit issuer.
The Amendment modifies the Company’s
Second Amended and Restated Revolving Credit Agreement (the “
Second Amended and Restated Revolving Credit Agreement
”),
entered into on February 17, 2016, among the Company, certain subsidiaries of the Company, as guarantors, the lenders party thereto
and Bank of America, N.A., as administrative agent and letter of credit issuer. Changes effected by the Amendment include the extension
of the final maturity date of the lenders’ commitments to January 25, 2019, reduction of the lenders’ total commitments
from $1.5 billion to $1.4 billion on the Effective Date, and further reduction of the lenders’ total commitments
to $750 million, effective upon consummation of the sale of the Company’s commercial aircraft leasing business to Avolon
Holdings Limited (the “
Air Disposition
”). The Air Disposition is targeted to close by the end of the first quarter
of 2017, pursuant to the Purchase and Sale Agreement, dated October 6, 2016, among C.I.T. Leasing Corporation, Park Aerospace Holdings
Limited, Bohai Capital Holding Co. Ltd., the Company and Avolon Holdings Limited, filed as Exhibit No. 2.1 to the Current Report
on Form 8-K dated October 12, 2016.
In addition, the Amendment modifies the
covenant requiring satisfaction of a $6 billion minimum consolidated net worth of the Company and its subsidiaries by replacing
it, effective upon consummation of the Air Disposition, with a covenant requiring satisfaction of a minimum Tier 1 capital ratio
of nine percent (9%).
On the Effective Date, the total commitment
amount under the Second Amended and Restated Revolving Credit Agreement was $1.400 billion, consisting of an approximately $1.073
billion revolving loan tranche and an approximately $327 million revolving loan tranche that can also be utilized for issuance
of letters of credit. As of the Effective Date, no amounts were drawn under the Second Amended and Restated Revolving Credit Agreement
other than approximately $100 million that was utilized for letters of credit. Any amounts drawn under the Second Amended and Restated
Revolving Credit Agreement, as amended by the Amendment, in the future will be used for general corporate purposes.
The foregoing description of the Amendment
and the transactions contemplated thereby is not complete and is subject to and qualified in its entirety by reference to the full
text of the Amendment, a copy of which is attached hereto as Exhibit 10.1 and the terms of which are incorporated herein by reference.