CIT, Goldman Reach Agreement On Amending $3 Billion Loan

   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 9.4% in recent premarket action to 86 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.

Friday's announcement, made in a filing with the 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; [e-mail]