DBRS Confirms BB (high) Rating of CIT Group’s First Lien Credit Facility, Trend Positive

DBRS has today confirmed its BB (high) rating of CIT Group Inc.’s (CIT or the Company) First Lien Credit Facility. The trend on the rating is Positive.

Today’s rating action follows CIT’s announcement that it has refinanced its first lien debt by amending and extending its existing first lien facility. Concurrently, the first lien facility, which was $4.0 billion immediately prior to the refinancing, has been reduced to $3.0 billion. Consistent with DBRS’s methodology for rating secured instruments, DBRS rates the $3.0 billion First Lien Credit Facility three notches above the Issuer Rating. The notching reflects DBRS’s view that recovery, in the case of default, will be greater than 90%. The high-recovery postulation considers the overall quality of the assets and the values of the assets have been marked-to-fair value as of December 2009 as part of the fresh start accounting.

The Positive trend reflects DBRS’s expectations that the Company should continue to make progress in improving and diversifying its funding profile, while restoring underlying profitability. To that end, the refinancing, which provides CIT with longer-term, more cost efficient funding while improving financial flexibility as certain covenants are amended, is viewed by DBRS, as further illustrating the continued progress of the Company towards those expectations.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Finance Companies Operating in the United States, which can be found on our website under Methodologies.

This is Corporate (Financial Institutions) rating.