DBRS Rates CIT’s $1.0 bn Senior Note Issuance at BB (high), $400 mn Subordinated Note Issuance at BB

DBRS, Inc. (DBRS) assigned a rating of BB (high) to the $500 million 4.125% Senior Notes due March 2021, and the $500 million 5.25% Senior Notes due March 2025 (the Senior Notes) issued by CIT Group Inc. (CIT or the Company). DBRS has also assigned a rating of BB to the $400 million 6.125% Subordinated Notes (the Subordinated Notes) due March 2028. The trend on the Senior Notes, as well as the Subordinated Notes is Stable. Net proceeds from the issuance of the Senior Notes will be used to retire outstanding indebtedness of the Company, as well as for general corporate purposes. Net proceeds from the issuance of the Subordinated Notes will be used for general corporate purposes, including returning capital to the Company’s shareholders.

RATING DRIVERS
Further progress in the evolution of the franchise to a commercial bank for the U.S. middle market that is accompanied by consistent loan growth, as well as by sustained improvement in earnings could result in upward ratings pressure. Continued progress in expanding the contribution of funding from deposits, while improving the overall quality of the deposit base would also be viewed favorably. Conversely, a prolonged deterioration in operating results; particularly if indicative of an excessive risk appetite or weakness in risk management could result in ratings being pressured. Further, sustained outflows of deposits resulting in a reversal of the improvement in the funding profile, or an aggressive return of capital or an acquisition considered outside CIT’s commercial lending focus could also lead to ratings being lowered.

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

The applicable methodology is the Global Methodology for Banks and Banking Organisations (May 2017), which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

Lead Analyst: David Laterza, Senior Vice President, Head of U.S. Non-Bank FIG, Global FIG
Rating Committee Chair: Michael Driscoll, Head of North American FIG, Global FIG
Initial Rating Date: May 27, 2010
Last Rating Date: October 13, 2017

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.