Standard & Poor’s on Monday cut its ratings on CIT Group (CIT), as the lender’s dislocation in capital markets continues to place pressure on co.’s funding model.
Standard & Poor’s Ratings Services said Monday that it downgraded CIT Group and warned that the lender may try to restructure its debt, possibly through bankruptcy or through a “distressed” exchange offer. S&P lowered the company’s counterparty credit ratings to CCC+/C from BB-/B.
“CIT has more than $1 billion of unsecured notes maturing in both third- and fourth-quarter 2009–payments that could become increasingly difficult to make if borrower draws increase significantly and CIT does not win regulatory approval of its strategic initiatives,” the rating agency said in a statement.
This latest S&P downgrade reflects once again the co.’s further erosion in liquidity, as its ability to repay maturing obligations and meet lending commitments keeps shrinking.