Indiana Grain Company, LLC

Posted: 10/05/09

By: tomgrisafi

CIT Group is going cap-in-hand once again to the hedge funds that help bail out the troubled lender this summer.

The 101-year-old firm may get a $6 billion loan from a creditors committee that numbers four hedge funds among its six members. Those creditors already threw CIT a $3 billion lifeline in July, after the government rejected the firm’s request for a second dose of bailout funds.

CIT said in a revised restructuring plan that it is negotiating a larger credit facility from the creditors, which could increase it from $3 billion to $9 billion. The new money would be used to finance a prepackaged bankruptcy if CIT’s proposed debt exchange fails to win enough bondholder support.

The creditors committee includes Boston-based Baupost Group, New York-based Centerbridge Partners, Los Angeles-based Oaktree Capital Management and Greenwich, Conn.-based Silver Point Capital.

Source: Reuters, FINalternatives

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