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Fitch Cuts Senior Ratings Of CIT Group

The Associated Press

NEW YORK (AP) — Credit ratings agency Fitch Ratings said Monday that it cut the senior debt ratings of CIT Group Inc. and placed all of the company's ratings on a negative watch.

The diversified financial services firm's senior debt ratings and its Canadian and Australian subsidiaries were cut to "BB" from "BB+." Both the old and new ratings are considered non-investment grade.

Fitch said it cut the ratings and placed all of CIT Group's ratings, including its issuer default rating, on a negative watch because of reduced financial flexibility. CIT is facing about $1.5 billion of maturing debt obligations in June, Fitch said in a statement.

Acquiring funds to help cover that debt could be problematic, the ratings agency said. CIT has applied to access a government program that would allow it to borrow money essentially insured by the government. However, if it is unable to receive access to the program CIT would have to find alternative funding that would likely need to be secured by the company's assets.

While that method for raising new cash would help short-term needs, it would be harmful to unsecured creditors and probably result in a multi-notch downgrade of CIT's issuer default rating, Fitch said.

Shares of CIT Group closed Monday at $3.80.