CIT, Goldman Reportedly Strike Debt Deal

NEW YORK (TheStreet) -- CIT Group(CIT ) has reached a tentative deal with Goldman Sachs(GS) over a $3 billion loan Goldman extended to the troubled commercial lender last year, a report says.

A deal could be reached within the next 24 hours, the Wall Street Journal reports, citing people familiar with the matter. However, the people cautioned the deal had yet to be finalized.

The agreement ends negotiations between Goldman and CIT's steering committee of bondholders over a $1 billion payment Goldman was to receive if CIT files for bankruptcy.

The new agreement calls for Goldman to reduce the loan to just more than $2 billion, according to the Journal. CIT in turn would pay Goldman about $300 million if it files for bankruptcy.

The deal with Goldman also could help CIT secure billions of dollars in new financing from its bondholders, who are currently voting on a debt exchange plan or a prepackaged bankruptcy, the Journal notes.

The deadline for bondholders to vote on the company's restructuring plan is next week.

CIT revised the terms of its exchange offer late last week, asking bondholders to swap out the company's current debt for debt that matures later and some stock. The proposed restructuring asks bondholders to cut their debt by about $5.7 billion.

-- Reported by Joseph Woelfel in New York .

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