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<< Rail News Home: Mechanical

9/8/2008    Rail-Car Market

Rail News: Mechanical

CIT Group opts to retain CIT Rail

CIT Group Inc. will keep CIT Rail after all. Today, the company announced it will retain the subsidiary — North America's third-largest rail-car lessor — instead of continuing to pursue a buyer for the $4.5 billion rail franchise.

CIT Group has posted progress with managing its balance sheet and strengthening its liquidity position, said Chairman and Chief Executive Officer Jeffrey Peek in a prepared statement. The company divested a home lending business, acquired $1.6 billion in funding under a Goldman Sachs agreement, renegotiated a $2 billion equipment conduit facility, sold $500 million worth of assets, repaid $1.5 billion in unsecured debt and pre-paid $2.1 billion in bank loans, among numerous transactions.

"We are very pleased with the progress we have made in securing more than $11 billion in liquidity over the past five months," said Peek. "Our decision to retain CIT Rail further illustrates our ... confidence in our ability to service our commercial clients and debt obligations over the next year without accessing the unsecured debt markets.

CIT Rail leases a fleet of about 115,000 rail cars and 550 locomotives.

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