April 2, 2012 / 1:22 PM / 7 years ago

CIT to reduce high cost debt by $500 million more

(Reuters) - Business lender CIT Group Inc (CIT.N) said it will redeem part of its 7 percent senior unsecured notes maturing in 2017, reducing its high-cost debt by $500 million.

CIT, which in late 2009 came out of a short bankruptcy, said in a statement it will continue to eliminate or refinance its remaining high-cost debt.

The company is led by former Merrill Lynch CEO John Thain.

CIT operates under an agreement subjecting it to close scrutiny from the Federal Reserve Bank of New York. The regulator imposed the agreement on a CIT bank unit after the company amassed heavy home lending losses and was unable to borrow in the capital markets under Thain’s predecessor.

Including the redemption announced today, the company will have eliminated or refinanced about $24 billion of high cost debt since 2010.

In January, New York-based CIT reported a 59 percent fall in fourth-quarter net income.

About $3.6 billion of notes maturing in 2017 and about $3.1 billion of notes maturing in 2016 will remain outstanding, the company said.

In March, the lender announced the redemption of certain notes maturing in 2015, cutting down its high cost debt by $1.6 billion.

Shares of the company, which have gained about 8 percent of their value since it last reported results, closed at $41.24 on Friday on the New York Stock Exchange.

Reporting by Sharanya Hrishikesh in Bangalore; Editing by Joyjeet Das

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