- The Washington Times - Friday, March 21, 2008

NEW YORK (AP) — CIT Group Inc. used up its credit lines and plans to sell billions of dollars in loans because the lender is having trouble raising money in tumultuous markets, the company said yesterday.

The New York-based lender tapped its credit lines with 40 banks to borrow $7.3 billion, saying it is vital to hoard cash because of skittishness in the lending market.

CIT Group expects to sell billions of dollars in loans and some of its businesses, and is trying to find a partner to help raise money.

The company, which has a $62.5 billion loan portfolio, said because of turbulent markets it decided to shrink itself and shield its portfolio from reliance on dicier financing markets.

“We recognize that given the current market environment, we need to run a smaller company,” Chief Executive Officer Jeff Peek said.

The announcement rattled investors, who in the past few months have had little tolerance for companies whose liquidity is under threat. CIT Group’s shares lost nearly a third of their value yesterday, closing at $7.92 and touching as low as $6.45, the cheapest trade in the history of the stock, which had topped $60 less than a year ago.

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