CIT to prepay $750m of debt as it moves towards recovery

Business lender CIT Group said on Monday it would prepay $750 million (Dh2.7 billion) on its $7.5bn in debt, marking a step towards recovery under the new leadership of Wall Street heavyweight John Thain.

Thain, a former head of Wall Street investment bank Merrill Lynch, on Monday took the reins earlier in the day as chief executive and chairman of CIT, a major business lender that recently emerged from bankruptcy.

CIT said its board of directors had "authorised the voluntary prepayment of $750m on its $7.5bn first lien credit facility".

The New York-based bank holding company said it would prepay "this high-cost debt" out of its more than $5bn in available cash.

The repayment is subject to a two per cent payment premium.

Thain, 54, replaced Peter Tobin, the interim CEO, as the lender continues to streamline its operations focused on serving the small-business and middle-market sectors, the company said in a statement. Thain will get an annual base salary of $6m, most of which is in stock, and a bonus of up to another $1.5m, in a nod to compensation practices popularised by the Obama administration's pay czar.

The salary includes $500,000 in cash, $2.5m of restricted CIT stock with a holding period of one year and $m in stock restricted for three years, the company said in a regulatory filing.

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