NEW YORK (Reuters) - CIT Group Inc (CIT.N: Quote, Profile, Research), a commercial finance company hit hard by the global credit crisis, on Monday announced plans to sell $1 billion of common stock and convertible preferred stock.

The New York-based company said it intends to use net proceeds for general corporate purposes, including payment of $8 million of preferred stock dividends this quarter, and $23 million of interest on junior subordinated notes in the third quarter.

Last week, CIT posted a $257.2 million first-quarter loss, slashed its dividend 60 percent, and said it may sell its railcar leasing business to raise cash. The previous month, it said it drew down its $7.3 billion of bank credit lines.

Shares of CIT fell $1.39, or 10.9 percent, to $11.35 in after-hours electronic trading. The shares closed Monday down 76 cents at $12.74. CIT said Citigroup Global Markets Inc, JPMorgan, Lehman Brothers Inc and Morgan Stanley are arranging the stock and convertible preferred offerings.

(Reporting by Jonathan Stempel; )