CIT gets £1.8 billion lifeline

NEW YORK (Reuters) - CIT secured a $3 billion (1.8 billion pound) loan facility from its bondholders on Monday and said it plans a comprehensive restructuring of its liabilities, but gave few details.

With the emergency loan, the 101-year-old lender to small and mid-sized businesses warded off a threat of imminent bankruptcy, but many experts questioned its ability to survive in its current form.

Several analysts and bankers said earlier in the day that the rescue financing might only delay a bankruptcy filing, in light of skittishness among CIT customers and the New York-based company's inability to readily tap capital markets.

But the scarcity of the details made public by CIT shows that much remains to be worked out as bondholders and the company seek an "orderly process" to split off CIT's profitable operations from its money-losing businesses, said one expert.

What's more, the high interest rates CIT will have to pay bondholders jeopardize the lender's odds for survival, said Michael Goldsmith, a managing director at financial advisory firm BBK.

"CIT will be hard pressed to be profitable when it lends to its clients-- they're losing money on every loan-- not a very good sign," Goldsmith said.

The loan gives the CIT more time to restructure its debt, and preserves the ability of thousands of businesses to obtain cash needed for day-to-day operations.

The company, which lends to nearly one million small and mid-sized businesses, said as a first step in its recapitalization plan, it has started a cash tender offer for its outstanding floating rate senior notes due August 17.

The offer will be for $825 for each $1,000 principal amount of notes tendered on or before July 31.