The US Treasury could take a sizeable loss on its $2.3bn investment in CIT Group, the US commercial lender, if it and the company’s bondholders approve a debt restructuring proposed this week.
The embattled lender, which focuses on small and mid-size businesses, has offered its bondholders a debt exchange that would reduce the company’s $30bn debt load and grant bondholders preferred stock amounting to between 92 and 94 per cent of its equity.
