Item 1.01.
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Entry into a Material Definitive Agreement.
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Completion of Offering of Senior Unsecured Debt
On June 19, 2020, CIT Group Inc. (“CIT”) completed a registered public offering of $500 million aggregate principal amount of senior unsecured fixed-to-floating rate notes due 2024 (the “Notes”). The Notes were priced at par. From June 19, 2020 to, but excluding, June 19, 2023, the Notes will bear interest at a rate of 3.929% per annum, payable semi-annually in arrears on June 19 and December 19 of each year, commencing on December 19, 2020. From and including June 19, 2023 until the maturity date, the Notes will bear interest at a floating rate equal to SOFR plus 382.7 basis points (3.827%), payable quarterly in arrears on September 19, 2023, December 19, 2023, March 19, 2024 and June 19, 2024.
The net proceeds of this offering were approximately $497 million, after deducting commissions, fees and expenses associated with the offering. CIT intends to use the net proceeds from the offering for general corporate purposes.
The Notes were issued pursuant to CIT’s shelf registration statement on Form S-3 (Registration No. 333-221965), as supplemented by the final prospectus supplement filed with the SEC on June 18, 2020.
The Notes are unsecured obligations of CIT and are not guaranteed by any of CIT’s subsidiaries.
The Notes were issued under a base indenture, dated March 15, 2012, as supplemented by a ninth supplemental indenture, dated as of June 19, 2020 (together, the “Indenture”), each between CIT, Wilmington Trust, National Association, as trustee and Deutsche Bank Trust Company Americas, as paying agent, security registrar and authenticating agent. The Indenture contains certain covenants that, subject to exceptions, limit CIT’s ability to (i) create liens and (ii) merge or consolidate, or sell, transfer, lease or dispose of all or substantially all of its assets.
CIT may redeem the Notes at its option (i) in whole but not in part on June 19, 2023 (the date that is one year prior to the maturity date) or (ii) in whole or in part at any time on or after May 19, 2024 (the date that is one month prior to the maturity date). The redemption price for such Notes will equal 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but not including, the date of redemption.
In addition, CIT may at any time and from time to time purchase Notes in open market transactions, tender offers or otherwise. If CIT experiences a Change of Control Triggering Event (as defined in the Indenture), the holders of the Notes may require CIT to repurchase for cash all or a portion of their Notes at a price equal to 101% of the aggregate principal amount of the Notes, plus accrued and unpaid interest.
The Indenture (including the Forms of Note included therein) and the underwriting agreement relating to the Notes have been filed as exhibits to this Current Report on Form 8-K and the description of the Indenture contained herein is qualified in its entirety by reference to the Indenture.