CIT prices $600 million mandatory convertibles due 2015 at 7.75%, up 20.07%

By Evan Weinberger

New York, Oct. 17 - CIT Group, Inc. priced $600 million in senior unsecured mandatory convertible units due Nov. 15, 2015 after the market close Wednesday with a coupon of 7.75% and an initial conversion premium of 20.07%.

The mandatories came at the middle of talk for a coupon of 7.5% to 8% and an initial conversion premium of 17.5% to 22.5%.

The conversion price is $42.00.

Morgan Stanley and Citigroup are joint bookrunners of the registered transaction. There is a $90 million over-allotment option.

Holders of the new CIT mandatories will be required to purchase CIT common stock by Nov. 17, 2010. The mandatories have call protection for life and there are no puts. There are standard takeover and dividend protections.

The mandatories will be issued in units of $25 par.

CIT is a New York-based commercial and consumer finance company. CIT plans to use the proceeds of the deal for general corporate purposes.

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