CIT Group launches subordinated debt fund

By Devika Patel

Knoxville, Tenn., Jan. 30 - CIT Group Inc. announced it has created 505 Capital Partners, LP, a fund that will invest in second-lien, mezzanine and other subordinated debt instruments.

The fund has raised $225 million in equity, and when fully leveraged it will have a target size of about $1 billion, the company said in a press release.

Senior managing director Tim Eichenlaub will head the fund, which will not be consolidated on CIT's balance sheet and will operate independently.

"We created 505 Capital Partners in response to the increasingly complex financing needs of our clients, as junior capital plays a critical part in the overall capital structure," CIT's president of corporate finance, Walter Owens, said in the release. "The fund offers us a powerful complement to our existing financing and syndication capabilities and will allow us to win more business with a one-stop financing solution."

CIT Group is a New York-based financial services company.

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