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Moody's lowers CIT
Moody's Investors Service said it downgraded CIT Group Inc.'s senior unsecured rating to A3 from A2 and short-term rating to Prime-2 from Prime-1.
The agency lowered, and kept on review for further downgrade, the issuer rating to A3 from A2, junior subordinated bond to Baa2 from Baa1 and preferred stock to Baa2 from Baa1.
The downgrades and review reflects CIT's reduced funding flexibility amid severe credit market dislocations and expected weaker profitability stemming from higher borrowing and credit costs, the agency said.
"Although CIT successfully renewed maturing committed conduit facilities in 2007, access to the term ABS markets is constrained," Moody's analyst Mark Wasden said in a written statement.
"Our downgrade reflects our concerns regarding the company's ability to respond to its funding challenges while managing potential dilution to its profitability and franchise strength," the analyst added.
Ratings are supported by the operating strengths of its core commercial finance businesses, the agency said.
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