CIT greenshoe exercised, lifts 8.75% convertible preferreds to $575 million

By Susanna Moon

Chicago, April 25 - CIT Group Inc. said underwriters exercised in full their $75 million over-allotment option on the company's 8.75% perpetual convertible preferred stock, which priced on April 21, increasing the size of the issue to $575 million.

As previously reported, the convertible preferreds were sold at par of $50. They priced with a dividend of 8.75% and an initial conversion premium of 15%.

J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc., Lehman Brothers Inc. and Citigroup Global Markets Inc. were the bookrunners of the registered shelf offering.

The preferreds are non-callable for the first seven years, after which they may be called subject to a hurdle at 150% of the conversion price.

The preferreds will have standard dividend and takeover protection.

CIT Group, a New York-based commercial finance company, said it will use the proceeds for general corporate purposes.

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