Fitch downgrades CIT

Fitch Ratings said it downgraded CIT Group Inc.'s long-term issuer default rating and senior debt to BBB from A-; subordinated debt, senior subordinated debt and junior subordinated debt to BBB- from BBB+; and preferred stock to BB+ from BBB+.

Fitch also affirmed the short-term issuer default rating at F2 and assigned a C individual rating, 5 support rating and "No Floor" support floor to the company.

The outlook is negative.

The agency said the downgrade primarily reflects the challenges CIT faces in achieving sustainable profitability given significant changes in its business model and mix prompted by unprecedented capital markets dislocation.

Fitch said it recognizes management's ability to navigate an unprecedented capital markets environment by executing on a number of initiatives, which have increased capital levels and given the company necessary breathing room. Nonetheless, the agency said CIT will face new challenges in operating in a wholly regulated environment.

The negative outlook reflects Fitch's concern with CIT's ability to return to sustainable profitability and maintain regulatory capital levels in accordance with stated minimum levels.

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