CIT Group Inc
The company said earlier this month that it was looking for investors to approve a large debt exchange that would reduce its borrowings, or approve a prepackaged bankruptcy. With the debt exchange not going well so far, CIT is now more likely to try a prepackaged bankruptcy, two people familiar with the matter said. They declined to be identified because the exchange offer is ongoing and information about its progress is private.
But separately, investors in CIT securities said it is possible that the company will not find enough debtholder approval for a prepackaged bankruptcy, which requires sufficient support before the company files for protection from creditors. Instead, CIT might have to aim for a pre-negotiated bankruptcy, which requires less support before the actual filing.
CIT spokesman Curt Ritter declined to comment.
(Reporting by Dan Wilchins and Paritosh Bansal; Editing by Richard Chang)