CIT Completes $10.4 Bln Sale Of Commercial Aircraft Leasing Business To Avolon

(RTTNews) - CIT Group Inc. (CIT, CITGQ.PK) said it has completed the sale of its commercial aircraft leasing business to Avolon Holdings Limited, an aircraft leasing company and wholly-owned subsidiary of Bohai Capital Holding Co. Ltd., for a purchase price of $10.4 billion.

With the completion of this transaction, as well as the recent sale of CIT's stake in the TC-CIT aviation joint ventures, CIT has now exited the commercial aircraft leasing business.

However, CIT's Commercial Finance business will continue to work with aircraft owners, manufacturers, suppliers and service providers in the industry to offer loans for commercial aircraft, aircraft engines and aircraft parts as part of its Aerospace, Defense & Government Finance business.

CIT Group said it will use the cash proceeds from the transaction to fund about $3 billion in capital return to shareholders and redeem $5.8 billion in senior unsecured debt. The company expects the liability management and capital return actions to be initiated as soon as practicable and before the end of April.

Separately, CIT Group said it continues to evaluate the issuance of approximately $325 million of Tier 1 qualifying preferred stock, which would allow for an incremental return of an equivalent amount of common equity.

Ireland-based Avolon is now the world's third largest aircraft leasing company with a combined fleet, as of 31 December, 2016, of 868 aircraft valued at over $43 billion.