June 9 (Bloomberg) -- CIT Group Inc., the commercial lender that tapped emergency credit lines this year when cash ran short, rose 3.2 percent in New York trading after Goldman Sachs Group Inc. provided $3 billion in financing.

The accord lasts for 20 years, the New York-based company said today in a regulatory filing. CIT said last week it had $8.1 billion in unsecured term debt and $2.1 billion in bank borrowings due by the end of this year.

CIT has been battered by four straight quarterly losses totaling more than $538 million tied to subprime mortgages and student lending. Chief Executive Officer Jeffrey Peek has already sold stock and assets, cut the dividend and drawn down $7.3 billion of emergency credit lines to quell speculation that the company faced bankruptcy. Peek has said CIT already has enough cash to last into next year.

``This will definitely help as the other unsecured debt comes due,'' said David Chiaverini, an analyst with BMO Capital Markets in New York. ``I don't think they are completely in the free and clear yet.''

The lender advanced 29 cents to $9.48 a share at 4:15 p.m. in New York Stock Exchange composite trading. The company's shares had dropped 62 percent this year before today. Credit- default swaps tied to CIT's bonds fell, signaling investors are more confident about the company's ability to repay its debt.

New Financing

The contracts fell 27 basis points to 488 basis points, according to CMA Datavision. The contracts are used to speculate on a company's creditworthiness or to hedge against losses.

``We view this transaction as another important milestone in achieving our desired financing profile,'' Peek said in a statement.

CIT has been seeking new sources of cash since March after credit ratings downgrades left the lender shut out of commercial paper markets, where it borrows short-term money to finance new loans.

The Goldman accord awards the securities firm a 2.85 percent fee, or $85.5 million annually for the first decade, and an additional amount equal to the three-month London interbank offered rate when it borrows from the facility.

The agreement also bans CIT from using mortgages it owns as collateral. CIT stopped originating home mortgages, including subprime loans, and quit student lending to focus on financing and advisory services to mid-sized companies. Chief Financial Officer Joseph Leone told investors at a conference last week that progress on fixing overdue home loans has slowed, adding that subprime ``has been a pain, to put it mildly.''

Another Step

UBS AG credit analyst David Havens called the Goldman accord ``another salutary step'' in a note to investors.

``We continue to believe CIT is a very well-managed firm, but its core independent wholesale funded business model seems to be going the way of the Mohicans, the buggy whip, the eight-track player,'' he wrote.

Among the assets up for sale is CIT's railcar-leasing business. Leone said last week that multiple bidders, including at least one from outside the U.S., have made offers.

Peek, who had been in the running to be president of Merrill Lynch & Co. before losing a power struggle in 2001, joined CIT in 2003 as chief operating officer. He took over as CEO in 2004.

CIT was founded in 1908 as the Commercial Credit and Investment Co. The firm was first to offer financing to help people buy Studebaker cars.

To contact the reporter on this story: Erik Holm in New York at eholm2@bloomberg.net.

Last Updated: June 9, 2008 16:33 EDT