July 13 (Bloomberg) -- Goldman Sachs Group Inc., which provided a $3 billion credit facility to CIT Group Inc. more than a year ago, said today that it has offset any exposure to the company with collateral and hedges.

“We have no material exposure because we are collateralized and, to the extent that we don’t have collateral, we are hedged,” said Lucas van Praag, a Goldman Sachs spokesman in New York. He declined to specify the nature of the hedges.

Goldman Sachs, which was the world’s most profitable securities firm before converting to a bank last year, agreed in June 2008 to provide $3 billion in financing to CIT Group, of which at least $1.5 billion has already been drawn down.

CIT Group, the century-old lender that hasn’t been able to persuade the U.S. government to back its debt sales, may default as soon as April, when a $2.1 billion credit line matures, according to Fitch Ratings. A failure of CIT, run by Chief Executive Officer Jeffrey Peek, would be the biggest bank collapse since regulators seized Washington Mutual Inc. in September.

CIT Group has argued that its collapse would put 760 manufacturing clients at risk of failure and “precipitate a crisis” for as many as 300,000 retailers, according to internal documents obtained by Bloomberg News that make the case for its importance to the U.S. economy.

Wells Fargo & Co., the fourth-largest U.S. bank, agreed in September to give CIT Group a $500 million credit facility. Susan Stanley, a spokeswoman at San Francisco-based Wells Fargo, declined to comment on the bank’s exposure to CIT Group.

Goldman Sachs’s comments on its vulnerability to CIT Group echo comments made last year about exposure to American International Group Inc., the New York-based insurer that was bailed out by the Federal Reserve. Goldman Sachs, which also said it had no material exposure to AIG because of collateral and hedges, got $12.9 billion from the firm between the government rescue of the insurer in September and the end of 2008.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: July 13, 2009 13:31 EDT