TPG Joins Thain's CIT to Start Commercial-Lending Venture

  • Strategic Credit Partners has $500 Million Target Size
  • Partnership Will Provide Financing For Health Care, IT

CIT Group Inc., led by Chief Executive Officer John Thain, is starting a venture with TPG’s special-situations and credit platform to help compete against bigger commercial lenders

The new entity, Strategic Credit Partners, will provide senior secured financing to U.S. companies in industries including communications, health care and information services, New York-based CIT said Wednesday in a statement. The venture will have a target size of $500 million.

The deal will help CIT, the provider of lending and leasing services, win business as Thain seeks to accelerate growth after the company emerged from a 2009 bankruptcy. In July, regulators approved CIT’s $3.4 billion takeover of OneWest Bank, a Pasadena, California-based lender backed by billionaires John Paulson and George Soros.

“We go up against institutions that are, in some cases, much bigger than us with much larger balance sheets, so it was a little bit of frustration,” Jim Hudak, president of CIT Corporate Finance, said in a phone interview. The venture “enables us to effectively compete against larger institutions.”

CIT rose 1.1 percent to $42.51 at 2:45 p.m. in New York trading. The company had slipped 12 percent this year through Tuesday.

TPG, founded by David Bonderman and Jim Coulter, manages about $75 billion in assets. TPG Special Situations Partners had more than $12 billion of assets under management as of June 30 and works on public and private investments through primary originations, secondary market purchases and restructurings.

Deutsche Bank AG is the financial adviser to CIT on the deal, and Dechert LLP provided legal counsel. TPG Special Situations Partners used Cleary Gottlieb Steen & Hamilton LLP.

For Related News and Information:
TPG Scores $5 Billion Gain in Three Years on Par Pharma Sale
CIT’s Thain Says OneWest Purchase Should Prompt More Bank Deals
Bonderman’s TPG Purchases Cushman & Wakefield for $2 Billion
TPG private equity holdings: 8818Z US PHDC1
CIT risk profile: CIT US RSKC
Thain audio-visual material: TNI ?1489674 AV
Credit markets watch: CMW
Top finance news: FTOP

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