Billionaire investor Carl Icahn offered to underwrite a $6 billion loan to CIT Group Inc. on Monday, complaining that a proposed solution hammered out by the cash-strapped, century-old commercial lender and its largest creditors is too expensive and detrimental to CIT's smaller bondholders.
In a blistering letter to CIT's board dated Monday, Icahn — who refers to himself as CIT's largest creditor — said the company is "shamelessly" offering to sell certain large bondholders $6 billion of secured loans "well below their fair market value."
He said the offer was made to encourage the large creditors to approve CIT's effort to reduce its debt load through a bond swap or prepackaged bankruptcy.
As an alternative to the current plan, Icahn offered to underwrite the $6 billion loan that he said would save the company as much as $150 million in fees to prospective lenders under the company's proposed financing. Icahn said in a statement that his offer wouldn't force bondholders to vote for CIT's current restructuring plan, which he claims would "entrench current board members and give them releases for a range of past acts."