CIT protests Moody’s downgrade

May 30, 2008 @ 12:54 pm

By Alex Peacocke

Financial services provider CIT is taking strong exception to a Moody’s downgrade that caused its share price to plunge more than 4%.

Moody’s Corp. of yesterday downgraded CIT Group Inc. to Baa1, from a rating of A3, claiming that the New York firm faced difficult market conditions and increased debt fallout from mortgage-backed securities from the credit crisis.

The ratings firm also faulted the liquidity in the firm’s portfolio.

“We disagree with the ratings actions that Moody’s has taken, particularly in light of the significant progress we have made to strengthen our balance sheet, improve liquidity and position CIT for long-term success and profitability,” CIT said in a statement released today.

“We believe the financial profile and strength of our businesses will generate financial results consistent with A rating levels.”

CIT said that it had “raised $1.6 billion in new capital, completed financings of approximately $1 billion, sold over $2 billion of assets at approximately book value and underwrote $600 million of loans at the CIT Bank.”

In the report downgrading CIT, New York-based Moody’s said the firm was still "under review" for future possible downgrades.

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