Goldman Confirms It Is Talking To CIT (CIT) On $3B Loan

According to reports from the Wall Street Journal, Goldman Sachs (NYSE: GS) is in talks to amend the terms of a $3 billion loan to struggling lender CIT Group (NYSE: CIT).

The loan, extended to CIT in June 2008, calls for CIT to pay Goldman $1 billion if it were to file for bankruptcy.

Goldman could reduce the total loan amount, though other scenarios likely are being considered.

The loan needs to be resolved as part of CIT's move to raise funds as part of its restructuring.

Goldman spokesman Michael Duvally said Goldman "is working with CIT and its creditors to enable it to continue to use the facility, which we believe gives it its most attractive cost of funding." Duvally said the the potential $1 billion payment is not a windfall payment, but reflects the "present value of the spread to be earned over the life of the facility."

Shares of CIT are up 3.6% to $1.16 in early action today.

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