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The loan is intended to help rally creditor support for a debt exchange, proposed by CIT's board. CIT's lenders must decide by midnight Thursday whether to support the exchange, a separate prepackaged bankruptcy plan or neither. Interestingly, the move pits the group of bondholders against activist investor Carl Icahn, who holds $2 billion in CIT debt and who has publicly opposed the debt swap. A Silver Point spokesman downplayed the notion the hedge fund is at odds with Icahn. "Silver Point has and continues to have a constructive relationship with Carl Icahn in this and other situations," he told the New York Post. "We have acted as a bridge between Carl and CIT to help them mediate their conflict." On Tuesday, Icahn offered to buy debt from "smaller" bondholders if they join his bid to block the troubled lender's prepackaged bankruptcy plan and debt exchange plan on the grounds that it would secure the positions of CIT directors who have helped drive the company "to the brink of bankruptcy." Icahn said if CIT's prepack or comprehensive debt exchange plan fails and the company falls into a full-fledged bankruptcy, he will launch a 30-day tender offer in which smaller debtholders can have a put option to sell bonds to him at 60% of par, according to a Tuesday open letter to CIT's "smaller holders." Under CIT's prepack plan, bondholders have been told they would receive 70 cents on the dollar. "They are getting a 70-cent piece of paper -- who knows what that will be worth looking ahead," Icahn told the Deal. "I believe in a traditional bankruptcy and all of these dire [CIT] scare tactics make no sense, therefore I am willing to buy at 60, because I think it's worth more than 60." (Subscribers to The Deal Pipeline can read the full story here.) Silver Point was reportedly one of six hedge funds that lent CIT $3 billion in July. - Sara Behunek See Also: Video: Oppenheimer's Heinberg on a CIT Group bankruptcy
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Beleaguered middle-market lender CIT Group Inc. (NYSE:CIT) is in the process of 
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