BORROWINGS

The following table presents the carrying value of outstanding borrowings.

Borrowings (dollars in millions)



	December 31, 2017						December 31, 2016
	CIT Group Inc.		Subsidiaries		Total		Total
Senior Unsecured	$	3,737.5	$	—	$	3,737.5	$	10,599.0
Secured borrowings:
Structured financings	—		1,541.4		1,541.4		1,925.7
FHLB advances	—		3,695.5		3,695.5		2,410.8
Total Borrowings	$	3,737.5	$	5,236.9	$	8,974.4	$	14,935.5

The following table summarizes contractual maturities of borrowings outstanding, which excludes PAA discounts, original issue discounts, and FSA discounts.

Contractual Maturities — Borrowings as of December 31, 2017 (dollars in millions)



	2018		2019		2020		2021		2022		Thereafter		Contractual Maturities
Senior unsecured notes	$	—	$	1,383.0	$	435.6	$	—	$	1,150.0	$	801.4	$	3,770.0
Structured financings	226.3		770.7		70.5		63.4		58.0		360.0		1,548.9
FHLB advances	1,400.0		1,145.5		1,150.0		—		—		—		3,695.5
	$	1,626.3	$	3,299.2	$	1,656.1	$	63.4	$	1,208.0	$	1,161.4	$	9,014.4

Unsecured Borrowings

Revolving Credit Facility

In February 2018, the Company's existing revolving credit facility was amended. See Note 30 - Subsequent Events. The following information was in effect at December 31, 2017.

The Revolving Credit Facility had a total commitment amount of $750 million and the maturity date of the commitment was January 25, 2019. The applicable margin charged under the facility was 2.00% for LIBOR Rate loans and 1.00% for Base Rate loans.

The Revolving Credit Facility was amended in February 2017 to lower the total commitments from $1.5 billion to $1.4 billion and to further extend the final maturity date of the lenders’ commitments. On April 4, 2017, upon consummation of the Commercial Air Sale, the total commitment amount under the Revolving Credit Facility was reduced from $1.4 billion to $750 million and the covenant requiring that the Company maintain a minimum $6 billion consolidated net worth was replaced by a covenant requiring that the Company maintain a minimum Tier 1 capital ratio of 9.0%. Also upon the consummation of the Commercial Air Sale, one of the nine domestic operating subsidiaries of the Company was discharged and released as a guarantor under the Revolving Credit Facility. As of December 31, 2017, the Revolving Credit Facility was unsecured and was guaranteed by eight of the Company’s domestic operating subsidiaries. In addition, the applicable required minimum guarantor asset coverage ratio ranged from 1.0:1.0 to 1.5:1.0 and was 1.25:1.0 at this date.

The Revolving Credit Facility may be drawn and prepaid at the option of CIT. The unutilized portion of any commitment under the Revolving Credit Facility may be reduced permanently or terminated by CIT at any time without penalty. There were no outstanding borrowings at December 31, 2017 and 2016. The amount available to draw upon at December 31, 2017 was $695 million, with the remaining amount of approximately $55 million being utilized for issuance of letters of credit to customers.

Senior Unsecured Notes

The following table presents the principal amounts by maturity date.



Maturity Date	Rate (%)		Date of Issuance	Par Value
February 2019	5.500	%	February 2012	$	383.0
February 2019	3.875	%	February 2014	1,000.0
May 2020	5.375	%	May 2012	435.6
August 2022	5.000	%	August 2012	1,150.0
August 2023	5.000	%	August 2013	750.0
Weighted average rate and total	4.793	%		$	3,718.6

CIT redeemed on May 4, 2017, 100% of the aggregate principal amount (approximately $4.84 billion) of its outstanding (i) $1,725.8 million, 4.250% Senior Unsecured Notes due August 2017; (ii) $1,465.0 million, 5.250% Senior Unsecured Notes due March 2018; (iii) $695.0 million, 6.625% Series C Unsecured Notes due April 2018; and (iv) $955.9 million, 5.000% Senior Unsecured Notes due May 2018, at an aggregate premium of $98 million.

In addition, on April 4, 2017, CIT commenced an offer to purchase for cash (the “Debt Tender Offer”) up to $950 million in the aggregate of its (i) 5.500% Series C Unsecured Notes due February 2019; (the "2019 Notes") (ii) 5.375% Senior Unsecured Notes due May 2020 (the "2020 Notes"); and (iii) 5.000% Senior Unsecured Notes due August 2022 (the “2022 Notes” and, together with the 2019 Notes and the 2020 Notes, the “Notes”). On April 18, 2017, CIT elected to increase the aggregate maximum principal amount of Notes accepted for purchase in the Tender Offer and a total principal amount of $969 million of our 5.500% Series C Unsecured Notes due 2019 were repurchased for total consideration of $1.04 billion, including a premium of $59 million and accrued interest of $9 million.

On September 15, 2017, CIT announced an offer to purchase for cash (the "Tender Offer") up to $800 million in aggregate of its outstanding (i) 5.500% Series C Unsecured Notes due February 2019 (the "2019 Notes"), (ii) 5.375% Senior Unsecured Notes due May 2020 (the "2020 Notes") and (iii) 5.000% Senior Unsecured Notes due August 2022 (the "2022 Notes"). On September 28, 2017, CIT announced that all $800 million of the tender offer had been subscribed as of the early participation deadline for total consideration of $861.2 million, including a premium of $50.6 million and accrued interest of $9.3 million. CIT purchased $398 million of the "2019 Notes", $302 million of the "2020 Notes" and $100 million of the "2022 Notes" that were tendered.

In addition to the premium payments noted above, included in the loss on debt extinguishment of $220.0 million for the year ended December 31, 2017 are transaction costs and acceleration of deferred costs.

The Indentures for the senior unsecured notes limit the Company's ability to create liens, merge or consolidate, or sell, transfer, lease or dispose of all or substantially all of its assets. Upon a Change of Control Triggering Event, as defined in the Indentures for the senior unsecured notes, holders of the senior unsecured notes will have the right to require the Company, as applicable, to repurchase all or a portion of the senior unsecured notes at a purchase price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of such repurchase.

In addition to the above table, there is an unsecured note outstanding with a 6.0% coupon and a carrying value of $39.6 million (par value of $51 million) that matures in 2036.

Secured Borrowings

At December 31, 2017 the Company had pledged $28.2 billion of assets (including collateral for the FRB discount window that is currently not drawn) although the collateral specifically identified and used to calculate available borrowings was $13.1 billion, which included $11.6 billion of loans (including amounts held for sale), $1.2 billion of operating lease assets, $0.2 billion of cash and $0.1 billion of investment securities. Under the FHLB Facility, CIT Bank may at any time grant a security interest in, sell, convey or otherwise dispose of any of the assets used for collateral provided that CIT Bank is in compliance with the collateral maintenance requirement immediately following such disposition and all other requirements of the facility at the time of such disposition.

FHLB Advances

As a member of the FHLB of San Francisco, CIT Bank N.A. can access financing based on an evaluation of its creditworthiness, statement of financial position, size and eligibility of collateral. The interest rates charged by the FHLB for advances typically vary depending upon maturity, the cost of funds of the FHLB, and the collateral provided for the borrowing and the advances are secured by certain Bank assets and bear either a fixed or floating interest rate. The FHLB advances are collateralized by a variety of consumer and commercial loans, including SFR mortgage loans, multi-family mortgage loans, commercial real estate loans, certain foreclosed properties and certain amounts receivable under a loss sharing agreement with the FDIC.

As of December 31, 2017, the Company had $5.2 billion of financing availability with the FHLB, of which $1.4 billion was unused and available, and $87.8 million was being utilized for issuance of letters of credit related to deposits. FHLB Advances as of December 31, 2017, have a weighted average rate of 1.56%. The following table includes the total carrying value of FHLB Advances and pledged assets⁽¹⁾.

FHLB Advances with Pledged Assets⁽¹⁾ Summary (dollars in millions)



	December 31, 2017				December 31, 2016
	FHLB Advances		Pledged Assets⁽¹⁾		FHLB Advances		Pledged Assets⁽¹⁾
Total	$	3,695.5	$	6,154.1	$	2,410.8	$	6,389.7

⁽¹⁾ For purposes of this table the term “Pledged Assets” means the assets required under the collateral maintenance requirement in connection with FHLB advances at each of the dates.

Structured Financings

Set forth in the following table are amounts primarily related to structured financings of and assets owned by consolidated VIEs. Creditors of these VIEs received ownership and/or security interests in the assets. These entities are intended to be bankruptcy remote so that such assets are not available to creditors of CIT or any affiliates of CIT until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings. Structured financings as of December 31, 2017, had a weighted average rate of 3.75%, which ranged from 0.55% to 5.5%.

Structured Financings and Pledged Assets Summary (dollars in millions)



	December 31, 2017				December 31, 2016
	Secured Borrowing		Pledged Assets		Secured Borrowing		Pledged Assets
Business Capital	$	768.8	$	2,838.6	$	949.8	$	2,608.0
Rail⁽¹⁾⁽²⁾	772.6		1,272.0		860.1		1,327.5
Commercial Finance	—		—		—		0.2
Subtotal — Commercial Banking	1,541.4		4,110.6		1,809.9		3,935.7
Non-Strategic Portfolios	—		—		115.8		212.6
Total	$	1,541.4	$	4,110.6	$	1,925.7	$	4,148.3


⁽¹⁾	At December 31, 2017, the TRS Transactions related borrowings and pledged assets, respectively, of $493.0 million and $818.6 million were included in Rail. The TRS Transactions are described in Note 11 — Derivative Financial Instruments.


⁽²⁾	At December 31, 2017, secured borrowings and pledged assets, respectively, of $250.3 million and $421.9 million were related to the pending sale of our European Rail business, NACCO, and will be transferred to the buyer upon sale of that business.

Not included in the above table are current borrowings of discontinued operations of $268.2 million and $1,571 million, at December 31, 2017 and 2016, respectively. See Note 2 — Discontinued Operations.

FRB

The Company has a borrowing facility with the FRB Discount Window that can be used for short-term, typically overnight, borrowings. The borrowing capacity is determined by the FRB based on the collateral pledged.

There were no outstanding borrowings with the FRB Discount Window as of December 31, 2017 and 2016.

Variable Interest Entities ("VIEs")

Described below are the results of the Company's assessment of its variable interests in order to determine its current status with regards to being the VIE primary beneficiary.

Consolidated VIEs

The Company utilizes VIEs in the ordinary course of business to support its own and its customers' financing needs. Each VIE is a separate legal entity and maintains its own books and records. The most significant types of VIEs that CIT utilizes are 'on balance sheet' secured financings of pools of leases and loans originated by the Company where the Company is the primary beneficiary. Refer to Note 1 — Business and Summary of Significant Accounting Policies for further discussion.

Unconsolidated VIEs

Unconsolidated VIEs include government sponsored entity ("GSE") securitization structures, private-label securitizations and limited partnership interests where the Company's involvement is limited to an investor interest where the Company does not have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE and limited partnership interests.

The Company has certain contractual obligations related to the HECM loans and the GNMA HMBS securitizations, which are VIEs for which CIT is not the PB. The Company, as servicer of these HECM loans, is currently obligated to fund future borrower advances, which include fees paid to taxing authorities for borrowers' unpaid taxes and insurance, mortgage insurance premiums and payments made to borrowers for line of credit draws on HECM loans.

In addition, the Company is required to repurchase the HECM loans once the outstanding principal balance is equal to or greater than 98% of the maximum claim amount or when the property forecloses to OREO, which reduces the secured borrowing balance. Additionally the Company services $140.3 million and $160.2 million of HMBS outstanding principal balance at December 31, 2017, and December 31, 2016, respectively, for transferred loans securitized by IndyMac for which OneWest Bank prior to the acquisition had purchased the mortgage servicing rights ("MSRs") in connection with the IndyMac Transaction. The carrying value of the MSRs was not significant at December 31, 2017 and December 31, 2016. As the HECM loans are federally insured by the FHA and the secured borrowings guaranteed to the investors by GNMA, the Company does not believe maximum loss exposure as a result of its involvement is material.

The table below presents potential losses that would be incurred under hypothetical circumstances, such that the value of its interests and any associated collateral declines to zero and assuming no recovery or offset from any economic hedges. The Company believes the possibility is remote under this hypothetical scenario; accordingly, this required disclosure is not an indication of expected loss.

Unconsolidated VIEs Carrying Value (dollars in millions)



	December 31, 2017				December 31, 2016
	Securities		Partnership Investment		Securities		Partnership Investment
Agency securities	$	4,950.2	$	—	$	2,152.9	$	—
Non agency securities — Other servicer	318.8		—		769.0		—
Tax credit equity investments	—		198.8		—		167.7
Equity investments	—		38.6		—		11.4
Total Assets	$	5,269.0	$	237.4	$	2,921.9	$	179.1
Commitments to tax credit investments	$	—	$	66.6	$	—	$	62.3
Total Liabilities	$	—	$	66.6	$	—	$	62.3
Maximum loss exposure⁽¹⁾	$	5,269.0	$	237.4	$	2,921.9	$	179.1


⁽¹⁾	Maximum loss exposure to the unconsolidated VIEs excludes the liability for representations and warranties, corporate guarantees and also excludes servicing advances.