Microsoft has terminated its vendor-financing deal with CIT
Group, Stacie Sloane, director of marketing for Microsoft’s
worldwide licensing and pricing group, confirmed.

CIT, which secured emergency financing from private investors
earlier this week, has been desperately trying not to enter
bankruptcy protection in the United States.  The lessor found
itself needing rescue financing after being turned down for a
second US government bailout earlier this month.

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Confirming the termination of the vendor finance deal – which
will be a major setback for the troubled lessor – Microsoft added
that a plan was in place for new customers to receive financing
through other vendors.

“We will ensure any credit-approved customer financing
commitments are honoured,” Sloane said.

“Microsoft works with a number of financial institutions,
including CIT, that provide vendor services and we continue to
offer financing to qualified customers as a way to pay for software
and services. Microsoft Financing has contingency plans in place to
protect our customers’ and partners’ needs.”

Separately, according to media reports, CIT has rejected an
offer from GE Capital for $2 billion (€1.4 billion) in senior
secured loans backed by aircraft.

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It has been reported that CIT rejected the loans from GE Capital
in favour of $3 billion in loans from a group of bondholders, from
which it has already received $2 billion in cash.

Bloomberg reported that the troubled lessor rejected
the deal, which would have been less costly and required fewer
assets as collateral, because the cash would not have been provided
until the end of July, due to a delay in structuring the deal.

Jason T Hesse