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The decline was the news of CIT having to draw on its $7.3 billion in bank credit lines as it struggled to refinance debt that will be due in the next few months; shares plunged 17.3%.

“Our decision today is a result of the protracted disruption in the capital markets as well as recent actions by the rating agencies,” said Jeffrey M. Peek, Chairman and CEO. “It provides us with added flexibility and ensures that our clients have the financing they need to operate and grow their businesses successfully.  We are actively positioning CIT to maximize value by optimizing our business portfolio and sizing our company to market conditions.”

Peek said CIT Group CIT cannot get capital from other sources amid continued deterioration of the credit markets. Aside from looking for new funding, CIT Group said it would also consider selling non-strategic assets and business lines to help raise cash.

Last year, CIT Group shut down its mortgage lending operations.  During the fourth quarter, the company set aside $385.5 million to cover bad mortgages.

CIT Group also created a separate $250 million reserve to cover losses in its home equity portfolio.

Moody's said it will continue to review CIT Group's operations for more potential downgrades, while S&P placed CIT Group on a negative outlook, which is a more long-term view.

Fitch Ratings signalled it may downgrade CIT Group, saying the credit market illiquidity has significantly impacted CIT's funding profile, according to a report on Thomson Financial News.

Fitch believes that current market conditions have materially constrained CIT's ability to source traditional unsecured funding at economically viable prices, and also believes CIT may need to utilize established alternative sources of funding and liquidity, which include unsecured, committed bank lines totaling 7.3 bln usd.

'Absent recent liquidity related events... CIT's fundamental performance remains sound considering the current environment,' the agency added.

It placed CIT's issuer default and debt ratings on rating watch negative as follows: long-term IDR at 'A', short-term IDR at 'F1', senior debt at 'A', subordinated/preferred at 'A-', short-term debt at 'F1'.