CIT Group Inc. plans to redeem almost all of the $4 billion ofdebt tied to its exit from bankruptcy as the small-business lenderled by John Thain seeks a return to investment-grade creditratings.

CIT will buy back $1 billion of its 7 percent Series Asecond-priority secured notes due in 2016 and about $2.9 billion ofthe debt maturing in 2017 on March 9, the New York-based companysaid in a statement yesterday. Repaying the debt will make thecompany's outstanding Series C notes and its revolving credit lineunsecured, leaving the lender with a “largely unencumbered balancesheet,” Thain said in the statement.

“This is a significant milestone for CIT,” Thain, chairman andchief executive officer of CIT, said in the statement. “Theseefforts will improve our financial flexibility as we continue toprovide much needed financing to the small business and middlemarket sectors.”