Less than three years after CIT Group Inc. completed its bankruptcy reorganization, Chief Executive Officer John Thain is persuading investors that its debt is as creditworthy as an investment-grade firm.

The average yield investors demand to hold the bonds of CIT rather than U.S. Treasuries fell to 310 basis points as of Aug. 17, according to Bank of America Merrill Lynch index data. The average spread on an index of BBB-rated financial firms that includes Axa SA and American Express Co., which is at least three grades above junk-rated CIT, was 349 basis points.

Investors are clamoring for CIT's securities as it polishes its credit profile by unencumbering assets and replacing high interest-rate debt with lower coupons. The commercial lender has chipped away at its balance sheet, reducing long-term debt by $10.5 billion since the end of 2010 as its average bond spread has dropped 151 basis points over the same time period.