Less than three years after CIT Group Inc. completed itsbankruptcy reorganization, Chief Executive Officer John Thain ispersuading investors that its debt is as creditworthy as aninvestment-grade firm.

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

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