CIT's Sr Debt & CP Rtg Adjusted To `A+/F1'; Outlook Stable By Fitch.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 31, 2000

The CIT Group, Inc.'s (CIT) senior debt, subordinated debt, and commercial paper ratings are adjusted by Fitch to `A+', `A', and `F1', respectively. The debt of related entities, guaranteed by CIT and listed at the end of this press release, were also changed. Additionally, CIT's preferred stock is affirmed at `A'. Approximately $37 billion of securities are affected by Fitch's actions. The Rating Outlook for CIT is Stable.

The rating action reflects CIT's increased leverage since its 1999 acquisition of Newcourt Credit Group, Inc. (Newcourt) and expected higher range for leverage and lower capitalization in future periods versus historical levels. Additionally, profitability as measured by return on equity, has weakened following the Newcourt transaction principally due to Newcourt's higher expense structure, which CIT is taking actions to rationalize. The lower profitability has impacted CIT's internal capital formation.

Despite these concerns, Fitch continues to view CIT as a top-tier commercial finance company, with a broad mix of market-leading businesses. Fitch recognizes recent improvements in leverage, profitability and efficiency measures and projects a continuation of these trends. CIT's significant managed receivable portfolio of $55 billion and business diversity positions the company well vis-a-vis most of its direct competitors through an entire operating cycle. CIT's focus on credit excellence has improved since the last U.S. recession as management has actively worked to diversify the receivables portfolio to reduce concentrations by equipment type and obligor. Unlike some of its direct competitors, CIT has a strong syndication function which management has used proactively to avoid loan concentrations.

Further, in the current economic environment, Fitch is comfortable that CIT has no significant asset quality problems on the horizon. Several factors have reduced CIT's asset quality measures since the Newcourt acquisition, including a general economic softening, the consolidation of Newcourt's higher-risk, pre-acquisition portfolio, and the integration of servicing centers. Asset quality is expected to improve going forward as the old Newcourt portfolio seasons and as consolidated servicing centers improve collections.

Funding is well balanced without an over-reliance on any source, including commercial paper. CIT has successfully accessed European and Asian capital markets for funding. Management uses interest rate swaps and other strategies to help minimize CIT's exposure to changes in interest rates.

Fitch has taken the following rating actions and ratings remain stable with the exception of AT&T Capital Corp.'s notes guaranteed by AT&T Corp.:

The CIT Group, Inc.:

-- Notes, debentures, MTNs, from `AA-' to `A+';

-- Sr. subordinated debentures, sub MTNs, from `A+' to `A';

-- Preferred stock, affirmed at `A';

-- Commercial paper, from `F1+' to `F1'.

Newcourt Credit Group, Inc.:

-- Senior debt, from `AA-' to `A+'.

AT&T Capital Corp.:

-- Notes, MTNs, from `AA-' to `A+';

-- Commercial paper, from `F1+' to `F1'.

AT&T Capital Corp.'s notes guaranteed by AT&T Corp.:

-- Guaranteed notes, MTNs, `AA-', Rating Watch Negative.

In connection with AT&T Corp.'s ratings placed on Rating Watch Negative on Oct. 25, 2000, Fitch places the senior debt issued by AT&T Capital Corp. and guaranteed by AT&T Corp. on Rating Watch Negative.

Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Insurance, Corporates, Structured Finance, Sovereigns and Public Finance markets worldwide.