NEW YORK (Reuters) – CIT Group Inc (CIT.N) launched on Thursday a debt-exchange plan that the struggling lender to small and mid-sized companies hopes will prevent it from filing for bankruptcy.

CIT, however, also asked bondholders to approve a prepackaged plan of reorganization that would allow it to initiate a voluntary filing under Chapter 11 if the debt exchange failed.

CIT said around a third of its bondholders agreed to participate in the exchange offer or vote for the prepackaged plan of reorganization.

Under the terms of the exchange offer, a tendering holder of an existing debt security would receive a pro-rata portion of each of five series of newly issued secured notes, with maturities ranging from four to eight years, and/or shares of newly issued voting preferred stock, CIT said.

The exchange offers are conditional upon achieving a debt reduction of at least &&6;5.7 billion in aggregate, with specific targets for the periods from 2009 to 2012.

The company said the plan has been approved by its board of directors and by a committee of bondholders no telecheck payday loans.

The exchange offer expires on October 29.

Founded more than a century ago, CIT&&9;s problems emerged in recent years following CEO Jeffrey Peek&&9;s idea to tap into potentially profitable but risky businesses such as subprime mortgages and student loans.

The financial meltdown triggered a sharp rise in CIT&&9;s loan losses and credit costs, leaving the company on the verge of collapse. The lender to businesses from retailers to sport teams has lost close to &&6;5 billion since the end of 2007.

CIT shares closed down 15 cents, or 12.4 percent, at &&6;1.06 on Thursday. (Reporting by Dan Wilchins and Paritosh Bansal; Additional reporting by Jennifer Ablan and Walden Siew; editing by Andre Grenon and Muralikumar Anantharaman)

CIT launches debt-swap plan, warns about bankruptcy