UPDATE 1-CIT Group draws on $7.3 billion bank lines

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NEW YORK, March 20 (Reuters) - CIT Group Inc (CIT.N: Quote, Profile, Research) said on Thursday it was drawing on $7.3 billion of bank lines to help conduct daily operations, a move that highlights the commercial finance company's difficulty in raising cash to pay off debt.

CIT's shares plummeted 37 percent, extending losses that were high even before the midday announcement. CIT shares have fallen 88 percent since the beginning of June.

The company, which said in February it needs to raise between $6 billion and $8 billion in the first two quarters of 2008, said on Thursday it is looking at additional funding sources and may sell non-strategic assets or businesses over the near term.

CIT is one of a legion of finance companies that have had trouble raising money from investors in recent months as markets became increasingly jittery about the extent of credit problems in the U.S. financial system.

Thornburg Mortgage Inc (TMA.N: Quote, Profile, Research), a "jumbo" mortgage lender, said on Wednesday it has to raise nearly $1 billion of capital to keep five lenders at bay and avert a possible bankruptcy filing.

Bear Stearns Cos Inc BSC.N, once the fifth-largest U.S. investment bank, was forced to sell itself to JPMorgan Chase & Co on Sunday for a pittance, after experiencing a run on the bank.

Drawing on bank lines is often seen as an emergency action for companies unable to get financing elsewhere.

Prior to the announcement, CIT's shares were down 33 percent on rumors the company was having trouble financing itself.

CIT's shares were down $4.29 at $7.35 at midday on the New York Stock Exchange. (Reporting by Dan Wilchins; editing by John Wallace/Andre Grenon)