For syndicated lenders, Monday was "turn back the clock" day.

That's when Allied Waste Industries Inc. said Chase Manhattan Corp. would lead a $7 billion highly leveraged loan to finance its $7.3 billion cash buyout of Browning-Ferris Industries Inc., its Houston-based rival.

The deal is the largest highly leveraged package since 1988, when a $13.7 billion loan was syndicated to finance Kohlberg Kravis Roberts & Co.'s buyout of RJR Nabisco Inc.

Joining Chase on the deal are Donaldson, Lufkin & Jenrette Inc. and Citigroup Inc., which advised Scottsdale, Ariz.-based Allied. Goldman, Sachs & Co. advised Browning-Ferris.

"It's not a leveraged buyout but ... it feels like it," said Harold Philipps, managing director and co-head of DLJ's senior debt group.

Though many buyouts in the 1990s have been financed by highly leveraged bank debt, nothing has rivaled RJR Nabisco's for size. The bull market has enabled many buyers to use their stock as currency, decreasing their need for bank loans.

Now comes Allied, a longtime bank loan customer whose debt is considered among the best at holding its value. And fund managers say they are excited about getting a piece of the deal.

"I think that deal is going to go very well," said a senior manager with a $1 billion loan portfolio. "There's a lot of demand out there and Allied has a great track record in the market."

Not everyone offered such glowing reviews. Roman Szuper, a debt analyst with Standard & Poor's Ratings Group, called Allied's heavy debt load - about $11 billion after the buyout-"ambitious." S&P put the credit ratings of both Browning-Ferris and Allied under review for possible downgrades.

Mr. Szuper speculated that Allied might have chosen to do a cash rather than a stock deal because it did not want to dilute its shares. "Using perhaps a half-cash, half-stock deal would have made our decision different," he said.

Nevertheless, the Allied deal reflects Chase's growing proficiency in turning its M&A advisory work into debt underwriting assignments. Last year Chase claimed 9.6% of the M&A advisory market, up from 3.8% in 1997, according to Securities Data Co.

It was Chase's relationship with the private equity firms Blackstone Group and Apollo Group, former shareholders of Allied, that brought them into the transaction, a source said.

Allied, in fact, had been working with DLJ and Citigroup's Salomon Smith Barney in its merger negotiations. Both firms had advised Allied on previous M&A deals while Chase was a newcomer.

However, it was Chase's clients, Blackstone and Apollo, that brought what one banker involved in the deal said is perhaps its most interesting element: a $1 billion investment in Allied preferred stock that can be converted to common stock. That cash infusion will help pay for Browning- Ferris.

"It's not often that a private equity firm will finance part of a public company's major acquisition," Mr. Philipps said. "A public company usually raises funds through the public markets."

Mr. Philipps said the Allied loan is expected to come to market in about two weeks. The package consists of a $1.5 billion credit line; a $2.25 billion six-year term loan; a $1 billion seven-year term loan; a $1.25 billion eight-year term loan; and a $1 billion two-year bridge loan.

Prices for the loan have not been set but the pieces are expected to come in at least at the London interbank offered rate plus 250 basis points.

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