Bankers on Friday rushed to finance Norfolk Southern Corp.'s blockbuster $11.5 billion loan to support the company's hostile bid for Conrail Inc.

By midmorning, co-leads J.P. Morgan & Co. and Merrill Lynch & Co. had secured commitments of at least $500 million each from more than 15 banks and had closed syndication of the senior managing agent tier.

The deal, which hit the market Thursday, is considered richly priced. "It's amazing what people can do when properly incented," said one banker close to the loan.

The total bank commitment, including $2 billion from each of the lead banks, is sufficient for Norfolk Southern to make a bona fide bid for Conrail, which has already signed a merger agreement with CSX Inc. Norfolk Southern can now make the case to Conrail's shareholders that banks' eagerness to contribute to the deal reflects the value of its offer, bankers said.

The first 15 banks committing at the $500 million level will receive an early-bird fee of $200,000. They will also get a flat fee of $1 million, regardless of Norfolk's success.

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