Two Canadian utilities are tapping U.S. investors for syndicated loans totaling $3.8 billion.

Citicorp, National Westminster Bank, and Royal Bank of Canada are expected to begin syndication of a $2 billion credit for Ontario Hydro early next week.

Meanwhile, last Friday, Royal Bank, Canadian Imperial Bank of Commerce, and CS First Boston launched a $1.8 billion credit for Hydro Quebec.

"We're seeing more and more companies come south of the border for their funds," said a loan syndicator at a New York money-center bank. "The Canadian market just isn't as developed for loans and trading."

Indeed, U.S. bankers pointed out that the Canadian market isn't as deep for bonds, either. "Even with all the Canadian and American banks operating there, the market is just a lot smaller there," said an investment banker.

The Ontario Hydro loan refinances a deal done last year; it is to be divided between 364-day and five-year facilities.

The refinancing comes just as last year's 364-day facility is maturing. Loan syndicators said the liquid market and lower prices have kept the refinancing market active, particularly during the second quarter, when loan volume reached an all-time high.

Pricing is expected to be similar to that for a recent Province of Ontario deal, which was similarly divided into 364-day and five-year pieces. Pricing for the two pieces before funds were drawn was 3.5 basis points and five basis points.

Pricing for funds drawn in the province's deal was tied to usage and ranged from the London interbank offered rate plus 17.5 basis points to Libor plus 22.5 basis points.

The $1.8 billion Hydro Quebec deal is divided into three pieces - two $600 million, five-year parts and a $600 million, seven-year part.

The deal is equally underwritten and will be syndicated simultaneously by the three lead banks.

Bankers said the deal would be uncomplicated this year by concern about potential secession from Canada by the province of Quebec, a worry kept alive last year by a provincial election campaign.

The deal is the largest to date for the Quebec-based utility; it consolidates some bilateral lines and a few syndicated facilities.

Six other banks have underwritten parts of the deal before general syndication, although their names were unavailable at press time.

Commitments are due July 29.

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