dman Sachs Group Inc. is scheduled to complete a $500 million loan package today for Dallas-based Allegiance Telecom Inc., a competitive local-exchange carrier, or CLEC, that plans to more than double the markets it serves by the end of next year.

The deal attracted 26 banks, far exceeding expectations, Goldman executives said. It comes on the heels of a stock issue, co-led by Goldman and Citigroup Inc.'s Salomon Smith Barney unit, that raised over $660 million for Allegiance at the end of January.

Analysts said lenders are increasingly attracted to deals involving the telecommunications sector in which Allegiance plays a part. The CLECs have mushroomed since Congress passed the Telecommunications Act of 1996 to ensure local competition with national companies in the market for local and long-distance service.

"Bankers are starting to believe in the CLECs," said Rosemarie Kalinowski, a fixed-income analyst at Standard & Poor's Corp. She said these companies "have shown that they are able to execute their business strategies, and the market has been willing to put money behind them."

Case in point: Most of the participants in the Allegiance loan package had to scale back their participation by 40% because of demand, and eight banks had already committed to the deal before it was formally introduced to the market in January, Goldman executives said.

Goldman, which counts telecommunications among its specialties, said more deals of this kind could be on the way, considering the level of interest generated by the Allegiance loan. "It is a new benchmark," said John Simonson, vice president of bank debt capital markets and head of Goldman's media and telecommunications loan practice. "We hope that we will be able to build on this success."

Allegiance's loan package is highly unusual, analysts said, in that it does not require the company to draw down any of the credit for two years. The package includes a $350 million, seven-year revolving credit and a $150 million, two-year, delayed-draw term loan, both priced at the London interbank offered rate plus 325 basis points. Toronto-Dominion Bank is administration agent, and FleetBoston Financial Corp. and Morgan Stanley Dean Witter & Co. are documentation agents.

Most loans to similar below-investment-grade firms require an immediate drawdown of credit, followed by scheduled drawdowns over the period of the loan, bankers and analysts said.

For example, Goldman and Toronto Dominion co-led a larger loan package this month, a $1 billion syndication deal for McLean, Va.-based Nextlink Communication Inc. that drew 50 banks and institutional investors. Nextlink's package included a $387.5 million, six-year senior secured multidraw loan, a six-year, $387.5 million revolving credit, and a $225 million six-and-a-half-year senior secured term loan. Upon closing, Nextlink drew down $375 million of the term loans.

Without immediate withdrawals on the loans, spread income for participants is delayed. Goldman may have made up for the delay by getting Allegiance to agree to pay higher-than-usual commitment fees - 150 basis points, compared with the more typical 50 basis points, analysts said.

Allegiance plans to use the proceeds from the equity offering and, eventually, the credit, to expand from 19 markets to 27 by the end of this year and 36 by the end of 2001.

Thomas M. Lord, chief financial officer of Allegiance, said the company lined up so much available financing because it is reluctant to enter new markets without sufficient cash flow. Mr. Lord, who used to turn to high-yield debt to raise funds for expansion, joked that the loan deal may indicate that companies like his have turned into "bona fide mature" businesses in the eyes of creditors.

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