Lehman Brothers Inc. will launch this week a $1 billion, five-year revolving credit facility for Excel Communications Inc., a Dallas-based provider of long distance services.

The loan will back Excel's $1.2 billion acquisition of Telco Communications Group Inc., a Chantilly, Va.-based telecommunications company. The merger, which was announced in early June, is expected to close at the end of the year.

A bank meeting for the loan is scheduled for Thursday.

Lehman, which was named arranger and syndication agent, is leading a group of arrangers which includes BankAmerica Corp., an arranger and documentation agent. NationsBank Corp. and First Union Corp. were named arrangers and administration agents.

Lehman won the lending mandate through its role as adviser to Excel, the nation's fourth-largest provider of residential long distance, on the Telco merger.

The deal is initially priced at Libor plus 100, which is considered leveraged but near investment-grade pricing. Commitment fees are 25 basis points, according to market sources.

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