Syndicated lending continued at a near-record pace in the third quarter as banks stepped up with financing for their merger-minded corporate customers.

Although volume slipped to $226.3 billion from the second quarter's high-water mark of nearly $253 billion, loan syndicators appear likely to break last year's annual volume record of $817 billion, said Babak Varzandeh, an analyst at Loan Pricing Corp.

Bankers said corporate mergers and spinoffs continued to generate business, with telecommunications and radio broadcast among the hottest sectors for loan demand.

"Banks gave a huge vote of confidence to the build out in wireless sector," said Mary Watkins, managing director and head of the loan syndications business at J.P. Morgan & Co.

A $2 billion loan led by Chase Manhattan Corp. for Sprint Spectrum and a $1.66 billion loan to Nextel Communications, led by J.P. Morgan, both attracted strong support, Ms. Watkins said.

James B. Lee, head of global investment banking at Chase, said merger activity "looks strong and looks to stay strong" with the likes of CSX Corp. and others announcing mergers in the fourth quarter. And he noted that the economy remained favorable for bank lending during the third quarter.

According to Loan Pricing's quarterly rankings, scheduled to be released today, Chase Manhattan continued to dominate the market, leading 139 deals for $72.6 billion - a 21% market share.

The biggest deal was a $5.5 billion loan for Westinghouse Corp.'s acquisition of Infinity Broadcasting, led by J.P. Morgan, the second-ranked syndicated lender. J.P. Morgan led 45 deals for $42.6 billion.

NationsBank Corp. ranked third, with 86 deals for $35.1 billion, followed by BankAmerica Corp., with 87 deals for $30.3 billion, and Citicorp, with 48 deals for $24.3 billion.

None of the investment banks that have been mounting a challenge to commercial banks in the loan-syndication business cracked the top 25. But Bankers Trust New York Corp., which lost some key lending executives to Morgan Stanley & Co., dropped to 12th place in the Loan Pricing ranking, from seventh in the second quarter.

The quarter was marked by continued progress in banks' attempt to solidify relationships by offering one-stop financial shopping to corporate customers who need investment banking advice and debt and equity underwriting, in addition to traditional bank loans.

"In our case, we led a lot of very large leveraged and situational credits that required either a large, complex bank loan or a large, complex one-stop loan and bond deal," said Mr. Lee.

Bankers said the one-stop shopping helped generate more leveraged loans, which are more profitable than nonleveraged loans.

The emphasis on the higher-yielding, but riskier, leveraged loans has helped keep overall profits up.

Bankers noted competition for market share is beginning to lower prices, especially for general purpose, backstop financing lines.

Bruce Ling, head of loan syndications at Credit Suisse, the ninth-ranked lender, said that tight pricing has become a concern. "Most of us in the market are surprised that volume continues to grow, and that the business remains profitable despite declines in rates and margins."

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