Citibank, NationsBank, and Credit Suisse have snared the lead roles in a $2 billion loan to Union Pacific Corp. for its proposed acquisition of Santa Fe Pacific Corp.

Union Pacific has made a $3.2 billion bid for the company, which will be paid for with 57% cash and 43% stock. Santa Fe shareholders would get $17.50 per share.

The three banks have called a meeting for today in New York to discuss syndication of the proposed facility. Citicorp is leading a $700 million portion, and Credit Suisse and NationsBank are each leading $650 million.

"We are all serving as coarrangers and co-administrative agents," said Tom Bunn, director of loan syndication at NationsBank.

Sources close to the deal said they do not anticipate going outside the company's primary bank group to syndicate the loan. Between 30 and 40 banks are expected to send representatives to the meeting.

Sources close to the deal say the A-rated investment grade railroad company is an attractive borrower.

Union Pacific, currently carrying $4.5 billion of debt, is on a negative credit watch at Standard and Poors Ratings Corp.

The loan is priced on a sliding scale. At AA, Union Pacific will pay a facility fee of 10 basis points and an all-in drawn level of 32.5 basis points.

The facility is a five-year revolver.

The big railroad deal is the latest in a series of mergers that have generated record volume of syndicated bank loans this year.

Large acquisitions have dominated the landscape in sectors such as health care and media. The Santa Fe-Union Pacific deal would be the largest railroad acquisition since the late 1970s.

"This is a very prominent deal," said Kenneth Weinstein, a director at Standard and Poors Ratings Group. "One of the largest railroads in the country is involved."

The acquisition of Santa Fe has been anything but assured since Union made its bid in late October.

At that point, Santa Fe already had an offer of $3 billion from Burlington Northern, another railroad company.

Despite coming in with the higher bid, Union Pacific could not get an audience with Santa Fe management. Management feared the deal would be delayed for years, if the Interstate Commerce Commission held a hearing to determine if the deal would be anticompetitive.

On Monday, however, the commission made the Union Pacific offer more attractive by giving informal approval for Union to establish a voting trust. This trust protects Santa Fe shareholders against the risk of the deal falling through.

Sources close to the deal think the Commission's actions this week has made the decision by the Santa Fe shareholders purely a financial one.

On Tuesday, Santa Fe agreed to meet with-Union Pacific for the first time, to share financial information and to discuss terms of the merger.

Despite the pressure from an increasingly sure fooled Union, Burlington has not raised its offer price.Railroad LineBorrower Union PacificAmount $2 billionPurpose Purchase of Santa Fe Pacific CorporationLead banks * Citibank * Credit Suisse * NationsBank

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