Chemical Banking Corp. is playing dual roles in the financing of the Sterling Group's $425 million purchase of Purina Mills.

Chemical's Texas subsidiary, Texas Commerce Bank, has won a leading role in a $188 million loan that will support the acquisition, while Chemical's securities underwriting subsidiary will comanage a $200 million junk bond offering planned by Purina, market sources said.

The Sterling Group is a Houston-based buyout firm. Sterling in late June agreed to buy Purina Mills from British Petroleum Co.

British Petroleum acquired Purina Mills, a St. Louis-based producer of feed for farm and other animals, from Ralston Purina Co. in 1986.

Texas Commerce has jointly underwritten the $188 million acquisition loan with the CIT Group and will manage syndication. CIT is 40% owned by Chemical and 60% owned by Dai-Ichi Kangyo Bank of Japan.

The financing comprises a $138 million, seven-year term loan and a $50 million, four-year revolving credit. The borrowing rate starts at about 275 basis points over the London interbank offered rate but can change based on the company's debt coverage.

Participants Sought

About 20 banks have been invited to participate in the loan. They are being asked for commitments of $10 million to $25 million and being offered upfront fees of roughly 1% to 1.375% of the committed amount, a banker said.

Details of the financing package will be sent this week to invited banks with a bank meeting to follow shortly. The loan is set to close by the end of next month.

Purina also plans to issue $200 million of 10-year senior subordinated debt. The lead manager will be Kidder, Peabody & Co., with Chemical Securities Inc. as a co-manager. This would be Chemical's fourth corporate bond underwriting since the Federal Reserve Board approved its application to enter the business in May.

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