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Final hurdle cleared in Route Three development

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ARRANGERS have decided to drop syndication of the $4.71 billion country parks section of the Route Three project because underwriters did not want to share the deal, bankers confirmed yesterday.

As a result the last hurdle has been cleared and the project can proceed, they said.

Bankers said a cancellation of the syndication had been on the cards since early this month when lenders, keen to underwrite the country parks section of the project, had offered the arrangers $7.1 billion in commitments, comfortably exceeding the target.

The strong interest in the project prompted the arrangers to abandon plans to offer the loan on the wider market because the underwriters' allocations would have had to be cut back substantially, they said.

Under a loan syndication, underwriters commit themselves to lending the full amount sought if a wider syndication fails, they said.

The underwriters farm the debt out to other lenders in a general loan syndication, but undertake to lend the borrower the money if other bankers are not interested in participating in the syndication.

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