By Lynn Adler and Michelle Sierra

NEW YORK (LPC) - A dozen banks that signed on to provide a record US$100bn bridge loan to back Broadcom Ltd's planned US$117bn takeover of Qualcomm Inc will earn starkly less than planned for extending credit to the chipmaker after US President Donald Trump on Monday blocked the deal over national security concerns.

Broadcom in February detailed the jumbo loan, the biggest committed credit package since global brewer AB InBev's US$75bn loan in 2015 that backed its purchase of rival SABMiller, for what would be the technology sector's largest deal ever. The loans represented a huge windfall for bankers eager to put money to work and rake in related fees.

"Broadcom’s 12 bridge lenders now stand to split a total pool of just US$20m to US$40m in fees," said Jeff Nassof, a director at Freeman Consulting Services. "Had the transaction closed, fees for the proposed long-term debt financing package could have reached 10 times this amount."

The whittled down fees that will be earned include money paid upfront and ticking fees accrued from the time the loan opened, he said. The lost fees include those that would have been taken in by underwriting roughly US$31bn in permanent bond financing that the company said it would issue to reduce the bridge.

The original 12 banks were in the process of downsizing their risk by expanding the bank group when the White House announced it was blocking the bid.

RECORD LOAN THAT WASN'T

The bank financing package included a US$20bn, one-year cash flow bridge facility; a US$4.477bn, two-year term loan; a US$19.679bn, three-year term loan; a US$19.679bn, five-year term loan; and a US$5bn, five-year revolving credit facility, LPC previously reported.

Bank of America Merrill Lynch, Citigroup, Deutsche Bank, JP Morgan, Mizuho, SMBC, MUFG, Wells Fargo, Scotiabank, BMO Capital Markets, Royal Bank of Canada and Morgan Stanley were lead arrangers and joint bookrunners on the syndicated loan.

The banks were either unavailable to immediately comment, or declined to comment.

Silver Lake, KKR and CVC had also agreed to provide US$6bn of convertible bond financing to Broadcom.

With this milestone loan going away, based on administration worries that the merger would give China an upper hand in mobile communications, bankers will have plenty of lending capacity to apply to other situations. The decision to scuttle the deal was based on concerns that the US advantage would be lost to China if Singapore-based Broadcom took over San Diego-based Qualcomm, according to a White House official.