Bankers close to the deal now expect Qatar Petroleum to take a more active role in the financing by supporting its subsidiary in discussions with lenders. Qasco and its financial adviser had originally planned to have the $1,340 million refinancing of Qasco debt secured by September, but as negotiations with potential lead arrangers continued, the original timetable slipped. Disagreements dragged on as the banks involved demanded the ability to vary the margin costs on the deal during syndication (MEED 21:9:07). Shortly afterwards, negotiations between the two sides are believed to have collapsed. Qasco now says it will not raise the funds until 2008, citing ‘credit market conditions’. However, banks have criticised the way the deal was handled and say that too few were approached to join the syndicate. In mid-September, Ernst & Young said the deal was progressing on schedule, and that additional lead arrangers had been approached to strengthen the banking group. However, it is thought that banks were reluctant to join the financing group and several international institutions refused to take part in the deal. One of the other problems was that the strength of Qatar Petroleum’s balance sheet was not offered as security on the loan, which was also regarded as too cheap, given risk appetite in the market. Neither Ernst & Young nor Qasco could be reached for comment. www.meed.com/bankingfinance