The likelihood that Roche can raise a $45 billion syndicated loan to finance its proposed buyout of Genentech is becoming increasingly remote, bankers tells Reuters. The sheer size of the jumbo deal would eclipse today’s shrinking loan market, which senior banking sources say is putting pressure on Roche to consider alternative funding options, such as a combo of loans, bonds, equity and cash.

“The question is about size. In light of the current climate, a $45 billion loan looks large. It would have to be a combination of everything - Roche would have to print bonds to get the deal done,” a senior banker close to the deal tells Reuters.

Just last week, Roche reiterated its committment to its $43.7 billion bid to acquire the 44 percent of Genentech it doesn’t already own. The drugmaker has been talking to banks about a jumbo loan since July and has repeatedly maintained it is confident of getting financing in place, despite deteriorating the global credit squeeze.

The exact size of the loan that Roche has been seeking was never finalized, but senior bankers tells Reuters the drugmaker was discussing a $45 billion figure. Banks, however, are not underwriting any new loans before the end of the year and the drive to de-leverage their balance sheets is expected to continue well into 2009, which means that the days of mega-loans are over, Reuters writes. “$45 billion was always right out there, it was the top of the market even in the good old days and I just don’t see that number being attainable any time soon,” one head of loan syndications tells Reuters.

Speculation that the cancellation of BHP Billiton’s $55 billion loan last week - after dropping plans to take over Rio Tinto - might aid Roche’s chances of securing a huge loan was dismissed by bankers. “The release of BHP’s capital doesn’t make Roche more viable. You would be replacing one problem with another - a big funded asset that you can’t sell. It’s not a credit issue; it’s a bank balance sheet issue,” the syndicate head tells Reuters.

Roche had more than 10 billion Swiss francs (or $8 billion) of net cash on its own balance sheet as of June 30. Along with cash on Genentech’s balance sheet and Roche’s own cash flow, this could further reduce the amount of debt to raise, bankers tells Reuters. However, the amount of debt that could be refinanced in the corporate bond market would be the key to any possible deal.

The corporate bond market has recently re-opened but issuance remains patchy and expensive going into the end of the year, which is leaving bankers to speculate that any deal could be some way off. “For the moment, here are no real developments. It’s in abeyance, but this is a very good and highly rated company in a good industry with a strong bank group,” the senior banker tells Reuters.

Roche argues that bringing Genentech into the corporate fold will give it a stronger and more effective market presence, and generate annual pretax cost synergy benefits of about $750 million to $850 million, Reuters writes. In doing so, Roche would gain control of all revenues for big-selling Genentech cancer drugs Avastin and Herceptin, as well as absorbing an attractive portfolio of new meds.

Initially, investors viewed the acquisition as a done deal and many bet Roche would increase its $89 a share offer to win over the Genentech board. But since the worsening the credit crisis entered a new phase in September, doubts have grown and Genentech shares have fallen a premium to a discount to the Roche offer, Reuters writes. “It doesn’t feel right in this environment,” an unnamed senior industry consultant tells Reuters.