(Bloomberg) — It would have been a coup for Goldman Sachs: Standing shoulder-to-shoulder with much larger rival JPMorgan Chase & Co. to split a $41.5 billion check financing AT&T Inc.’s mega media deal with Discovery Inc.But by the time the transaction was announced Monday, Goldman would ultimately trim its commitment, largely due to regulatory restrictions, according to people with knowledge of the matter. JPMorgan and its monstrous $3.7 trillion balance sheet, meanwhile, covered the difference.For most observers, it was a relatively small hiccup in a blockbuster deal heralding the return of jumbo takeovers while putting forth a challenger to the likes of Netflix and Disney. But for Goldman it underscored anew the hurdles it has to overcome when competing with massive commercial banks touting fortress balance sheets.It also cast a spotlight once again on Wall Street’s most storied rivalry, which has only grown more intense in recent years.Representatives for Goldman, JPMorgan, AT&T and Discovery declined to comment on the transaction.Goldman Sachs may routinely rank at the top in advising on global mergers and acquisitions, but the firm’s constrained ability to self-fund big financing packages with the ease of commercial banking giants such as JPMorgan has long been a sore spot for its dealmakers. Behind the scenes, bankers at Goldman, Morgan Stanley and a roster of boutique advisory firms have groused for years that some banks effectively buy their way into mandates by offering loans.For Goldman, the issue on the AT&T-Discovery deal was that regulatory limits constrain the amount of exposure it can have to individual companies relative to the size of its balance sheet, which is roughly a third that of JPMorgan.Goldman would end up financing $18 billion of the deal, or 43%, with JPMorgan picking up the remaining $23.5 billion.Goldman could have ultimately funded the full 50%, but it would have impacted the bank’s ability to do other business with AT&T, and the lower amount was settled on in consultation with the borrower, one of the people familiar with the matter said. Goldman was upfront that the regulatory cap could affect its ability to lend the full amount, the person said.Competitive MarketThe deal comes amid an unprecedented period for corporate borrowing that started last year when the Federal Reserve slashed interest rates and unleashed a flood of liquidity into debt capital markets. It’s left banks competing for billions of dollars in underwriting fees, first when companies desperately raised cash to weather the pandemic, and now as they look to finance a renewed wave of dealmaking.After United Airlines Holdings Inc. decided to scrap a bond deal last May that was led by JPMorgan, Goldman swooped in less than two months later to win the lead role on a new multibillion-dollar debt deal for the airline.Banks are also eager to put to work deposits that have surged as the government has poured trillions of dollars into the economy to kick start the recovery. Many bankers see acquisition financing as a key opportunity to ensure lending volumes this year come close to matching 2020.Relationship BuildingBridge loans are also a crucial step in building relationships with companies to win higher-paying mandates down the road.The facilities are intended to be taken out in the bond market, for example, and the banks that led the bridge usually also lead those transactions, which are more lucrative.As for the AT&T-Discovery deal itself, the initial $41.5 billion in financing commitments are being split up into multiple portions, including a formal $31.5 billion bridge loan, and a $10 billion term loan divided into a $3 billion 18-month tranche and a $7 billion three-year portion.The bridge facility is the ninth-largest since Bloomberg began tracking the data, and the biggest since two mega-deals in 2019: AbbVie Inc.’s acquisition of Allergan Plc, and Bristol-Myers Squibb Co.’s acquisition of Celgene Corp.And more jumbo financings may soon be on the horizon. Dealmaking climbed to a record $1.1 trillion in the first quarter as the economy rebounded, and there have been few signs that trend will slow.(Updates with loan details beginning in 15th paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.