iGate to offer senior notes worth $325 mn

To use funds towards redeeming earlier senior notes issue

Nasdaq-listed iGate Corporation today said that it will offer senior notes worth $325 million (around Rs 1,991 crore) and use the funds toward redeeming its $770 million 9.0 per cent senior notes due 2016.

The fresh issue of senior notes would be due 2019 and "will be guaranteed by certain existing and future wholly-owned US subsidiaries of iGATE", the company said in a filing to the Securities and Exchange Board.

Senior notes are debt securities or bonds that take precedence over other unsecured notes and must be repaid in the event of bankruptcy, according to financial dictionary Investopedia. Senior notes are relatively secure because of their priority status in the event of liquidation. With this added security comes a reduced interest or coupon rate as compared to junior bonds.

iGate said, in addition to the proceeds from this issue, the company would also use cash in hand, proceeds from its 2013 term loan and its credit facility to redeem the senior notes due 2016.

The fresh issue is subject to "market and other customary conditions", the company said.