Moody's might upgrade iGate

Moody's Investors Service said it placed iGate Corp.’s Ba3 corporate family rating, Ba3-PD probability of default rating and B1 senior notes under review for upgrade following the announcement that Capgemini has entered into a definitive agreement to acquire iGate for $4 billion.

The agency said its review will assess Capgemini's final plans to assume or refinance iGate's $325 million of 4¾% senior notes due 2019, which have a change-of-control put option at 101. If some of the notes remain outstanding upon the close, the new rating will depend on whether Capgemini guarantees the notes and the credit profile of the acquirer at the time the guarantee is issued, Moody’s said.

Even without the guarantee, iGate will likely benefit from implicit credit support from Capgemini, a larger company with greater financial resources and business diversity, the agency said.

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