A.M. Best Affirms and Assigns Ratings to Scottish Re Group; Removes All Ratings from Under Review.OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength ratings of A- (Excellent) and assigned issuer credit ratings of "a-" to Scottish Annuity & Life Insurance Company (Cayman) Ltd., (SALIC) (Cayman Islands Cayman Islands (kā`mən), British dependency (2005 est. pop. 44,300), 100 sq mi (259 sq km), comprising three islands in the West Indies. ), Scottish Re (U.S.), Inc. (Wilmington, DE), Scottish Re Life Corporation (Overland Park Overland Park, city (1990 pop. 111,790), Johnson co., NE Kans., a residential suburb of Kansas City; inc. 1960. There is printing and publishing, and the manufacture of apparel, aircraft parts, cement, prepared foods, salt, chemicals, marine accessories, and signs. , KS) and Scottish Re Limited (Windsor, England There are three places called Windsor in England:
These rating actions follow A.M. Best's analysis of the financial and operating impact resulting from Scottish Re Group Limited's (Scottish Re) (NYSE NYSE See: New York Stock Exchange :SCT Sacrococcygeal teratoma (SCT) A tumor occurring at the base of the fetus's tailbone. Mentioned in: Prenatal Surgery ) (Cayman Islands) expected acquisition of the U.S. life reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. business of the ING Group (The Netherlands). The ratings reflect Scottish Re's strong capital position, sound and profitable operating fundamentals and continued growth in new reinsurance business. Offsetting factors include the highly competitive nature of the life and annuity reinsurance business and Scottish Re's continued appetite for growth through acquisitions. The acquisition of ING's U.S. life reinsurance business is a significant event for Scottish Re, from both a financial and market profile basis. Following the closing of the acquisition, Scottish Re will be among the top three in the life reinsurance marketplace; consequently, meaningful new marketing opportunities likely will develop. A.M. Best believes Scottish Re's operating and financial plans are reasonable and expects its record of profitable growth to continue. Furthermore, the company is not expected to significantly increase its leverage position; thus, its coverage ratios will remain strong. Moreover, A.M. Best expects Scottish Re to maintain strong capital levels to support its insurance and investment activities over the medium term. As with any large transaction, A.M. Best believes Scottish Re is likely to face a number of integration challenges. In addition, this acquisition closely follows the purchase of ERC (database) ERC - An extended entity-relationship model. Life, which may exacerbate the challenges related to integration. Although Scottish Re's profitability is expected to strengthen with the addition of the ING U.S. life reinsurance business, A.M. Best also believes earnings may be pressured by spread compression in its financial solutions business line, which is reflective of the continued low interest rate environment. The following debt ratings have been affirmed with a stable outlook. Scottish Re Group Limited-- --"bbb-" on $115 million 4.5% senior unsecured convertible notes, due 2022 --"bb" on $141.9 million 5.875% of hybrid capital units, due 2007 The following indicative ratings for debt securities under the shelf registration have been affirmed with a stable outlook. Scottish Re Group Limited-- --"bb" on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. --"bb+" on subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". --"bbb-" on senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. --Scottish Holdings Statutory Trust II and III--"bb+" on preferred securities For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debt. For current Best's Ratings, independent data and analysis on more than 470 reinsurance companies, please visit http://www.ambest.com/reinsurance/. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com. |
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