A.M. Best Assigns Ratings to Scottish Re Group's Shelf Registration.Business Editors
OLDWICK, N.J.--(BUSINESS WIRE)--Feb. 25, 2004
A.M. Best Co. has assigned indicative ratings of "bbb-" senior debt, "bb+" 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". and "bb" 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. to Scottish Re Group Ltd'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 Cayman Islands (kā`mən), British dependency (2005 est. pop. 44,300), 100 sq mi (259 sq km), comprising three islands in the West Indies. ) $750 million shelf registration. A.M. Best has also assigned a debt rating of "bb+" to trust preferred securities, which may be issued by Scottish Holdings Statutory Trust II and III and are special purpose vehicles. Additionally, A.M. Best has affirmed all existing debt ratings. The outlook for all the ratings is stable.
The proceeds from this offering--which may include common shares/preferred shares--will be used to support growth in the company's core operating subsidiaries and for general corporate purposes. Subsequent to any debt offerings under the shelf registration, A.M. Best does not expect Scottish Re's financial leverage to exceed 25%. Its current interest coverage is favorable at about seven times.
Scottish Re's operating fundamentals and capitalization are sound, enhanced by conservative investment management practices, improving earnings, strong growth in new 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 and geographic diversification achieved primarily through its Windsor, England-based subsidiary, Scottish Re Limited.
Although A.M. Best views current capitalization as strong, Scottish Re is experiencing rapid growth, having acquired 95% of ERC (database) ERC - An extended entity-relationship model. Life Reinsurance Corp. (Jefferson City MO), which doubled the group's life insurance in-force. Accordingly, A.M. Best expects the risk-based capital ratios Risk-based capital ratio
Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. of Scottish Re's insurance subsidiaries to decline over the medium term and may require additional capital support from the parent. Moreover, A.M. Best believes Scottish Re may be challenged to achieve greater scale as it operates in the highly competitive life reinsurance marketplace where much larger, established players have significant competitive advantages.
The following ratings have been affirmed:
Scottish Re Group Limited--
-- "bbb-" on $115 million 4.5% senior unsecured
convertible notes, due 2022
-- "bb" on $132.2 million 5.875% of hybrid capital units,
The following indicative ratings for debt securities under the shelf registration have been assigned:
Scottish Re Group Limited--
-- "bb" on preferred stock
-- "bb+" on subordinated debt
-- "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
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