A.M. Best Comments on MassMutual's Investment in Scottish Re.OLDWICK, N.J. -- A.M. Best Co. has commented that the financial strength rating of A++ (Superior) and the issuer credit ratings of "aaa" of Massachusetts Mutual Life Insurance Company MassMutual Financial Group is the fleet name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates, with more than 13 million clients and over $455 billion in assets under management at year-end 2006. (MassMutual) (Springfield, MA) and its rated subsidiaries remain unchanged following today's announcement that MassMutualCothrough a 50-50 joint venture with Cerberus Capital Management L.P. (Cerberus)Cowill obtain management control via a capital infusion Capital infusion Often refers to the cross-subsidization of divisions within a firm. When one division is not doing well, it might benefit from an infusion of new funds from the more successful divisions. in Scottish Re Group Limited (Scottish Re) (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. ) [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 ], a global 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. specialist. The transaction is being structured as an investment, and as such, Scottish Re will not be integrated into MassMutual. The total amount of the investment is expected to be approximately $600 million, with MassMutual and Cerberus each contributing half and receiving in return mandatorily convertible cumulative preferred stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. of Scottish Re. MassMutual and Cerberus would obtain management control of Scottish Re with three representatives from each of the investors on Scottish Re's Board of Directors. The transaction requires unanimous approval of Scottish Re's current Board of Directors and consent from at least two-thirds of Scottish Re's shareholders. Closing is expected in second quarter 2007. Consistent with the announcement, A.M. Best views the transaction as an investment, which is not strategic or core to MassMutual's operations. Though this transaction is not material to MassMutual's aggregate investment portfolio or capital base, A.M. Best will prospectively monitor the size and volume of future investments with similar characteristics to determine the appropriateness of such holdings in the context of MassMutual's current ratings. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh. 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 www.ambest.com. |
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