A.M. Best Downgrades Ratings of Scottish Re; Ratings Remain Under Review.OLDWICK, N.J. -- A.M. Best Co. has downgraded the financial strength rating (FSR (Free System Resource) In Windows 3.x, the amount of unused memory in various 64K blocks reserved for managing current applications. Every open window takes some space in this area. See Windows memory limitation. ) to B+ (Very Good) from B++ (Very Good) and the issuer credit ratings (ICR (Intelligent Character Recognition or Image Character Recognition) The machine recognition of hand-printed characters as well as machine printing that is difficult to recognize. ) to "bbb-" from "bbb+" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands) (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.M. Best has also downgraded the ICR of Scottish Re to "bb-" from "bb+". All ratings remain under review with negative implications. (See below for a detailed list of the ratings.) These rating actions follow A.M. Best's review of Scottish Re's short-term liquidity and collateral needs subsequent to A.M. Best's rating Best's rating A rating A.M. Best Co. assigns to insurance companies based on the company's ability to meet its obligations to its policyholders. action on July 31, 2006 (see press release). A.M. Best notes that, as indicated in its recent Securities and Exchange Commission filings, Scottish Re faces uncertainty in the future availability of credit facilities. In addition, note holders have the right to require Scottish Re to repurchase $115 million of 4.5% senior convertible notes on December 6, 2006. Absent new sources of funding, A.M. Best believes that Scottish Re's liquidity position is significantly strained. While the company has engaged investment bankers to evaluate strategic alternatives and review capital and liquidity sources, and a sale of the company is likely, the timing and execution of any capital raising initiatives to alleviate these liquidity concerns is uncertain. The FSR has been downgraded to B+ (Very Good) from B++ (Very Good) and the ICRs have been downgraded to "bbb-" from "bbb+" and remain under review with negative implications for the following subsidiaries of Scottish Re Group Limited: --Scottish Annuity & Life Insurance Company (Cayman) Ltd. --Scottish Re (U.S.), Inc. --Scottish Re Life Corporation --Scottish Re Limited --Orkney Re, Inc. The ICR has been downgraded to "bb-" from "bb+" and remains under review with negative implications for Scottish Re Group Limited. The following debt ratings have been downgraded and remain under review with negative implications: Scottish Re Group Limited-- --to "bb-" from "bb+" on $115 million 4.5% senior unsecured convertible notes, due 2022 --to "b" from "bb-" on $143 million 5.875% of hybrid capital units, due 2007 --to "b" from "bb-" on $125 million non-cumulative preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. Stingray stingray: see ray. stingray or whip-tailed ray Any of various species (family Dasyatidae) of rays noted for their slender, whiplike tail with barbed, usually venomous spines. Pass-thru Trust-- --to "bbb-" from "bbb+" on $325 million senior unsecured pass-thru certificates, due 2012 The following indicative ratings for debt securities under the shelf registration have been downgraded and remain under review with negative implications: Scottish Re Group Limited-- --to "b" from "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. --to "b+" from "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". --to "bb-" from "bb+" on senior unsecured debt --Scottish Holdings Statutory Trust II and III--to "b+" from "bb" on preferred securities 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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