Standard & Poor's has revised the CreditWatch status of its ratings on Scottish Re Group, Scottish Re's operating companies, and dependent unwrapped securitised deals to positive from negative. Scottish Re has a “CCC” counterparty credit rating, and Scottish Re's operating companies have “B+” counterparty credit and financial strength ratings.
The revision to positive follows two announcements by Scottish Re.
First, that it has reached an agreement with Mass Mutual Capital Partners and affiliates of Cerberus Capital Management on a planned equity infusion of $300m by each in the second quarter of 2007, assuming regulatory and shareholder approval.
Second, Scottish Re has brought down the outstanding letters of credit under its bank credit facility to less than $5m and has negotiated a backup facility for letters of credit for the remainder. As a result, an agreement is likely with the bank syndicate on its credit facility within a week to allow funds to be upstreamed from the operating companiesto the holding company, enabling repayment of $115m of convertible notes to the noteholders, who are likely to exercise a put option on 6 December 2006.
