Standard & Poor’s Ratings Services says it has lowered its counterparty credit rating on Scottish Re Group Ltd. to B plus, from BB plus.

S&P, New York, also lowered its counterparty credit and financial strength ratings on Scottish Re’s operating subsidiaries to BBB minus, from BBB plus.

Scottish Re, Hamilton, Bermuda, recently reported a net loss of $124 million for the second quarter on $594 million in revenue, compared with $1.6 million in net income on $502 million in revenue for the second quarter of 2005.

The company emphasized in its third-quarter earnings release that it believes it has enough access to cash to meet obligations to customers and investors, and that it has tried structure reinsurance relationships in ways that reduce the likelihood that customers can cancel contracts simply because Scottish Re has failed to meet specified financial goals.

But S&P says in a comment on the rating actions that it believes disclosures in the company’s second-quarter Form 10-Q report suggest that Scottish Re may have some trouble tapping a $200 million bank credit facility, even though Scottish Re has not used the facility.

“The ratings were lowered reflecting our concerns that the group’s access to credit facilities is more limited than we had previously believed,” Neil Strauss, an S&P credit analyst, says in a statement. “It is our belief that without additional capital, the company is likely to be unable to satisfy future needs, including potential debt redemption in December 2006.”

One of Scottish Re’s major units, Scottish Annuity & Life Insurance Company (Cayman) Ltd., has been doing well, but terms of an existing credit facility restrict that unit’s ability to pay dividends to or make loans to the parent company, S&P says.

The restrictions should help make the liquidity position of Scottish Annuity & Life stronger than the liquidity position of the parent company, but Scottish Annuity & Life may have trouble writing new business until Scottish Re clears up its financial situation, S&P says.

“Standard & Poor’s continues to believe that there is substantial value in the underlying businesses in the operating companies, however, the franchise has been impaired by the continuing recurring disclosures of the operational issues at Scottish Re and the company will need to find funding sources to fund ongoing business,” S&P says.