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September 28, 2006 at 05:12 PM
A life reinsurer says it is trying to increase its financial flexibility by dropping some financing arrangements.
Scottish Re Group Ltd., Hamilton, Bermuda, says it already has terminated letters of credit that had supplied $40 million in borrowing capacity for it and its affiliates.
Scottish Re also is looking for vehicles to refinance $43 million in debt outstanding on a $200 million line of credit so that it can terminate that line of credit, the company says.
Scottish Re reinsurance subsidiaries have large amounts of capital, but the parent company recently reported a large loss.
Scottish Re wants to shut down some of its letters of credit because letter terms restrict the company’s ability to shift cash from the reinsurance subsidiaries to the parent company.
Once alternative financing arrangements are in place and the $200 million credit facility shuts down, Scottish Re can make sure the parent company has the cash it needs to meet obligations to noteholders, the company says.
