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December 04, 2006 at 03:34 PM
Scottish Re Group Ltd. says it now has freed the cash needed to make good on obligations to investors that could come due Wednesday.
Scottish Re, Hamilton, Bermuda, reported big losses earlier this year because of problems with some reinsurance arrangements, and it has faced concerns about its ability to respond to holders of senior convertible notes that might exercise optional put rights Wednesday.
Although Scottish Re operating units have had adequate supplies of cash, the parent company has faced constraints on its ability to use the cash.
A group of financial institutions led by a unit of Bank of America Corp., Charlotte, N.C., now has agreed to amend a July 14, 2005, credit agreement, Scottish Re says.
The change will let Scottish Re’s Scottish Annuity & Life Insurance Company (Cayman) Ltd. unit make up to $115 million in distributions this week to help Scottish Re make any payments due in connection with the exercise of the convertible note holders’ put rights, Scottish Re says in a report filed with the U.S. Securities and Exchange Commission.
Scottish Re and other borrowers have agreed to put in place irrevocable back-up letters of credit equal to at least 105% of the total aggregate amount of letters of credit outstanding under the original credit agreement, Scottish Re says.
