Scottish Re Buys Back Convertible Notes

S&P also has raised its counterparty credit and financial strength ratings on Scottish Re’s operating companies to BB, from B plus.

S&P raised the ratings because of the credit agreement change announced Dec. 1, S&P says.

S&P is still looking closely to see whether Scottish Re succeeds at completing a $600 million financing deal announced Nov. 27 that would give an affiliate of Massachusetts Mutual Life Insurance Company, Springfield, Mass., and Cerberus Capital Management L.P., New York, a majority stake in Scottish Re, S&P says.

The deal is supposed to close by June 30, 2007.

“If the deal closes, it is likely that Standard & Poor’s would raise the counterparty credit rating on Scottish Re Group Ltd. to the BB category and raise the counterparty credit and financial strength ratings on Scottish Re’s operating companies as well as the ratings on dependent unwrapped securitized deals related to Scottish Re to within the BBB category,” S&P says.

“However, if the deal is not consummated, the current ratings would likely be lowered to the B category or lower,” S&P says. “Without the deal, it would be difficult for Scottish Re to proceed with an orderly run-off or manage as an operating company.”