Standard & Poor’s Ratings Services says it has lowered counterparty credit and financial strength ratings it has assigned to units of a life reinsurer.
S&P, New York, says it has cut the ratings on Scottish Annuity & Life Insurance Companies (Cayman) Ltd. and affiliated operating companies to CCC plus, from B minus.
Standard & Poor’s also lowered its ratings on the companies’ dependent unwrapped securitized deals by 1 notch.
The ratings on the parent holding company, Scottish Re Group Ltd., Hamilton, Bermuda, remains unchanged at CCC minus.
“The downgrade reflects the greater-than-expected deterioration in the group’s already severely limited financial flexibility and liquidity,” S&P credit analyst Robert Hafner says in a statement about the rating change. “This has resulted primarily from the higher-than-expected asset impairments leading to additional collateral posting requirements, as disclosed in the company’s recent 10-K filing.”
Scottish Re disclosed $972 million in investment impairments taken in 2007 and $752 million in additional impairments expected to be recognized in the first quarter of 2008, S&P says.