Moody's puts Scottish Re on review uncertain

Moody's Investors Service said it changed the direction of review for Scottish Re Group Ltd.'s ratings to uncertain from possible downgrade. Scottish Re's ratings could now be downgraded, upgraded or confirmed depending on the future developments at Scottish Re.

The agency said that the broader range of possible rating outcomes reflects the possibility that Scottish Re may be successful in implementing its main strategic goal, which is the sale of the company. The agency said that according to Scottish Re vice president and senior credit officer Scott Robinson, "it is likely that some insurers and/or reinsurers are interested in purchasing Scottish Re" and that "possible suitors consist of those companies that could place the Scottish Re inforce business into runoff and those that could use it as a platform to enter or enhance their position in the U.S. life reinsurance market."

If an acquisition of Scottish Re is completed, the ultimate ratings of the company would depend upon the financial strength of the purchaser as well as the structure of the deal, but the ratings would likely be upgraded from their current level, the agency said.

Notwithstanding the possibility of Scottish Re being acquired, Moody's emphasized that the company still needs to secure additional collateral and/or liquidity over the next several weeks to prevent further downgrade.

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