S&P rates Scottish Re preferreds BB-

Standard & Poor's said it assigned its BB- preferred stock rating to Scottish Re Group Ltd.'s (BBB-/stable/--) proposed $125 million noncumulative perpetual preferred stock.

The ratings on Scottish Re reflects the group's strong and growing competitive position in the U.S. and global life reinsurance markets, strong operating earnings and capitalization, and improving scale, S&P said.

Somewhat offsetting these strengths is the group's aggressive recent acquisition strategy, which has strained financial flexibility, and brings heightened risk due to integration challenges, the agency said.

Following the issue, financial leverage (debt plus hybrid to capital) will increase above historical levels to about 37%. Fixed-charge coverage for full-year 2005 is likely to be about 5x.

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