S&P drops Scottish Re

Standard & Poor's said it lowered its counterparty credit rating on Scottish Re Group Ltd. to CCC from B+ and kept the rating on CreditWatch with negative implications.

At the same time, S&P said it lowered its counterparty credit and financial strength ratings on Scottish Re's operating companies to B+ from BBB- and kept them on CreditWatch with negative implications.

In addition, S&P said it raised its senior secured debt rating on Ballantyne Re plc's class A-1 notes to AA from BBB- and removed the rating from CreditWatch developing.

The downgrade on Scottish Re reflects the increased possibility that the company will not repay the noteholders of $115 million of convertible notes, who are likely to exercise a put option on Dec. 6, the agency noted.

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