Fitch keeps Scottish Re on watch

Fitch Ratings said Scottish Re Group Ltd.'s ratings remain on Rating Watch negative following the announcement that the company entered into an agreement that will result in a new equity investment into the company of $600 million.

The company's ratings were placed on Rating Watch negative on July 31 due to concerns regarding its ability to repay $115 million of senior convertible notes that are expected to be put to the company on Dec. 6. Fitch said it believes that Scottish Re has made good progress in resolving the key liquidity and collateral issues and expects that remaining issues will be resolved over the next several days that will allow affiliate Scottish Annuity & Life Insurance (Cayman) Ltd. to dividend funds to Scottish Re to fund the expected put.

Once these remaining issues are resolved, the agency expects to change the direction of the Rating Watch to evolving to reflect the company's pending agreement to sell a majority stake to MassMutual Capital Partners LLC and Cerberus Capital Management, LP.

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