Fitch puts Scottish Re on evolving watch

Fitch Ratings said it revised the Rating Watch on Scottish Re Group Ltd.'s ratings to evolving from negative following notification that the company has successfully amended its bank agreement to allow the transfer of funds from affiliate Scottish Annuity & Life Insurance (Cayman) Ltd. to Scottish Re. Funds are expected to be transferred to the trustee on Monday to repay $115 million of senior convertible notes that are expected to be put to the company on Dec. 6. This notification satisfies Fitch's most immediate near-term concern.

The ratings being placed on Rating Watch evolving reflects the pending agreement with MassMutual Capital Partners LLC and Cerberus Capital Management, LP, which is expected to result in a new equity investment into the company of $600 million. Fitch said that while it views the agreement and the potential $600 million investment positively, Scottish Re continues to face business and operating challenges and uncertainties, including the outcome of the shareholder vote. As such, the Rating Watch could be revised positively or negatively or the ratings could be affirmed with a stable outlook as the process develops.

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