A.M. Best Company yesterday joined Fitch Ratings, S&P, Moody's in downgrading the rating of Scottish Re as the ailing reinsurer faces uncertainty on the future availability of credit facilities.

These rating actions follow A.M. Best's review of Scottish Re's short-term liquidity and collateral needs subsequent to A.M. Best's rating action on July 31.

S&P downgraded Scottish Re on August 18, Moody's downgraded the ratings of Scottish Re on August 21 and on August 22 Fitch downgraded the ratings of Scottish Re.

A.M. Best notes that, as indicated in its recent Securities and Exchange Commission filings, Scottish Re faces uncertainty in the future availability of credit facilities.

Also, note holders have the right to require Scottish Re to repurchase $115 million of 4.5 percent senior convertible notes on December 6, 2006.

Absent new sources of funding, A.M. Best believes that Scottish Re's liquidity position is significantly strained.

While the company has engaged investment bankers to evaluate strategic alternatives and review capital and liquidity sources, and a sale of the company is likely, the timing and execution of any capital raising initiatives to alleviate these liquidity concerns is uncertain.

A.M. Best has downgraded the financial strength rating (FSR) to B+ (Very Good) from B++ (Very Good) and the issuer credit ratings (ICR) to "bbb-" from "bbb+" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Scottish Re) (Cayman Islands).

The agency has also downgraded the ICR of Scottish Re to "bb-" from "bb+". All ratings remain under review with negative implications.

These rating actions follow A.M. Best's review of Scottish Re's short term liquidity and collateral needs subsequent to A.M. Best's rating action on July 31. The FSR has been downgraded to B+ (Very Good) from B++ (Very Good).

The ICRs have been downgraded to "bbb-" from "bbb+" and remain under review with negative implications for the following subsidiaries of Scottish Re Group Limited: Scottish Annuity & Life Insurance Company (Cayman) Ltd., Scottish Re (US) Incorporated, Scottish Re Life Corporation, Scottish Re Limited and Orkney Re Incorporated.