Moody?s Investors Service believes Scottish Re still needs to secure additional collateral and/or liquidity over the next several weeks to prevent further downgrade.

On Monday Moody?s changed the direction of review for Scottish Re Group Limited?s ratings to uncertain from possible downgrade.

The change in the direction of the ratings review impacts the company?s debt ratings (Ba3 senior unsecured debt) and the Baa3 insurance financial strength (IFS) ratings of the company?s core insurance subsidiaries, Scottish Annuity & Life Insurance Company (Cayman) Ltd. and Scottish Re (US), Incorporated.

The rating agency said the revised direction of the review indicates the possibility that Scottish Re?s ratings could now be downgraded, upgraded or confirmed depending on the future developments at Scottish Re.

Moody?s stated that the broader range of possible rating outcomes reflects the possibility that Scottish Re is successful in implementing its main strategic goal, which is the sale of the company. According to vice president and senior credit officer Scott Robinson: ?It is likely that some insurers and/or reinsurers are interested in purchasing Scottish Re.

?Possible suitors consist of those companies that could place the Scottish Re inforce business into runoff and those that could use it as a platform to enter or enhance their position in the US life reinsurance market.?

If an acquisition of Scottish Re is completed, the ultimate ratings of the company would depend upon the financial strength of the purchaser as well as the structure of the deal, but the ratings would likely be upgraded from their current level.

Moody?s also believes that some private equity firms could be interested in investing in Scottish Re. The rating agency notes that unless a private equity firm partnered with a company with insurance expertise, it would view this outcome as a less viable long term solution than an outright sale of the company, with limited if any upward movement likely in Scottish Re?s ratings. The Bermuda Insurance Index Advisory Committee last week said Scottish Re Group Limited (SCT BH), has been removed from the Index?s constituent base with immediate effect.