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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2004
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SCOTTISH RE GROUP LIMITED
(Exact name of registrant as specified in its charter)
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Cayman Islands 001-16855 98-0362785
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
P.O. Box HM 2939
Crown House, Third Floor, 4 Par-la-Ville Road
Hamilton HM12
Bermuda N/A
(Address of Principal Executive Offices) (Zip Code)
(441) 295-4451
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The direct financial obligation described below was executed or became
effective during the reporting period reflected by the Form 10-K for the fiscal
year ended December 31, 2004, and as such, will be filed as an exhibit to such
Form 10-K.
Credit Agreement
On December 29, 2004, Scottish Annuity & Life Insurance Company (Cayman)
Ltd., an insurance company domiciled under the laws of the Cayman Islands
("SALIC"), and a direct subsidiary of Scottish Re Group Limited (the "Company"),
Scottish Re (Dublin) Limited, an insurance company domiciled in Ireland
("Scottish Dublin"), and a direct subsidiary of SALIC, Scottish Re (U.S.), Inc.,
a life insurance company domiciled in Delaware ("Scottish US"), and an indirect
subsidiary of SALIC, Scottish Re Limited, an insurance company organized under
the laws of England and Wales ("Scottish UK" and, together with SALIC, Scottish
Dublin and Scottish US, collectively the "Borrowers"), and an indirect
subsidiary of the Company, Bank of America, N.A., and lenders party thereto
(collectively the "Lenders"), entered into a Credit Agreement (the "Credit
Agreement"), pursuant to which the Lenders have agreed to collectively provide a
364 day revolving, unsecured credit facility in the aggregate principal amount
of $175,000,000 (the "Credit Facility") to the Borrowers. The Credit Agreement
is a direct financial obligation of each of the Borrowers; however, SALIC will
guarantee the payment obligations of Scottish Dublin, Scottish US and Scottish
UK.
The Credit Facility may be increased to an aggregate principal amount of
$200,000,000, in which increase the Lenders may, but are not obligated to,
participate on a pro rata basis. Standby letters of credit issued under the
Credit Facility will be unconditional, irrevocable and will have a maximum term
of one year from the date of issuance. The proceeds of the loans will be used by
the Borrowers for working capital, capital expenditures and general corporate
purposes.
The Credit Facility will terminate and all amounts outstanding thereunder
will be due 364 days from the closing date (the "Closing Date"), unless the term
out option (the "Term Out Option") is exercised. The Term Out Option may be
exercised if there are no events of default under the Credit Facility and if all
representations and warranties are true and correct as of the date of
conversion. If exercised, the outstanding principal amount of loans under the
Credit Facility on the maturity date (the "Maturity Date"), which is 364 days
from the Closing Date, may be converted, at SALIC's option, to term loans which
will be repayable in a single payment twelve months from the Maturity Date.
The interest rate on each loan made under the Credit Agreement, as
determined by the nature of the loan, will be at (i) the Federal Funds Rate plus
0.50%, (ii) the prime rate as announced by Bank of America, or (iii) the British
Bankers Association LIBOR Rate plus an applicable margin. Borrowers may select
interest periods of 1, 2 or 3 months for LIBOR loans, subject to availability.
Interest will be payable at least quarterly, at the end of each interest period.
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Under the terms of the Credit Agreement, the following constitute events of
default:
o nonpayment of principal, interest, fees or other amounts due under any
loan or letter of credit obligation thereunder;
o failure to adhere to the terms of any covenants contained therein;
o any material misstatement made in any representation or warranty
contained therein;
o default on any indebtedness or guarantee in the amount of $10,000,000
or more by any of the Borrowers or their subsidiaries;
o any attachment or levy against all or part of any Borrowers' property,
if not released within 30 days after such attachment or levy;
o the institution of bankruptcy or insolvency proceedings, whether
voluntary or involuntary;
o entry of a final judgment against any Borrower or subsidiary for
payment greater than a certain threshold amount, or any non-monetary
judgment that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
o actual or asserted invalidity of any loan documentation;
o change of control; or
o customary ERISA defaults.
If an event of default occurs and is continuing, the entire principal thereof
and interest accrued thereon may be declared to be due and payable immediately.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
SCOTTISH RE GROUP LIMITED
By: /s/ Paul Goldean
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Paul Goldean
Executive Vice President and General Counsel
Dated: December 29, 2004
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