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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): August 18, 2005
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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 1.01. Entry into a Material Definitive Agreement.
The entry into a letter of credit agreement is described below under Item
2.03.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Letter of Credit Agreement
On August 18, 2005 (the "Closing Date"), Scottish Re (Dublin) Limited, an
insurance company incorporated and existing under the laws of Ireland ("Scottish
Dublin"), an indirect subsidiary of Scottish Re Group Limited (the "Company")
and a direct subsidiary of Scottish Annuity & Life Insurance Company (Cayman)
Ltd., ("SALIC"), as borrower (the "Borrower"), SALIC, an insurance company
domiciled under the laws of the Cayman Islands and a direct subsidiary of the
Company, as guarantor (the "Guarantor"), Bank of America, N.A., and lenders
party thereto (collectively the "Lenders"), entered into a Letter of Credit
Agreement (the "Credit Agreement"), pursuant to which the Lenders have agreed to
collectively provide a three-year revolving, unsecured letter of credit facility
in the aggregate principal amount of $30,000,000 (the "Credit Facility") to
Scottish Dublin. The Credit Agreement is a direct financial obligation of
Scottish Dublin; however, SALIC will guarantee the payment obligations of
Scottish Dublin.
The Credit Facility may be increased up to an aggregate principal amount of
$50,000,000, in which increase the Lenders may, but are not obligated to,
participate on a pro rata basis. For any new lender to participate in the Credit
Facility, the lender must be authorized to carry on the activities set out in
the Schedule to the European Communities (Licensing and Supervision of Credit
Institutions) Regulations, 1992 (the "Banking Regulations"), including, but not
limited to, providing guarantees and commitments, within Ireland by the
establishment of a branch or by way of the provision of services. The
undertaking or provision of such activities must be in accordance with each new
lender's authorization in the jurisdiction in which it is incorporated and the
requirements of the Banking Regulations must be complied with in full.
The Credit Facility will be used to issue letters of credit to back
reinsurance obligations of Scottish Dublin. Standby letters of credit issued
under the Credit Facility will be clean, unconditional, irrevocable and will
have a maximum term of one year from the date of issuance. The letters of credit
will be issued by Bank of America, and each Lender will purchase an irrevocable
and unconditional participation in each letter of credit. The Credit Facility
will terminate on July 14, 2008 (the "Commitment Termination Date"). Under the
Credit Facility, the last stated maturity date for letters of credit will be on
or before the date which is one year after the Commitment Termination Date.
Scottish Dublin will pay a facility fee on each letter of credit (i) prior
to the Commitment Termination Date on each Lender's commitment amount,
regardless of usage and (ii) after the Commitment Termination Date on the
outstanding letters of
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credit. In addition, Scottish Dublin will pay a utilization fee on all
outstanding letters of credit if the aggregate available amount of all
outstanding letters of credit exceeds 50% of the aggregate amount of the Credit
Facility. A letter of credit fee is due on the aggregate maximum stated amount
for each letter of credit that is issued and outstanding. Such fees are payable
quarterly, in arrears, commencing on the Closing Date, and will be determined in
accordance with a pricing grid. Any letter of credit fee paid will be shared
proportionately by the Lenders.
Under the terms of the Credit Agreement, the following constitute events of
default:
o nonpayment of letter of credit reimbursement obligations, fees or
other amounts due under any letter of credit obligation thereunder;
o failure to adhere to the terms of certain covenants as specified
therein;
o any material misstatement made in any representation or warranty
contained therein;
o default on any indebtedness or guarantee in the amount of $20,000,000
or more;
o the institution of bankruptcy or insolvency proceedings, whether
voluntary or involuntary;
o Scottish Dublin and SALIC or any subsidiary becomes unable or admits
in writing its inability to pay its debts as they become due or any
writ of attachment or similar process is not released, vacated or
bonded within 30 days;
o entry of a final judgment against Scottish Dublin or SALIC or
subsidiary for payment greater than $20,000,000, 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 obligations of the Lenders
to issue letters of credit may terminate, all amounts outstanding under the
Credit Facility may be declared to be due and payable immediately and Scottish
Dublin may be required to provide cash collateral to secure any outstanding
letters of credit.
A copy of the Credit Agreement is attached hereto as Exhibit 10.1, and is
incorporated by reference herein.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1 Letter of Credit Agreement, dated as of August 18, 2005, among
Scottish Re (Dublin) Limited, as Borrower, Scottish Annuity & Life
Insurance Company (Cayman) Ltd., as Guarantor, Bank of America, N.A.,
as Administrative Agent and L/C Issuer, and the Other Lenders Party
Hereto, and Bank of America Securities LLC, as Sole Lead Arranger and
Sole Book Manager.
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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: August 18, 2005
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INDEX TO EXHIBITS
Number Description
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10.1 Letter of Credit Agreement, dated as of August 18, 2005, among
Scottish Re (Dublin) Limited, as Borrower, Scottish Annuity & Life
Insurance Company (Cayman) Ltd., as Guarantor, Bank of America, N.A.,
as Administrative Agent and L/C Issuer, and the Other Lenders Party
Hereto, and Bank of America Securities LLC, as Sole Lead Arranger and
Sole Book Manager.
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