Scottish Re Completes $2.1 billion Triple-X Securitization

Company Release - 05/04/2006 20:48

HAMILTON, Bermuda--(BUSINESS WIRE)--May 4, 2006--Scottish Re Group Limited
(NYSE: SCT), a global life reinsurance specialist, announced today that
Ballantyne Re plc closed an offering of $1.7 billion of 30-year notes and
approximately $400 million of subordinated notes and equity in the largest
Regulation Triple-X securitization to date. The underlying block of business was
acquired from ING on December 31, 2004 and includes 1.7 million policies with an
aggregate face value of over $180 billion.


"The success of Ballantyne Re further solidifies Scottish Re's position as a
market leader in life securitizations," said Scott E. Willkomm, President and
Chief Executive Officer of Scottish Re Group Limited. "We have now securitized
over $3 billion in XXX reserves in three term transactions and have financed an
additional $2 billion in Triple-X reserves in two synthetic transactions."


With the completion of this transaction, Scottish Re has successfully
implemented permanent solutions to secure long-term collateral for all of the
Regulation Triple-X reserves acquired in connection with the ING Re acquisition.
As part of the arrangement with ING, Scottish Re will receive a $6.2 million
refund of fees paid to ING over the last 12 months for providing a letter of
credit supporting the excess reserves associated with the Ballantyne Re block.
The refund will be recognized as income in the second quarter of 2006.
Additionally, assets held in trust by ING supporting this business have been
released to Scottish Re.


"Our ability to develop and execute innovative structures provides significant
value to our clients and shareholders," said Paul Goldean, Executive Vice
President. "Ballantyne Re is our second securitization vehicle domiciled in
Ireland, a jurisdiction Scottish Re has been operating in since 2000."


Ballantyne Re was formed as a public limited company in Ireland and established
for the sole purpose of reinsuring the defined block of business from Scottish
Re (U.S.). Proceeds from Class A Notes will be held in a credit-for-reinsurance
trust and used to fund regulatory reserves associated with level premium term
life insurance policies (commonly referred to as Regulation XXX reserves).

    There are three tranches of Class A senior notes:

    --  $250 million of Class A-1 term notes

    --  $1 billion of Class A-2 term notes guaranteed in part by Ambac
        Assurance UK Limited ("Ambac") and in part by Assured Guaranty
        (UK) Ltd. ("Assured Guaranty").

    --  $400 million of Class A-3 auction rate notes guaranteed by
        Ambac

The Class A-2 and Class A-3 notes are guaranteed with respect to the timely
payment of interest and ultimate payment of principal.


The Class B notes are comprised of two tranches; $10 million of Class B-1 notes
have a fixed interest rate and $40 million of Class B-2 notes are floating rate
securities. Interest and principal on the Class B notes are not guaranteed. In
addition, a portion of the Class C notes was sold to non-affiliated parties,
with the balance retained by Scottish Re.


"A growing number of investors are embracing this asset class and have shown
interest in obtaining a larger portion of the underlying risk," explains Michael
Baumstein, Senior Vice President of Scottish Re Capital Markets. "We expect this
trend to continue as more transactions are brought to the market."


The Class A-1 Notes are not guaranteed and are rated "A-" by Standard & Poor's,
"Aa2" by Moody's Investors Service and "AA" by Fitch Ratings. Series A of the
Class A-2 Notes are guaranteed by Ambac and are rated "AAA" by Standard &
Poor's, "Aaa" by Moody's and "AAA" by Fitch. Series B of the Class A-2 Notes are
guaranteed by Assured Guaranty and are rated "AAA" by Standard & Poor's, "Aa1"
by Moody's and "AAA" by Fitch. The Class A-3 Notes are guaranteed by Ambac and
are rated "AAA" by Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch. The
Class B-1 Notes and Class B-2 Notes are rated "BBB+" by Standard & Poor's,
"Baa1" by Moody's and "BBB+" by Fitch. The Class C notes are unrated.




The transaction was structured such that the securities have recourse only to
Ballantyne Re and not to any Scottish Re entity. As a result of the absence of
recourse to Scottish Re or its affiliates, both Standard & Poor's and Moody's
will exclude Ballantyne Re's debt from Scottish Re's financial leverage and
coverage ratios.


Lehman Brothers was the sole structuring agent and lead book-runner for the
transaction. Scottish Re Capital Markets, Goldman Sachs, Banc of America
Securities and RBS Greenwich Capital acted as co-managers. The notes sold are
not registered under the Securities Act of 1933, as amended, and may not be
resold in the United States without registration or an applicable exemption from
the registration requirements.


About Scottish Re


Scottish Re Group Limited is a global life reinsurance specialist. Scottish
Re has operating companies in Bermuda, Charlotte, North Carolina, Dublin,
Ireland, Grand Cayman, and Windsor, England. Its flagship operating subsidiaries
include Scottish Annuity & Life Insurance company (Cayman) Ltd. and Scottish Re
(U.S.), Inc., which are rated A- (excellent) by A.M. Best, A (strong) by Fitch
Ratings, A3 (good) by Moody's and A- (strong) by Standard & Poor's, Scottish Re
Limited, which is rated A- (excellent) by A.M. Best, A (strong) by Fitch Ratings
and A- (strong) by Standard & Poor's and Scottish Re Life Corporation, which is
rated A- (excellent) by A.M. Best Company. Scottish Re Capital Markets, Inc., a
member of Scottish Re Group Limited, is a registered broker dealer that
specializes in securitization of life insurance assets and liabilities.
Additional information about Scottish Re Group Limited can be obtained from its
Web site, www.scottishre.com .


    CONTACT: Scottish Re Group Limited
             Michael Baumstein, 441-298-4394
             michael.baumstein@scottishre.com

    SOURCE: Scottish Re Group Limited