Scottish Re Group Ltd (fka SKRRF)

[insomniac]

I dont think it has to do with Bermuda.. I believe it has to do with being a bulletin board stock.
If skrrf was on a major exchange , they would have to report within a certain time limit.. It was(ie.) 45 days for a qtrly, and a bit longer for a year end report.. if they didnt comply ,, they would be delisted from the NYSE (for example) and would be placed on the pinks/bulletin board. Frankly Im not sure if bulletin board stocks have any such requirement.It certainly must be more relaxed than the above example. Try calling NASDaq/FINRA, and find out "reporting requiements" for pink sheet stocks..

[cdaniel394]

Does SKRRF even have to report being its based out of Bermuda????

[cdaniel394]

Any ideas when we might hear about 4th quarter numbers? Thanks

[bwana12]

The hierarchy of the preferred is the same it has always been. It is just that the accountants have a strange way of presenting things. I believe a bunch of people have been led to err.

If the company were buying back preferreds, I believe it would do so through privately-negotiated transactions and/or a tender. There is very little volume in the open market, any sizeable chunk can change the market price in no time. I am a bit dissapointed that management has not provided more updates on relevant events, but as far as the company's business is concerned I see not big vhanges UNLESS there is a restructuring of the equity base and a recap/merger. I still do not believe MM / CC will just sit and wait, and the purchase of the Orkney notes is probably is a step in the right direction.

[insomniac]

I was referring to that activity over the last 3 months .. The positve OBV (on balance volume)in Skruf vs.. Negative OBV on skrrf. I guess I was hoping you could theorize something along the lines of say...The company may be buying up the preferred Or theres reason to believe the preferred has been moved up on the hierarchy etc..

[insomniac]

Axe?? He does seem to know how to break the back of a stock/

[h_man_investor]

Maybe we should ask BB OTC King- I thought he was the axe in this name?

[bwana12]

Because it is held in firmer hands? There is virtually no volume in SKRUF. Look at the spread - more than 20% of the value. It went down like crazy (it got to 50 cts, I believe). What I believe is happening is that volume creates volume, and a lot of tech people out there get to look at SKRRF because it shows up on their screens with daily movement. With SKRUF, there is very little to analyze, no interest.

I still believe the expedted upside on both is pretty similar (4 to 5 fold on each). SKRRF has more risk, as it is a junior security. It also has unlimited upside. Most people here are probably thinking that good news will move the stock up quickly because of volume, wheras the pref will move slowly.

Hope you find the above helpful.

[insomniac]

My concern is the continuous distribution that is going on in the stock. I would rather be looking at an anticipatory upmove as we approach earnings ,rather than this constant selling. I do hope that they do come up with a strategy. It dosent seem to matter (yet) that the financials are improving.As you know it has been dropping since the last earnings report.
Regarding SKRUF,it does seem to be doing a reversal from the common and appears to me to be under accumulation...
Can you put a financial thesis together based on what I am seeing??? Why skruf up and skrrf declining??

[bwana12]

I would have originally thought so too (i.e. a relatively early release, compared to the previous year's), but it might just work in their favour to hold on to those numbers until they have figured out the next move. It has been to quiet, and that to me means they don't want to say anything now.

I am hoping that when they do release they do it together with a clearer strategy for moving forward.

[insomniac]

My Guess is
They release earnings on Friday.Anyone else care to speculate?

[eom7]

Nice post - Thanks!

[Enterprising Investor]

Black’s Apollo Targets Fixed Annuities With Bermuda Reinsurer.

Jan. 8 (Bloomberg) -- In the 20 years since Leon Black got into the private-equity business, his Apollo Global Management LLC has made money buying companies, distressed debt and bank loans. Now, the New York-based firm is targeting fixed annuities, a $600 billion market dominated by insurers.

Apollo, working through a Bermuda reinsurer that opened last year, is guaranteeing payments on fixed annuities sold by life insurance companies, according to regulatory filings. In exchange, it invests the cash from the sales mostly in bonds and keeps any profits left after the annuity holders are paid.

The firm, started by Black in 1990, is seeking to take advantage of a capital shortage that forced some annuity issuers to turn away business in 2009. While Apollo says its investing skills are a good fit for annuity reinsurance, other money managers have lost money in the market.

“The idea is to use insurance liabilities as a cheap source of funding for an asset-management business,” Chris Stroup, chairman of Wilton Re Holdings Ltd., a Wilton, Connecticut, life-reinsurance company, said in an interview. “This is a strategy that has been attempted before and hasn’t always worked out.”

Max Capital Group Ltd., a life, property and annuity reinsurer, lost $175 million in 2008 after its portfolio of private investments dropped 19 percent. Hedge-fund manager Louis Moore Bacon helped finance the formation of Max Capital through an affiliate and remains the company’s largest shareholder, according to regulatory filings. His brother Zack Bacon was chief executive officer of Alstra Capital Management LLC, which ran Max Capital’s portfolio of fund investments from 2004 until January 2009.

Investment Losses

Scottish Re Group Ltd., an annuity reinsurer established in 1998 by Michael French, a founder of the Dallas-based hedge-fund firm Maverick Capital Ltd., realized a $979 million investment loss in 2007 on a portfolio that included securities backed by subprime residential mortgages. U.S. shares of Bermuda-based Scottish Re trade at 17 cents, compared with a high of $5.40 in 2007.

Jonathan Gasthalter, a spokesman for Apollo, declined to comment on the venture, disclosed in a Nov. 23 filing with the U.S. Securities and Exchange Commission. The move is part of Apollo’s latest initiative, the pursuit of “value-oriented” debt strategies that can outperform traditional fixed-income investments, according to the documents.

The firm’s capital-markets unit oversees $18.1 billion in credit assets, while the leveraged-buyout group manages $33.5 billion. Both have helped Black, 58, accumulate an estimated net worth of $2 billion, ranking him as the 158th richest American, according to Forbes magazine.

Bermuda Unit

Apollo formed Athene Life Re Ltd. to negotiate the purchase of annuity policies, according to the filing. Frank “Chip” Gillis, former head of insurance solutions at Bear Stearns Cos., is running Athene. James Belardi, previously chief investment officer for AIG Retirement Services Inc., heads another subsidiary, Athene Asset Management LLC.

Life insurers are the main sellers of fixed annuities, investment contracts that offer clients a guaranteed return over a set period that is typically tax-deferred. Insurers invest the proceeds from the sales mostly in debt securities with the aim of earning a higher yield and pocketing the difference.

Reinsurers such as Swiss Reinsurance Co. of Zurich and Transamerica Reinsurance in Charlotte, North Carolina, haven’t provided much fixed-annuity coverage because the profits are small relative to the capital required, said William Pargeans, a vice president at A.M. Best Co., an Oldwick, New Jersey, credit- ratings firm. Athene is the first reinsurer to focus exclusively on fixed annuities, he said in an interview.

Black’s Background

“It all boils down to the returns you can get on your investment portfolio,” according to Pargeans, who specializes in life reinsurance. “The only way margins can be better is if you are willing to take on more investment risk.”

Black, the former head of mergers at Michael Milken’s Drexel Burnham Lambert Inc., bought about $6.5 billion of junk bonds from the failed Executive Life Insurance Co. after forming Apollo. The firm has specialized since then in LBOs and debt investments, purchasing $24 billion of bank loans and more than $8 billion of distressed debt during the credit crunch that began in 2007, according to the SEC filing.

“To the extent Apollo has expertise in fixed income, this is a place for them to deploy their capital,” said John Matovina, chief financial officer of American Equity Investment Life Holding Co. American Equity transferred about $513 million of annuities to Athene under an agreement that took effect July 1, according to Matovina and a Nov. 9 SEC filing by the West Des Moines, Iowa, insurer.

Mortgage Bonds

Apollo invested at least $371 million of the premiums as of Sept. 30, with about $229 million in mortgage-backed bonds, $67 million in corporate securities and $47 million in equities, possibly including preferred stock, according to American Equity’s SEC filing.

Guggenheim Partners LLC has also put together a venture that will reinsure annuities, according to documents filed with the National Association of Insurance Commissioners in Washington. The Chicago-based money manager bought Wellmark Community Insurance Inc. in August, renamed it Guggenheim Life & Annuity Co. and is marketing annuity reinsurance to insurers.

“Athene and Guggenheim saw an opportunity in 2009 and they acted on it,” said Richard Tucker, vice president of business development at Ruark Consulting LLC, a Simsbury, Connecticut, reinsurance intermediary and actuarial consultant. “My understanding is they created the insurance companies to be another form of asset gatherer.”

Shawn Simmons, a spokesman for Guggenheim, declined to comment.

Annuity Sales Surge

Investors began piling into fixed annuities during the 2008 stock-market decline. Sales in the first nine months of last year rose 17 percent to $87.2 billion, according to LIMRA, an insurance research group based in Windsor, Connecticut.

The reinsurance frees capital for the annuity companies, allowing them to write more contracts. Because insurers must set aside capital equaling as much as 10 percent of a new annuity’s face value, some turned away business last year, said John Lenz, president of Lenz Financial Group, a Portland, Oregon, annuity wholesaler.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aKAvThrW1KSA

[It is unclear to me if there is any link between Apollo and SKRRF.]

SEC filing mentioned in story:
http://sec.gov/Archives/edgar/data/1411494/000119312509239721/ds1a.htm

[mlkrborn]

0.13-0.175 day's range on friday..

[mlkrborn]

SCT is also a ticker symbol for BoA C. $10 value..

[cdaniel394]

Anything going on here?

[cdaniel394]

Anything going on here?

[insomniac]

4TH

[cdaniel394]

Little help here please. On December 31, was that the end of the second quarter? Thanks

[hfields]

I am seeing some nice movement here on my charts....we may be moving up soon...

[CIGGYGAG]

61,800 shares traded in 1st hour. average 10 day volume 52,700.
interesting.

[hfields]

she's movin' a little on my daily chart...buy volume comin' in...

[g2nec]

Nice for those paying attention

[g2nec]

Buyin op here

[insomniac]

When he said volume "ALWAYS" preceeds price,I knew what I was dealing with.

[h_man_investor]

There you go again- big volume at the ask. That's a seller! Sure, someone is buying but someone is also selling a lot of shares at the ask.

Why hasnt this stock gone up? The market is up? SKRUF is up?

Or is this stock still consolidating (on no volume)?

[mlkrborn]

Question for ticker symbol SCT.. I see SCT symbol passing by among live quotes of CNBC once in while.. did anyone else notice it? What is it? It appears as $10? ,, Thought SCT doesnt doesnt trade under that symbol any more?
tia

[bwana12]

The problem I see with them giving less value to shareholders is the lack of a valid reason for them to back out of their original commitment, which is to have the $600 million convert at $4.00.

They can always go back and offer shareholders $0.20 per share and try to get them all out of the picture, but I see it as unlikely that a $14 million payout (that's the value at 20 cts) would silence all people involved. I have read studies about the "nuisance value" of worthless stock, and in this case with deep-pocket controlling shareholders I can see it at 5% of total value (i.e. the $600 that MM/CC invested), which comes to about ... $0.50, or $40 million.

The board, in any event, could be liable if they make decissions that favour some shareholders at the expense of others. A sale to a third party now that nets current common shareholders $0 would be taking away the option value of the stock in exchange for a current payout to MM/CC that they have little or no claim to from a purely legal perspective. Tough situation for the board, but they probably don't want to face another shareholder lawsuit.

Hope the above make some level of sense to you.

[insomniac]

I dont see why they would have to make such a generous offer to the common shareholders . I cant think of any buyout that was offered a triple + to its current price.In general it's ususally a 20% premium. Is a restructure that different, that they would make such a terrific offer on a 16 cents stock with a negative book value.. I would hope that you are correct and maybe even that your estimates are low,However,I just dont get where you are coming up with 50 cents. Could you expand your reasoning on this point???

[bwana12]

Under the current capital structure, it is unlikely that SKRRF will be "in the money" from a book-value perspective for some time. It is currently some $550 million away from there, and it is difficult to see how such a significant amount of money will ever be made out of operating earnings (if any). Significant additional write-ups are also unlikely, IMO. As such, the only way the common is likely to see any value is either:

i) when the convertible preferred converts automatically (in six-year's time), at which point there will be aproximately a $1 value per share on a book-value basis; or,

ii) if CC/MM decide they want to sell and/or restructure in order to have a stronger balance sheet, at which point whatever gets accepted by the majority of shareholders, or the independent members of the board, is likely to be the final value. My best guess at this point is about $0.50.

In any of the above cases there is clearly significat updise, the question is when. Even 50 cts in a couple of years is a decent-enough return.

Obviously the above analysis can prove to be wrong, but I haven't seen anything better being posted.

Any comments welcome.

[cdaniel394]

What will it take to get SKRRF moving? No buying messages please.LOL

[cdaniel394]

Looks like a little bit of action.

[hfields]

That is what I was thinking too.

[g2nec]

Talk about a tight stk

[hfields]

Yep. Not much volume on Skruf either.

[cdaniel394]

Looks that way to me. Stuck in the mud.

[hfields]

No trades on skrrf today? Is this correct?

[cdaniel394]

Psssst! Wake up!

[cdaniel394]

I think that I might have been correct about the tax loss selling. Now that the end of the year is behind us, lets hope for higher highs in 2010. Happy New Year all!

[g2nec]

Safe, healthy and prosperous New Year to all

[g2nec]

Added 155

[insomniac]

TWO INSTITUTIONS ADDED TO SKRRF ROSTER Go to CNN,,,,,,

, put in quote and look up institutions. One appears to be a small broker dealer and the other a Money Mgr with 5 billion in assests .. Each holding 350,000 shares. Record dates of June and Sept..2009

[decouverte d Elbe]

I'm already on it! Thanks, looking to add now!

[g2nec]

Saw that, I added yesterday and today

[OTC BB King]

Big volume at the ask, someone appears to be buying blocks. Strange to see this kind of volume in the middle of a holiday week.

[decouverte d Elbe]

Looks like a very good opportunity here to add,new quarter like you said will be great chance to see this one go, tommorrow looks like a good day for pinks, I've got about 5 other hot ones to consider, and some powder to hit 'em.

[mlkrborn]

Strange trading day!

[hfields]

Yep...

[decouverte d Elbe]

I'm holding a core position, this looks like a good level to buy for me, if I had the powder

[Enterprising Investor]

I concur.

The first thing is closing out the quarter.

The other thing to think about is low volume, big price changes. It can move in the other direction just as quickly.