Primus Guaranty, Ltd. (NYSE: PRS) today announced that its subsidiary,
Primus Financial Products, LLC ("Primus Financial”), has terminated $1.3
billion notional principal of credit swaps with a significant
counterparty. These swaps represent the counterparty’s entire portfolio
of credit swaps with Primus Financial. Primus Financial paid $6.5
million to the counterparty, a significant discount to the market value
of the portfolio, to terminate these swaps. Included in this portfolio
were a small number of reference entities which Primus Financial
concluded had a high risk profile, including certain financial
guarantors.
This is the second credit mitigation transaction that Primus Financial
has completed and announced in recent months. Through these
transactions, Primus Financial has terminated approximately $1.4 billion
of single-name credit swaps, and has capped its exposure to an
additional $1.2 billion of credit swaps, assigning them to a newly
formed, wholly owned subsidiary.
The company continues to discuss with its counterparties potential
credit mitigation transactions, as it actively manages its credit
protection portfolio in amortization. Primus Financial’s previously
announced strategy is to address certain concentration issues in a small
number of higher risk sectors, including insurance, building/development
and retail, among others. No assurance can be given that the company
will be successful in completing risk mitigation transactions or, if
successful, that Primus Financial will achieve the desired risk
reductions in its portfolio.
About Primus Guaranty
Primus Guaranty, Ltd. is a Bermuda company with operations in New York,
Boston and London. Through its subsidiaries, the company is a leading
manager of corporate credit assets and provider of credit protection.
Primus manages assets in structured credit funds and operating
companies, across a range of asset classes – including investment grade,
high yield and leveraged loans – using both cash and synthetic
instruments.
Safe Harbor Statement
Some of the statements included in this press release and other
statements Primus Guaranty may make, particularly those anticipating
future financial performance, business prospects, growth and operating
strategies, market performance, valuations and similar matters, are
forward-looking statements that involve a number of assumptions, risks
and uncertainties, which change over time. For those statements, Primus
Guaranty claims the protection of the safe harbor for forward-looking
statements contained in the U.S. Private Securities Litigation Reform
Act of 1995. Any such statements speak only as of the date they are
made, and Primus Guaranty assumes no duty to, and does not undertake to,
update any forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements, and
future results could differ materially from historical performance. For
a discussion of the factors that could affect the company's actual
results please refer to the risk factors identified from time to time in
the company's SEC reports, including, but not limited to, Primus
Guaranty's Annual Report on Form 10-K, as filed with the U.S. Securities
and Exchange Commission.
