Primus Guaranty, Ltd. (the "Company”) (NYSE:PRS) today commented on
certain aspects of the credit default swap ("CDS”) portfolio of Primus
Financial Products, LLC ("Primus Financial”).
The Company noted that, despite continued uncertainty and volatility in
the global financial and credit markets during the first quarter of
2009, Primus Financial experienced one new credit event in its
single-name CDS portfolio during this period. According to the
International Swaps and Derivatives Association, Inc., there were a
total of 15 credit events in the first three months of the year.
The Company also said that as of March 31, 2009, Primus Financial did
not have CDS exposure to any of the Big 3 U.S. automakers in its
single-name or tranche CDS portfolios. While the Company’s policy is to
refrain from commenting on individual exposures in Primus Financial’s
portfolio unless there is a credit event, it is making this disclosure
in light of the significant financial news and interest in these
companies.
The credit event that Primus Financial experienced during the 2009 first
quarter was related to Idearc Inc. ("Idearc”), which recently filed a
petition under Chapter 11 of the U.S. Bankruptcy Code. Primus
Financial’s single-name CDS notional exposure referencing Idearc is $10
million with current counterparties. Primus Financial also has CDS
exposure to Idearc in its bespoke tranche portfolios, which are not
subject to first loss due to existing subordination levels. The Company
does not anticipate that Primus Financial will have to make payments on
its bespoke tranche transactions as a result of the Idearc bankruptcy.
However, the capital requirements associated with each tranche will
increase as a result of a reduction in tranche subordination.
About Primus Guaranty
Primus Guaranty, Ltd. is a Bermuda company, with its principal operating
subsidiaries, Primus Financial Products, LLC and Primus Asset
Management, Inc., headquartered in New York City. Primus Financial
Products provides protection against the risk of default on corporate,
sovereign and asset-backed security obligations through the sale of
credit swaps to dealers and banks. Primus Asset Management provides
credit portfolio management services to Primus Financial Products, and
manages private investment vehicles, including two collateralized loan
obligations and three synthetic collateralized swap obligations for
third parties.
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.
