Primus Guaranty, Ltd. (NYSE:PRS) commented today on the ratings actions
taken by Moody’s Investors Service, Inc. ("Moody’s”)
regarding the company and its Primus Financial Products LLC ("Primus
Financial”) subsidiary.
"Unprecedented credit market volatility and the resulting failure of
such firms as Fannie Mae, Freddie Mac, Lehman Brothers and Washington
Mutual have clearly impacted Primus Financial,”
said Thomas W. Jasper, Chief Executive Officer, Primus Guaranty. "However,
at the end of September, Primus Financial had $820 million in long term
debt and equity capital to meet commitments under its credit default
swaps contracts. Additionally, $75 million of capital is held at Primus
Guaranty.” In its report, Moody’s
noted, "the current strong liquidity position
at the holding company.”
The downgrade of Primus Financial's Aaa rating does not trigger a credit
event, or require collateral postings, or allow a counterparty to
terminate its credit default swap transactions with Primus Financial.
Primus Financial has agreed with Moody’s to
limit trading activities while it works on a plan addressing its current
ratings profile. Primus Financial will continue to collect quarterly
premium payments on its credit swap portfolio from its counterparties.
The average remaining tenor on the portfolio is 3.5 years. The total
future, premium receipts on Primus Financial’s
credit swap portfolio is in excess of $300 million.
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 offers 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 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.
