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WIKI ANALYSIS
Headquartered in Bermuda, Primus Guaranty sells credit swaps as protection against the risk of default on investment grade obligations. In exchange of a fixed quarterly premium, Primus will guarantee its customers a payment of an agreed amount in case debt issuer counterparty defaults. The primary purchasers of credit swaps are commercial and investment banks, as well as portfolio managers, insurance companies and other financial institutions seeking to reduce the credit risk exposure in their fixed-income security portfolios (eg. containing bonds, loans receivables). Primus Financial, the issuing subsidiary, carries an Aaa rating ("exceptional") from Moody's, and AAA rating by Standard & Poor's Rating Services. Primus was started in 2002 and on October 5, 2004 the company went public through an IPO of 9,143,493 shares at $13.50 per share. The company sold $2.8 billion of new credit swaps in the third quarter of 2007, which represents the highest level of new transactions since going public in 2004. These new transactions will generate over $65 million in future premiums, assuming the contracts are held to term. Primus continues to look for ways to diversify its revenue stream. Currently the company operates:
Primus Asset Management, Inc., provides credit portfolio management services to Primus Financial, as well as third parties.
PRS Trading Strategies, LLC, began operating during 2006, and engages in relative value trading and other strategies involving buying and selling of credit swaps and other financial instruments in pursuit of financial returns.
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