On 12 May 2009 Primus Guaranty Ltd. (Primus) announced that its wholly-owned subsidiary, Primus Asset Management, Inc., has agreed to acquire CypressTree Investment Management LLP (CypressTree). We anticipate long term benefits from this acquisition, which will enhance the company’s position in the asset management space. However, in the near term, it is likely that asset management fees will continue to be pressured by unfavorable operating…

The Primus Guaranty Ltd. (Primus) NYSE common stock price appreciated 21.9% on 05 May 2009, reflecting market anticipation for its 1Q 09 results announcement on 06 May 2009 coupled with the positive expectations for the outcome of the federal reserve stress test on banks. However, our outlook for Primus remains negative given credit mitigation costs and the current challenging operating conditions. Therefore, we maintain the NYSE common stock a SELL....

As the company has now introduced an internal policy of amortizing income from its CDS portfolio net of costs and realized losses from credit events, no additions will be made to the CDS portfolio. Instead the company intends to focus on its structured credit asset management business through revamping the current business model and potentially through mergers and acquisitions. Going forward, although we remain cautious, with limited visibility on earnings…