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Primus Guaranty Ltd. (PRS) filed Quarterly Report for the period ended 2011-09-30.
Primus Guaranty Ltd. has a market cap of $201.6 million; its shares were traded at around $5.43 with a P/E ratio of 27.2 and P/S ratio of 0.6.
This is the annual revenues and earnings per share of PRS over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of PRS.
Highlight of Business Operations:
GAAP net loss available to common shares for the third quarter of 2011 was $283.1 million, compared with GAAP net income available to common shares of $229.0 million for the third quarter of 2010. The Company’s GAAP net income (loss) available to common shares primarily comprised net credit swap revenue (loss) of $(283.4) million and $227.5 million for the third quarter of 2011 and 2010, respectively. Net credit swap revenue (loss) for the periods was chiefly attributable to unrealized mark-to-market gains (losses) on Primus Financial’s credit swap portfolio. During the third quarter of 2011, net credit swap loss was $283.4 million, which comprised premium income of $9.9 million and unrealized mark-to-market losses of $293.3 million. Primus Financial did not have any realized losses on credit swaps during the three months ended September 30, 2011. The net credit swap revenue of $227.5 million in the third quarter of 2010 comprised premium income of $14.0 million, realized losses on credit swaps of $17.5 million and unrealized mark-to-market gains of $231.1 million.Net unrealized gains (losses) on credit swaps were $(293.3) million and $231.1 million for the three months ended September 30, 2011 and 2010, respectively. During the third quarter of 2011, we saw an increase in the weighted average market credit swap spreads in Primus Financial’s credit swap portfolio. The increase in swap spreads, which outweighed the effect of the contraction in the remaining tenor and size of the credit swap portfolio, resulted in unrealized mark-to-market losses in the third quarter of 2011. Weighted average market credit swap spreads in Primus Financial’s credit swap portfolio fell in the third quarter 2010 resulting in unrealized mark-to-market gains. Primus Financial makes a nonperformance risk adjustment in determining the fair value of its credit swap liabilities. During the three months ended September 30, 2011 and 2010, Primus Financial recorded gains (losses) from nonperformance risk adjustments of $129.5 million and $(101.9) million, respectively, which is reflected in net credit swap revenue in these periods.
GAAP net income/loss available to common shares for the nine months ended September 30, 2011 was $(137.3) million, compared with GAAP net income available to common shares of $127.2 million for the nine months ended September 30, 2010. The Company’s GAAP net income (loss) available to common shares primarily comprised net credit swap revenue (loss) of $(136.3) million and $125.4 million for the nine months ended September 30, 2011 and 2010, respectively. Net credit swap revenue (loss) for the periods was chiefly attributable to unrealized mark-to-market gains (losses) on Primus Financial’s credit swap portfolio.
Net unrealized gains (losses) on credit swaps were $(153.1) million and $163.4 million for the nine months ended September 30, 2011 and 2010, respectively. The change in unrealized gains (losses) on credit swaps reflects fluctuations in market credit swap premium levels, reductions in the average remaining maturity and contractions in the notional size of the credit swap portfolio in those periods. In addition, payments to counterparties for the settlement of credit events or early termination or amendment of credit swaps during the nine months ended September 30, 2011 and 2010 reduced the liability for unrealized losses on credit swaps. Primus Financial makes a nonperformance risk adjustment in determining the fair value of its credit swap liabilities. During the nine months ended September 30, 2011 and 2010, Primus Financial recorded gains (losses) from nonperformance risk adjustments of $104.1 million and $(101.8) million, respectively, which is reflected in net credit swap revenue (loss) in these periods.
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