Attributing the result primarily to changes in the fair value of its credit default swap (CDS) portfolio and corporate defaults, the company reported realised net losses from credit events of $65.2 million. As of the close of the year, the notional value of its CDS portfolio shrunk from $22.9 billion at the end of the third quarter to $22.5 billion. This compares with a total notional value of $23 billion on December 31, 2007.
Escalating corporate defaults and the likelihood of diminished cashflows led Standard & Poor's to downgrade Primus to CCC on December 12.
"The turmoil in the credit markets continued to have a significant impact on our performance during the fourth quarter. However, while market conditions remain extremely difficult, the actions taken by governments and central banks to help restore confidence in the financial system and major financial institutions were a benefit to our credit protection business," chief executive Thomas Jasper said in a statement.