Primus to Sell CypressTree Subsidiary to CIFC

Primus Guaranty, Ltd. (NYSE:PRS), today announced it has entered into a binding letter of intent to sell CypressTree Investment Management, LLC (CypressTree), its third-party asset management subsidiary, to Commercial Industrial Finance Corp. (CIFC). Terms of the transaction were not disclosed.

CypressTree manages or subadvises approximately $2.8 billion of high yield and leveraged loan assets in eight collateralized loan obligations (CLOs). These CLOs include: Primus CLO I and II, and Hewett’s Island CLO I-R, II, III, IV, V and VI. The collateral management contracts for the eight CLOs will be included in the sale. A total rate of return swap and a collateralized swap obligation managed by CypressTree also will be included in the sale.

CIFC is a top-performing credit asset management business that manages $3.6 billion in assets across seven CLOs. The firm’s team of 15 investment professionals averages 17 years of experience and is led by Peter Gleysteen, a pioneer of the U.S. corporate loan market.

"The divestiture of CypressTree is part of our previously announced plan to focus on managing and preserving the value of our credit protection business in amortization,” said Thomas W. Jasper, Primus Guaranty’s chief executive officer. "While CLO management is no longer a core business for Primus, CIFC’s talent, experience and track record helps to ensure that our CLOs and CLO investors remain in the hands of one of the premier credit investment firms.”

Peter Gleysteen, CIFC’s chief executive officer, stated, "We are pleased to add the CypressTree business to our existing platform. With this transaction, CIFC will have over $6 billion in assets under management, and we believe that the additional scale and our leading track record will be beneficial to all debt and equity investors in the CypressTree, Primus and CIFC CLOs.”

Primus Guaranty’s credit protection business, which consists of Primus Financial Products’ $14 billion portfolio of credit default swaps, is not affected by the sale. Primus Financial Products will remain part of Primus Guaranty and will continue to be managed by Primus Financial portfolio managers.

Berkshire Capital Securities LLC acted as advisor to Primus on the sale of the CLO business.

CLO Investor Questions

Investors in the Hewett’s Island and Primus CLOs with questions are encouraged to contact either Ms. Martha Hadeler of CypressTree at 617/371-9320 or mhadeler@cyptree.com, or Ms. Nga Tran, CIFC’s Head of Institutional Relationships, at 212/624-1204 or ntran@cifc.com.

About Primus Guaranty

Primus Guaranty, Ltd. is a Bermuda company with operations in New York, Boston and London. Through its subsidiaries, the company is a leading manager of corporate credit assets and provider of credit protection. Primus manages assets in structured credit funds and operating companies, across a range of asset classes – including investment grade, high yield and leveraged loans – using both cash and synthetic instruments.

About CIFC

Commercial Industrial Finance Corp. (CIFC) is a top performing corporate credit asset management business, combining the best credit practices of banks and asset managers. CIFC is a proactive, fundamentals-based corporate credit manager with best-in-class processes and controls, high transparency to investors and a proprietary credit technology platform. CIFC is based in New York and is an SEC registered investment adviser.

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 U.S. 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.