S&P lowers Primus

Standard & Poor's said it lowered Primus Financial Products LLC's issuer credit rating to AA- from AA+. Ratings remain on CreditWatch with negative implications, where they were placed Sept. 26.

The action reflects the fact that Primus' credit derivative portfolio has weakened further and view regarding the uncertainty of the outcome of the settlement of Primus' swaps with Lehman Brothers Special Financing Inc. (

Primus has absorbed losses due to credit event settlements on several of the reference entities in its credit derivative portfolio, including Freddie Mac, Fannie Mae, Lehman Brothers Holdings Inc., Washington Mutual Inc. and Kaupthing Bank, the agency said.

S&P said it downgraded the company because its analytic approach incorporates the need for adequate capital resources to address potential termination payments.

Primus may experience further losses as a result of credit events from the reference obligors that have ratings below B, the agency noted.

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