NEW YORK (Bloomberg) — Bermuda-based Primus Guaranty Ltd. said it will sell an asset-management unit to Commercial Industrial Finance Corp. almost 15 months after buying the business.

CIFC, led by former JPMorgan Chase & Co. syndicated loan head Peter Gleysteen, will acquire Primus' CypressTree Investment Management, which manages about $2.8 billion of leveraged loans and high-yield bonds in eight collateralised loan obligations, Hamilton, Bermuda-based Primus said yesterday in a statement.

Primus is selling a unit it bought to expand its asset-management arm after being shut out of its primary business of selling credit-default swap guarantees to banks and other financial firms when credit markets seized up in 2007. The firm, with $14 billion in swaps guaranteeing corporate and government debt, has sought capital to rebuild the company.

With almost all of Primus' capital supporting its swaps business, "We knew that as we implemented this strategy we would require additional outside capital," chief executive officer Thomas Jasper said last month in a letter to shareholders.

The company this year considered "various capital-raising opportunities," Jasper said in the August 12 letter. "All of them, however, proved unattractive because they would potentially be too dilutive." Primus didn't disclose the terms of the deal in its statement and Steven Kennedy, a spokesman for the company, declined to comment further. Gleysteen didn't immediately return a phone call.

CLOs, a type of collateralised debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return, have risen in value since Primus bought CypressTree as the price of the debt has climbed.

The S&P/LSTA US Leveraged Loan 100 Index has increased to 90.24 cents on the dollar from 79.37 cents when Primus completed the acquisition in July 2009.

CIFC, based in New York, is also buying Primus' total-rate- of-return swap and a so-called synthetic collateralised debt obligation managed by CypressTree that bets on debt using credit-default swaps.