Bermuda-based Primus Guaranty, Ltd. reported a $13.9 million net loss for the first quarter of 2005 compared with a net loss of $8.3 million for the first quarter of 2004.

The provider of credit protection said in its financial report released yesterday that the quarterly net losses for 2005 and 2004 included declines in the fair value of the credit swap portfolio of $19.5 million and $14.5 million respectively for the periods. The company also incurred an unusual expense in the first quarter 2005 of approximately $800 thousand due to accelerated compensation expense as a result of personnel changes.

?Though GAAP results were negative, due to unrealised mark-to-market losses on our portfolio of credit swaps sold, I was quite pleased with the Economic Results for the quarter. Our team demonstrated their ability to take advantage of the opportunities presented particularly towards the end of the quarter, as increasing volatility in credit spreads created attractive new investment opportunities for the core business,? said Thomas Jasper, Chief Executive Officer.

?Further, this market volatility helped us to complete our initial tranche transaction in the first few weeks of the second quarter, enabling us to leverage our core business to enhance the growth in the portfolio.

?Looking forward in 2005, we expect to see continuing volatility in credit swap premiums, giving us opportunities to grow our portfolio of credit swaps at attractive premium levels. Further, we will continue to leverage our core competencies by growing and developing the asset management business,? he said.