Bermuda-based corporate credit manager Primus Guaranty said one of its subsidiaries had paid $6.5 million to terminate a major portfolio of credi-default swaps.

The deal between Primus Financial Products and "a significant counterparty", who was not named, terminated $1.3 billion of notional principal of credit swaps, the company said yesterday.

"Included in this portfolio were a small number of reference entities which Primus Financial concluded had a high risk profile, including certain financial guarantors," Primus said in a press release.

This is the second credit mitigation transaction that Primus Financial has completed and announced in recent months. Through these transactions, Primus Financial has terminated approximately $1.4 billion of single-name credit swaps, and has capped its exposure to an additional $1.2 billion of credit swaps, assigning them to a newly formed, wholly owned subsidiary.

The company continues to discuss with its counterparties potential credit mitigation transactions, as it actively manages its credit protection portfolio in amortisation.