Bermuda-based financial guarantor Primus Guaranty Ltd. yesterday announced a net loss of $918.5 million for the fourth quarter, citing turmoil in the credit markets.

The company, which provides around $22.5 billion in credit protection for clients, has suffered from the dramatic decline in value of its credit default swap portfolio.

For the full year 2008, Primus recorded a net loss of $1.7 billion, or $38.37 per share, compared with a net loss of $563.5 million, or $12.87 per share in 2007.

"The turmoil in the credit markets continued to have a significant impact on our performance during the fourth quarter," said Primus chief executive officer Thomas Jasper. "However, while market conditions remain extremely difficult, the actions taken by governments and central banks to help restore confidence in the financial system and major financial institutions were a benefit to our credit protection business.

"As a result of recent economic and financial developments, we are adapting our strategic and business focus to the realities and opportunities that we see ahead in the credit markets.

"Our major focus continues to be unlocking the embedded value in Primus Financial's credit swap portfolio for shareholders and building our structured credit asset management business."

The fourth-quarter loss, which broke down to $21.20 per share, was primarily the result of net unrealised mark-to-market losses on the credit swap portfolio of $859.7 million, after the inclusion of a favourable non-performance risk adjustment of $537.6 million, the company said.