NEW YORK (Bloomberg) — A unit of Bermuda-based Primus Guaranty Ltd. that manages $22.5 billion in credit-default swaps had its ratings cut by Standard & Poor's for the fifth time in less than six months as the corporate debt it guarantees deteriorates.

S&P lowered its issuer credit rating on Primus Financial Products LLC by two levels to BBB+, the third-lowest investment-grade ranking, according to a statement from the ratings firm. The rating was lowered because of "further deterioration" of the rankings of companies on which Primus sold default protection, S&P said.

Primus also will have to pay out on $10 million in credit swaps guaranteeing the debt of Idearc Inc., which has filed for bankruptcy protection, according to a statement this week from Primus.

Primus, a so-called credit-derivative product company that sold debt guarantees to banks and other financial companies, is barred from doing new business because of a downgrade from S&P in February. S&P had assigned its top rating of AAA to the Primus unit before cutting it for the first time in October. Moody's Investors Service last month cut the unit's rating below investment grade to Ba2 before withdrawing the rating at the company's request.

In credit swaps, the seller pays the buyer face value of the underlying security in exchange for the debt or the cash equivalent should the borrower default.

Primus has said that it isn't required to post collateral with its counterparties as the value of its credit swaps contracts declines, and ratings downgrades don't change that.