1170593--3/16/2010--PRIMUS_GUARANTY

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{loan, real, estate}

{interest, director, officer}

{loss, insurance, financial}

{provision, law, control}

{regulation, change, law}

{tax, income, asset}

{property, intellectual, protect}

{debt, indebtedness, cash}

{system, service, information}

{competitive, industry, competition}

{personnel, key, retain}

{operation, international, foreign}

{acquisition, growth, future}

{stock, price, share}

{stock, price, operating}

We face risks in Primus Financial s credit protection business from concentrations in its single name credit swaps sold on issuers in certain industries. Primus Financial s counterparties are primarily global financial institutions and major credit swap dealers. Some of these institutions have been under stress which has impacted their balance sheets, capital ratios and ratings and many have had to raise large amounts of new capital. A default by a major counterparty could have a material adverse impact on Primus Financial. Primus Financial s tranche portfolio of credit swaps also creates risks for us. As a result of the disruption in the credit markets, management has changed its strategy to amortize Primus Financial s credit swap portfolio and to emphasize our credit asset management expertise by expanding our asset management activities and developing a new credit protection platform as a replacement for our credit protection business. There can be no assurance that our new business plan will be successful. Our operations may become subject to increased regulation or existing regulations may change, which may result in administrative burdens, increased costs or other adverse consequences. We may have difficulty in servicing our outstanding debt. We may require additional capital in the future, which may not be available on favorable terms or at all. We depend on a limited number of key employees. If we are not able to retain key employees or attract new employees in the future, we may be unable to operate our business successfully. Variations in market credit swap premiums and correlation levels could cause our financial results to be volatile. Certain of our principal shareholders control us. Our rights plan may have anti-takeover effects that could prevent a change of control. The commercial and investment activities of some of our principal shareholders and directors may compete with our business. There can be no assurance that funds will be available to pay cash dividends on our common shares. We are exposed to significant credit market risk related to changes in foreign exchange rates which may adversely affect our results of operations, financial condition or cash flows. We are highly dependent on information systems and third-party service providers. We face potential exposure to litigation and claims within our business and strategy. Our status as a PFIC may result in significant additional tax costs for shareholders who are U.S. taxpayers. If we are found to be engaged in a U.S. trade or business, we may be liable for significant U.S. taxes. If the IRS successfully challenges the treatment Primus Financial has adopted for its credit swap transactions, the timing and character of taxable income recognized by Primus Financial could be adversely affected. Risks Related to Our Status as a Bermuda Company It may be difficult to effect service of process and enforcement of judgments against us and our officers and directors

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1170593--3/16/2010--PRIMUS_GUARANTY_LTD