Primus Guaranty (PRSG) 10-Q 2009 Q3 Quarterly report

EXHIBIT 12

PRIMUS GUARANTY, LTD

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED
DISTRIBUTIONS OF SUBSIDIARY
(In thousands, except ratios)

	Nine Months Ended			Years Ended December 31,
	September 30, 2009			2008			2007			2006			2005			2004
Earnings (loss):
Net income (loss) available to common shares	$	1,165,279		$	(1,716,146	)	$	(563,541	)	$	94,891		$	4,083		$	23,685
Provision (benefit) for taxes		152			61			52			42			46			46
Distributions on preferred securities of subsidiary		2,740			6,642			7,568			5,683			3,865			2,138
Income (loss) from continuing operations before taxes (a)		1,168,171			(1,709,443	)		(555,921	)		100,616			7,994			25,869
Add:
Fixed charges		9,834			23,674			28,297			16,532			6,525			3,019
Subtract:
Distributions on preferred securities of subsidiary		(2,740	)		(6,642	)		(7,568	)		(5,683	)		(3,865	)		(2,138	)
Adjusted earnings (loss)	$	1,175,265		$	(1,692,411	)	$	(535,192	)	$	111,465		$	10,654		$	26,750
Fixed charges:
Interest expense		7,094			17,032			20,729			10,849			2,660			881
Distributions on preferred securities of subsidiary		2,740			6,642			7,568			5,683			3,865			2,138
Total fixed charges and preferred distributions	$	9,834		$	23,674		$	28,297		$	16,532		$	6,525		$	3,019
Ratio of earnings to combined fixed charges and distributions on preferred securities of subsidiary (b)		119.51			(71.49	)		(18.91	)		6.74			1.63			8.86

(a)	Income (loss) from continuing operations before taxes represents income (loss) before income taxes plus adding back distributions on preferred securities of subsidiary.
(b)	Due to the losses for the years ended December 31, 2008 and 2007, respectively, the ratio coverage was less than 1:1. Additional earnings of approximately $1.7 billion and $563.5 million for the years ended December 31, 2008 and 2007, respectively, would be needed to achieve the coverage ratio of 1:1.