Primus Guaranty (PRSG) 10-Q 2008 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
	September 30,			Year Ended December 31,
	2008			2007			2006			2005			2004			2003
Earnings (loss):
Net earnings (loss)	$	(797,694	)	$	(563,541	)	$	94,891		$	4,083		$	23,685		$	78,471
Provision (benefit) for taxes		61			52			42			46			46			(172	)
Distributions on preferred securities of subsidiary		5,144			7,568			5,683			3,865			2,138			1,854
Income (loss) from continuing operations before taxes (a)		(792,489	)		(555,921	)		100,616			7,994			25,869			80,153
Add:
Fixed charges		18,216			28,608			16,698			6,589			3,033			1,854
Subtract:
Distributions on preferred securities of subsidiary		(5,144	)		(7,568	)		(5,683	)		(3,865	)		(2,138	)		(1,854	)
Adjusted earnings (loss)	$	(779,417	)	$	(534,881	)	$	111,631		$	10,718		$	26,764		$	80,153
Fixed charges:
Interest expense		12,838			20,729			10,849			2,660			881			—
Amortization of capitalized debt issuance costs		234			311			166			64			14			—
Distributions on preferred securities of subsidiary		5,144			7,568			5,683			3,865			2,138			1,854
Total fixed charges and preferred distributions	$	18,216		$	28,608		$	16,698		$	6,589		$	3,033		$	1,854
Ratio of earnings to combined fixed charges and distributions on preferred securities of subsidiary		(42.79	)(b)		(18.70	)		6.69			1.63			8.82			43.23

(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 loss for the nine months ended September 30, 2008, the ratio coverage was less than 1:1. Additional earnings of $797.6 million would be needed to achieve the coverage ratio of 1:1.