TEXT-Fitch rates Principal Financial Group's notes 'A-'
Sept 20 - Fitch Ratings has assigned an 'A-' rating to Principal Financial Group, Inc.'s (PFG) recent issuance of $300 million of 10-year 3.30% senior unsecured notes and $300 million of 30-year 4.625% senior unsecured notes. PFG's long-term Issuer Default Rating is unaffected by this rating action. Fitch affirmed the ratings of PFG and its insurance operating subsidiaries with a Stable Outlook on June 25, 2012. The notes are guaranteed by PFG's intermediate holding company, Principal Financial Services, Inc., of which the organization's primary operating companies are wholly owned subsidiaries. This includes Principal Life Insurance Company, PFG's largest insurance operating subsidiary and the source of the vast majority of the overall organization's operating cash flow. Fitch expects proceeds from the debt issuance to be used to help fund PFG's ongoing growth, which is expected to be achieved both organically and through moderately-sized acquisitions, and potentially to fund the repayment of PFG's $400 million of senior unsecured notes maturing in May 2014. Fitch does not expect the issuance of the new senior debt to result in an increase in PFG's financial leverage ratio above Fitch's rating trigger of 25%. The company's financial leverage was approximately 18% at June 30, 2012. PFG, headquartered in Des Moines, IA, markets a range of retirement savings, investment and insurance products and services primarily in the small- to medium-sized business segment. PFG reported consolidated assets of $152 billion, and total shareholders' equity of $9.4 billion at June 30, 2012. Fitch has assigned the following ratings: Principal Financial Group, Inc. --$300 million 3.3% senior unsecured notes due 2022 'A-'; --$300 million 4.625% senior unsecured notes due 2042 'A-'. Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable Criteria and Related Research: --'Insurance Rating Methodology' (Sept. 19, 2012); --'Principal Financial Group' (July 24, 2012). Applicable Criteria and Related Research: Insurance Rating Methodology