S&P puts Principal Financial on watch

Standard & Poor's said it placed its ratings, including the A counterparty credit rating, on Principal Financial Group Inc. and its subsidiaries on CreditWatch with negative implications.

The agency said the CreditWatch placement reflects the deteriorating business and macroeconomic conditions, which are increasing the pressure on the group's earnings, investments and capital adequacy position. The company has been proactive with its expense management initiatives, S&P said, but these have not been sufficient to stem the decline in the fixed-charge coverage ratio.

The CreditWatch placement also reflects the company's need to refinance $455 million in term debt coming due in August 2009 and reliance to a limited degree on commercial paper for some of its working capital requirements, S&P said. The agency added that while the firm does have the ability redeem this debt outstanding from internal sources, doing so would diminish its financial flexibility.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.