Moody's: Principal Financial view stable

Moody's Investors Service said it affirmed the guaranteed senior unsecured debt ratings at A3 of Principal Financial Group Inc., but changed the outlook to stable from negative.

The action follows the company's recent issuance of $1.15 billion of common equity, as well as $750 million of new senior debt, the proceeds of which are expected to be used to repay the $455 million of outstanding senior debt at downstream holding company, Principal Financial Services, Inc., maturing in August 2009 and for general corporate purposes

"The funds provide the group with needed capital to absorb the elevated level of investment losses and increases in capital requirements from securities' ratings transition anticipated over the next few years," Moody's vice president Laura Bazer said in a statement.

"PFG's credit profile is heavily exposed and sensitive to the commercial real estate markets with both CMBS securities and commercial mortgage loans, and the recent capital raise will help mitigate any unanticipated adverse performance on those asset classes," Bazer said.

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