Fitch lifts Principal Financial view to stable

Fitch Ratings said it affirmed Principal Financial Group, Inc.’s long-term issuer default rating at A, along with the insurer financial strength rating at AA- on its U.S. operating subsidiaries.

The agency also said it revised the company’s outlook to stable from negative.

Fitch also said it affirmed and withdrew the ratings of Principal Financial’s funding agreement-backed notes issuance programs as the ratings are no longer considered to be relevant to the agency’s coverage.

The ratings affirmed also include the company’s $300 million 1.85% notes due Nov. 2017 at A-, $350 million 8.875% notes due May 2019 at A-, $300 million 3.3% notes due Sept. 2022 at A-, $300 million 3.125% notes due May 2023 at A-, $600 million 6.05% notes due Oct. 2036 at A-, $300 million 4.625% notes due Sept. 2042 at A-, $300 million 4.35% notes due May 2043 at A-, 5.563% preferred stock due 2015, series A at BBB and 6.518% preferred stock due 2035, series B at BBB.

The affirmation reflects the company’s strong capitalization and stable, balanced operating profitability, Fitch said.

These strengths are partially offset by its increased financial leverage and above-average exposure to direct mortgages and structured mortgage securities, the agency said.

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