Fitch rates Principal Financial notes A-, BBB

Fitch Ratings said it assigned an A- rating to Principal Financial Group, Inc.'s issuance of roughly $400 million of 10-year senior unsecured notes and a BBB rating to its issuance of about $400 million of 40-year junior subordinated debentures.

The long-term issuer default rating is unaffected by this action.

The notes are guaranteed by Principal Financial Services, Inc., PFG's intermediate holding company, whose long-term issuer default rating is currently A. Fitch affirmed the ratings of PFG and its insurance operating subsidiaries with a stable outlook on April 13.

Roughly $550 million of the proceeds are expected to be used to redeem PFG's series A non-cumulative perpetual preferred stock and series B non-cumulative perpetual preferred stock, with the remainder expected to be used for general corporate purposes.

Fitch said the ratings are supported by PFG’s strong competitive position in several key markets and product lines, strong capitalization and stable and balanced earnings profile, partially offset by above-average exposure to direct mortgages and structured mortgage securities. The company's recent operating performance has been strong.

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