Principal Financial to price $1,000-par fixed-to-floating junior subordinated notes due 2055

By Stephanie N. Rotondo

Phoenix, May 4 – Principal Financial Group Inc. is offering $1,000-par fixed-to-floating rate junior subordinated notes due 2055, the company said in a prospectus filed with the Securities and Exchange Commission on Monday.

Price talk is in the 4.875% area, according to a trader.

The notes will be fully and unconditionally guaranteed by Principal Financial Services Inc.

BofA Merrill Lynch, HSBC, Wells Fargo Securities LLC, Barclays, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the joint bookrunners.

The interest rate will be fixed and payable semiannually through 2020. The notes will then pay interest on a floating-rate basis, coming quarterly.

The Des Moines-based insurance company will have the option to defer any interest payment for one or more consecutive periods, but not exceeding five years.

The notes become redeemable in 2020. However, the company can redeem the debt prior to that date within 90 days of a rating agency or tax event.

Proceeds will be used to redeem the company series A and B noncumulative preferred stock.

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