By Stephanie N. Rotondo
Phoenix, May 4 – Principal Financial Group Inc. priced $400 million of 4.7% $1,000-par fixed-to-floating rate junior subordinated notes due May 15, 2055 on Monday, according to a market source.
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 May 15, 2020. The notes will then pay interest on a floating-rate basis – Libor plus 304.4 basis points – and will be payable 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 on or after May 15, 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.
| Issuer: | Principal Financial Group Inc.
|
| Securities: | Fixed-to-floating rate junior subordinated notes
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| Amount: | $400 million
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| Maturity: | May 15, 2055
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| Bookrunners: | BofA Merrill Lynch, HSBC, Wells Fargo Securities LLC, Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co.
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| Coupon: | Fixed at 4.7% until May 15, 2020, then floating at Libor plus 304.4 bps
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| Price: | Par of $1,000
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| Yield: | 4.7%
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| Talk: | 4.875% area
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| Call options: | On or after May 15, 2020 or within 90 days of a rating agency or tax event at par plus accrued interest
|
| Pricing date: | May 4
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