Published on 11/3/2016 in the Prospect News Investment Grade Daily.
New Issue: Principal Financial Group sells $650 million of notes due 2026, 2046
By Cristal Cody
Eureka Springs, Ark., Nov. 3 – Principal Financial Group, Inc. sold $650 million of senior notes (Baa1/BBB+) in two tranches on Thursday, according to a market source and an FWP filing with the Securities and Exchange Commission.
The company priced $350 million of 3.1% 10-year notes at 99.854 to yield 3.117%. The notes priced with a spread of 130 basis points over Treasuries.
Principal Financial Group sold $300 million of 4.3% 30-year notes at 99.882 to yield 4.307%, or 170 bps over Treasuries.
Both tranches priced on the tight side of guidance.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Barclays, Goldman Sachs & Co., BofA Merrill Lynch, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the bookrunners.
The notes are guaranteed by Principal Financial Services, Inc.
Proceeds will be used with available cash to purchase any 1.85% notes and 8.875% notes tendered in a tender offer and to redeem any 1.85% notes and 8.875% notes that are not tendered.
The retirement savings, investment and insurance products company is based in Des Moines.
| Issuer: | Principal Financial Group, Inc.
|
| Guarantor: | Principal Financial Services, Inc.
|
| Amount: | $650 million
|
| Description: | Senior notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Barclays, Goldman Sachs & Co., BofA Merrill Lynch, U.S. Bancorp Investments Inc., Wells Fargo Securities LLC
|
| Co-managers: | BNP Paribas Securities Corp., BNY Mellon Capital Markets, LLC, RBC Capital Markets, LLC, Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Mizuho Securities USA Inc., Samuel A. Ramirez & Co., Inc., UBS Securities LLC, Williams Capital Group, LP
|
| Trade date: | Nov. 3
|
| Settlement date: | Nov. 10
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| Ratings: | Moody’s: Baa1
|
| S&P: BBB+
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| Distribution: | SEC registered
|
|
|
| 10-year notes
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| Amount: | $350 million
|
| Maturity: | Nov. 15, 2026
|
| Coupon: | 3.1%
|
| Price: | 99.854
|
| Yield: | 3.117%
|
| Spread: | Treasuries plus 130 bps
|
| Price guidance: | Treasuries plus 130 bps-135 bps area
|
| Call feature: | Before Aug. 15, 2026 at greater of par or Treasuries plus 20 bps; thereafter at par
|
|
|
| 30-year notes
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| Amount: | $300 million
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| Maturity: | Nov. 15, 2046
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| Coupon: | 4.3%
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| Price: | 99.882
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| Yield: | 4.307%
|
| Spread: | Treasuries plus 170 bps
|
| Price guidance: | Treasuries plus 170 bps-175 bps area
|
| Call feature: | Before May 15, 2046 at greater of par or Treasuries plus 30 bps; thereafter at par
|
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