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Principal Financial Group, Inc. Announces Companys Application to theU.S. Department of the Treasury's Capital Purchase Progra

^{Published on 2008-11-18 16:20:11 - Market Wire}
 

DES MOINES, Iowa--([ BUSINESS WIRE ])--Principal Financial Group, Inc. (NYSE: PFG) today announced that it has applied to participate in the U.S. Department of the Treasury's Capital Purchase Program (TCPP), as a savings and loan holding company subject to oversight of the Office of Thrift Supervision. If The Principal participates in TCPP, the company would issue preferred shares and warrants to the Treasury. The amount for which a company can apply is prescribed by the application. The Principal has applied for and could participate up to $2 billion.

As a diversified financial services company providing investment, banking, retirement and insurance products to businesses and individuals, the company is a significant provider of credit and liquidity to U.S. corporate and consumer markets. The proceeds will allow the company to continue to: fulfill that role; support and capitalize the company's federal savings bank subsidiary, Principal Bank; and support the ongoing organic growth needs of the company's operating units.

Reflecting the company's financial strength, operating performance and ability to meet its obligations, on November 7, 2008, Principal Life Insurance Company's insurance financial strength rating was affirmed by Moody's Investors Service at 'Aa2', Excellent, with a stable outlook, and on September 5, 2008, Principal Life's insurer financial strength rating was affirmed by Fitch Ratings at 'AA', Very Strong, with a stable outlook. The company believes it is prudent to consider the TCPP as another option to build on its position of financial strength, by adding to its capital cushion in a time of volatile and uncertain market conditions.

Forward looking and cautionary statements

This press release contains forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update or revise these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended December 31, 2007, and in the company's quarterly report on Form 10-Q for the quarter ended September 30, 2008, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions that may significantly affect the company's ability to meet liquidity needs, access to capital and cost of capital; difficult conditions in the global capital markets and the general economy, which the company does not expect to improve in the near future, that may adversely affect the company's business and results of operations; the actions of the U.S. government, Federal Reserve and other governmental and regulatory bodies for purposes of stabilizing the financial markets, which might not achieve their intended effect; the risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets recognized at the time of acquisition; the impairment of other financial institutions that could adversely affect the company; investment risks which may diminish the value of the company's invested assets and the investment returns credited to customers, which could reduce sales, revenues, assets under management and net income; requirements to post collateral or make payments related to declines in market value of specified assets, which may adversely affect company liquidity and expose the company to counterparty credit risk; changes in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.'s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and default of the company's re-insurers.

About the Principal Financial Group

The Principal Financial Group^® (The Principal ^®)¹ is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $287.4 billion in assets under management² and serves some 19.0 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit [ www.principal.com ].

¹ "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

² As of September 30, 2008