Moodys.com
Close
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Related Issuers
Principal Financial Global Funding, LLC
Principal Financial Group (Australia) Pty Ltd
Principal Financial Group, Inc.
Principal Financial Services, Inc.
Principal Life Global Funding I
Principal Life Income Fundings Trust 1
Principal Life Income Fundings Trust 2
Principal Life Income Fundings Trust 2004-1
Principal Life Income Fundings Trust 2004-10
Principal Life Income Fundings Trust 2004-11
Principal Life Income Fundings Trust 2004-18
Principal Life Income Fundings Trust 2004-19
Principal Life Income Fundings Trust 2004-2
Principal Life Income Fundings Trust 2004-20
Principal Life Income Fundings Trust 2004-21
Principal Life Income Fundings Trust 2004-22
Principal Life Income Fundings Trust 2004-23
Principal Life Income Fundings Trust 2004-24
Principal Life Income Fundings Trust 2004-25
Principal Life Income Fundings Trust 2004-26
Principal Life Income Fundings Trust 2004-27
Principal Life Income Fundings Trust 2004-28
Principal Life Income Fundings Trust 2004-29
Principal Life Income Fundings Trust 2004-3
Principal Life Income Fundings Trust 2004-30
Principal Life Income Fundings Trust 2004-31
Principal Life Income Fundings Trust 2004-32
Principal Life Income Fundings Trust 2004-33
Principal Life Income Fundings Trust 2004-34
Principal Life Income Fundings Trust 2004-35
Principal Life Income Fundings Trust 2004-4
Principal Life Income Fundings Trust 2004-5
Principal Life Income Fundings Trust 2004-6
Principal Life Income Fundings Trust 2004-7
Principal Life Income Fundings Trust 2004-8
Principal Life Income Fundings Trust 2004-9
Principal Life Insurance Company
Rating Action:

MOODY'S UPGRADES PRINCIPAL LIFE INSURANCE COMPANY'S INSURANCE FINANCIAL STRENGTH RATING TO Aa2; AFFILIATED RATINGS ALSO RAISED

10 Sep 2004
MOODY'S UPGRADES PRINCIPAL LIFE INSURANCE COMPANY'S INSURANCE FINANCIAL STRENGTH RATING TO Aa2; AFFILIATED RATINGS ALSO RAISED

New York, September 10, 2004 -- Moody's upgraded Principal Life Insurance Company's insurance financial strength rating to Aa2 from Aa3. Moody's also upgraded the commercial paper rating of Principal Financial Services, Inc. (PFSI), Principal Life's intermediate holding company, to Prime-1 from Prime-2, and raised the senior debt rating of Principal Financial Group (Australia) Pty, Ltd. (which was assumed and is guaranteed by PFSI), to A2 from A3. Other affiliated ratings were also raised (see list below). The rating outlook for Principal Life and all of its affiliates is stable. This concludes a review for possible upgrade initiated on May 12, 2004, following Principal Financial Group's (PFG) announcement of its proposed sale of its residential mortgage banking subsidiary, Principal Residential Mortgage, Inc. (PRMI), to Citigroup for approximately $1.3 billion.

According to the rating agency, the upgrade was based on the significant improvement in Principal Life's risk profile as a result of the PRMI sale, which closed on July 1, 2004. PRMI was both an important participant in the US residential mortgage banking market and a sizable operation for PFG. While the subsidiary could at times be highly profitable, its underlying origination and mortgage servicing businesses were, in Moody's view, significantly riskier than its insurance businesses, and subject to substantial earnings swings.

For example, in 2003 and the first half of 2004, PRMI's earnings were sharply curtailed by downward valuation adjustments and model assumption changes caused by persistent low interest rates and higher-than-expected mortgage prepayment activity. PRMI's significant mortgage "pipeline" debt (which was transferred to Citigroup as part of the sale and repaid) and its hedging activities were additional sources of risk for PFG. Moody's believes that although PFG will be challenged to replace PRMI's earnings, the loss will be more than offset by the improvement in the group's overall risk profile.

At the same time, Moody's noted that Principal Life's NAIC Risk-Based Capital (RBC) ratio was adversely affected by the sale of PRMI . PRMI was an indirect subsidiary of the life insurance company, and therefore, part of its statutory capital. Moody's expects Principal Life's NAIC RBC ratio to recover to at least 375% by year-end 2004, however. The company's NAIC RBC ratio stood at 444% at year end 2003.

Commenting further on the sale of PRMI, the rating agency added that Principal Life can now focus more fully on the growth of its core group pension business. Moody's views Principal Life's leadership in this market, together with its efficient, technology-based operations, and disciplined financial, investment, asset-liability management capabilities as key strengths. The company's life and health businesses, as well as PFG's other insurance and non insurance activities, both in the US and abroad, provide additional revenue and earnings diversity to the group.

These strengths are tempered by the growing exposure of Principal Life's core pension business to equity market risk and competitive pricing pressures, by the continuing growth of its "investment-only" spread business, and by the company's relatively high direct exposure to commercial mortgages and real estate, in terms of total investments and capital (albeit well managed). In addition, while PFG's nominal consolidated financial leverage declined significantly with the sale of PRMI and remains moderate relative to its peers, Moody's believes that financial leverage and capital will remain under public shareholder pressure for higher ROEs, via share repurchases, acquisitions, and/or higher levels of debt.

Moody's has included in its rating expectations the possibility that PFG will use the cash proceeds from the PRMI sale (i.e., up to approximately $630 million) for stock repurchases. A major acquisition with the proceeds is in not in Moody's rating expectations (see below).

Factors that could lead to a rating upgrade include: significant expansion of Principal Life's core full-service and qualified pension and life insurance franchises, resulting in a sustainable increase in statutory net income (20% or more) over several consecutive quarters; divestiture of PFG's commercial mortgage banking operations; a permanent reduction in PFG's consolidated GAAP financial leverage to below 20% (currently 21% at June 30, 2004); NAIC RBC ratio of above 400%.

Factors that could result in a rating downgrade include: a sizable acquisition (over $500 million) or expansion into new/higher risk/foreign business; material deterioration of Principal Life's core full-service and qualified pension business, with permanent reduction of statutory net income by 20% or more over several consecutive quarters; increase in "investment-only" institutional spread business to over 35% of general account reserves at Principal Life; consolidated financial leverage at PFG of above 25%; reduction in NAIC RBC ratio to below 350%.

The following ratings were upgraded:

Principal Life Insurance Company: insurance financial strength to Aa2 from Aa3; surplus notes to A1 from A2;

Principal Financial Services, Inc.: rating for commercial paper to Prime-1 from Prime-2;

Principal Financial Group, (Australia) PTY (assumed and guaranteed by Principal Financial Services Inc.): senior debt to A2 from A3;

Principal Financial Global Funding, LLC (program rating of senior notes): to Aa2 from Aa3;

Principal Life Global Funding I (program rating of senior notes): to Aa2 from Aa3;

Principal Life Income Fundings Trusts (program rating of senior notes): to Aa2 from Aa3;

The following prospective universal shelf ratings of Principal Financial Group, Inc. were also upgraded:

Senior debt and related depositary shares, warrants, purchase contracts, purchase units to (P) A3 from (P)Baa1; subordinated debt, junior subordinated debt and related depositary shares, warrants, purchase contracts, purchase units to (P)Baa1 from (P)Baa2; preferred stock and related depositary shares, warrants, purchase contracts, purchase units to (P) Baa2 from (P)Baa3;

Principal Capital I, II and III: preferred stock and related purchase contracts and purchase units to (P)Baa1 from (P)Baa2.

Principal Life Insurance Company is the lead operating company of Principal Financial Group, Inc., a diversified life insurance and financial services group based in Des Moines, Iowa. At June 30, 2004, Principal Life had total statutory assets of $94 billion, and statutory capital of approximately $4.6 billion. At June 30, 2004, the Principal Financial Group, Inc. reported total consolidated assets of approximately $111 billion and shareholders' equity of approximately $7 billion.

Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. For more information, visit our website at www.moodys.com/insurance.

New York
Robert Riegel
Managing Director
Life Insurance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Laura Bazer
VP - Senior Credit Officer
Life Insurance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

No Related Data.
© 2019 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​
Moodys.com