Moody’s rates Principal Financial notes Baa1

Moody's Investors Service said it assigned a Baa1 senior debt rating to about $650 million of senior notes to be issued by Principal Financial Group, Inc. (guaranteed senior unsecured debt at Baa1, stable) under an existing shelf registration with the Securities and Exchange Commission.

The notes, which will be issued in tranches of $350 million and $300 million, maturing in 10 and 30 years, respectively, will be guaranteed by Principal Financial Services, Inc. (issuer rating at Baa1, stable outlook), Principal Financial Group’s intermediate holding company.

The outlook is stable.

Net proceeds will be used to help redeem up to $800 million of senior debt under separate tender offers.

	Moody's said the ratings of the notes are based on a full, unconditional, and irrevocable guarantee from Principal Financial Services, the direct owner of Principal Life Insurance Co. (insurance financial strength rating at A1, stable outlook). Because of the structural subordination of Principal Financial Group’s obligations to those of Principal Financial Services, Principal Financial Group’s senior debt and subordinated debt ratings would each be a notch lower without the Principal Financial Services guarantee, the agency added.

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