Principal Financial Group receives AM Best rating on new senior notes
Principal Financial Group is adding fresh long-term debt as it manages funding for general corporate needs and upcoming maturities. The insurer and asset manager’s new USD 400 million senior unsecured notes due 2037 receive a stable long-term issue credit rating of “a” (Excellent) from AM Best.
Highlights
- AM Best assigns an 'a' (Excellent) Long-Term Issue Credit Rating with a stable outlook to Principal Financial Group's USD 400 million 5.3% senior unsecured notes due 2037.
- Principal Financial Group plans to use proceeds to support general business purposes and prefund upcoming maturities, extending long-dated funding and liability management.
- AM Best reports pro forma adjusted financial leverage at 24%, adequate interest coverage, and strong liquidity, indicating the new debt fits within existing credit metrics.
Debt issuance rating and use of proceeds
As reported by AM Best, the rating agency assigns a Long-Term Issue Credit Rating of “a” (Excellent) to Principal Financial Group, Inc.’s recently announced USD 400 million issuance of 5.3% senior unsecured notes due 2037. The outlook on the rating is stable.The proceeds from the debt issuance are expected to support general business purposes and to prefund upcoming maturities. The transaction adds long-dated funding while helping the company manage its liability schedule.
Leverage and liquidity position
AM Best says Principal Financial Group’s pro forma adjusted financial leverage of 24% and its interest coverage remain adequate and align with the company’s current ratings. It also says the holding company maintains strong liquidity.Those measures indicate the new borrowing remains within the group’s existing credit profile, limiting pressure on its current ratings while supporting ongoing funding flexibility.
Our earlier article on the surge in short-term U.S. Treasury yields explained how rising two-year rates signaled markets were pricing in a tougher path for Fed policy, including the possibility of another hike. It also noted that the rebound in yields has revived debate over the neutral rate and is already pushing up borrowing costs across the economy—an important backdrop for companies tapping long-dated debt markets.
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