Principal Declines U.S. Bailout After Raising Capital (Update1)
By Andrew Frye
June 11, 2009
June 11 (Bloomberg) -- Principal Financial Group Inc., the Des Moines, Iowa-based seller of life insurance and retirement products, declined a federal bailout after raising $1.9 billion selling stock and bonds to private investors.
The insurer opted not to sell a stake to the Treasury "due to the stabilization of the credit and financial systems in the U.S.," Chief Executive Officer Larry Zimpleman said today in a statement distributed by Business Wire.
Prudential Financial Inc., Allstate Corp. and Ameriprise Financial Inc. also refused assistance from the U.S. Troubled Asset Relief Program. The rally in stock and bond markets this quarter boosted the value of investments that life insurers hold to back policies. A total of six carriers were cleared for aid last month.
"It's nice to be standing where I'm standing," Zimpleman told investors at a conference on May 28 after the company raised $1.15 billion in a stock sale and $750 million selling debt. Principal's management "distanced ourselves from some of our competitors" by raising capital in May, he said.
Hartford Financial Services Group Inc., which was approved for $3.4 billion in aid, was "finalizing details" in its talks with the U.S. about a Treasury capital injection, the company said last month. Lincoln National Corp. said taking TARP funding could be part of a "mix" of capital alternatives available.
Principal slipped 31 cents, or 1.4 percent, to $21.33 at 4:15 p.m. on the New York Stock Exchange. The shares have more than tripled since March 9. The announcement was made after the close of regular trading today.
Click here to return to FBIC homepage