(The story "Principal Financial Declines Investment From U.S.
Govt," published at 5:32 p.m. EDT, incorrectly stated the company
issued a statement regarding TARP last week. A corrected version
follows.)
Principal Financial Group Inc. (PFG) said it wouldn't
participate in the U.S. Treasury Department's Capital Purchase
Program, saying it wouldn't need the funds as capital markets have
improved since the insurance company's initial application last
year.
"We're seeing the capital markets in the U.S. returning to more
normal functioning," said Chief Executive Larry Zimpleman.
Principal Financial became the fourth of six approved life
insurance applicants to reject the funds. Prudential Financial Inc.
(PRU), Ameriprise Financial Inc. (AMP) and Allstate Corp. (ALL)
have already said no to the government's investment.
Last month, Principal issued a non-committal statement regarding
its potential TARP award, saying its decision whether to
participate depended on a review of all the terms and conditions,
both economic and non-economic.
The company applied for the program in November when credit
markets were inactive and the CPP, which is part of the Troubled
Asset Relief Program, was intended to boost capital among banks and
insurance companies to encourage lending.
But Principal Financial, which announced last month that its
application to participate in the plan had received preliminary
approval, has since launched a $1.15 billion secondary equity
offering and $750 million debt offering to improve its capital
base.
Principal Financial's units offer a variety of insurance and
financial services, including its insurance unit which offers life,
health and disability coverage.
Shares were inactive in after-hours trading at $21.33. The stock
has lost 61% of its value from its 52-week high in September, but
has rebounded from its all-time low of $5.41 in March.
- By John Kell, Dow Jones Newswires; 201-938-5285;
john.kell@dowjones.com