What did Principal Financial Group actually issue in this transaction?

The Company did not directly sell securities in this transaction. Its trust subsidiary, High Street Funding Trust III, sold 500,000 Pre-Capitalized Trust Securities (P-Caps) for $500,000,000 in a private Rule 144A placement. The Company instead holds a right to require the Trust to purchase up to $500,000,000 of its 5.807% Senior Notes due 2055.

What does the Company pay for this arrangement?

In consideration of the Issuance Right, the Company pays the Trust a facility fee calculated at 1.289% per annum on the maximum aggregate principal amount of Senior Notes it could issue to the Trust. The fee is payable on each February 15 and August 15, starting August 15, 2025 and running through February 15, 2055. The Company also agreed to reimburse the Trust's expenses, including trustee's fees, under a Trust Expense Reimbursement Agreement.

When would the Company be required to issue the Senior Notes?

The Issuance Right is exercised automatically if the Company or PFSI fails to pay the facility fee or other amounts due, and the failure is not cured within 30 days, or upon certain bankruptcy events. The Company must also exercise it in full if it reasonably believes consolidated stockholders' equity has fallen below $4 billion (subject to adjustment), if an indenture event of default has occurred or would have occurred, or if certain Investment Company Act events relating to the Trust occur.

How and when can the P-Caps and Senior Notes be redeemed?

The Company may redeem outstanding Senior Notes held by the Trust in whole or in part. Redemptions before August 15, 2054 are priced at the greater of 100% of principal or a make-whole amount, plus accrued and unpaid interest. On or after August 15, 2054, the price is 100% of principal plus accrued interest. The P-Caps mandatorily redeem on February 15, 2055 (or the next business day) unless redeemed earlier.

Who guarantees these obligations?

Principal Financial Services, Inc. (PFSI) fully, unconditionally and irrevocably guarantees the Senior Notes and the Company's obligations under the Facility Agreement and the Trust Expense Reimbursement Agreement. The Facility Agreement also allows the Company to assign the Issuance Right to consolidated subsidiaries or persons to whom it or its consolidated subsidiaries have an obligation.

PFG 8-K: Financial Events

01—Abstract

Summary

Summary of the 8-K filed March 6, 2025. Cited figures are marked; the original filing is the authoritative source.

Principal Financial Group, Inc. (PFG) reported in this Form 8-K, filed March 6, 2025, under Item 2.03 (Creation of a Direct Financial Obligation), that on March 6, 2025 (the "Closing Date") its trust subsidiary, High Street Funding Trust III, completed a private Rule 144A placement of 500,000 Pre-Capitalized Trust Securities ("P-Caps") redeemable February 15, 2055, for an aggregate purchase price of $500,000,000^a.

The trust invested the proceeds in a portfolio of U.S. Treasury principal and/or interest strips. Under a Facility Agreement entered into the same day with the Trust and The Bank of New York Mellon Trust Company, N.A., as notes trustee, the Company holds an Issuance Right to require the Trust to purchase up to $500,000,000^b aggregate principal amount of its 5.807% Senior Notes due 2055. In consideration, the Company pays the Trust a facility fee at 1.289% per annum, payable semi-annually from August 15, 2025 through February 15, 2055.

The Senior Notes and the Company's obligations under the Facility Agreement and a Trust Expense Reimbursement Agreement are fully, unconditionally and irrevocably guaranteed by Principal Financial Services, Inc. (PFSI). The filing also describes circumstances requiring exercise of the Issuance Right, including if the Company reasonably believes its consolidated stockholders' equity (excluding accumulated other comprehensive income (loss) and non-controlling interests) has fallen below $4 billion^c, subject to adjustment.

Optional redemption before August 15, 2054 is at the greater of par or a make-whole amount, and at par plus accrued interest on or after that date. The P-Caps mandatorily redeem on February 15, 2055 unless redeemed earlier.

02—Key points

Key Highlights

On March 6, 2025, High Street Funding Trust III completed a private Rule 144A sale of 500,000 P-Caps redeemable February 15, 2055, for $500,000,000 in aggregate purchase price.
The Trust invested the offering proceeds in U.S. Treasury principal and/or interest strips (Eligible Assets).
The Company obtained an Issuance Right to require the Trust to buy up to $500,000,000 of its 5.807% Senior Notes due 2055.
The Company pays the Trust a facility fee of 1.289% per annum, with payments due each February 15 and August 15 from August 15, 2025 through February 15, 2055.
Principal Financial Services, Inc. fully, unconditionally and irrevocably guarantees the Senior Notes and the Company's Facility Agreement and Trust Expense Reimbursement Agreement obligations.
The Issuance Right must be exercised if the Company reasonably believes consolidated stockholders' equity (excluding AOCI and non-controlling interests) has fallen below $4 billion, subject to adjustment.
Redemption before August 15, 2054 is at the greater of 100% of principal or a make-whole amount, plus accrued interest; on or after that date, it is at 100% of principal plus accrued interest.

03—Questions

Frequently Asked Questions

What did Principal Financial Group actually issue in this transaction?
The Company did not directly sell securities in this transaction. Its trust subsidiary, High Street Funding Trust III, sold 500,000 Pre-Capitalized Trust Securities (P-Caps) for $500,000,000 in a private Rule 144A placement. The Company instead holds a right to require the Trust to purchase up to $500,000,000 of its 5.807% Senior Notes due 2055.
What does the Company pay for this arrangement?
In consideration of the Issuance Right, the Company pays the Trust a facility fee calculated at 1.289% per annum on the maximum aggregate principal amount of Senior Notes it could issue to the Trust. The fee is payable on each February 15 and August 15, starting August 15, 2025 and running through February 15, 2055. The Company also agreed to reimburse the Trust's expenses, including trustee's fees, under a Trust Expense Reimbursement Agreement.
When would the Company be required to issue the Senior Notes?
The Issuance Right is exercised automatically if the Company or PFSI fails to pay the facility fee or other amounts due, and the failure is not cured within 30 days, or upon certain bankruptcy events. The Company must also exercise it in full if it reasonably believes consolidated stockholders' equity has fallen below $4 billion (subject to adjustment), if an indenture event of default has occurred or would have occurred, or if certain Investment Company Act events relating to the Trust occur.
How and when can the P-Caps and Senior Notes be redeemed?
The Company may redeem outstanding Senior Notes held by the Trust in whole or in part. Redemptions before August 15, 2054 are priced at the greater of 100% of principal or a make-whole amount, plus accrued and unpaid interest. On or after August 15, 2054, the price is 100% of principal plus accrued interest. The P-Caps mandatorily redeem on February 15, 2055 (or the next business day) unless redeemed earlier.
Who guarantees these obligations?
Principal Financial Services, Inc. (PFSI) fully, unconditionally and irrevocably guarantees the Senior Notes and the Company's obligations under the Facility Agreement and the Trust Expense Reimbursement Agreement. The Facility Agreement also allows the Company to assign the Issuance Right to consolidated subsidiaries or persons to whom it or its consolidated subsidiaries have an obligation.

04—Continue

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