Will Principal Financial Group reject TARP?

S&P 500: -10.19 (-1.14%)

Principal Financial Group (PFG) -1.48%
You may remember from my April 9 post that the Treasury Department ad decided to grant TARP funding to life insurers – Principal Financial Group gained over 21 percent that day.

Today, the Wall Street Journal reported that the Treasury was finally ready to cut checks to six insurers – including Hartford Financial Services Group, Allstate, Prudential Financial, Ameriprise Financial, Lincoln National, and Principal Financial Group – but several of the insurers are no longer in need of assistance.

Prudential Financial and Ameriprise Financial have already decided to decline TARP funds, while Allstate and Principal Financial are expected to forgo government funding as well. Principal raised $1 billion in a common stock offering earlier this week at a price of $19.75, and Allstate successfully offered $1 billion of debt this week.

As I said in the post linked above, the strength of Principal’s business is their 401(k) business, which is a dominating player in the small to medium-size business market.




Peter Lazaroff, Junior Analyst