Principal Financial Announces $1B+ Stock Sale

   DOW JONES NEWSWIRES 
 

Principal Financial Group Inc. (PFG) announced plans to sell 42.3 million shares of stock, looking to take advantage of a two-month surge to raise at least $1 billion in capital.

The planned sale by the life insurer and asset manager is the latest in a spate in recent weeks as companies use the rebound from March's multiyear lows to raise capital. Increasing investor demand for corporate stock and debt offerings has become a prime way for companies to get new funds as credit markets remain constrained.

Chances are the amount of stock ultimately offered will be raised by Principal, as investor demand of late has led many companies to boost the ultimate size of offerings.

Not including the 15% over-allotment of the offer's proposed size, Prudential would boost shares outstanding by 16%.

Shares closed Friday at $23.36 and were inactive premarket. The stock has more than quadrupled from March's all-time low of $5.41; the insurer went public in 2002.

The life-insurance sector has been roiled by troubles in investment portfolios and annuities, both heavily exposed to the downbeat financial sector. Beyond raising capital, Principal is among those expected to get some help from the Troubled Asset Relief Program. The Treasury Department earlier this year decided to include life insurers among the financial companies eligible for such aid.

-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136; [e-mail]