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Principal rejects government money


Principal Financial Group Inc. announced today that it has declined to participate in the U.S. Treasury Department’s Capital Purchase Program (CPP).

It had received preliminary approval to participate in the program in May, along with several other life insurers with banking or savings and loan subsidiaries.

“We have decided not to participate in the CPP due to the stabilization of the credit and financial systems in the U.S. and the further strengthening of our already solid financial and capital position,” said Larry Zimpleman, chairman, president and CEO, in a release.

Principal had applied to participate in the program in November, when the credit markets were tight. Now conditions have improved, and in recent weeks, Principal has boosted its capital base with a $1.15 billion secondary equity offering and a $750 million debt offering.

Other life insurers, including Prudential Financial Inc. and Ameriprise Financial Inc., also have chosen not to participate.

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