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Des Moines-based Principal seeks $2 billion

Thursday, November 20, 2008

DES MOINES - Retirement, insurance and financial services company Principal Financial Group Inc. said plans to apply to the U.S. Treasury for participation in the capital purchase program.

The Des Moines-based company, which offers 401(k) retirement plans, has an Internet bank and life and health insurance divisions, said Tuesday it would issue preferred shares and warrants to the Treasury. The company would be subject to oversight of the Office of Thrift Supervision.

The company has applied for up to $2 billion.

The government cash would allow the company to capitalize its federal savings bank subsidiary, Principal Bank; support the ongoing organic growth needs of the company's operating units; and continue to serve its corporate and consumer markets.

The company said in a statement that it believes pursuing the government program is prudent "as another option to build on its position of financial strength, by adding to its capital cushion in a time of volatile and uncertain market conditions."

Principal has $287.4 billion in assets under management as of Sept. 30. and serves about 19 million customers worldwide.

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