A.M. Best Comments on Principal Financial's Acquisition of WM Advisors.OLDWICK, N.J. -- A.M. Best Co. has commented that the financial strength rating of A+ (Superior) and issuer credit rating of "aa" of Principal Life Insurance Company (PLIC PLIC Piecewise Linear Interface Calculation PLIC Pseudolikelihood Information Criterion PLIC Piecewise Linear Interface Reconstruction PLIC Partitioned Linear Interference Canceler PLIC Provincial Land Information Council PLIC Progressive Lossless Image Coding ) and the existing debt ratings of Principal Financial Group, Inc. (PFG PFG Principal Financial Group PFG Performance Food Group (Richmond, VA) PFG Pinnacle Financial Group PFG Plasma Flood Gun PFG Planning for Growth PFG Pasty Faced Geek PFG Perfluoroguanidine ) (NYSE NYSE See: New York Stock Exchange : PFG) (both of Des Moines Des Moines, city, United States Des Moines (dĭ moin`), city (1990 pop. 193,187), state capital and seat of Polk co., S central Iowa, at the junction of the Des Moines and Raccoon rivers; inc. , IA) and its subsidiaries are unchanged following the recent announcement of PFG's intended acquisition of WM Advisors, Inc. PFG will pay Washington Mutual “WaMu” redirects here. For the Washington, DC radio station, see WAMU. Washington Mutual (or WaMu; NYSE: WM) is the United States' largest savings and loan association. $740 million in cash for WM Advisors, with the transaction expected to close by year-end. The outlook for all ratings remains stable. The acquisition is generally viewed positively by A.M. Best, as it provides additional scale and enhanced asset management capabilities to PFG's domestic mutual fund business. WM Advisors' broker-dealer distribution platform will also provide access to a broader range of distribution partners, including banks and other financial institutions. A.M Best notes that between PFG's recent share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. and the pending acquisition of WM Advisors, the group will have utilized more than $3 billion of capital in under three years. However, while PFG is no longer viewed to hold "excess" capital, PLIC's risk-based capital position is expected to remain adequate for its current ratings. Additionally, PFG's consistently strong operating performance should continue to provide a strong source of capital going forward. Furthermore, although a portion of the acquisition cost is expected to be financed with long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , PFG's financial leverage is projected to remain moderate, with an adjusted debt-to-capital ratio in the range of 15%. For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. For current Best's Ratings, independent data and analysis on more than 1,100 individual life/health companies and A.M. Best groups, please visit www.ambest.com/lh. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com. |
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