Fitch: Principal Financial Group's Ratings Unaffected by WM Advisors Acquisition.

CHICAGO -- Fitch Ratings announced that the ratings of Principal Financial Group Inc. (PFG) and its subsidiaries are unaffected following the announcement of the pending $740 million acquisition of WM Advisors, Inc. Fitch believes the acquisition will not materially affect the pension-oriented earnings profile of PFG, which represented 46% of 2005 consolidated operating earnings. The ratings for the PFG companies are listed below. The Rating Outlook for all company ratings remains Stable.

Fitch believes the acquisition is in-line with PFG's desire to expand its global asset management business. Relative to its own operations, PFG will be acquiring significant assets under management, which will almost double the assets under management of its existing Principal Mutual Funds business. However, Fitch notes PFG's existing business contributed only 2% of the company's 2005 consolidated operating earnings. Fitch expects the acquisition will add to PFG's scale with a set of strongly performing funds and enhance its distribution capabilities in the wholesale area, but does not anticipate significant expense savings from the combination.

Fitch expects year-end leverage for PFG and Risk Based Capital (RBC) for PLIC will remain at levels acceptable for the rating category.

Fitch currently rates PFG and its subsidiaries as follows:

Principal Financial Group:

-- Issuer Default Rating (IDR) at 'A+';

-- 5.563% preferred stock due 2015, series A at 'A-';

-- 6.518% preferred stock due 2035, series B at 'A-'.

Principal Financial Services Inc.:

-- IDR at 'A+';

-- Senior debt rating at 'A';

-- $465 million 8.2% due Aug. 15, 2009 at 'A'.

--Commercial paper rating at 'F1'.

Insurance subsidiaries:

Principal Life Insurance Company (PLIC)

-- Insurer financial strength at 'AA';

-- IDR at 'AA-';

-- Surplus notes at 'A+';

-- $100 million due March 1, 2044 at 'A+'.

Fitch currently rates the following funding agreement backed notes issuance programs and their outstanding issues at 'AA':

Principal Financial Global Funding LLC 

Principal Life Income Fundings Trust

Principal Life Global Funding I

Principal Financial Global Funding II, LLC

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.