���������ֳ�

���������ֳ� - New York - 27 Feb 2025: ���������ֳ� has assigned an 'A-' rating to the $500 million of 30-year pre-capitalized trust securities (P-Caps) issued by High Street Funding Trust III, a newly created trust established by Principal Financial Group, Inc. (Principal).

Key Rating Drivers

Principal has created a new Delaware trust, High Street Funding Trust III, which will issue $500 million of P-Caps. The proceeds from the issuance will be invested in a portfolio of principal and interest strips of U.S. Treasuries (eligible assets). The trust will enter a facility agreement with Principal that gives it the right to deliver 30-year senior notes to the trust in exchange for eligible assets.

If Principal exchanges eligible assets for senior notes, the senior debt would rank pari passu in right of payment and upon liquidation to its current and future senior debt obligations. The ratings on the P-Caps are therefore equivalent to the ratings assigned to Principal's existing senior unsecured notes, which are currently rated 'A-'. If Principal issues senior notes to the trust in exchange for eligible assets, ���������ֳ� expects financial leverage to be sustained below 25%.

���������ֳ� believes the newly issued P-Cap securities provide Principal with an additional source of capital and liquidity that could be used in a stress scenario. The issuance of the P-Cap securities will not affect financial leverage unless Principal issues senior debt in exchange for assets in the trust.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

--Run-rate return on equity below 10% and a GAAP-based fixed-charge coverage ratio below 7x;

--A decline in the company's reported RBC ratio to a level below 375% or a Prism capital model score of 'Strong';

--Sustained increase in financial leverage to a level above 25%;

--Deterioration in asset performance and quality, particularly in the commercial real estate portfolio, resulting in increased impairments or realized losses that lead to material capital or earnings degradation.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

--Improved diversification of the company's sources of revenue and earnings;

--Sustained return on equity of 12% or higher and maintain fixed-charge coverage above 12x;

--Low volatility in earnings and capital over an extended period;

--Financial leverage below 20%;

--A Prism capital model score of 'Extremely Strong'.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ���������ֳ�'s ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on ���������ֳ�'s ESG Relevance Scores, visit .

Additional information is available on

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Prism U.S. Life Insurance Capital Model, v1.3.4-2023 (1)

ADDITIONAL DISCLOSURES

• Dodd-Frank Rating Information Disclosure Form
• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS