e424b2
 

             
Pricing Supplement Dated May 25, 2004
 Filed pursuant to Rule 424(b)(2)
(To Prospectus dated March 5, 2004, and
   Registration Statement Nos. 333-110499 and 333-110499-01
Prospectus Supplement dated March 5, 2004)
    
 
            
      CUSIP: 74254PAS1

(PRINCIPAL FINANCIAL GROUP LOGO)

Principal Life Insurance Company
Secured Medium-Term Notes
Issued Through
Principal Life Income Fundings Trust 5 (the “Trust”)

The description of this pricing supplement of the particular terms of the Secured Medium-Term Notes offered hereby, and the Funding Agreement (specified below) issued by Principal Life Insurance Company (“Principal Life”) to the Trust, the payment obligations of which are fully and unconditionally guaranteed by the Guarantee (specified below) issued by Principal Financial Group, Inc. to the Trust, supplements the description of the general terms and provisions of the notes, the funding agreements and the guarantees set forth in the accompanying prospectus and prospectus supplement, to which reference is hereby made.

1. The Notes

                     
Principal Amount:
   $ 200,000,000     Purchasing Agent(s) Discount:   0.000%    
Issue Price:
     100%     Original Issue Date:   June 2, 2004
Net Proceeds to the Trust:
   $ 200,000,000     Stated Maturity Date:   December 15, 2005
                     
Specified Currency:
   U.S. Dollars    
 
                    
Interest Payment Dates:
   The fifteenth day of March, June, September and December of each year    
 
                    
Initial Interest Payment Date:
  September 15, 2004    
 
                    
Regular Record Date:
  15 calendar days prior to the Interest Payment Date    
 
                    
Type of Interest Rate:
  o Fixed Rate   x Floating Rate    
 
                    
Fixed Rate Notes:
  o Yes x No.   If, Yes,        
 
                    
Interest Rate:
                   
 
                    
Floating Rate Notes:
  xYes o No.   If, Yes,        
 
                    
Regular Floating Rate Notes:
      x Yes   o No.   If, Yes,
  Interest Rate:   3-Month LIBOR -.01%        
  Interest Rate Basis(es):   See below.        
 
                    
Floating Rate/Fixed Rate Note:
   o Yes   x No.   If, Yes,
  Floating Interest Rate:            
  Interest Rate Basis(es):            
  Fixed Interest Rate:            
  Fixed Rate Commencement Date:        

 

 

                     
Inverse Floating Rate Note:
   o Yes   x No.   If, Yes,
  Fixed Interest Rate:            
  Floating Interest Rate:            
  Interest Rate Basis(es):            
 
                    
Initial Interest Rate, if any:
 The Interest Rate as of the Original Issue Date, determined on May 28, 2004, the second London Banking Day preceding the Original Issue Date.
 
                    
Initial Interest Reset Date:
 September 15, 2004              
             
Interest Rate Basis(es). Check all that apply:
   
  o CD Rate       o Commercial Paper Rate
  o CMT Rate       o Eleventh District Cost of Funds Rate
  x LIBOR       o Federal Funds Rate
  o EURIBOR       o Treasury Rate
  o Prime Rate       o Other (See Attached)
 
            
  If LIBOR:   o LIBOR Reuters Page x LIBOR Moneyline Telerate Page 3750
           LIBOR Currency: U.S. Dollars  
 
            
  If CMT Rate:        
      Designated CMT Telerate Page:  
      If 7052: o Weekly Average    o Monthly Average
      Designated CMT Maturity Index:  
 
            
Index Maturity: 3-Month
        
 
            
Spread: -0.01%
        
 
            
Spread Multiplier: Not applicable
  
 
            
Interest Reset Date(s): Each Interest Payment Date
    
 
            
Interest Rate Determination Date(s): The second London Banking Day preceding the related Interest Reset Date
 
            
Maximum Interest Rate, if any: Not applicable
    
 
            
Minimum Interest Rate, if any: Not applicable
    
             
Calculation Agent:
  Citibank, N.A.    
 
            
Exchange Rate Agent:
  Not applicable    
 
            
Computation of Interest (not applicable unless different than as specified in the prospectus and prospectus supplement):
Day Count Convention (not applicable unless different than as specified in the prospectus and prospectus supplement):
 
            
Amortizing Note:
   o Yes   x No.   If, Yes,
Amortizing Schedule:
            
Additional/Other Terms:
            
 
            
Discount Note:
  o Yes   x No.   If, Yes,
Total Amount of Discount:
            
Initial Accrual Period of Discount:
            
Additional/Other Terms:
            
 
            
Redemption Provisions:
  o Yes   x No.   If, Yes,
Initial Redemption Date:
            
Initial Redemption Percentage:
            
Annual Redemption Percentage Reduction (if any):
      
Redemption:
  o In whole only and not in part    
  o May be in whole or in part    
Additional Other Terms:
            

 

 

             
Repayment:
  o Yes   x No.   If, Yes,
Repayment Date(s):
            
Repayment Price:
            
Repayment:
  o In whole only and not in part    
  o May be in whole or in part    
Additional/Other Terms:
            
 
            
Sinking Fund (not applicable unless specified):
      
 
            
Additional Amounts to be Paid for Withholding Tax (not applicable unless specified):
 
            
Securities Exchange Listing:
  o Yes   x No.   If, Yes, Name of Exchange:
 
            
Authorized Denominations:
  $ 1,000      

Ratings:

     The Notes issued under the Program are rated AA by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”).
     Principal Life expects the Notes to be rated Aa3 by Moody’s Investors Service, Inc. (“Moody’s”).
             
Purchasing Agents Purchasing Notes as Principal:
  x Yes   o No.   If Yes,
         
Purchasing Agent(s)
   Principal Amount
Goldman, Sachs & Co.
   $ 200,000,000  
Total:
   $ 200,000,000  
             
Purchasing Agents Acting as Agent:
  o Yes   x No.   If Yes,
         
Purchasing Agent(s)
   Principal Amount
 
 
Total:
    
           
State of Organization of the Trust:
New York
 
          
Additional/Other Terms:
Not applicable
 
          
Special Tax Considerations:
Interest payable on the Notes will be treated as “qualified stated interest” for United States federal income tax purposes, as it meets the specified criteria referenced in the prospectus supplement under the heading “Material United States Federal Income Tax Considerations—U.S. Holders—Interest and Original Issue Discount”.
 
          
2. The Funding Agreement
    
 
          
Funding Agreement Issuer:
Principal Life Insurance Company  
 
          
Funding Agreement No.:
7-06131      
 
          
Deposit:
  $200,000,015      
 
          
Net Deposit:
$200,000,000      
 
          
Effective Date:
June 2, 2004  
 
          
Stated Maturity Date:
December 15, 2005  

 

           
Specified Currency:
U.S. Dollars  
 
          
Interest Payment Dates:
The fifteenth day of March, June, September, and December of each year.  
 
          
Initial Interest Payment Date:
September 15, 2004  
 
          
Type of Interest Rate:
o Fixed Rate x Floating Rate  
 
          
Fixed Rate Funding Agreement:
o Yes x No. If, Yes,
 
          
Interest Rate:
   
 
          
Floating Rate Funding Agreement:
x Yes o No. If, Yes,
 
        
Regular Floating Rate Funding Agreement: 
x Yes o No. If, Yes,
  Interest Rate: 3-Month LIBOR -.01%  
  Interest Rate Basis(es): See below  
 
          
Floating Rate/Fixed Rate Funding Agreement:   
o Yes x No. If, Yes,
  Floating Interest Rate:  
  Interest Rate Basis(es):  
  Fixed Interest Rate:  
  Fixed Rate Commencement Date:  
 
          
Inverse Floating Rate Funding Agreement:   
o Yes x No. If, Yes,
  Fixed Interest Rate:  
  Floating Interest Rate:  
  Fixed Interest Rate Basis(es):    
 
          
Initial Interest Rate, if any:
 The Interest Rate as of the Original Issue Date, determined on May 28, 2004, the second London Banking Day preceding the Original Issue Date.
 
          
Initial Interest Reset Date:
 September 15, 2004    
             
Interest Rate Basis(es). Check all that apply:
   
  o CD Rate       o Commercial Paper Rate
  o CMT Rate       o Eleventh District Cost of Funds Rate
  x LIBOR       o Federal Funds Rate
  o EURIBOR       o Treasury Rate
  o Prime Rate       o Other (See Attached)
 
            
  If LIBOR:   o LIBOR Reuters Page x LIBOR Moneyline Telerate Page
           LIBOR Currency: U.S. Dollars  
 
            
  If CMT Rate:        
      Designated CMT Telerate Page:  
      If 7052: o Weekly Average    o Monthly Average
      Designated CMT Maturity Index:  
             
Index Maturity:
     3-Month  
 
            
Spread:
     -0.01%    
 
            
Spread Multiplier:
     Not applicable  
 
            
Interest Reset Date(s):
 Each Interest Payment Date  
 
            
Interest Rate Determination Date(s):
 The second London Banking Day preceding the related Interest Reset Date
 
            
Maximum Interest Rate, if any:
 Not applicable  
 
            
Minimum Interest Rate, if any:
 Not applicable  
             
Computation of Interest (not applicable unless different than as specified in the prospectus and prospectus supplement):

 

 

             
Day Count Convention: (not applicable unless different than as specified in the prospectus and prospectus supplement):
 
            
Amortizing Funding Agreement:
  o Yes   x No.   If, Yes,
Amortizing Schedule:
            
Additional/Other Terms:
            
 
            
 
            
Discount Funding Agreement:
  o Yes   x No.   If, Yes,
Total Amount of Discount:
            
Initial Accrual Period of Discount:
            
Additional/Other Terms:
            
 
            
Redemption Provisions:
  o Yes   x No.   If, Yes,
Initial Redemption Date:
            
Initial Redemption Percentage:
            
Annual Redemption Percentage Reduction (if any):
        
Redemption:
  o In whole only and not in part    
  o May be in whole or in part    
Additional Other Terms:
            
 
            
Repayment:
  o Yes   x No.   If, Yes,
Repayment Date(s):
            
Repayment Price:
            
Repayment:
  o In whole only and not in part    
  o May be in whole or in part    
Additional/Other Terms:
            
 
            
Sinking Fund (not applicable unless specified):
      
 
            
Additional Amounts to be Paid For Withholding Tax (not applicable unless specified):

Ratings:

The Funding Agreement issued under the Program is rated AA by S&P.
Principal Life expects the Funding Agreement to be rated Aa3 by Moody’s.
     
Additional/Other Terms:
  Not applicable.
 
    
Special Tax Considerations:
  Not applicable.
 
    
3. The Guarantee
    
 
    
Guarantee Issuer:
  Principal Financial Group, Inc.
Effective Date:
  June 2, 2004
Additional/Other Terms:
  Not applicable