e424b2
 

     
Pricing Supplement Dated May 5, 2005
  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: 74254PFQ0

(PRINCIPAL FINANCIAL LOGO)

Principal Life Insurance Company
Secured Medium-Term Notes
Issued Through
Principal Life Income Fundings Trust 11 (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:
   $250,000,000   Purchasing Agent(s) Discount:   None
 
            
Issue Price:
   100.00%   Original Issue Date:   May 10, 2005
 
            
Net Proceeds to the Trust:
   $250,000,000   Stated Maturity Date:   November 13, 2006
 
     
Specified Currency:
   U.S. Dollars
 
    
Interest Payment Dates:
   The thirteenth day of November, February, May and August of each year
 
    
Initial Interest Payment Date:
   August 13, 2005
 
    
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: oYes x No. If, Yes,
 
Interest Rate:
 
Floating Rate Notes: xYes o No. If, Yes,
 
Regular Floating Rate Notes: xYes o No. If, Yes,
Interest Rate: 3-Month LIBOR - .035%
Interest Rate Basis(es): See below.
 
Floating Rate/Fixed Rate Note: oYes x No. If, Yes,
Floating Interest Rate:
Interest Rate Basis(es):
Fixed Interest Rate:
Fixed Rate Commencement Date:

 

 

         
Inverse Floating Rate Note: oYes x No. If, Yes,
  Fixed Interest Rate:    
  Floating Interest Rate:    
  Interest Rate Basis(es):    
 
        
Initial Interest Rate, if any: 3.195%
 
        
Initial Interest Reset Date: August 13, 2005
 
        
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: -0.035%
 
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: oYes x No. If, Yes,
Amortizing Schedule:
Additional/Other Terms:
 
Discount Note: oYes x No. If, Yes,
Total Amount of Discount:
Initial Accrual Period of Discount:
Additional/Other Terms:
 
Redemption Provisions: oYes 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: oYes 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 Ratings Services, a division of The McGraw-Hill Companies, Inc. (“S&P”).
Principal Life expects the Notes to be rated Aa2 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  
 
Banc of America Securities LLC
   $ 250,000,000  
 
        
Total:
   $ 250,000,000  

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.:
   6-11965
 
    
Deposit:
   $250,000,015
 
    
Net Deposit:
   $250,000,000
 
    
Effective Date:
   May 10, 2005
 
    
Stated Maturity Date:
   November 13, 2006

 

 

 
Specified Currency:                 U.S. Dollars
 
Interest Payment Dates:          The thirteenth day of November, February, May and August of each year
 
Initial Interest Payment Date:    August 13, 2005
 
Type of Interest Rate:               o Fixed Rate x Floating Rate
 
Fixed Rate Funding Agreement: oYes x No. If, Yes,
 
Interest Rate:
 
Floating Rate Funding Agreement: xYes o No. If, Yes,
 
Regular Floating Rate Funding Agreement: xYes o No. If, Yes,
Interest Rate: 3-Month LIBOR - .035%
Interest Rate Basis(es): See below
 
Floating Rate/Fixed Rate Funding Agreement: oYes x No. If, Yes,
Floating Interest Rate:
Interest Rate Basis(es):
Fixed Interest Rate:
Fixed Rate Commencement Date:
 
Inverse Floating Rate Funding Agreement: oYes x No. If, Yes,
Fixed Interest Rate:
Floating Interest Rate:
Interest Rate Basis(es):
 
Initial Interest Rate, if any: 3.195%
 
Initial Interest Reset Date: August 13, 2005
         
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: -0.035%
 
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: oYes x No. If, Yes,
Amortizing Schedule:
Additional/Other Terms:
 
Discount Funding Agreement: oYes x No. If, Yes,
Total Amount of Discount:
Initial Accrual Period of Discount:
Additional/Other Terms:
 
Redemption Provisions: oYes 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: oYes 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 Aa2 by Moody’s.
 
Additional/Other Terms:       Not applicable
 
Special Tax Considerations: Not applicable
 
3. The Guarantee
 
Guarantee Issuer: Principal Financial Group, Inc.
 
Effective Date:               May 10, 2005
 
Additional/Other Terms: Not applicable