Moody's rates Hanover notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to the $200 million senior debt issuance due March 2020 of Hanover Insurance Group, Inc.

The outlook is stable.

Proceeds are expected to be used for general corporate and working capital purposes, which may include share repurchases of Hanover's common stock, capital expenditures and acquisitions.

The agency said Hanover's ratings are based on the company's competitive position in regional small and middle market business and the strength of its independent agency network, its good profitability, its strong risk-adjusted capitalization and the solid reserve strength of its property/casualty operations.

These strengths are partly offset by Hanover's limited scale, high cost structure and catastrophe exposure reflecting business concentration in a limited number of states, Moody's said.

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