S&P rates Hanover notes BB

Standard & Poor's said it assigned a BB rating to the Hanover Insurance Group Inc.'s proposed subordinated debentures maturing in 2053.

The debentures are expected to qualify for equity treatment under the agency's criteria for hybrid securities.

The proceeds will be used for general corporate purposes, including share repurchases, S&P said.

The ratings reflect the group's strong competitive position and stable operating performance, the agency said.

The company maintains a strong capital position and management continues to execute its strategy successfully to refocus on its balanced property/casualty business and geographic expansion, S&P added.

While earnings are stable, Hanover has earnings volatility arising from its geographic concentration in the northeast of the United States with its potentially large catastrophe risks and a relatively high expense structure that continues to be a weakness and limits the rating, the agency said.

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