Moody's rates Hanover notes Ba1(hyb)

Moody's Investors Service said it affirmed the ratings of the Hanover Insurance Group and the Hanover Insurance Co.

Moody's also assigned a Ba1(hyb) subordinated debt rating to its $175 million issuance of 40-year 6.35% fixed-rate debentures.

The proceeds are expected to be used for general corporate purposes, including share repurchases.

Moody's also said it assigned provisional Baa3 ratings to the company's new shelf registration from which the debentures were issued.

The outlook is stable.

The ratings reflect the company's good market position largely in small- to mid-size commercial lines and low- to moderate-hazard specialty business, Moody's said, along with strong relationships with its network of independent agents and brokers.

These positive factors are partly offset by its high cost structure, significant catastrophe exposure and greater modeling and pricing error associated with its international specialty business, the agency said.

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