Hanover begins tender offer for 7.625% debentures, 8.207% securities

By Angela McDaniels

Tacoma, Wash., June 2 - Hanover Insurance Group, Inc. has begun a tender offer to purchase a portion of its 7.625% senior debentures due 2025 and a portion of the 8.207% series B capital securities issued by AFC Capital Trust I, according to a company news release.

The maximum the company will spend to purchase the securities is $125 million, excluding accrued distributions or interest.

All tendered 8.207% capital securities will be accpeted before any of the tendered 7.625% debentures are accepted.

For each $1,000 principal amount, the company is offering $800 for the 8.207% capital securities and $900 for the 7.625% debentures.

In each case, the payout includes a $30 early tender premium for securities tendered by 5 p.m. ET on June 15.

The company will also pay accrued distributions or interest up to but excluding the settlement date.

The offer expires at 11:59 p.m. ET on June 29.

Hanover said it expects to fund the offer with its cash and cash equivalents on hand. It plans to then replace that cash with the proceeds of a loan from the Federal Home Loan Bank of Boston to its subsidiary, Hanover Insurance Co.

Goldman, Sachs & Co. (800 828-3182 or 212 357-4692) is the dealer manager, and Okapi Partners LLC (212 297-0720 or 877-796-5274) is the information agent.

Hanover is a Worcester, Mass.-based holding company for a group of insurers.

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