A.M. Best Assigns Rating to The Hanover Insurance Group, Inc.’s Senior Unsecured Notes

A.M. Best has assigned an issue rating of “bbb” to the $375 million 4.50% senior unsecured notes due 2026 of The Hanover Insurance Group, Inc. (Hanover, Inc.) (headquartered in Worcester, MA) [NYSE: THG]. Additionally, A.M. Best has assigned indicative ratings of “bbb” on senior unsecured debt, “bb+” on subordinated debt and “bb+” on the preferred stock of the recently filed shelf registration of Hanover, Inc. The outlook assigned to each rating is stable. The new shelf registration replaces Hanover, Inc.’s previous shelf registration, which expired March 20, 2016. All remaining ratings of Hanover Inc. and its subsidiaries are unchanged. (Please see related A.M. Best press release dated May 22, 2015.)

The rating assignments recognize the favorable risk-adjusted capitalization and positive operating earnings trend of the Hanover Insurance Group Property and Casualty Companies (Hanover). The ratings also recognize Hanover’s proactive and comprehensive risk management, its significant U.S. market presence in commercial and personal lines and its solid earnings in its international segment generated by its United Kingdom subsidiary, Chaucer Holdings, PLC.

Management plans to use the proceeds of this issuance to retire its outstanding 2020 and 2021 maturity senior notes during the second quarter of 2016. At year-end 2015, Hanover Inc.’s financial leverage measured 22.6%. With this issuance and the subsequent retirement of senior notes, financial leverage will modestly decrease to 22.4%, which is still within A.M. Best’s guidelines for its current ratings level. In addition, Hanover Inc.’s interest coverage ratio is expected to remain solid for its ratings.

This press release relates to rating(s) that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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