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Hannover Re has been mulling over the idea of a capital increase for some time, but downgrades from the rating agencies and strains to its balance sheet could force the German reinsurer to up the ante and tap the capital markets.

“There are a host of opportunities open to Hannover Re,” says Pilar Gomez-Bravo, credit analyst at Lehman Brothers, “but from a credit perspective, one favourable

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