Above-average characteristics of Hornbeck's U.S. Gulf of Mexico deep water market; A young, technologically advanced offshore supply vessel (OSV) fleet; and Growing market, geographic, and business diversity. Continued high spending levels, which could lead to higher debt levels and weaker liquidity than currently expected; Very cyclical pricing; and A lack of longer term contracts for the OSV and barge fleets, possibly raising the volatility of earnings and cash flows. The ratings on Hornbeck Offshore Services Inc. reflect the risks posed by the company's niche position in the highly volatile OSV industry, aggressive growth strategy, elevated debt leverage, and lack of longer term contracts. The company's young, technically advanced OSV fleet, growing geographic and business diversification, and historically better-than-average performance of
