The ratings for HORNBECK-LEEVAC Marine Services Inc. reflect the company's position in the deep-water offshore supply vessel (OSV) market and the diversification provided by its tug and tank barge business. Solid near-term fundamentals and contract support are providing good financial results and cash flow generation. However, high debt leverage, contract-renewal risk, and a speculative new-vessel program temper these strengths. Hornbeck's 10-vessel OSV fleet enjoyed strengthening day-rates and utilization during 2001 (average utilization of 99% with $11,872 average day-rates during 2001 versus 93% utilization and $8,435 day-rates in 2000). Its focus on the deepwater Gulf of Mexico, requiring technically advanced vessels and allowing some insulation from the larger OSV market, provided Hornbeck a ready market for its new build program during
