The ratings on Hornbeck Offshore Services Inc. reflect the risks posed by the company's niche position in the highly volatile offshore supply vessel (OSV) market, an aggressive growth strategy, and aggressive debt leverage. These risks are tempered by the diversification provided by its tug and tank barge businesses, a young, technically advanced OSV fleet, and the current, robust markets, which mitigate a lack of longer-term contracts beyond 2006. Hornbeck's business risk profile is considered weak, reflecting its participation in the volatile offshore marine services market. The majority of Hornbeck's cash flow is generated from its OSV division (nearly 75% of 2005 EBITDA), which is largely in the deepwater Gulf of Mexico and is susceptible to the exploration and production industry's
