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) industry, aggressive growth strategy, elevated debt leverage, and lack of longer term contracts. These risks are tempered by the diversification the company's tug and tank barge division provides; its young, technically advanced OSV fleet; and near-term expectations for favorable operating conditions in the deepwater market. Standard&Poor's Ratings Services considers Hornbeck's business risk profile as weak, reflecting participation in the volatile offshore marine services market. Hornbeck generates the majority of its cash flow through its OSV division (about 70% of EBITDA during the nine months ended Sept. 30, 2007). The OSV industry is exposed to
