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. The company's young, technically advanced OSV fleet, growing geographic and business diversification, and expectations for favorable operating conditions in its core deepwater market temper the risks. 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. The OSV industry is exposed to the spending levels of exploration and production companies, leading to variable earnings and cash flow. However, Hornbeck's niche position
