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 its deep water market, buffer the above risks. Standard&Poor's Ratings Services considers Hornbeck's business risk profile as weak, reflecting the volatility of the marine services industry, lack of geographic diversification and limited contract coverage beyond 2009. Hornbeck generates the vast majority of its cash flow through its well regarded OSV division, which is exposed to the cyclical spending levels of the exploration and production industry. However, Hornbeck's
