The ratings on Covington, La.-based 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, and elevated debt leverage. The company's young, technically advanced OSV fleet, growing geographic and business diversification, and historically better-than-average performance of its deepwater market buffer the above risks. We expect Hornbeck to benefit from its fleet expansion, as well as the historically less-volatile nature of the deepwater U.S. Gulf of Mexico market. Standard&Poor's Ratings Services considers Hornbeck's business risk profile as weak, reflecting the volatility of the marine services industry, and limited but growing geographic diversification. Hornbeck generates the vast majority of its cash flow through its well-regarded
