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 somewhat buffer the above risks. Standard&Poor's Ratings Services believes that the current six-month moratorium on deepwater drilling in the U.S. Gulf of Mexico will adversely affect utilization and dayrates across the region. Although Hornbeck has a high quality fleet, demand has been soft—and will likely get considerably weaker—in the Gulf of Mexico. In addition, Hornbeck has significant exposure to deepwater drilling in the region,
