S&P upgrades Hornbeck to BB-

Standard & Poor's said it raised the corporate credit rating on Hornbeck Offshore Services Inc. to BB- from B+.

The outlook is stable.

The recovery rating on the company's senior unsecured notes was revised to 3 from 2, indicating an expectation of meaningful (50% to 70%) recovery in the event of payment default. The agency affirmed the BB- rating on the senior unsecured debt.

S&P said the upgrade reflects its expectation that Hornbeck will see improvement in day rates and use of its vessels, resulting in improved operating performance and credit measures. Activity levels in the Gulf of Mexico have been improving since the end of the Macondo-related moratorium, with about 38 deepwater rigs now active, and the agency expects several additional deepwater rigs to be delivered to the Gulf over the next 12 months.

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