S&P upgrades Hornbeck

Standard & Poor's said it raised its corporate credit and senior unsecured ratings on Hornbeck Offshore Services Inc. to BB- from B+ following a review of current and expected growth initiatives and Hornbeck's ability to fund them in a manner that will not hurt credit quality.

The ratings were also removed from CreditWatch with positive implications, where they were placed on March 11 following the announcement that Hornbeck would issue 6 million shares of common stock in an IPO. The outlook is now stable.

S&P said the ratings on Hornbeck reflect the risks posed by the company's niche position in the highly volatile offshore support vessels market, an aggressive growth strategy, significant contract-renewal risk in 2005, and high debt leverage. These risks are tempered by the diversification provided by its tug and tank barge business.

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