S&P: Hercules Offshore unaffected

Standard & Poor's said that Hercules Offshore's (B-/stable/--) initial public offering that raised $184 million by selling 9.2 million shares at $20 each has no immediate affect on its ratings or outlook.

Proceeds from the offering will be used to fund additional acquisitions of lift boats and to repay about $45 million of debt under its $140 million term loan B due 2010, S&P said.

S&P noted that two of Hercules Offshore's rigs were damaged by Hurricane Katrina, one of which is believed to be a total loss (the insurance value is $50 million) and the other is expected to be out of service until the second quarter of 2006.

Another one of its rigs also is undergoing maintenance with expected completion dates of the first quarter of 2006, leaving only five of its eight rigs operational, S&P said. Nonetheless, current favorable market conditions, increasing cash flows derived from its lift boat business and continued debt reduction are favorable for credit quality, S&P said.

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