SFL - Ship Finance International Limited Announces Concurrent Offerings of Convertible Senior Notes and Borrowed Common Shares


HAMILTON, BERMUDA--(Marketwire - Jan 24, 2013) - Press Release from Ship FinanceInternational Limited, January 24, 2013

Ship Finance International Limited ("Ship Finance" or the "Company") (NYSE: SFL)today announced that it intends to offer, subject to market andotherconditions, $250 million aggregate principal amount of its ConvertibleSeniorNotes due 2018 (the "Notes"). In addition, the Company announced thatDeutscheBank AG, London Branch (the "Share Borrower"), intends to offer,subject tomarket and other conditions, common shares (the "Common Shares"),which theShare Borrower is borrowing from a wholly owned subsidiary of ShipFinance. TheShare Borrower is an affiliate of Deutsche Bank Securities Inc., theunderwriterfor the offering of Common Shares.

The Notes will pay interest quarterly and mature on February 1, 2018. TheNoteswill be convertible into our common shares. Upon conversion, we willpay ordeliver, as the case may be, cash, our common shares, or a combination ofcashor our common shares, at our election.

The Company intends to use the net proceeds received from the offeringof theNotes to redeem or repurchase all of the Company's outstanding 8.5% SeniorNotesdue 2013. Any net proceeds not used to redeem or repurchase the 8.5%SeniorNotes due 2013 will be used for general corporate purposes, includingworkingcapital.

In connection with the Company's offering of the Notes, a subsidiaryof theCompany will enter into a share lending agreement with the Share Borrower,underwhich it will lend to the Share Borrower up to $100 million of theCompany'scommon shares. None of the borrowed shares are newly-issued commonshares.Instead, the shares are provided by way of a loan from one of ShipFinance'slargest shareholders, which is an affiliate of the Company.

$70 million of the borrowed shares will be initially offered at a fixedprice,and up to the remaining $30 million of borrowed shares are expectedto besubsequently sold at prevailing market prices at the time of saleor atnegotiated prices.

The sale of the borrowed shares is intended to facilitate privatelynegotiatedtransactions or short sales by which investors in the Notes may hedgetheirinvestments in the Notes or other convertible notes of the Company. TheShareBorrower will be required to return the borrowed shares on or about thematurityof the Notes or, if earlier, upon the conversion, repurchase,redemption orcancellation of all of the Notes and upon the occurrence of certainotherevents. Neither the Company, nor its subsidiaries nor its shareholderwillreceive any proceeds from the sale of the borrowed shares. The ShareBorrower orits affiliates will receive all the proceeds from the sale of theborrowedshares.

The closing of the offering of the Notes is contingent upon the closing oftheconcurrent offering of the fixed-price borrowed shares, and the closing oftheconcurrent offering of the fixed-price borrowed shares is contingent upontheclosing of the offering of the Notes.

ABG Sundal Collier Inc. and Deutsche Bank Securities Inc. will act asunderwriters for the offering of the Notes. Deutsche Bank Securities Inc.willact as underwriter for the offering of the Common Shares.

The offering of the Notes and the offering of the Common Shares will bemadeunder the Company's existing shelf registration statement filedwith theSecurities and Exchange Commission on November 12, 2010.

The offering of the Notes and the offering of the Common Shares will beofferedonly by means of a prospectus, forming a part of the Company'sshelfregistration statement, related prospectus supplements and otherrelateddocuments. You may obtain these documents for free by visiting EDGARon theSecurities and Exchange Commission website at www.sec.gov. Alternatively,copiesof the preliminary prospectus supplement may be obtained from DeutscheBankSecurities Inc., Attention: Prospectus Department, 60 Wall Street, NewYork, NY10005, telephone: +1 800 503 4611 (with respect to the offerings of theNotesand the Common Shares), or ABG Sundal Collier Inc., 535 Madison Avenue,17thFloor, New York, NY 10022, telephone: +1 212 605 3800 (with respectto theoffering of the Notes). Before you invest, you should read theprospectussupplements and accompanying base prospectus along with other documentsthat theCompany has filed with the Securities and Exchange Commission for morecompleteinformation about the Company and these offerings.

This announcement does not constitute an offer to sell or the solicitationof anoffer to buy the Notes, common shares or any other securities, nor willthere beany sale of convertible notes, common shares or any other securities in anystate or jurisdiction in which such offer, solicitation or sale would beunlawful prior to registration or qualification under the securities lawsof anysuch state or jurisdiction.

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

About Ship Finance

Ship Finance is a leading ship-owning company with one of the largest andmostdiverse asset bases across the maritime and offshore industries. It islisted onthe New York Stock Exchange and trades under the symbol "SFL". Weown andoperate 62 vessels and drilling units across the tanker, drybulk, carcarrier,container and offshore sectors. In the tanker and drybulk sectors weown andoperate 25 crude-oil tankers, one oil/bulk/ore carrier, or OBO, 11drybulkcarriers and two chemical tankers. In the liner sector we own andoperate 11container vessels, including two chartered-in container vessels, andtwo carcarriers, and in the offshore sector we own and operate six offshoresupplyvessels, one jack-up drilling rig and three ultra-deepwater drilling units.

Cautionary Statement Regarding Forward Looking Statements

This press release may contain forward looking statements. Thesestatements arebased upon various assumptions, many of which are based, in turn, uponfurtherassumptions, including Ship Finance management's examination ofhistoricaloperating trends. Although Ship Finance believes that these assumptionswerereasonable when made, because assumptions are inherently subject tosignificantuncertainties and contingencies which are difficult or impossible topredict andare beyond its control, Ship Finance cannot give assurance that it willachieveor accomplish these expectations, beliefs or intentions.

Important factors that, in the Company's view, could cause actualresults todiffer materially from those discussed in this presentation include thestrengthof world economies and currencies, general market conditionsincludingfluctuations in charter hire rates and vessel values, changes in demandin thetanker market as a result of changes in OPEC's petroleum productionlevels andworldwide oil consumption and storage, changes in the Company'soperatingexpenses including bunker prices, dry-docking and insurance costs,changes ingovernmental rules and regulations or actions taken by regulatoryauthorities,potential liability from pending or future litigation, generaldomestic andinternational political conditions, potential disruption of shippingroutes dueto accidents or political events, and other important factors describedfromtime to time in the reports filed by the Company with the UnitedStatesSecurities and Exchange Commission.

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Ship Finance International Limited via Thomson Reuters ONE


Questions should be directed to:
Harald Gurvin
Chief Financial Officer
Ship Finance Management AS
+47 23 11 40 09

Magnus T. Valeberg
Senior Vice President
Ship Finance Management AS
+47 23 11 40 12

Ole B. Hjertaker
Chief Executive Officer
Ship Finance Management AS
+47 23 11 40 11

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