Good day, and thank you for standing by. Welcome to the Q1 2021 SFL Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker for today, Ole Hjertaker. Thank you. Please go ahead. Thank you, and welcome all to SFL Corporation's First Quarter Conference Call. I will start the call by briefly going through the highlights of the quarter, and following that, our CFO, Aksel Olesen, will take us through the financials, and the call will be concluded by opening up for questions. Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. Forward-looking statements are not guarantees of future performance. These statements are based on our current plans and expectations and are inherently subject to risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, but are not limited to, conditions in the shipping, offshore, and credit markets. You should therefore not place undue reliance on these forward-looking statements. Please refer to our filings with the Securities and Exchange Commission for more detailed discussions of our risks and uncertainties, which may have a direct bearing on our operational result and our financial condition. The announced dividend of $0.15 per share represents a dividend yield of around 7.5% based on the closing price yesterday, and this is our 69th quarter with dividends. Over the years, we have paid nearly $28 per share in dividend or approximately $2.4 billion in total, and we have a significant fixed rate charter backlog supporting continued dividend capacity going forward. The total charter rate revenues was $135 million in the quarter, with more than 85% of this from vessels on long-term charters and less than 15% from vessels employed on short-term charters and in the spot market. The EBITDA equivalent cash flow in the quarter was approximately $98 million, and the last 12 months, the EBITDA equivalent has been approximately $440 million. The net income came in at $31 million in the quarter, or $0.27 per share. In addition to good contribution from our operating assets, we also had a positive effect this quarter from the sale of shares in ADS Crude Carriers and positive mark-to-market relating to our interest rate hedging instruments. Our fixed rate backlog stands at approximately $2.4 billion from owned and managed vessels after recent acquisitions, providing significant cash flow visibility going forward. The backlog excludes revenues from 16 vessels trading in the short-term market and also excludes future profit share optionality. In addition, we have excluded charter hire relating to the drilling rigs to be conservative in light of the ongoing financial restructuring in Seadrill. We are pleased to execute on our commitment to invest in assets and markets with a lower carbon footprint. We have spent a lot of time evaluating various new technology initiatives that can improve performance of vessels, including existing vessels on the water. In April, we agreed with the Volkswagen Group to build and charter out two new build dual fuel car carriers designed to use liquified natural gas or LNG for propulsion. The charter period is 10 years from delivery in 2023, and until the new vessels are delivered, Volkswagen will charter our two existing car carriers, SFL Composer and SFL Conductor, and we intend to cooperate with our customer to use eco-friendly biofuel for the propulsion of our two existing car carriers. The transaction adds more than $200 million to the fixed rate charter backlog, and importantly, also added another end user to our customer portfolio. Maintaining market leading operational standards and close relationships with end users pays off, as illustrated by another deal with Maersk Line, where we have agreed to purchase a 2020 build 5,300 TEU container vessel in combination with a long-term charter. The delivery is expected to take place in the third quarter of 2021, and we will then have 13 vessels on charter to Maersk Line. All these are on time charter terms where we are responsible for technical management and vessel operations. While the purchase price is confidential on this last vessel, we can confirm that it's well below current charter fee broker valuations, adding a nice buffer for us. Subsequent to quarter end, the company also successfully placed $150 million in senior unsecured sustainability linked bonds due in 2026. The bonds will pay a coupon of 7.25% per annum, that proceeds will be used to refinance existing debt and for general corporate purposes. It was done on a very cost-efficient Norwegian documentation basis, with strong international demand from Asia, Europe, and the U.S. Excluding the drilling rigs, the backlog from owned and managed shipping assets was $2.4 billion at the end of the quarter. Over the years, we have changed both fleet composition and structure, and we now have 84 shipping assets in the portfolio and no vessels remaining from the initial fleet in 2004. This slide does not include the remaining three offshore assets. In total, we have 87 assets if we include these as well. In addition to the long-term charter vessels, we have 16 vessels traded in the short-term market. We also have significant contribution from profit share this quarter, as well as over the long term, both relating to charter rates and fuel savings. We do not have a set mix in the portfolio. Focus is on evaluating deal opportunities across the segments and try to do the right transactions from a risk-reward perspective. Over time, we believe this will balance itself out, but we try to be careful and conservative in our investments and not just invest because money is burning in our pocket. With respect to Seadrill and their financial restructuring, there is really nothing more to report at the moment. We have entered into agreements relating to two of our drilling rigs, where we will receive approximately 75% of the lease hire under the existing charter arrangements for West Linus and West Hercules during Seadrill's Chapter 11 proceeding. Both rigs are active and working for oil companies, and the charter rate is sufficient to cover our debt service relating to these rigs. We are, of course, very pleased to see a strengthening harsh environment drilling market in the North Sea on the back of a rising oil price. With regard to the laid-up rig, West Taurus, this has been redelivered to SFL Corporation, and we are preparing it for recycling, which will most likely take place in the third quarter. Over the years, we have gone from a single asset class chartered to one single customer to a diversified fleet and multiple counterparties. Over the time, the mix of the assets and charter backlog has varied from 100% tankers initially to nearly 60% offshore 10 years ago to container and car carriers now being the largest segment with 77% of the backlog. If you look at the counterparties, it is now mainly to end users and market leaders in their respective segments and relatively few are intermediaries where we have less visibility on the use of the assets and quality of operations. Strategically, this gives us access to more deal flow opportunities, such as the repeat business with Maersk and MSC, for example. Our strategy has therefore been to maintain a strong technical and commercial operating platform in cooperation with our sister companies in the Seatankers Group. This gives us the ability to offer a wider range of services to our customers, from structured financing to full service time charters, which is where most of our asset portfolio lies. With full control over vessel maintenance and performance, including energy efficiency and emission minimizing efforts, we can impact improvements to our vessels through the life of the assets and not only be passively owning vessels employed on bareboat charters, where the customers may not always have an incentive to make such improvements. With that, I will give the word over to our CFO, Aksel Olesen, who will take us through the financial highlights for the quarter. Thank you, Ole. On this slide, we have shown a pro forma illustration of cash flows for the first quarter. Please note that this is only a guideline to assess the company's performance and is not in accordance with U.S. GAAP and also net of extraordinary and non-cash items. The company generated gross charter hire of approximately $135 million in the first quarter, with approximately 84% of the revenue coming from our fixed charter rate backlog, which currently stands at $2.4 billion, providing us with strong visibility on our cash flow going forward. During the first quarter, the liner fleet generated gross charter hire of approximately $74 million, including approximately $2.4 million in profit split contribution related to fuel savings on some of our large container vessels. Of this amount, approximately 95% was derived from our vessels on long-term charters. SFL Corporation's liner backlog currently stands at $1.9 billion, with an average remaining charter term of approximately 4.5 years, or approximately 7.5 years if weighted by charter hire. With the recent acquisitions and charter extensions in the liner segment, more than 75% of our total backlog is with the world's leading container shipping lines and automobile manufacturers. Our tanker fleet generated approximately $50.3 million in gross charter hire during the quarter, including approximately $300,000 in profit share contribution from our VLCCs on charter to Frontline. Furthermore, the net charter hire from the company's two Supramax tankers deployed in the short-term markets was approximately $2.5 million compared to $1.6 million in the previous quarter. During the quarter, our dry bulk fleet generated approximately $32 million in gross charter hire. Of this amount, approximately 60% was derived from our vessels with long-term charters to Golden Ocean and Hyundai Glovis. During the quarter, the company had 10 Supramax and handysize vessels employed in the spot and short-term market. These vessels generated approximately $9.8 million in net charter hire compared to $6.4 million in the previous quarter. SFL Corporation owns two drilling rigs, which have been chartered out to subsidiaries of Seadrill on bareboat terms. In the first quarter, we received charter hire of approximately $13.2 million from the rigs. In connection with the Chapter 11 filing of Seadrill in February, and as previously announced, SFL Corporation has entered into interim agreements with Seadrill relating to West Linus and West Hercules, allowing the uninterrupted performance of subcharters to oil majors while the Chapter 11 process is ongoing. According to these agreements, SFL Corporation will receive approximately 75% of the invoiced charter hire under the original contract for the West Hercules and West Linus. This is essentially equivalent to the interest and amortization due on the secured bank loan facilities relating to these rigs. This summarizes to an adjusted EBITDA of approximately $98 million for the first quarter. We then move on to the profit and loss statement as reported under the U.S. GAAP. As we have described in previous earnings calls, our accounting statements are different from those of a traditional shipping company. As our business strategy focuses on long-term charter contracts, a large part of our activities are classified as capital leasing. As a result, a significant portion of our charter revenues are excluded from U.S. GAAP operating revenues and instead booked as revenues classified as repayment of investment in finance leases and vessel loans. Results in associates and long-term investments and interest income from associates. For the first quarter, we report total operating revenues according to U.S. GAAP of approximately $109 million, which is less than the approximately $135 million of charter hire actually received for the reasons just mentioned. During the quarter, the company recorded profit split income of $2.6 million, mainly related to fuel savings on some of our large container vessels. The net result was impacted by non-recurring and our non-cash items, including, amongst others, a positive mark to market effect relating to interest rate swaps and equity investments of $9.3 million. Following the divestment of 50.1% in River Box Holding last quarter, the vessels are accounted for as investments in associates applying the equity method. As a result of the accounting treatment, operating revenues, operating expenses, and net interest expenses in these affiliates are not included in SFL Corporation's consolidated income statement. Instead, the net contribution from these affiliates are recognized as a combination of interest income from associates and results in associates. Overall, according to U.S. GAAP, the company reported a net profit of $31.5 million or $0.27 per share. We now move on to the balance sheet. At quarter end, SFL Corporation had approximately $216 million of cash and cash equivalents, excluding approximately $8 million in cash held in a wholly owned non-consolidated subsidiary. Subsequent to quarter-end, the company successfully placed $150 million in senior secured sustainability-linked bonds due in 2026. The notes will pay a coupon of 7.25% per annum, and the net proceeds will be used to refinance existing debt, including our convertible note with maturity in October, which is included in the short-term debt. As discussed on our last earnings call, the West Linus and West Taurus were fully consolidated on our balance sheet as financial leases during the fourth quarter. After, among other things, changes to certain financing terms relating to the assets. Following the agreements entered into with Seadrill in connection with the Chapter 11 filing, the leases for the West Linus and West Hercules have been changed to operating leases. West Linus was therefore moved from investment in sales-type direct financing and leaseback assets to vessels and equipment in our balance sheet during the first quarter. After the recently announced transaction, we have approximately $184 million of remaining CapEx to be paid over the next 2.5 years, and we expect the majority of this to be financed with senior bank finance. Based on Q1 2021 figures, the company had a book equity ratio of approximately 27%. To summarize, the board has declared a cash dividend of $0.15 per share for the quarter. This represents a dividend yield of approximately 10.5% based on the closing share price yesterday. This is the 69th consecutive quarterly dividend, and since inception of the company in 2004, approximately $28 per share or approximately $2.4 billion in aggregate, has been returned to shareholders through dividends. Our $2.4 billion backlog from our shipping assets gives us strong visibility on future cash flow and continued debt service. The company has significant financial strength with approximately $216 million in cash on the balance sheet at the end of the first quarter. We have recently demonstrated our commitment to invest in modern, fuel-efficient vessels with a lower carbon footprint through the recent agreement with Volkswagen Group for two new building car carriers and the issuance of $150 million of senior unsecured sustainability-linked notes. With a strong track record and affiliation with the Seatankers Group of Companies, we have a unique access to both capital and deal flow, a great combination to continue to grow our business. With that, I give the word back to the operator, who will open the line for questions. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, please press the pound or hash key. Please stand by while we compile the Q&A roster. We now have our first question that comes from the line of Randy Giveans from Jefferies. Thank you. Please ask your question. Thanks, operator. Howdy, gentlemen. How's it going? Hi, Randy. Good to hear from you. You as well. All right. Looking at your fleet here, you've done a few acquisitions, mainly on the car carrier side. You also bought the 5,300 TEU from Maersk. At these levels, are you interested in buying or selling? If so, what asset classes are attractive right now? Obviously, asset values are rising pretty much across all sub-sectors. Any sector you prefer at these levels? Yeah, thanks. I would say we look at opportunities across our sectors. I would say we are, of course, very much more cautious on offshore assets for natural reasons. What we have seen, for instance, on the liner side and container side, we've seen asset prices going up very quickly. There we would be cautiously looking at opportunities, and our focus would be to do deals where we can take down, call it our effective asset exposure to a more normalized mid-cycle type residual value, also factoring in expectations for changes in propulsion technology going forward. If that works and we have a good, strong charter to a strong counterparty where we are confident that they will pay also when the market cools down, we wouldn't have a problem with adding more capacity in that segment. Of course, our preference is to buy assets with long-term charters. We have seen over the years that it's been more in the liner quoted space where we have seen the long-term charters, but we've also seen it from time to time in other sectors, like on the dry bulk side, we've seen it, and we looked at projects. On the tanker side, too, we will, of course, also follow developments in segments where we are not exposed currently. Of course, until or unless we do a deal there, we cannot really comment on specifics. We look at many opportunities and try to be selective on which we do. Sure. I guess, did you look at or participate in the LNG powered VLCC tenders by some of the oil majors or the Qatar LNG new build tenders that are out there currently? What I can say there is that we have seen essentially, I would say, all or certainly most of the opportunities that have been out there, and we've spent more time, I would say, on the opportunities where there have been, call it new technology and dual fuel opportunities. What we have and where we are, we have spent quite a lot of time, and our COO, Trym Sjølie, he's focused a lot on that. We are focusing on what we call well-to-wake perspective on assets. What we have seen is that a dual fuel vessel, you cannot always compare a dual fuel to a dual fuel. You have different technologies there, and there are technologies there we believe are better from a long-term perspective and more versatile as an owner from a long-term perspective. Many of the projects we saw, particularly during last year, were based on technology where we were not so interested in taking a lot of, call it residual exposure. If you combine that with shorter charters than we would prefer, we've seen others be more, what do you say, more eager to get the projects and therefore bid lower rates or accept higher risk. Again, we have our preference from a risk-adjusted return. Others have theirs. We will only know later which was right, but we try to be cautious and mindful when we make these investments, and we see a lot of focus on technology shift, and we, of course, will prepare and watch that carefully as it develops. Got it. All right. Then for the upcoming converts maturity, I know you mentioned you did the $150 million senior unsecured bonds. I guess, will that entire amount be used to repay the converts, and when will you repay those? I think the purpose of the sustainability linked bond was, of course, to tap on a very kind of attractive market in terms of cost of capital. We did that with a very international investor base, proceeds for that bond is partly to address the convert, general corporate purposes, the balance can be addressed with some cash at hand. I would say a combination of the above, really. For all practical purposes, that maturity has been addressed. We also have in the existing indenture on the new bond issue, we have a borrowing limit of up to $200 million. $50 million on top of the $150 million that we have already raised. Giving us additional flexibility. Right. Can you confirm the amount and the date that you plan on repaying those converts? I cannot confirm the exact date and amount. It's early October, I think, yeah. I think it's mid-October, and I think at quarter-end, the standing amount was approximately $212 million. Yeah. Got it. Yep. That's what we have. All right, thanks so much. Thank you. Thank you. Our next question comes from the line of Gregory Lewis from BTIG. Thank you. Please ask your question. Yeah. Hi. Thank you, and good afternoon. I was actually hoping for a little color around the interest rate guidance. Congrats on doing the sustainability-linked bonds. I imagine you're going to be doing more of those in the future. I guess what I'm kind of curious is, as we think about a good run rate, just looking at your debt position, at the end of Q1, any kind of color around interest rate guidance you can give us for the next few quarters? How we should be thinking about that number? You're thinking about secured debt? The senior secured debt? No, just that as I look at the interest expense in Q1, there was a nice step down from Q4. Just how we should think about that? Sure. I think, it will be, I would say, at the base case, rather stable from what you saw in the first quarter. The step down is really related to the divestment of the 50.1% on the River Box Holding and how that's reflected. That's basically the main difference there. Okay, perfect for that. Although generally, we have a lot of interest rate hedges. When we do a long-term charter, we typically fix the chart interest rate. We don't have so much, call it, market related movements as such on a cash interest basis. We do see on some of the swaps, we have some swaps that are so-called designated, and while we have others where we don't have them so closely tied to the underlying call it loan, and therefore we have some mark-to-market movement on the value there. Our interest swaps are really based as hedges, to ensure that we really have a stable interest rate when we have visibility on cash flow. Okay, perfect for that. Then, Ole, I was hoping you could dig in a little bit around this acquisition that would be announced with Maersk. I guess my first question is, if I were to look back, when you previously kind of worked through this uncertainty around the last Seadrill restructuring, the company was kind of quiet on the acquisition front. As I think about this acquisition, how should we think about this acquisition in terms of the company's financial position and your kind of outlook, I guess, is how I'd ask it. Yeah, you are absolutely correct. We were quite cautious throughout last year, given the uncertainty relating to Seadrill and also whether or not Seadrill were going to file for Chapter 11 again or not, as they did. As we now have more clarity there, we know that the two rigs that are working are producing good cash flows for Seadrill, covering full, call it, OpEx for them, also a contribution through their G&A. There is a buildup on top of that net after also paying that charter rate to us. That gives us, of course, better visibility on the cash flow from those two assets. Also now when effectively, the convert maturity has been addressed, we are, I would say, from a corporate perspective in a better position to do more transactions, hopefully. Again, we are cautiously evaluating all deals and we hope, of course, to execute on more transactions, and we'll announce them and comment then. I think it's certainly a much better, call it a setting for us now than last year, just due to the rate situations. Okay, great. Realizing we don't want to talk about specific customers on the call, I would characterize a lot of liner companies, not all, but a lot of liner companies' decisions to focus on owning the new tonnage and then as the vessels age, you typically after they're maybe halfway through their useful life, the liners typically then go out and sell or sale and lease back vessels. Is there anything to glean from the fact that this transaction that you did was for a 2020-built vessel versus, say, a 2005-2010-built vessel? Is anything changing in how the liner companies are thinking about the positioning of their fleets, and is that an opportunity for SFL Corporation going forward? Yeah. Thanks. Yes, the vessel we have agreed is essentially brand new. It's a new built vessel. It's been on the water a few months, and therefore, you could call it secondhand, but it's with all the new, call it bells and whistles that you build on a new vessel. If you look at the order book, and of course, there's been a lot of activity on the new building ordering side the last six months in particular. Still, the order book is lower than it's been historically. I think over the years, it's hardly been below this level ever. It's only been the last two years or so that we've seen lower order books than we saw up until, call it this new search. If you look at the assets that have been ordered, I would say most of the assets are very conventional type vessels. They are very similar to specifications you would order 10 years ago. Only around a third, I think, of the vessels have been ordered with scrubbers, at least based on the market data we've seen. Very few vessels, I believe sort of 10%, 12% or so, have been ordered with dual fuel. If you look at container ships and the way we look at it, there was a big technology shift from vessels ordered before the financial crisis, i.e., delivered maybe as late as 2011, 2012, and the vessels that were ordered after the financial crisis, which started delivering in 2013 and onwards. The vessels that were ordered before were designed for much higher speeds, bigger engines, less fuel efficiency, and really built for higher speed, while the vessels built from 2013 and onwards were really designed very similar to what has been ordered recently. Of course, a new vessel is always marginally better than the previous vessel, so there are some gradual improvements, but it is not really been a real shift in that. I would say, the liner companies, as we see them experience it, they are, of course, more focused on what we call the modern eco-type vessels built from 2013 onwards. Of course, in the frenzy that we have seen right now where there has been a shortage of capacity because of bottlenecks, they will charter anything. That's also why you've seen asset values and charter rates for vessels that were barely covering their operating expenses for many years now, suddenly shooting through the roof, and you get phenomenal rates currently. We believe that is something that will subside when the market cools down again. We believe that modern vessels built after the financial crisis have much better prospects also in the long run. Okay, great for that. I guess just because it is so topical, I will squeeze in another question. Yep. Clearly, the dry bulk market has been very strong year to date. Just as I think about that and I look at a lot of the vessels you have that are on short-term charters. As we think about the opportunity for a lot of the vessels that are on short-term charters, how should we think about the opportunity for those? Is that something where SFL Corporation would think about putting them on a one-year charter, or if you think it's something multi-year, we'll just kind of keep these vessels operating on kind of short-term spot type market work? Well, so far we've been operating them in the short-term market for a while. The market has been soft for a few years, and all these were chartered on longer-term charters previously. Then, as they've come off, we've traded them in the market. Because we have the operating platform, we haven't had to effectively flip them and recharter them at very low rates as they came off those charters. We are from an asset perspective and charter perspective, we are agnostics. Of course, we like long-term charters, but you can also buy them from us if you like to. We are agnostics from that perspective. As we like to say, everything is for sale here except my dog. You won't get that one. Yes, we look at opportunities also relating to charters. If you look at the main bulk of our portfolio are employed on long-term charters. While the number, there are, I think, around 16 vessels in the short-term market. If you look at the aggregate value of our portfolio, it's a very small portion, maybe, 8%-10%, perhaps. I don't have the number on the top of my head. Absolutely. It is a small handful of vessels, but nevertheless, it seems like that could be a nice driver, be the dolly of even some asset monetization here over the next couple of quarters. All right. Hey, thank you very much for the time, everybody. Thank you. Thank you. The next question comes from the line of Liam Burke from B. Riley. Thank you. Please ask your question. Thank you. Good afternoon. With the stated strategy emphasizing container and dry bulk fleet assets, are you going to manage your tanker assets any differently? As asset values or any of these improve, how do you expect to manage that part of the fleet? Well, of course, we look at the transaction opportunities in all segments. We've also looked at opportunities on the tanker side. Of course, we have in mind also, we call it the wider shift in the market, where we see that, I think many investors and stakeholders prefer liner assets and dry bulk assets over oil production and oil transportation assets. It's all down to risk reward and if the opportunity is interestingly enough, and also factoring in that, assets like tanker assets over time may be more expensive to fund because of relative less interest in the market. It doesn't mean that you cannot develop interesting opportunities also around those. I think the reason why we have more on the liner side and dry bulk side now is simply because that is where we have seen more compelling investment opportunities that combines both a counterpart that is strong, assets we like, both from a technological aspect, where we have long-term charter coverage and where we believe the residual value, call it exposure or the asset where they are at the end of the charter is at the attractive level. The fact that we've done more on the liner side now is not excluding new deals. We did a deal with Phillips 66 a couple of years ago, and, of course, we can do other deals, also with oil majors going forward. Sure. Getting back to the dry bulk fleet, obviously, it's a much smaller part of it, and your propensity is to go with the longer-term charters to match to your financing. Asset prices on the container side are higher. Is there anything you see in the dry bulk area that's interesting to you, which would meet your pretty specific criteria? We look at opportunities there as well. We cannot be specific on what we do look at. It's a nice cocktail of asset, counterparty, charter tenor, and residual exposure. We may do more also on the dry side. We've also seen projects with some of the major ore manufacturers from time to time, but not something where we have announced any specific transactions at least today. Great. Thank you very much. Thank you. Thank you. Once again, ladies and gentlemen, it is star one, if you wish to ask a question. Our next question comes from the line of Chris Wetherbee from Citi. Please ask your question. Hey, guys. Good morning. Jim on for Chris. Just wanted to follow up on a couple of points Greg brought up. You mentioned that basically on the interest rate side from a liability perspective, are there any step-ups or protections from basically in terms of lease rates that we should be thinking about moving forward where if there's a sizable increase, that potentially the spread between your financing costs and the top line might expand? The way it works, what we typically do when we do a new long-term charter, we typically try to match financing term with the charter term. We also normally hedge the interest rate, either through a fixed rate agreement with a financial institution, or we do a call it interest rate hedge on the side. If you then look at what you have then, you say at the end of the charter period, you're looking at the new charter opportunity. Of course, any charter opportunity and the charter rates, call it in the market, will have the prevalent interest rate as a component in the structure at the time. Therefore, you could say that, if the interest rate should go up significantly, you will effectively see a higher charter rate at that time. We also have on some of the assets, like our eight container ships with Golden Ocean, we have a charter, an interest rate adjustment factor where they effectively absorb the interest rate volatility, which means that we can then be financed on a short-term interest market. If the interest rates should go up, they will absorb it. Yeah. Is that not correct, Aksel? Exactly. Except for that we actually have Capesize assets to Golden Ocean. Not to talk about container assets. That's right. Capesize. Got it. From an asset liability matching perspective, it seems like it's pretty tightly matched and it's not necessarily that there's downside or upside just from an interest rate perspective, excluding sort of the impacts of rechartering activity. Is that the right way to sort of think about this moving forward in terms of your outlook for this year? Maybe I would say the conservative strategy in terms of interest rate exposure. It's kind of not very to take any risk and also to look at the latest bond we did was also a fixed rate bond. That's kind of the philosophy we have here. Maybe owning shipping assets is the perfect interest hedge. Yeah. Inflation hedge. Yeah. Then separately or connected as well, I guess, a sustainability bond that you had issued. Now understanding sort of the 7% rate, what do you think it would have been had it not been sort of sustainability-linked? Are the cost savings really something that you don't see here, but it was like a refi issue or a sustainability bond, you might see that rate move down further overall? Just trying to understand about essentially what was gained with that transaction in particular. I think, when look and we discuss this a lot internally also with kind of the managers there that pre-placed and also I think, I don't think there will be a kind of a significant difference in the pricing. What's interesting is that you reach a much broader audience of investors in the paper, you have far more liquidity. We also have a kind of fairly international broad placement where I think kind of 45-ish% bought was from international investors outside the Nordics. It basically kind of makes the paper more attractive for investors and hence creates liquidity, which overall is positive for the trading of the bond in the aftermarket. Yeah. I think also another factor is that raising capital on Norwegian documentation, as this was, is also much more cost-efficient from a legal perspective. Sort of, I would say maybe also on a fee perspective compared to some of the U.S. issuance as we have seen. If you look at the all-in cost we think that's also a significant positive contributor. Exactly. Yeah. Got it. All right. Your outlook and your approach to the market, or you've been consistent about sort of your outlook and approach to the market from a sector perspective, but kind of wanted to get your sense of where you are in sort of the terms that you might look at on the deals themselves. Obviously, you want something longer-term secured, perfect world, but like relative to the market, what sort of deals that are sort of the most likely to get done and sort of the most attractive, like what kind of terms are you seeing or things like long-term that are like sort of cap downside available to you along with upside? Just trying to understand sort of like where the market is in terms of what you see coming across incrementally and what's attractive, and then if you could layer in sort of like what essentially the terms are you're getting on the bank debt side versus what's available on the market to someone else in terms of bank debt. Sure. Into that'd be great. Exactly. I think in terms of kind of deal flow, I think we see quite a bit these days. I think we, of course, again, we are being quite selective. I mean some segments, call it the entry price, be quite rich. You also have kind of lot of forward starting dates on a lot of the cash flow, where you, and that comes back to kind of financing and the ability to lock in interest cost. I think, I mean, we have evaluated a broad deal of, deal opportunities across, I would say all segments, liners, tankers, dry bulk. It is a lot of activity. Again, I think we are as always being very disciplined. We have a strong focus on counterparty risk and also residual value. Of course, that is a bit tricky these days with all kind of the new propulsion technologies, and there's kind of no clear conclusion on what the right solution yet. In those occasions, you especially have to be certain that you have a sufficiently long charter to basically have a residual that you're very comfortable with. In terms of bank financing, I would say currently we have a bank group of, I think, around 30 banks, international. I think you see the migration to the East where SFL Corporation we have a lot of good cornerstone banks in Japan, also in Taiwan, and also a lot of support from many of the Chinese financial institutions. European banks are still there, I would say, due to regulatory issues and overall policy of reducing their exposure to the shipping space, there has been retraction. Overall, it's really a flight to quality for the banks. For SFL Corporation, we are very fortunate. We have very good access to capital. I would say, looking back over, call it, last 12 months, the margins have become more competitive, which has basically enabled us to basically take advantage of the capital cost arbitrage of the transactions we do. For us, if you look at the recent transactions we've done, there's so many incoming calls in terms of wanting to finance these assets. We are optimistic to basically finance the transactions and also new opportunities, and we're appreciative to our banking group of the support they are giving us. Got it. Actually, two very small points of clarification. On the deal flow you're seeing, is there more of a reluctance to take on the residual value risk from your customer's perspective? I think it was layered in there. I just want to clarify that, and then also just to be clear, the access to sort of the broad bank group, The Eastern banks, that's not necessarily something that's broadly available throughout the market, or is that something more specific to you? Just trying to understand if that's an industry trend or an SFL Corporation trend. On the first one, I think all customers try to put the residual risk to you. I think that is something you see in the market. I think we have a big group of existing clients, a very good relationship, and I think that's very often see that you can expand relationships, and you basically take a common approach to what sensible residual value is for both parties, and those are the deals you can execute on. Could you please repeat the last part of your question? You mentioned the trend about the pulling out or the- The banks pulling out? Reluctance from the banks and them being replaced by Eastern banks. Is the ability to access the replacement banks something that's available to the entire market, or is that something more specific to you given the scale and scope? Just trying to understand if it's an SFL Corporation trend or an industry trend. Yeah, as I said, there's a general flight to quality. I think SFL Corporation is a company due to its kind of strong track record affiliation with the Seatankers group of companies. We are fortunate to have strong access to banks. I think it's really the, call it second, third tier ship owners that basically are losing out on bank capacity. Even from the European banks, we have a very strong support. With regards to the Japanese banks, they are very fond of our business strategy, always to acquire an asset with a long charter attached. That's very familiar with them because that is the approach that most of the Japanese ship owners have as well. Resonates good with their approach to risk. Thank you. Thank you. Thank you. There are no further questions at this time. Please continue. Thank you. I would like to thank everyone for participating in our first quarter conference call, and also thank the SFL team on board the vessels and on shore for their efforts in a challenging time with continued uncertainty caused by the COVID-19 situation, and particular for our vessel crews. If you have any follow-up questions, there are contact details in the press release, or you can get in touch with us through the contact pages on our webpage, www.sflcorp.com. Thank you. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.