Shipowner SFL Corp has opened the books for its previously announced bond sale.
The John Fredriksen-backed leasing company intends to issue a four-year senior unsecured sustainability-linked bond.
The books are already covered by investors for at least $150m with a fixed coupon of 8% to 8.25%, according to chief executive Ole Hjertaker.
“It is not unexpected. We are a repeat issuer,” he told TradeWinds.
The final size will be determined when the books are closed.
There has been great interest from investors in the US and outside Scandinavia, the CEO added.
The strong demand reflects that high-yield bond funds, which have seen large inflows lately, are eager to buy shipping bonds.
The bond will be linked to a set of sustainability goals.
“We are very comfortable that we will reach the sustainability targets,” Hjertaker said.
“We work with large logistics companies such as Maersk and Hapag-Lloyd. The clients and we have an incentive to make sure that our fleet is continuously improved.”
Net proceeds from the issue will be used for general corporate purposes, including refinancing and investments.
“This is a part of our ongoing operations. This one will mature in 2028, so then we will have bonds with a smooth maturity schedule,” Hjertaker said.
SFL has four outstanding senior unsecured bonds listed on the Oslo Stock Exchange.
One, an outstanding amount of NOK 695m ($64.9m), is maturing in June. A January 2025 bond has an outstanding amount of NOK 540m.
Two issues of $150m each have maturity in 2026 and 2027.
In March, SFL bought three LR2 tanker resales from Fredriksen’s private fleet in a $230m deal.
The company said then that it expects to take delivery of the vessels between the second and fourth quarter of this year, and the charter period will be a minimum five years plus up to three years of extension options.
SFL engaged Arctic Securities and DNB Markets for the bond sale.
