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SFL - Termination of charters for five container vessels


April 10, 2012 - HAMILTON, BERMUDA


Press release from Ship Finance International Limited, April 10, 2012

Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the"Company"),today announced that it has agreed to terminate chartering agreements withHorizon Lines, LLC ("Horizon Lines") relating to five of its vessels. ShipFinance will receive as termination compensation $40 million in second liennotes issued by Horizon Lines and warrants exercisable into ten percent ofthecommon stock of Horizon Lines, Inc. as part of the restructuring outlinedbelow.

The 2,824teu vessels were built in Korea in 2006 and 2007, and have beenchartered to Horizon Lines for an average of approximately 5 years. Theoriginalbareboat charter term was for 12 years, but following the termination oftheHorizon Lines charters, Ship Finance will employ the vessels in thetime-chartermarket instead. The break-even rate per day per vessel (after interest,debtamortization and estimated operating expenses) will be approximately$10,500 forthe first 18 months and thereafter approximately $14,500 per day for thenext66 months.

The issuance of the $40 million of notes is part of a comprehensiverestructuring of Horizon Lines. The notes will be part of a total ofapproximately $140 million of second lien notes, and junior toapproximately$225 million of first lien notes. The notes will mature in October 2016andinterest is payable semi-annually, first time in October 2012. The annualinterest rate will be 13% if paid in cash, 14% if paid 50/50 in cash andnewlyissued bonds and 15% if paid in newly issued bonds only.

As security for the bonds, Horizon Lines has pledged essentially all of itsassets, including 12 owned vessels in its U.S. Jones Act business. HorizonLines will have the option to redeem the notes at 106% starting in October2013, at 103% starting in October 2014 and at par starting in October 2015.

In addition, as part of Horizon Lines' overall restructuring, holders ofitsremaining $228 million of Convertible Senior Secured Notes converted theirnotesinto common stock (or warrants for non-U.S. citizens). Following thisconversionof Convertible Senior Secured Notes and the issuance of the $40 million ofnotesto Ship Finance, Horizon Lines, Inc.'s total funded debt will be reducedfromapproximately $593 million as of March 31, 2012 to approximately $404million.

CEO of Ship Finance Management AS, Ole B. Hjertaker, said in a comment:"We arepleased with the outcome of this comprehensive restructuring of HorizonLines.The vessels are only five years old on average and of good quality anddesign.Even though the container chartering market currently is soft, we believethereis a good potential for improvements from current levels and our break-evenrates are significantly below the historical average."

Mr. Hjertaker continued: "The redelivery of the five vessels to ShipFinancewill enable Horizon Lines to focus entirely on its core domestic U.S JonesActcontainer market, and Horizon Lines should be well positioned to deliverpositive results going forward. Ship Finance will become a largestakeholder inthe restructured Horizon Lines and expects to benefit from both theinterest onthe notes as well as the value of securities received."


April 10, 2012

The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda

About Ship Finance

Ship Finance is a major ship owning company listed on the New York StockExchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 69vessels, including 25 crude oil tankers (VLCC and Suezmax), two chemicaltankers, five oil/bulk/ore vessels, 11 drybulk carriers including twonewbuildings, 15 container vessels including four newbuildings, sixoffshoresupply vessels, one jack-up drilling rig, one ultra-deepwater drillship andtwoultra-deepwater semi-submersible drilling rigs. The fleet is one of thelargestin the world and most of the vessels are employed on long-term charters.

More information can be found on the Company's website: www.shipfinance.org

Cautionary Statement Regarding Forward Looking Statements

This press release may contain forward looking statements. These statementsarebased upon various assumptions, many of which are based, in turn, uponfurtherassumptions, including Ship Finance management's examination of historicaloperating 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 actual resultstodiffer materially from those discussed in this presentation include thestrengthof world economies and currencies, general market conditions includingfluctuations in charter hire rates and vessel values, changes in demand inthetanker market as a result of changes in OPEC's petroleum production levelsandworldwide oil consumption and storage, changes in the Company's operatingexpenses including bunker prices, dry-docking and insurance costs, changesingovernmental rules and regulations or actions taken by regulatoryauthorities,potential liability from pending or future litigation, general domestic andinternational political conditions, potential disruption of shipping routesdueto accidents or political events, and other important factors describedfromtime to time in the reports filed by the Company with the United StatesSecurities 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[HUG#1601184]

Questions should be directed to:
Harald Gurvin
Chief Financial Officer, Ship Finance Management AS
+47 23114009 / +47 97520363

Ole B. Hjertaker
Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243

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