SFL Corporation Ltd (Hold, TP: USD8.60) - Counting down to H2 2022
Last night SFL Corp announced that the West Hercules rig will be redelivered by Seadrill by H2 2022, and set to charter at USD40k–65k/day – above the debt-servicing cost of cUSD60k/day. In our view, this limits the risk of a DPS cut within the coming year. SFL has guaranteed USD83m of the USD182m bank debt on the unit. Beyond H2 2022, we see cash generation at risk if the unit is left without a contract for a sustained period.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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