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2016-07-22

Ship Finance International Limited: SFL - Adjusted agreement with Deep Sea Supply Plc.

Press release from Ship Finance International Limited, July 22, 2016.

Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the
"Company"), today announced that it has agreed to amend the terms of the
long-term chartering agreements with an affiliate of Deep Sea Supply PLC
("DESS").

Our current charter guarantor, Deep Sea Supply BTG AS ("DESS BTG"), is a 50/50
owned joint venture between DESS and the Brazilian company BTG Pactual
("BTG"). DESS and BTG have now agreed that DESS will acquire the remaining
shares in DESS BTG, with settlement in shares, warrants and some cash. The
agreement is subject to standard closing conditions, including approval by
the DESS's shareholders of the issuance of the warrants. Following the
acquisition, DESS will be our charter guarantor going forward.

Concurrently, DESS will amend its financing terms and effectively defer up to
$68 million of scheduled debt amortization until March 31, 2018 and also
extend maturity of three loan facilities which were originally due later this
year.

As part of the overall transaction, Ship Finance has agreed to reduce the
charter rates until May 2018, in exchange for extending the charter period by
3 years and introducing a 50/50 profit share on charter revenues earned by
the vessels. This will be combined with a prepayment of $17 million on our
bank loan facilities, equal to scheduled amortization until May 2018, and
certain other adjustments. The net effect on our distributable cash flow will
be neutral, with reduced charter hire balanced by reduced loan amortization
and lower interest expenses.

The proposed transaction will preserve DESS' liquidity position and better
position the company through the current market downturn in the segment,
while Ship Finance will effectively increase its backlog by approximately $21
million and still maintain the distributable cash flow from the vessels. In
addition we will now have a 50% profit share which could be valuable in a
market recovery scenario.

Ole B. Hjertaker, CEO of Ship Finance Management AS, said in a comment: "The
DESS charters were agreed back in 2007, and we have now enjoyed the cash flow
from these assets for nearly nine years and depreciated the vessels to a
comfortably low level. The reduction in charter rates is balanced by the
extended charter period, and the value of optionality relating to the new
profit share could be significant, as illustrated by the arrangement we have
on our tanker assets.

We will receive base charter rates which are clearly in excess of what can be
achieved in the spot market today and we will have a stronger counterpart
with a good liquidity position and low cash break-even rates. The uncertainty
relating to our offshore asset exposure should then be reduced, without
impacting our distribution capacity."

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

About Ship Finance

Ship Finance International Limited (NYSE: SFL) has an unprecedented track
record in the maritime industry, being consistently profitable and paying
dividends every quarter since 2004. The Company's fleet of more than 70
vessels is split between tankers, bulkers, container vessels and offshore
assets, and Ship Finance's long term distribution capacity is supported by a
portfolio of long term charters and significant growth in the asset base over
time.

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

Cautionary Statement Regarding Forward Looking Statements

This press release may contain forward looking statements. These statements
are based upon various assumptions, many of which are based, in turn, upon
further assumptions, including Ship Finance management's examination of
historical operating trends. Although Ship Finance believes that these
assumptions were reasonable when made, because assumptions are inherently
subject to significant uncertainties and contingencies which are difficult or
impossible to predict and are beyond its control, Ship Finance cannot give
assurance that it will achieve or accomplish these expectations, beliefs or
intentions.

Important factors that, in the Company's view, could cause actual results to
differ materially from those discussed in this presentation include the
strength of world economies and currencies, general market conditions
including fluctuations in charter hire rates and vessel values, changes in
demand in the tanker market as a result of changes in OPEC's petroleum
production levels and worldwide oil consumption and storage, changes in the
Company's operating expenses including bunker prices, dry-docking and
insurance costs, changes in governmental rules and regulations or actions
taken by regulatory authorities, potential liability from pending or future
litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
and other important factors described from time to time in the reports filed
by the Company with the United States Securities and Exchange Commission.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Ship Finance International Limited via Globenewswire

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