Flex LNG Ltd has completed a $175 million Japanese operating lease with call option financing for the Bermudian-domiciled company’s vessel Flex Courageous, generating net proceeds of approximately $42 million.

The transaction, which extends the vessel’s debt maturity to 2035, is expected to reduce the cost of debt by approximately 1.5 per cent per annum. The refinancing follows the recently announced contract extension of up to 10 additional years for Flex Courageous.

This is the first of three planned vessel refinancings under the company’s balance sheet optimisation programme 3.0, introduced in the Q1 2025 investor presentation. The programme follows Flex LNG securing up to 37 years of combined contract backlog across three vessels.

Flex LNG remains on track to refinance Flex Resolute and Flex Constellation in the second half of 2025. Combined, the three refinancings are expected to unlock $120 million in net proceeds while also extending maturities and reducing borrowing costs.

“We are pleased to have completed our first refinancing of 2025 at very attractive terms,” said Knut Traaholt, chief financial officer of Flex LNG Management AS. “We sincerely appreciate the continued trust and support from our banking partners and lease providers. With this transaction completed, we now turn our attention to the planned refinancings of Flex Resolute and Flex Constellation, continuing our efforts to further strengthen Flex LNG’s financial platform.”

As of the end of Q1 2025, Flex LNG reported a cash balance of $410 million.