FSL TRUST TO ACQUIRE THREE CONTAINERSHIPS FOR US$210 MILLION

• Transaction significantly accretive to DPU
• Guidance for Q2 and Q3 DPU raised again:
    o   Q2: DPU of US2.77 cents, 6.9% higher than Q1 DPU and
    o   Q3: DPU of US3.05 cents, 17.8% higher than Q1 DPU of US2.59 cents
• Total asset acquisitions of more than half a billion US Dollars in just 14 months
    since listing; equivalent to 108% asset growth since IPO

Singapore, 12 May 2008 – FSL Trust Management Pte. Ltd. (“FSLTM”), Trustee-Manager of First Ship Lease Trust (“FSL Trust”), announced today that it has entered into a conditional agreement to acquire three container vessels from a wholly owned subsidiary of Taiwan-based and -listed Yang Ming Marine Transport Corporation (“YML”) for a total consideration of US$210 million.

YML is the world’s 16th largest container liner company with a consolidated revenue of NT$133.8 billion (US$4.1 billion) in 2007. The agreement remains subject to documentation and closing for vessels 1 and 2, and subject to documentation, closing and financing for vessel 3. The first vessel is expected to be delivered to FSL Trust by end May, the second by end June and the third by end October, all within this year.

The acquired vessels will concurrently be leased back to YML for a lease term of 12 years. The lease payments are on a fixed basis for the entire lease term. Each lease agreement contains a purchase option for YML at the expiry of the 12 year lease term.

Significant accretion to DPU

The acquisition of the initial two vessels will be significantly accretive to FSL Trust’s distribution per unit (“DPU”). Assuming no change in the equity structure of FSL Trust and after deducting estimated incentive fees attributable to the Trustee-Manager, the acquisition is projected to generate an additional DPU of US0.02 cents for the quarter ending 30 June 2008, and an additional DPU of US0.18 cents for each full calendar quarter thereafter. Together with the recently announced Geden transaction, the total DPU guidance for Q2 2008 is now US2.77 cents, and US3.05 cents for Q3. FSLTM will give guidance on the DPU accretion for the third vessel once financing has been secured.

Rationale for the acquisition

Mr Philip Clausius, Chief Executive Officer of FSLTM, said: “We are delighted to have entered into this agreement with YML, Taiwan’s second largest shipping group and one of the best credits in the industry. We continue our revenue diversification drive with yet another top class customer.

“This US$210 million transaction brings our total asset acquisitions to US$508 million in only 14 months since our listing in March 2007 and to US$350 million for this year, against a full year target of US$300 million. Equally important, we are delighted to again be able to deliver yet another round of very substantial and immediate DPU accretion to our unitholders.”

Funding

The acquisition of the first two ships will be funded by drawing from FSL Trust’s second US$200 million revolving credit line which is arranged by The Bank of Tokyo-Mitsubishi UFJ Co., Ltd., Singapore Branch and Bayerische Hypo- und Vereinsbank AG, Singapore Branch. Upon drawing from that line FSLTM will arrange for interest rate swaps to provide for a long term spread protection for these leases. FSLTM has commenced discussions with its lenders to increase the second revolving credit line from US$200 million to about US$265 million, enabling FSL Trust to also take delivery of the third vessel. Once these discussions are concluded, FSLTM will make an announcement providing further details.

Asset Description

The three vessels to be acquired in this transaction, namely ’YM Eminence’, ‘YM Elixir’ and ‘YM Enhancer’, are high quality container vessels of the “Panamax” class with a carrying capacity of about 4,250 TEU each. Built by CSBC Corporation, Taiwan, ’YM Eminence’ was delivered in April 2008, whereas ‘YM Elixir’ and ‘YM Enhancer’ are expected to be delivered in June and October this year respectively. Following their respective deliveries, the vessels will trade in YML’s Intra-Asia and Asia- Europe liner services. Classed with Lloyd’s Register of Shipping and flying the Liberia flag, FSL Trust will own the vessels through three Marshall Islands special purpose companies. From its initial portfolio of 13 vessels at listing, FSL Trust will have a portfolio of 23 vessels after successful closing of the third Yang Ming vessel by end October 2008, comprising seven containerships, nine product tankers, three chemical tankers, two dry bulk carriers and two crude oil tankers.

FSL Trust press release