INTERVIEW-S'pore's First Ship to grow assets by $300-$350 mln/yr

SINGAPORE, July 25 (Reuters) - Singapore's First Ship Lease Trust (FSL) FSLT.SI said on Friday it aims to buy up to $350 million worth of vessels a year and that borrowing costs remain reasonable despite the credit crunch.

"Going forward, we are looking at $300 to $350 million on an annual basis to grow our portfolio," Chief Financial Officer Cheong Chee Tham told Reuters in an interview.

Borrowing costs remain "reasonable" at around Libor plus 120 basis points compared with Libor plus 100 basis points about a year ago, he added.

FSL leases tankers, container ships and dry bulk carriers to shipping firms such as Taiwan's Yang Ming (2609.TW: Quote, Profile, Research) and Russia's Rosneft (ROSN.MM: Quote, Profile, Research) on a long-term basis. It has a fleet of 22 vessels with another on the way once financing is completed.

For the second quarter ended June 30, the trust's revenue rose 71 percent to $20.7 million from a year ago while distribution to unitholders increased 28 percent to 2.8 U.S. cents a share.

FSL expects to pay a third quarter distribution of 3.05 cents, Cheong said, adding that the payout will remain at 100 percent of surplus cash flow in the foreseeable future. (Reporting by Kevin Lim and Charmian Kok, editing by Neil Chatterjee)