But I think the ones — I mean if you look at the ones you offer more financing structures, maybe for them there is more deal flow opportunity right now, simply because funding cost is higher. And therefore, the alternative cost of doing like a bareboat type lease is relatively smaller. But we have strategically moved a little away from the bareboat type offering because what we have seen is that for those kind of deals, you typically do that with intermediaries. You don’t do a bareboat deal with an end user. And therefore, there is a risk element here that I think is underappreciated, right now most of the shipping segments are booming, strong markets, nobody talks about it. But we’ve been through this over 20 years now. We’ve seen some cycle over the years.
So our focus is to do deals with strong counterparties and users, focus on getting the right deals done and don’t be nervous, if there is a quarter when you do that many deals. The deal flow is out there. There is a continued need for transportation assets and logistics solutions on the water, but they just don’t be desperate to do a deal because that’s when you do the wrong deals, maybe that’s a short answer to that. We are constantly screening deal opportunities. We are looking at opportunities. We cannot communicate specifically what we look at, but there are deals that could potentially be done. But we try to be disciplined. It’s got to be the right type of asset. We have to focus on the right as we call it residual value exposure i.e. what kind of residual risk are we willing to take on after a deal, what’s the financing structure?
And maybe importantly, who’s the counterparty? Is this a counterparty strong enough and an underlying volatile market, is this counterparty someone who can honor their obligation also in a down cycle, because that’s what we’ve seen over the years is that anybody can do a deal in an upcycle market, you just pay a little more than the next guy. The problem is, how do you manage the down cycles. And that’s I think that’s something that we hope our history brings along is that, yes, markets are volatile, but we managed through some pretty rough cycles. And hopefully, we’re set up to deal even better with cycles going forward.
Unidentified Analyst: Okay. Great. And then I just have one other question on the balance sheet. I noticed that we saw I guess sequentially some of the long-term lease liability went into short-term lease liabilities. Is that just going to unwind? Or should we think about that being either renewed or extended over the next call? I don’t know couple of quarters.
Aksel Olesen: It’s Aksel here. So I think you should look at us like our ordinary traditional debt on the vessels that there are opportunities to basically roll this going forward as well. We haven’t finally concluded if we can do in New York or do that bit additional bank financing, but both options are likely, so could just assume rolling that on the same level.
Unidentified Analyst: Okay. Perfect. Thank you for that. Thanks, everybody.
Aksel Olesen: Thank you.
Ole Hjertaker: Thank you.
Unidentified Company Representative: [Operator Instructions] And the next question will come from Richard Diamond. Please unmute and speak.
Richard Diamond: Great quarter, great job building cash flow. Ole, you and the team have incredible deal flow at SFL. What do you think are the most interesting areas looking out to the fourth quarter and next year?
Ole Hjertaker: Yes. Thanks for that Richard, and thanks for the kind words. We are focusing across the Board, our preference are for deals that are I would say logistics sort of oriented i.e. where we go into a logistics chain with counterparties. So car carriers for instance is a segment that we’ve been spending quite a bit of time on. We’ve grown a lot in that segment. We still think there could be interesting opportunities on the container side. Yes, the market is volatile. And yes, I can say, it’s not the super cycle we saw a year or two ago. But there’s still underlying demand for transportation capacity. And certainly with modern high-end assets the more fuel efficient that is reducing both call it the energy footprint or emissions footprint per loaded box where that matters.
And that’s also where we have concentrated our investments. We’ve also seen some of the opportunities on the tanker side. So I would say there are opportunities across the Board here. The only segment you can say, we don’t have in our portfolio that would be natural would be LNG in particular. But our dilemma there has been one it’s sort of the investment level in that segment and the charter rates where you don’t really amortize down so much of the investment, which means that we have been a little conservative in our willingness to take on residual exposure in that segment. But otherwise, we are active across the Board and looking at opportunities and I think we have quite good access to deal flow.
Richard Diamond: Thank you.
Ole Hjertaker: Yes. Thank you.
Aksel Olesen: Thank you.
Unidentified Company Representative : As there are no further questions from the audience, I would like to thank everyone for participating in this conference call. If you have any follow-up questions to management, there are contact details in the press release, or you can get in touch with us through the contact pages on our webpage, www.sflcorp.com. Thank you very much.
