[1] In December 1975, Baldur was transferred to the Icelandic Coast Guard and converted to an armed trawler to serve in the third Cod Wars conflict against the United Kingdom under captain Höskuldur Skarphéðinsson.

[2] Its main purpose was to cut the nets of British trawlers fishing inside the 200-nautical-mile (370-kilometre) exclusive fishery zone claimed by Iceland.

[3][4][5] On 28 February HMS Yarmouth collided with Baldur's stern, severely damaging the frigate's bow,[6] and forcing her to leave the patrol area assisted by the Royal Maritime Auxiliary Service tug Rollicker.

[7][8] On 10 March, after having evaded several collision attempts by HMS Mermaid, Baldur collided Diomede and suffered moderate damage.

This time the frigate was severely damaged after colliding with Baldur's stern, with over 6-metre (20 ft) long tear opening on its port side,[12] knocking it out of the conflict.