Lesson question

I am working on the lessons from hi.is. In lesson 2, part of the
exercise is to translate:

Óláfr á bát. Hann heitir Ormr.

I am thinking that it is supposed to be:

Olaf owns a boat. It is called Ormr.

But the original uses the pronoun "hann," where I'm thinking it
should be "þat." Otherwise, wouldn't it be, "he is called Ormr?"

Óláfr á bát. "þat" heitir Ormr.

Nominative case: I you he she it
Accusative case: me you him her it

Nominative case: ek þú hann hon þat
Accusative case: mik þik hann hana þat

Thank you!