26 Financial liabilities

Bank loans and credit limit

During 2015, Swisscom took up short-term bank loans in CHF and EUR on a weekly and monthly basis. As of 31 December 2015, there were short-term bank loans totalling CHF 130 million and EUR 500 million outstanding (prior year: CHF 530 million).

In 2015, Swisscom had a bank loan of EUR 200 million (CHF 217 million) with a term of 5 years. This interest-bearing bank loan was transformed into variable-rate CHF financing through a foreign currency swap and was designated as a fair value hedge for hedge accounting. In 2015, Swisscom repaid bank loans amounting to CHF 960 million and EUR 350 million. As of 31 December 2015, no transaction costs were recognised in connection with the bank loans, as in the prior year. The effective interest rate of the CHF denominated bank loans –0.2%, in EUR –0.3% and in USD 4.62%. A bank loan of EUR 300 million was designated for hedge accounting for net investments in foreign shareholdings. The bank loans may become due for immediate repayment if the shareholding of the Swiss Confederation in the capital of Swisscom falls below one third or if another shareholder can exercise control over Swisscom.

Swisscom has a confirmed bank line of credit amounting to CHF 100 million maturing in 2016 and a further confirmed line of credit of CHF 2,000 million from banks maturing in 2020. As of 31 December 2015, these lines of credit had not been drawn down, as in the prior year.

Debenture bonds

In April 2015, Swisscom issued two debenture bonds with an aggregate nominal value of CHF 400 million: one issue for CHF 250 million with a coupon rate of 0.25% and maturing in 2023 and a second issue for CHF 150 million bearing interest of 1.0% maturing in 2035. These issues were taken up to repay outstanding debts. In addition, interest rate swaps were entered into for a nominal amount of CHF 225 million to hedge the interest rate risk on financing received which were designated as fair value hedges for hedge-accounting purposes. In September 2015, Swisscom took up a debenture bond for EUR 500 (CHF 542 million) with a coupon rate of 1.75% and with final maturities in 2025. The debenture bond was issued by Lunar Funding V, an independent Irish multi-purpose vehicle. It is secured by a loan note from Lunar Funding V to Swisscom in the same amount. The bond so taken up was used to refinance existing finance debts. In addition, the EUR 500 million interest-bearing financing was swapped into variable-rate financing in CHF and designated as a fair value hedge for hedge-accounting purposes. Already in the prior year, Swisscom had taken up a debenture bond totalling EUR 500 million (CHF 601 million) through the intermediary of Lunar Funding V which was designated for hedge accounting of net investments in foreign shareholdings. In 2015, Swisscom repaid a debenture bond of CHF 500 million upon maturity. In the prior year, Swisscom repaid a debenture bond of CHF 1,250 million upon maturity. In addition, in the prior year, a premature partial redemption of the debenture bond maturing in 2018 and totalling CHF 75 million (nominal value) was made. The difference of CHF 8 million between the redemption amount of CHF 83 million and the carrying amount of the redeemed bonds of CHF 75 million was recognised as other financial expense.

Private placements

The interest rate risk of private placements maturing in 2016 is hedged with interest rate swaps and was designated as cash flow hedges for hedge-accounting purposes. The duration of the hedges is identical to the duration of the hedged private placements. As in the prior year, no transaction costs were recorded as of 31 December 2015 in connection with the private placements. The effective interest rate on the private placements is 1.7%. The Swiss-franc-denominated private placements of CHF 581 million maturing in 2017 through 2019 may become due for immediate repayment if the shareholding of the Swiss Confederation in the capital of Swisscom falls below 35% or if another shareholder can exercise control over Swisscom. The investors in the remaining private placements are entitled to resell their investments to Swisscom should the Swiss Confederation permanently give up its majority shareholding in Swisscom.

Liabilities arising from finance leases

­Swisscom concluded two agreements in 2001 for the sale of real estate. At the same time, Swisscom entered into long-term agreements to lease back part of the real estate sold which, in part, qualify as finance leases. The gain realised on real estate classified as finance leases was deferred. As of 31 December 2015, the deferred gains totalled CHF 163 million (prior year: CHF 167 million). The deferred gains are released to other income over the term of the individual leases. The effective interest rate of the finance lease liabilities was 5.84%.

The minimum lease payments and financial liabilities relating to these leaseback agreements are set out in the following table:

The future payments of the liabilities arising under finance leases, expressed in terms of their present value, as of 31 December 2014 and 2015 were as follows:

In addition, operating lease arrangements exist for miscellaneous real estate with terms of 1 to 25 years. See Note 35. In 2015, conditional rental payments of CHF 3 million were recorded as rental expense (prior year: CHF 3 million).