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26 Financial liabilities

In CHF million   31.12.2016   31.12.2015
Bank loans   208   746
Debenture bonds   645   45
Private placements   251   350
Finance lease liabilities   16   16
Other interest-bearing financial liabilities   1   2
Derivative financial instruments. See Note 33.   1   6
Other non-interest-bearing financial liabilities   3   30
Total current financial liabilities   1,125   1,195
         
Bank loans   545   610
Debenture bonds   5,495   5,385
Private placements   487   581
Finance lease liabilities   492   510
Other interest-bearing financial liabilities   33   13
Derivative financial instruments. See Note 33.   62   55
Other non-interest-bearing financial liabilities   257   244
Total non-current financial liabilities   7,371   7,398
Total financial liabilities   8,496   8,593

Bank loans and credit limit

          Carrying amount

In CHF million
 
Due within
  Par value
in CHF
 
31.12.2016
 
31.12.2015
Bank loans in CHF variable interest-bearing   2016   130     130
Bank loans in EUR variable interest-bearing   2016   542     542
Bank loans in CHF variable interest-bearing   2017   70   70  
Bank loans in EUR variable interest-bearing   2017   64   64  
Bank loans in EUR variable interest-bearing   2020   258   258   326
Bank loans in EUR fixed interest-bearing   2020   215   219   219
Bank loans in USD fixed interest-bearing   2028   101   142   139
Total bank loans           753   1,356

During 2015 and 2016, Swisscom took up short-term bank loans in CHF and EUR on a weekly and monthly basis. As of 31 December 2016, there were, as a result, short-term bank loans totalling CHF 70 million and EUR 60 million outstanding (prior year: CHF 130 million and EUR 500 million).

In the prior year, Swisscom had taken up a bank loan of EUR 200 million with a term of until 2020. This interest-bearing EUR-denominated bank loan was transformed into variable-rate CHF interest-bearing financing through a foreign-currency swap and was designated as a fair value hedge for hedge accounting purposes. As of 31 December 2016, 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 was –0.20%, in EUR –0.16% and in USD 4.62%. A bank loan of EUR 240 million (CHF 258 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 two confirmed lines of credit from banks each amounting to CHF 1,000 million maturing in 2020 and 2022, respectively. As of 31 December 2016, none of these lines of credit had been drawn down, as in the prior year.

Debenture bonds

              Carrying amount

In CHF million
 
Maturity years
  Par value
in CHF
  Nominal
interest rate
 
31.12.2016
 
31.12.2015
Debenture bond in CHF   2007–2017   600   3.75%   610   610
Debenture bond in CHF   2009–2018   1,425   3.25%   1,434   1,432
Debenture bond in EUR   2013–2020   537   2.00%   535   539
Debenture bond in EUR   2014–2021   537   1.88%   536   540
Debenture bond in CHF   2010–2022   500   2.63%   500   499
Debenture bond in CHF   2015–2023   250   0.25%   253   251
Debenture bond in CHF   2012–2024   500   1.75%   504   504
Debenture bond in EUR   2015–2025   537   1.75%   554   540
Debenture bond in CHF   2014–2026   200   1.50%   202   202
Debenture bond in CHF   2016–2027   200   0.38%   198  
Debenture bond in CHF   2016–2028   200   0.38%   202  
Debenture bond in CHF   2014–2029   160   1.50%   161   161
Debenture bond in CHF   2016–2032   300   0.13%   299  
Debenture bond in CHF   2015–2035   150   1.00%   152   152
Total debenture bonds               6,140   5,430

In 2016, Swisscom issued three debenture bonds with an aggregate nominal value of CHF 700 million: of this amount, CHF 200 million bears a coupon rate of 0.375% maturing in 2028, CHF 300 million bearing interest of 0.125% maturing in 2032 as well as an issue of CHF 200 with coupon rate of 0.375% maturing in 2027. These debenture bonds issues were taken up to repay outstanding debts. In the prior year, Swisscom took up debenture bonds totalling CHF 400 million. Related to this, interest rate swaps were entered into for a nominal amount of CHF 425 million in order to hedge the interest rate risk on financing received and were designated as fair value hedges for hedge-accounting purposes.

In 2015, Swisscom had taken up a debenture bond totalling EUR 500 million (CHF 542 million) through the intermediary of Lunar Funding V. This interest-bearing financing of EUR 500 million was swapped into variable-rate financing in CHF by means of a foreign-currency swap and designated as a fair value hedge for hedge-accounting purposes. Furthermore, Swisscom repaid a debenture bond amounting to CHF 500 million upon maturity in the prior year.

Private placements

          Carrying amount

In CHF million
 
Due within
  Par value
in CHF
 
31.12.2016
 
31.12.2015
Private placements in CHF domestic   2016   200     200
Private placements in CHF abroad   2017   250   249   247
Private placements in CHF abroad   2018   72   70   69
Private placements in CHF abroad   2019   278   269   265
Private placements in CHF domestic   2031   150   150   150
Total private placements           738   931

In the first quarter of 2016, a maturing private placement totalling CHF 150 million was extended by a further 15 years at a fixed interest rate of 0.56%. As in the prior year, no transaction costs were recorded as of 31 December 2016 in connection with the private placements. The effective interest rate on the private placements is 1.2%. The Swiss-franc-denominated private placements with a carrying value of CHF 588 million maturing in 2017 to 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 2016, the deferred gains totalled CHF 158 million (prior year: CHF 163 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 6.0%.

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

In CHF million   31.12.2016   31.12.2015
Within 1 year   45   46
Within 1 to 2 years   44   40
Within 2 to 3 years   38   39
Within 3 to 4 years   34   36
Within 4 to 5 years   33   35
After 5 years   984   1,060
Total future minimum lease payments   1,178   1,256
Less future financing costs   (670)   (730)
Total finance lease liabilities   508   526
Thereof current finance lease liabilities   16   16
Thereof non-current finance lease liabilities   492   510

The future payments of the liabilities arising under finance leases, expressed in terms of their present value, as of 31 December 2015 and 2016 were as follows:

In CHF million   31.12.2016   31.12.2015
Within 1 year   16   16
Within 1 to 2 years   16   11
Within 2 to 3 years   11   10
Within 3 to 4 years   7   7
Within 4 to 5 years   6   6
After 5 years   452   476
Total present value of finance lease liabilities   508   526

In addition, operating lease arrangements exist for miscellaneous real estate with terms of 1 to 25 years. See Note 35. In 2016, conditional rental payments of CHF 2 million were recorded as rental expense (prior year: CHF 3 million).

Other non-interest-bearing financial liabilities

On 31 December 2016, the carrying value of other non-interest-bearing financial liabilities amounts to CHF 260 million (prior year: CHF 274 million). Included therein is the carrying value of a financial liability in the amount of CHF 233 million (prior year: CHF 230 million) arising from the acquisition of search.ch AG in 2015. See note 5.