38. Non-Current and Current Financial Liabilities

The increase in amounts due to banks is mainly attributable to promissory note loans in the amount of € 70 million issued to banks in the 2015 financial year. These promissory note loans with a lower interest rate repay the € 65 million loan granted by HGV to the Real Estate subgroup, see also Note 48. Amounts due to banks also include interest of € 1,913 thousand accrued up to the balance sheet date (previous year: € 2,162 thousand). Transaction costs of € 713 thousand (previous year: € 584 thousand), incurred by taking out loans, only increase the amounts due to banks for the duration of the loan.

Other loans comprise a € 11.5 million loan granted by a minority shareholder in 2015 as well as promissory note loans of € 5 million issued to other creditors.

Buildings, surfacing and movable non-current assets with a carrying amount of € 4,207 thousand (previous year: € 6,869 thousand) have been pledged as collateral for interest-bearing loans. The collateral agreements provide that the assets are transferred to the banks until the loans and interest have been repaid in full and that they have a right to dispose of the assets if the borrower is in arrears with payments of interest and principal.

Liabilities from finance leases (€ 40,084 thousand; previous year: € 39,853 thousand) represent the discounted value of future payments for movable non-current assets.

The liabilities towards employees consist primarily of wages, salaries and holiday entitlements.

Other financial liabilities mainly consist of liabilities from the payment of a settlement to shareholders outside the Group. This entitlement to a financial settlement amounts to € 47,161 thousand for the financial years 2015 and 2016 (previous year: € 52,738 thousand for the financial years 2014 and 2015), see also Note 6 and Note 35.

The floating interest rates are EURIBOR or LIBOR rates with maturities of one to six months.

Interest rates of 1.2 to 2.6 % p. a. (previous year: 1.7 to 2.4 % p. a.) were used to measure the fair value of fixed interest-bearing loans. The interest rates are derived from the risk-free rate depending on maturity plus a premium according to the credit rating. They therefore constitute market rates. The average interest rate for the reported liabilities from bank loans was 2.6 % in the reporting year (previous year: 3.1 %).

The variable interest rates are partly hedged by interest rate hedges (see also Note 47). As a result of borrowing, certain affiliates have covenants linked to key balance sheet figures and collateral. Violating these covenants would authorise the lender to demand additional collateral, a change to the conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of the balance sheet date, the corresponding borrowings totalled € 67,589 thousand (previous year: € 45,265 thousand).