38. Non-Current and Current Financial Liabilities

Amounts due to banks also include interest of € 1,130 thousand accrued up to the balance sheet date (previous year: € 1,913 thousand). Transaction costs of € 320 thousand (previous year: € 713 thousand), incurred by taking out loans, only increase the amounts due to banks for the duration of the loan.

Other loans comprise a € 10.5 million loan granted by a minority shareholder (previous year: € 11.5 million) 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 € 3,112 thousand (previous year: € 4,207 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.

The liabilities from finance leases represent the discounted value of future payments for movable non-current assets.

The liabilities towards employees consist primarily of wages and salaries.

The other financial liabilities include a settlement obligation to other shareholders. This entitlement to a financial settlement amounts to € 40,647 thousand for the financial years 2016 and 2017 (previous year: € 47,161 thousand for the financial years 2015 and 2016), 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 2.2 % p. a. (previous year: 1.2 to 2.6 % 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 2.2 % in the reporting year (previous year: (2.6 %).

The variable interest rates were partly hedged by interest rate hedges until October 2016 (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 € 64,133 thousand (previous year: € 67,589 thousand).