Financial debt includes all of the Bertelsmann Group’s interest-bearing liabilities to banks and capital markets as of the end of the reporting period. Carrying amounts are calculated as follows:

Current and Non-Current Financial Debt  

CurrentNon-current
Remaining term in years
in € millions12/31/201512/31/20141 to 5 years> 5 years12/31/201512/31/2014
Bonds7864301002,5782,6782,220
Promissory notes16014930960
Liabilities to banks8291121210
Lease liabilities109545462
Other financial debt1221241752212
1,0006543432,7323,0752,364

At initial recognition within the scope of IAS 39, the noncurrent financial debt is recognized at fair value including transaction costs, and the subsequent measurement is based on amortized cost using the effective interest method. Foreign currency liabilities are translated using the exchange rate at the end of the reporting period. The Bertelsmann Group has access to floating rate and fixed-rate funds through various contractual arrangements. Financial debt is generally unsecured.
In April 2015, Bertelsmann SE & Co. KGaA issued two subordinated hybrid bonds totaling a volume of €1,250 million. The first bond, with a nominal volume of €650 million, has a term of 60 years and a 3.0 percent coupon for the first eight years. Afterwards, interest rates will be reset every five years based on the five-year swap rate. This bond can be called by Bertelsmann for the first time in 2023 and redeemed at its nominal value. The second bond with a nominal volume of €600 million also has a term of 60 years and a 3.5 percent coupon for the first twelve years. Afterwards, interest rates will be reset every five years based on the five-year swap rate. Bertelsmann can first call this bond in 2027 and redeem it at its nominal value. Interest for the two bonds may be deferred depending on a dividend payment to the owners of Bertelsmann SE & Co. KGaA. In December 2015, Bertelsmann issued a promissory note in the amount of €100 million with a term of five years and a promissory note in the amount of €150 million with a term of ten years in private placements. The bond due in October 2015 in the amount of €500 million was repaid on time, of which €70 million had already been repaid ahead of time in the financial year 2013. At the end of the reporting period, the Group had bonds, private placements and promissory notes outstanding with a nominal volume of €3,796 million (previous year: €2,726 million).
The differences in carrying amount versus nominal value in the table below result from transaction costs, premiums and discounts.

Bonds and Promissory Notes  

in € millionsDue dateEffective interest rate in %Carrying amount 12/31/2015Carrying amount 12/31/2014Fair value 12/31/2015Fair value 12/31/2014
3.625% Bertelsmann SE & Co. KGaA
(€500 million bond) 2005
10/6/20153.74430441
4.750% Bertelsmann SE & Co. KGaA
(€1,000 million bond) 2006
9/26/20164.89786785813842
4.207% Bertelsmann SE & Co. KGaA
(€60 million promissory note) 2012
5/4/20194.2160606869
3-mon.-EURIBOR + 40 Bp. Bertelsmann SE &
Co. KGaA (€100 million floating rate note) 2014
11/18/2019n/a100100100100
0.774% Bertelsmann SE & Co. KGaA
(€100 million promissory note) 2015
12/1/20200.84100100
2.625% Bertelsmann SE & Co. KGaA
(€750 million bond) 2012
8/2/20222.80742741816836
1.750% Bertelsmann SE & Co. KGaA
(€500 million bond) 2014
10/14/20241.84496496506516
1.787% Bertelsmann SE & Co. KGaA
(€150 million promissory note) 2015
12/1/20251.83149151
3.700% Bertelsmann SE & Co. KGaA
(€100 million bond) 2012
6/29/20323.849898121128
3.000% Bertelsmann SE & Co. KGaA
(€650 million hybrid bond) 2015
4/23/20753.11646606
3.500% Bertelsmann SE & Co. KGaA
(€600 million hybrid bond) 2015
4/23/20753.58596531
3,7732,7103,8122,932

The documentation of the bonds from Bertelsmann SE & Co. KGaA in 2005, 2012 and 2014 is within the framework of a base documentation for debt issuance programs. The bonds issued by Bertelsmann SE & Co. KGaA in 2006 and the promissory notes were issued on the basis of separate documentation. The bonds have a rating of “Baa1” (Moody’s) and “BBB+” (Standard & Poor’s). The debt issuance program was updated in April 2015. The framework documentation allows Bertelsmann SE & Co. KGaA to place bonds with a total volume of up to €4 billion on the capital market. Transaction costs and agreed discounts or premiums are taken into account in interest result over the term, impacting the carrying amount of the bonds and promissory notes. These led to a difference to the nominal volume of €-23 million (previous year: €-16 million) at the end of the year.
As a rule, in order to determine the fair value of the bonds issued, the quoted prices at the end of the reporting period are used. On December 31, 2015, the cumulative fair value of the listed bonds totaled €3,272 million (previous year: €2,635 million) with a nominal volume of €3,286 million (previous year: €2,466 million) and a carrying amount of €3,266 million (previous year: €2,452 million). The stock market prices are based on level 1 of the fair value hierarchy.

The quoted prices applied in determining the fair values are shown in the table below.

Quoted Prices  

in percent12/31/201512/31/2014
3.625% Bertelsmann SE & Co. KGaA
(€500 million bond) 2005
102.589
4.750% Bertelsmann SE & Co. KGaA
(€1,000 million bond) 2006
103.370107.008
2.625% Bertelsmann SE & Co. KGaA
(€750 million bond) 2012
108.793111.447
1.750% Bertelsmann SE & Co. KGaA
(€500 million bond) 2014
101.210103.170
3.000% Bertelsmann SE & Co. KGaA
(€650 million hybrid bond) 2015
93.261
3.500% Bertelsmann SE & Co. KGaA
(€600 million hybrid bond) 2015
88.417

The fair values of private placements and promissory notes are determined using actuarial methods based on yield curves adjusted for the Group’s credit margin. This credit margin results from the market price for credit default swaps at the end of the respective reporting periods. Fair value is measured on the basis of discount rates ranging from -0.07 percent to 2.29 percent. The fair values of the private placements and promissory notes are based on level 2 of the fair value hierarchy.

The table below shows the interest rates for bonds and promissory notes issued.

Interest on Bonds and Promissory Notes  

Carrying amount as of 12/31/2015Carrying amount as of 12/31/2014
in € millionsFixed interestFloating rateTotalFixed interestFloating rateTotal
Bonds3,3641003,4642,5501002,650
Promissory notes3093096060
 3,6731003,7732,6101002,710

Credit Facility

The Bertelsmann Group has access to a syndicated agreement entered into with major international banks in the amount of €1,200 million (previous year: €1,200 million), which in June 2015 was extended by one year to 2020. Bertelsmann SE & Co. KGaA can draw down this credit facility using floating rate loans in euros, US dollars and pounds sterling based on EURIBOR or LIBOR on a revolving basis.

Leasing Liabilities

Finance leases exist for the following assets:

Leased Assets  

12/31/201512/31/2014
in € millionsAcquisition costsNet carrying amountAcquisition costsNet carrying amount
Land, rights equivalent to land and buildings1054810552
Technical equipment and machinery8262
Other equipment, fixtures, furniture and office equipment135157
1265512661

The beneficial ownership of leased assets lies with the lessee, providing that the lessee also bears the significant risks and rewards of ownership. The Group’s finance lease activities primarily relate to long-term agreements for office space. The Group generally has the option to acquire such properties at the end of the lease term.

The minimum lease payments for finance leases are presented in the following table:

Minimum Lease Payments for Finance Leases  

12/31/201512/31/2014
in € millionsNominal amount of lease pay­mentsDis­count amountsPresent valueNominal amount of lease pay­mentsDis­count amountsPresent value
Up to 1 year10101010
1 to 5 years6285441437
Over 5 years31724
72864821171

As of the end of the reporting period, no subleases were in place as part of finance lease agreements. In the previous year, future minimum lease payments with a nominal value of less than €1 million were expected as a result of subleases arising from finance lease agreements.