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GOLDMAN SACHS GROUP INC 8-K Report, Rights Modification (Apr 23, 2015)

Filed April 23, 2015For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

This 8-K filing by The Goldman Sachs Group, Inc. (GS) announces a significant event related to its capital structure: the establishment and filing of a Certificate of Designations for its 5.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M. This series of preferred stock, with a liquidation preference of $25,000 per share, was officially established on April 20, 2015. An important implication for common stockholders is that the issuance of this Series M Preferred Stock introduces certain restrictions on the company's ability to declare or pay dividends on, or repurchase, its common stock. These restrictions are triggered if Goldman Sachs fails to pay the required dividends on the Series M Preferred Stock. Investors should note that this filing pertains to the terms of this new preferred stock and its impact on future common stock dividend policies and share repurchases.

Key Highlights

  • 1Goldman Sachs established its 5.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M, effective April 20, 2015.
  • 2The Series M Preferred Stock has a liquidation preference of $25,000 per share.
  • 3The issuance of Series M Preferred Stock imposes restrictions on common stock dividends and repurchases if preferred dividends are not paid.
  • 4This filing incorporates the Certificate of Designations, which details the terms of the Series M Preferred Stock.
  • 5The filing is connected to a Registration Statement on Form S-3 regarding the offering and sale of depositary shares representing interests in the Series M Preferred Stock.
  • 6Legal opinions from Sullivan & Cromwell LLP related to the depositary shares are also included as exhibits.

Frequently Asked Questions

The main purpose of this 8-K filing is to formally report the establishment and terms of Goldman Sachs' new 5.375% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M, by filing a Certificate of Designations. It also details how this new preferred stock issuance impacts the company's ability to make distributions to common shareholders.

If Goldman Sachs fails to pay the required dividends on the Series M Preferred Stock, the company will be restricted from declaring or paying dividends on its common stock, as well as from purchasing or redeeming its common stock. This prioritizes the payment of dividends to preferred shareholders.

The Series M Preferred Stock has a dividend rate of 5.375% fixed initially, and it is designated as Fixed-to-Floating Rate. It is also Non-Cumulative, meaning that any missed dividend payments are not accumulated and must be paid in the future.

Yes, the filing mentions that additional exhibits are provided in connection with the offering, issuance, and sale of depositary shares representing interests in the Series M Preferred Stock under a Registration Statement on Form S-3. This indicates that the preferred stock, likely in the form of depositary shares, is being made available to investors.