Summary
Goldman Sachs Group, Inc. (GS) filed an 8-K on June 17, 2019, to report the establishment of its 5.50% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series Q. This filing details the terms and conditions of this new preferred stock, including its liquidation preference and dividend rate. Crucially for investors, the issuance of this Series Q Preferred Stock imposes certain restrictions on Goldman Sachs' ability to declare or pay dividends on, or repurchase, its common stock if dividends on the Series Q Preferred Stock are not paid. This is a standard feature designed to protect preferred stockholders and could impact the timing or amount of common stock distributions if the company encounters financial difficulties.
Key Highlights
- 1Goldman Sachs established a new series of preferred stock: 5.50% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series Q.
- 2The Series Q Preferred Stock has a liquidation preference of $25,000 per share.
- 3The issuance of Series Q Preferred Stock introduces restrictions on common stock dividends and repurchases if preferred dividends are not paid.
- 4This filing relates to the terms set forth in a Certificate of Designations filed with the Secretary of State of Delaware.
- 5The company is also referencing exhibits related to depositary shares representing interests in the Series Q Preferred Stock, indicating a potential public offering or issuance.
- 6Legal opinions from Sullivan & Cromwell LLP are included as exhibits, pertaining to the depositary shares.
- 7The filing was made on June 17, 2019, with an event date of June 13, 2019.
Frequently Asked Questions
The main purpose of this 8-K filing is to officially report the establishment and terms of a new class of preferred stock, the 5.50% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series Q. This includes details on its dividend rate, liquidation preference, and the associated restrictions it places on common stock distributions.
The Series Q Preferred Stock introduces a condition that can restrict Goldman Sachs' ability to pay dividends on or repurchase its common stock if it fails to pay dividends on the Series Q Preferred Stock. This means that preferred dividends take priority over common stock distributions in such scenarios.
The filing mentions "depositary shares representing interests in the Registrant’s Series Q Preferred Stock" and references a registration statement. This suggests that Goldman Sachs may be offering or has recently offered these depositary shares, which represent ownership interests in the Series Q Preferred Stock, to the public.
'Non-cumulative' means that if Goldman Sachs misses a dividend payment on the Series Q Preferred Stock in any period, that missed dividend is lost forever and does not accrue. The company is not obligated to make up for those missed payments in the future, though failure to pay may trigger the restrictions on common stock distributions.