8-KShareholder MattersCorporate ChangesExhibits & Filings

GOLDMAN SACHS GROUP INC 8-K Report, Rights Modification (Nov 15, 2019)

Filed November 15, 2019For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group Inc. (GS) has filed an 8-K report on November 14, 2019, detailing material modifications to the rights of its security holders and amendments to its articles of incorporation. Specifically, the company has established and filed the Certificate of Designations for its 4.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series R. This new class of preferred stock, with a liquidation preference of $25,000 per share, introduces specific terms and conditions that will impact the company's ability to manage its common stock dividends and repurchases. The primary implication for investors is the potential restriction on common stock dividends and repurchases if Goldman Sachs fails to pay dividends on its Series R Preferred Stock. This filing signifies a change in the capital structure and dividend policy, introducing a new layer of priority for preferred shareholders and potentially affecting the flexibility of common stock distributions. Investors in both common and preferred stock should review the Certificate of Designations for a complete understanding of the rights and restrictions associated with this new Series R Preferred Stock.

Key Highlights

  • 1Goldman Sachs Group Inc. has established a new class of preferred stock: 4.95% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series R.
  • 2The Series R Preferred Stock has a liquidation preference of $25,000 per share.
  • 3The filing of the Certificate of Designations for Series R Preferred Stock introduces new terms affecting security holder rights.
  • 4A key provision is the restriction on GS's ability to declare/pay common stock dividends or repurchase common stock if preferred dividends are not paid.
  • 5This action amends the company's Restated Certificate of Incorporation.
  • 6The company has also filed exhibits related to the offering and sale of depositary shares representing interests in the Series R Preferred Stock.

Frequently Asked Questions

The primary impact on common stock is that Goldman Sachs' ability to declare or pay dividends on, or purchase, redeem, or acquire its common stock will be subject to restrictions if it fails to pay dividends on its newly issued Series R Preferred Stock.

The Series R Preferred Stock is 4.95% Fixed-Rate Reset Non-Cumulative Preferred Stock with a liquidation preference of $25,000 per share. Its specific terms and conditions are detailed in the Certificate of Designations filed with the report.

Yes, the introduction of the Series R Preferred Stock and its associated dividend payment requirements means that the company's flexibility in distributing dividends to common shareholders is now tied to its ability to meet its obligations to preferred shareholders. Failure to do so will restrict common stock dividend payments.

Investors can find detailed information in Exhibit 3.1, the Certificate of Designations of the Registrant relating to the Series R Preferred Stock, which is filed as part of this 8-K report.