Summary
Goldman Sachs Group, Inc. (GS) has filed an 8-K to announce the creation and terms of its new 6.500% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series AA. This new preferred stock has a liquidation preference of $25,000 per share. The issuance of this Series AA Preferred Stock introduces specific restrictions on Goldman Sachs' ability to pay dividends on or repurchase its common stock, contingent upon the timely payment of dividends on the Series AA Preferred Stock. This filing is important for investors as it details a new class of preferred equity that ranks senior to common stock in terms of dividend payments and liquidation preference. The dividend rate is fixed initially but subject to reset, and the non-cumulative nature means missed dividends are not owed to holders. The associated restrictions on common stock actions highlight the priority given to preferred stockholders, which could impact future shareholder returns on common equity if dividend obligations on the preferred stock are not met.
Key Highlights
- 1Goldman Sachs issued 6.500% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series AA.
- 2The Series AA Preferred Stock has a liquidation preference of $25,000 per share.
- 3Dividends on the Series AA Preferred Stock are non-cumulative.
- 4Failure to pay dividends on the Series AA Preferred Stock imposes restrictions on Goldman Sachs' ability to pay dividends or repurchase its common stock.
- 5The company filed a Certificate of Designations with the Secretary of State of Delaware to establish the terms of the Series AA Preferred Stock.
- 6Additional exhibits include a form of certificate for the preferred stock and legal opinions related to depositary shares representing interests in the preferred stock.