Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-219206
The information in this preliminary prospectus supplement is not complete
and may be changed. This preliminary prospectus supplement is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
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Subject to Completion. Dated September 18, 2017.
The Goldman Sachs Group, Inc.
$
Fixed and Floating Rate Notes due
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We will pay a fixed rate of interest at a rate of 5% per annum quarterly on January ,
April , July and October of each year, commencing on January , 2018 to, and including, October , 2018. After
October , 2018, interest will be payable quarterly on January , April , July and October of each year, commencing on
January , 2019 to, and including, the stated maturity date (October , 2027) at a floating rate equal to the then-applicable
3-month
USD LIBOR rate plus the spread
of 1.1% per annum, subject to the minimum interest rate of 0% per annum and the maximum interest rate of 6% per annum. The notes will mature on the stated maturity date. On the stated maturity date, you will receive $1,000, plus any accrued and
unpaid interest, for each $1,000 of the face amount of your notes.
LIBOR is being modified, see page
S-8.
The interest on your notes for each quarterly interest period commencing on or after October , 2018 to, but excluding, the stated
maturity date, each of which we refer to as a “floating rate interest period”, will be a rate equal to:
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If the
3-month
USD LIBOR rate on the interest determination date for a floating rate interest period
plus
the spread is
less than
the applicable maximum interest
rate, the
3-month
USD LIBOR rate on such interest determination date
plus
the spread, subject to the minimum interest rate; or
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If the
3-month
USD LIBOR rate on the interest determination date for a floating rate interest period
plus
the spread is
equal to
or
greater than
the
applicable maximum interest rate, the applicable maximum interest rate.
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For the floating rate interest periods commencing on or
after October , 2018 to, but excluding, the stated maturity date, even if the
3-month
USD LIBOR rate on an interest determination date plus the spread is greater than the applicable
maximum interest rate, interest on the notes will accrue only at the applicable maximum interest rate in the applicable interest period.
Your
investment in the notes involves certain risks, including our credit risk. See page S-8.
You should read the disclosure herein to better
understand the terms and risks of your investment.
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Original issue date:
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October , 2017
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Original issue price:
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100% of the face amount
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Underwriting discount:
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% of the face amount
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Net proceeds to the issuer:
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% of the face amount
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In addition to offers and sales at the initial price to public, the underwriters may offer the notes from time to time
for sale in one or more transactions at market prices prevailing at the time of sale, at prices related to market prices or at negotiated prices.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they
obligations of, or guaranteed by, a bank.
Goldman Sachs & Co. LLC
Prospectus Supplement No. dated September , 2017.
The issue price, underwriting discount and net proceeds listed on the cover page hereof relate to the
notes we sell initially. We may decide to sell additional notes after the date of this prospectus supplement, at issue prices and with underwriting discounts and net proceeds that differ from the amounts set forth above. The return (whether positive
or negative) on your investment in notes will depend in part on the issue price you pay for such notes.
Goldman Sachs may use this prospectus in
the initial sale of the offered notes. In addition, Goldman Sachs & Co. LLC, or any other affiliate of Goldman Sachs may use this prospectus in a market-making transaction in a note after its initial sale.
Unless Goldman Sachs or its
agent informs the purchaser otherwise in the confirmation of sale, this prospectus is being used in a market-making transaction.
About Your Prospectus
The
notes are part of the Medium-Term Notes, Series N program of The Goldman Sachs Group, Inc. This prospectus includes this prospectus supplement and the accompanying documents listed below. This prospectus supplement constitutes a supplement to the
documents listed below and should be read in conjunction with such documents:
The information in this prospectus supplement supersedes any conflicting information in the documents listed above. In addition, some
of the terms or features described in the listed documents may not apply to your notes.
S-2
SPECIFIC TERMS OF YOUR NOTES
We refer to the notes we are offering by this prospectus supplement as the “offered notes”
or the “notes”. Please note that in this prospectus supplement, references to “The Goldman Sachs Group, Inc.”, “we”, “our” and “us” mean only The Goldman Sachs Group, Inc. and do not include its
consolidated subsidiaries, while references to “Goldman Sachs” mean The Goldman Sachs Group, Inc., together with its consolidated subsidiaries. Also, references to the “accompanying prospectus” mean the accompanying prospectus,
dated July 10, 2017, as supplemented by the accompanying prospectus supplement, dated July 10, 2017, relating to Medium-Term Notes, Series N, of The Goldman Sachs Group, Inc. Please note that in this section entitled “Specific Terms
of Your Notes”, references to “holders” mean those who own notes registered in their own names, on the books that we or the trustee maintain for this purpose, and not those who own beneficial interests in notes registered in street
name or in notes issued in book-entry form through The Depository Trust Company. Please review the special considerations that apply to owners of beneficial interests in the accompanying prospectus, under “Legal Ownership and Book-Entry
Issuance”. References to the “indenture” in this prospectus supplement mean the senior debt indenture, dated July 16, 2008, as amended, between The Goldman Sachs Group, Inc. and The Bank of New York Mellon, as trustee.
Key Terms
Issuer:
The
Goldman Sachs Group, Inc.
Specified currency:
U.S. dollars (“$”)
Denominations:
$1,000 and integral multiples of $1,000 in excess thereof
Face amount:
each note will have a face amount equal to $1,000, or integral multiples of $1,000 in excess thereof;
$ in the aggregate for all the offered notes; the aggregate face amount of the offered notes may be increased if the issuer, at its sole option, decides to sell an additional
amount of the offered notes on a date subsequent to the date of this prospectus supplement
Stated maturity date:
October ,
2027
Trade date:
September , 2017
Original issue date (settlement date):
October , 2017
Form of Notes:
global form only
Supplemental discussion of U.S.
federal income tax consequences:
We intend to treat your notes as variable rate debt instruments for U.S. federal income tax purposes. Under this characterization, it is the opinion of Sidley Austin
LLP
that you should
include the amounts treated as qualified stated interest in ordinary income at the time you receive or accrue such payments, depending on your regular method of accounting for tax purposes. In addition, you should be required to include any original
issue discount in ordinary income as such original issue discount accrues, regardless of your method of accounting for tax purposes. Any gain or loss you recognize upon the sale, exchange or maturity of your notes should be capital gain or loss.
Please see “Supplemental Discussion of Federal Income Tax Consequences” below for a more detailed discussion.
Fixed interest rate:
for
the fixed rate interest periods, interest on the notes will be 5% per annum
Fixed rate interest payment dates: quarterly;
on each
January , April , July and October , commencing on January , 2018 to, and including, October , 2018
Fixed rate interest periods:
quarterly; the periods from and including a fixed rate interest payment date (or the original issue date, in the case of
the first fixed rate interest period) to but excluding the following fixed rate interest payment date
Floating interest rate:
for the floating
rate interest periods commencing on or after October , 2018 to, but excluding, the stated maturity date, interest on the notes will be:
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if the
3-month
USD LIBOR rate on an interest determination date
plus
the spread is
less than
the applicable maximum interest rate, the
3-month
USD LIBOR rate on such interest determination date
plus
the spread, subject to the minimum interest rate; or
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if the
3-month
USD LIBOR rate on an interest determination date
plus
the spread is
equal to
or
greater than
the applicable maximum interest rate, the
applicable maximum interest rate
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S-3
Maximum interest rate:
6% per annum
Minimum interest rate:
0% per annum
Base rate for the floating
rate interest periods:
3-month
USD LIBOR (as described in the accompanying prospectus supplement under “Description of the Notes We May Offer — Interest Rates — LIBOR
Notes”).
LIBOR is being modified, see page
S-8.
Discontinuance of the base rate:
if the
calculation agent determines that the base rate has been discontinued, the calculation agent will determine whether to use a substitute or successor base rate that it has determined, in its sole discretion, is comparable to the base rate
Reuters screen LIBOR page:
LIBOR01
Index
maturity:
3 months
Index currency:
U.S. dollar
Spread:
1.1% per annum
Floating rate interest payment
dates:
quarterly; on each
January , April , July and October , commencing on January , 2019 to and ending on
the stated maturity date
Floating rate interest periods:
quarterly; the periods from and including a floating rate interest payment date (or the
final fixed rate interest payment date, in the case of the first floating rate interest period) to but excluding the next succeeding floating rate interest payment date (or the stated maturity date, in the case of the final floating rate interest
period)
Business day convention:
modified following unadjusted; applicable to interest payment dates and floating rate interest reset dates
Interest determination dates:
for each floating rate interest period, the second London business day preceding the floating rate interest reset date
Floating rate interest reset dates:
every
January , April , July and
October of each year, commencing on October , 2018
Day count convention:
30/360 (ISDA). As
further described under “Description of Debt Securities We May Offer — Calculations of Interest on Debt Securities — Interest Rates and Interest” in the accompanying prospectus, for each fixed rate interest period or floating
rate interest period (each, an “interest period”), 30/360 (ISDA) means the number of days in such interest period in respect of which payment is being made divided by 360, calculated on a formula basis as follows, as described in
Section 4.16(f) of the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, without regard to any subsequent amendments or supplements:
[360 × (Y2 – Y1)] + [30 × (M2 – M1)] + (D2 –D1)
360
where:
“Y1” is the year, expressed as a number, in which the first day of the interest period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the interest period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the interest period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the interest period falls;
“D1” is the first calendar day, expressed as a number, of the interest period, unless such number would be 31, in which case D1 will be
30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the interest period, unless such
number would be 31 and D1 is greater than 29, in which case D2 will be 30.
Regular record dates:
the scheduled business day immediately preceding
each interest payment date
No listing:
the notes will not be listed or displayed on any securities exchange or interdealer market quotation system
S-4
Limited events of default:
The only events of default for the notes are (i) interest or principal
payment defaults that continue for 30 days and (ii) certain insolvency events. No other breach or default under our senior debt indenture or the notes will result in an event of default for the notes or permit the trustee or holders to
accelerate the maturity of any debt securities – that is, they will not be entitled to declare the principal amount of any notes to be immediately due and payable. See “Risks Relating to Regulatory Resolution Strategies and Long-Term Debt
Requirements” and “Description of Debt Securities We May Offer — Default, Remedies and Waiver of Default — Securities Issued on or After January 1, 2017 under the 2008 Indenture” in the accompanying prospectus for
further details.
No redemption:
the notes will not be subject to redemption right or price dependent redemption right
London business day:
any day on which commercial banks are open for general business (including dealings in U.S. dollars) in London
Business Day:
New York business day
Defeasance applies as
follows:
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covenant defeasance: no
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Calculation agent:
Goldman Sachs & Co. LLC
CUSIP no.:
38150A4M4
ISIN no.:
US38150A4M42
FDIC:
the notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency; nor are they
obligations of, or guaranteed by, a bank
S-5
HYPOTHETICAL EXAMPLES
The following examples are provided for purposes of illustration only. They should not be taken as an indication or prediction of future investment
results and are intended merely to illustrate the method we will use to calculate the amount of interest accrued during each floating rate interest period.
The examples below are based on
3-month
USD LIBOR rates that are entirely hypothetical; no one can predict what
the
3-month
USD LIBOR rate will be on any day during the floating rate interest periods, and no one can predict the interest that will accrue on your notes in any interest period during the floating rate
interest periods.
For these reasons, the actual
3-month
USD LIBOR rates during the floating rate interest
periods, as well as the interest payable on each floating rate interest payment date, may bear little relation to the hypothetical examples shown below or to the historical
3-month
USD LIBOR rates shown
elsewhere in this prospectus supplement. For information about the
3-month
USD LIBOR rates during recent periods, see “Historical
3-Month
USD LIBOR Rates” on
page S-13. Before investing in the offered notes, you should consult publicly available information to determine the
3-month
USD LIBOR rates between the date of this prospectus supplement and the date of your
purchase of the offered notes.
The following examples illustrate the method we will use to calculate the interest rate at which interest will accrue
on each day included in each floating rate interest period, subject to the key terms and assumptions below.
The percentage amounts in the left
column of the table below represent hypothetical final
3-month
USD LIBOR rates on a given interest determination date. The right column of the table below represents the hypothetical interest, as a percentage
of the face amount of each note, that would be payable on the applicable floating rate interest payment date, based on the corresponding hypothetical
3-month
USD LIBOR rate. The information in the table also
reflects the key terms and assumptions in the box below.
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Key Terms and Assumptions
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Face amount
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$1,000
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Maximum interest
rate
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6% per annum
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Minimum interest
rate
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0% per annum
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Spread
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1.1% per annum
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Also, the hypothetical examples shown below do not take into account the effects of applicable taxes.
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Hypothetical
3-Month
USD
LIBOR Rate
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Hypothetical Interest Amount Payable On a Floating Rate Interest
Payment Date (Including the Spread)
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On or after
January , 2019 to and
including October , 2027 (per annum)
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-4.000%
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0.000%*
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-3.000%
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0.000%*
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-2.000%
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0.000%*
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-1.100%
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0.000%*
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0.000%
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1.100%
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1.000%
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2.100%
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2.000%
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3.100%
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3.000%
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4.100%
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4.900%
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6.000%**
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5.000%
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6.000%**
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6.000%
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6.000%**
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7.000%
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6.000%**
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* Interest is floored at the minimum interest rate of 0.000% per annum for the floating rate interest payment dates.
** Interest is capped at the maximum interest rate of 6.000% per annum for the floating rate interest payment dates on or after January
, 2019 to and including October , 2027.
S-6
Payments on the notes are economically equivalent to the amounts that would be paid on a combination of
other instruments. For example, payments on the notes are economically equivalent to the amounts that would be paid on a combination of an interest-bearing bond bought, and an option bought, by the holder (with an implicit option premium paid over
time by the holder). The discussion in this paragraph does not modify or affect the terms of the notes or the United States income tax treatment of the notes, as described elsewhere in this prospectus supplement.
We cannot predict the actual
3-month
USD LIBOR rate on any
day or the market value of your notes, nor can we predict the relationship between the
3-month
USD LIBOR rate and the market value of your notes at any time prior to the stated maturity date. The actual
interest payment that a holder of the offered notes will receive on each floating rate interest payment date and the rate of return on the offered notes will depend on the actual
3-month
USD LIBOR rates
determined by the calculation agent over the life of your notes. Moreover, the assumptions on which the hypothetical examples are based may turn out to be inaccurate. Consequently, the interest amount to be paid in respect of your notes on each
floating rate interest payment date may be very different from the information reflected in the examples above.
LIBOR is being modified, see page
S-8.
S-7
ADDITIONAL RISK FACTORS SPECIFIC TO YOUR NOTES
An investment in your notes is subject to the risks described below, as well as the risks and
considerations described in the accompanying prospectus, dated July 10, 2017, and in the accompanying prospectus supplement, dated July 10, 2017. Your notes are a riskier investment than ordinary debt securities. You should carefully
review these risks and considerations as well as the terms of the notes described herein and in the accompanying prospectus, dated July 10, 2017, as supplemented by the accompanying prospectus supplement, dated July 10, 2017, of The
Goldman Sachs Group, Inc. Your notes are a riskier investment than ordinary debt securities. You should carefully consider whether the offered notes are suited to your particular circumstances.
The Notes Are Subject to the Credit Risk of the Issuer
Although the return on the notes will be based in part on the performance of the
3-month
USD LIBOR rate, the
payment of any amount due on the notes is subject to our credit risk. The notes are our unsecured obligations. Investors are dependent on our ability to pay all amounts due on the notes, and therefore investors are subject to our credit risk and to
changes in the market’s view of our creditworthiness. See “Description of the Notes We May Offer — Information About Our Medium-Term Notes, Series N Program — How the Notes Rank Against Other Debt” on page
S-5
of the accompanying prospectus supplement.
The Amount of Interest Payable On The Notes In Certain Interest
Periods Is Capped
For each floating rate interest period commencing on or after October , 2018, on the applicable
interest determination date, the
3-month
USD LIBOR rate plus the spread will be subject to the applicable maximum interest rate, which will limit the amount of interest you may receive on each floating rate
interest payment date. Thus, you will not benefit from any increases in the
3-month
USD LIBOR rate plus the spread above the applicable maximum interest rate. Accordingly, the notes may provide more or less
interest income than an investment in a similar instrument.
We May Sell an Additional Aggregate Face Amount of the Notes at a Different Issue
Price
At our sole option, we may decide to sell an additional aggregate face amount of the notes subsequent to the date of this prospectus
supplement. The issue price of the notes in the subsequent sale may differ substantially (higher or lower) from the issue price you paid as provided on the cover of this prospectus supplement.
The Amount of Interest Payable on Your Notes Will Not Be Affected by the
3-Month
USD LIBOR Rate on Any Day
Other Than an Interest Determination Date
For each interest period after the first four interest periods, the amount of interest payable on each
floating rate interest payment date is calculated based on the
3-month
USD LIBOR rate on the applicable interest determination date plus the spread. Although the actual
3-month
USD LIBOR rate on a floating rate interest payment date or at other times during a floating rate interest period may be higher than the
3-month
USD LIBOR rate on
the applicable interest determination date, you will not benefit from the
3-month
USD LIBOR rate at any time other than on the interest determination date for such floating rate interest period.
Regulation and Reform of “Benchmarks”, Including LIBOR and Other Types of Benchmarks, May Cause such “Benchmarks” to Perform
Differently Than in the Past, or to Disappear Entirely, or Have Other Consequences Which Cannot be Predicted
LIBOR and other interest rate,
equity, foreign exchange rate and other types of indices which are deemed to be “benchmarks” are the subject of recent national, international and other regulatory guidance and proposals for reform. Some of these reforms are already
effective while others are still to be implemented. These reforms may cause such “benchmarks” to perform differently than in the past, or to disappear entirely, or have other consequences which cannot be predicted. Any such consequence
could have a material adverse effect on your notes.
Any of the international, national or other proposals for reform or the general increased
regulatory scrutiny of “benchmarks” could increase the costs and risks of administering or otherwise participating in the setting of a “benchmark” and complying with any such regulations or requirements. Such factors may have the
effect of discouraging market participants from continuing to administer or contribute to certain “benchmarks”, trigger changes in the rules or methodologies used in certain “benchmarks” or lead to the disappearance of certain
“benchmarks”. The disappearance of a “benchmark” or changes in the manner of administration of a “benchmark” could result in discretionary valuation by the calculation agent or other consequence in relation to your
notes. Any such consequence could have a material adverse effect on the value of and return on your notes.
On July 27, 2017, the Chief
Executive of the U.K. Financial Conduct Authority (FCA), which regulates LIBOR, announced that it will no longer persuade or compel banks to submit rates for the calculation of LIBOR (which includes the
3-month
USD LIBOR rate) after 2021. Such announcement indicates that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. It is not possible to predict
S-8
the effect that this announcement or any such discontinuance will have on the
3-month
USD LIBOR rate or your notes. If the calculation agent determines
that
3-month
USD LIBOR has been discontinued, the calculation agent will determine whether to use a substitute or successor base rate that it has determined, in its sole discretion, is comparable to
3-month
USD LIBOR. See “Specific Terms of Your Notes—Key Terms—Discontinuance of the base rate” on page
S-4.
The Historical Levels of the
3-month
USD LIBOR Rate Are Not an Indication of the Future Levels of the
3-month
USD LIBOR Rate
In the past, the level of the
3-month
USD LIBOR
rate has experienced significant fluctuations. You should note that historical levels, fluctuations and trends of the
3-month
USD LIBOR rate are not necessarily indicative of future levels. Any historical
upward or downward trend in the
3-month
USD LIBOR rate is not an indication that the
3-month
USD LIBOR rate is more or less likely to increase or decrease at any time
during a floating rate interest period, and you should not take the historical levels of the
3-month
USD LIBOR rate as an indication of its future performance.
If You Purchase Your Notes at a Premium to Face Amount, the Return on Your Investment Will Be Lower Than the Return on Notes Purchased at Face Amount
and the Impact of Certain Key Terms of the Notes Will be Negatively Affected
The amount you will be paid for your notes on the stated maturity
date will not be adjusted based on the issue price you pay for the notes. If you purchase notes at a price that differs from the face amount of the notes, then the return on your investment in such notes held to the stated maturity date will differ
from, and may be substantially less than, the return on notes purchased at face amount. If you purchase your notes at a premium to face amount and hold them to the stated maturity date, the return on your investment in the notes will be lower than
it would have been had you purchased the notes at face amount or a discount to face amount.
The Market Value of Your Notes May Be Influenced by
Many Unpredictable Factors
When we refer to the market value of your notes, we mean the value that you could receive for your notes if you chose
to sell them in the open market before the stated maturity date. A number of factors, many of which are beyond our control, will influence the market value of your notes, including:
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the
3-month
USD LIBOR rate;
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the volatility — i.e., the frequency and magnitude of changes — in the level of the
3-month
USD LIBOR rate;
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economic, financial, regulatory, political, military and other events that affect LIBOR rates generally;
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other interest rates and yield rates in the market;
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the time remaining until your notes mature; and
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our creditworthiness, whether actual or perceived, and including actual or anticipated upgrades or downgrades in our credit ratings or changes in other credit measures.
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These factors, and many other factors, will influence the price you will receive if you sell your notes before maturity, including the price you may
receive for your notes in any market making transaction. If you sell your notes before maturity, you may receive less than the face amount of your notes.
You cannot predict the future performance of the
3-month
USD LIBOR rate based on its historical performance. The
actual performance of the
3-month
USD LIBOR rate during the floating rate interest periods, as well as the interest payable on each floating rate interest payment date, may bear little or no relation to the
hypothetical levels of the
3-month
USD LIBOR rate or to the hypothetical examples shown elsewhere in this prospectus supplement.
If the
3-month
USD LIBOR Rate Changes, the Market Value of Your Notes May Not Change in the Same Manner
The price of your notes may move differently than the
3-month
USD LIBOR rate. Changes in the
3-month
USD LIBOR rate may not result in a comparable change in the market value of your notes. We discuss some of the reasons for this disparity under “— The Amount of Interest Payable on Your Notes Will
Not Be Affected by the
3-Month
USD LIBOR Rate on Any Day Other Than an Interest Determination Date” and “— The Market Value of Your Notes May Be Influenced by Many Unpredictable Factors”
above.
Anticipated Hedging Activities by Goldman Sachs or Our Distributors May Negatively Impact Investors in the Notes and Cause Our
Interests and Those of Our Clients and Counterparties to be Contrary to Those of Investors in the Notes
Goldman Sachs expects to hedge our
obligations under the notes by purchasing futures and/or other instruments linked to
3-month
USD LIBOR. Goldman Sachs also expects to adjust the hedge by, among other things, purchasing or
S-9
selling any of the foregoing, and perhaps other instruments linked to
3-month
USD LIBOR, at any time and from time to time, and to unwind the hedge by
selling any of the foregoing on or before the final interest determination date for your notes. Alternatively, Goldman Sachs may hedge all or part of our obligations under the notes with unaffilated distributors of the notes which we expect will
undertake similar market activity. Goldman Sachs may also enter into, adjust and unwind hedging transactions relating to other
3-month
USD LIBOR-linked notes whose returns are linked to
3-month
USD LIBOR.
In addition to entering into such transactions itself, or distributors entering into such
transactions, Goldman Sachs may structure such transactions for its clients or counterparties, or otherwise advise or assist clients or counterparties in entering into such transactions. These activities may be undertaken to achieve a variety of
objectives, including: permitting other purchasers of the notes or other securities to hedge their investment in whole or in part; facilitating transactions for other clients or counterparties that may have business objectives or investment
strategies that are inconsistent with or contrary to those of investors in the notes; hedging the exposure of Goldman Sachs to the notes including any interest in the notes that it reacquires or retains as part of the offering process, through its
market-making activities or otherwise; enabling Goldman Sachs to comply with its internal risk limits or otherwise manage firmwide, business unit or product risk; and/or enabling Goldman Sachs to take directional views as to relevant markets on
behalf of itself or its clients or counterparties that are inconsistent with or contrary to the views and objectives of the investors in the notes.
Any of these hedging or other activities may adversely affect the levels of
3-month
USD LIBOR — and
therefore the market value of your notes and the amount we will pay on your notes at maturity. In addition, you should expect that these transactions will cause Goldman Sachs or its clients, counterparties or distributors to have economic interests
and incentives that do not align with, and that may be directly contrary to, those of an investor in the notes. Neither Goldman Sachs nor any distributor will have any obligation to take, refrain from taking or cease taking any action with respect
to these transactions based on the potential effect on an investor in the notes, and may receive substantial returns on hedging or other activities while the value of your notes declines. In addition, if the distributor from which you purchase notes
is to conduct hedging activities in connection with the notes, that distributor may otherwise profit in connection with such hedging activities and such profit, if any, will be in addition to the compensation that the distributor receives for the
sale of the notes to you. You should be aware that the potential to earn fees in connection with hedging activities may create a further incentive for the distributor to sell the notes to you in addition to the compensation they would receive for
the sale of the notes.
As Calculation Agent, Goldman Sachs & Co. LLC Will Have the Authority to Make Determinations that Could Affect the
Value of Your Notes and the Amount You May Receive On Any Interest Payment Date
As calculation agent for your notes, Goldman Sachs &
Co. LLC will have discretion in making certain determinations that affect your notes, including determining the
3-month
USD LIBOR rate on any interest determination date, which we will use to determine the
amount we will pay on any applicable floating rate interest payment date during the floating rate interest periods. Further, if GS&Co. as calculation agent determines that
3-month
USD LIBOR has been
discontinued, GS&Co. will determine whether to use a substitute or successor base rate that it has determined, in its sole discretion, is comparable to
3-month
USD LIBOR. The exercise of this discretion by
Goldman Sachs & Co. LLC could adversely affect the value of your notes and may present Goldman Sachs & Co. LLC with a conflict of interest. We may change the calculation agent at any time without notice and Goldman Sachs &
Co. LLC may resign as calculation agent at any time upon 60 days’ written notice to Goldman Sachs.
Your Notes May Not Have an Active Trading
Market
Your notes will not be listed or displayed on any securities exchange or included in any interdealer market quotation system, and there
may be little or no secondary market for your notes. Even if a secondary market for your notes develops, it may not provide significant liquidity and we expect that transaction costs in any secondary market would be high. As a result, the difference
between bid and asked prices for your notes in any secondary market could be substantial.
Certain Considerations for Insurance Companies and
Employee Benefit Plans
Any insurance company or fiduciary of a pension plan or other employee benefit plan that is subject to the prohibited
transaction rules of the Employee Retirement Income Security Act of 1974, as amended, which we call “ERISA”, or the Internal Revenue Code of 1986, as amended, including an IRA or a Keogh plan (or a governmental plan to which similar
prohibitions apply), and that is considering purchasing the offered notes with the assets of the insurance company or the assets of such a plan, should consult with its counsel regarding whether the purchase or holding of the offered notes could
become a “prohibited transaction” under ERISA, the Internal Revenue Code or any substantially similar prohibition in light of the representations a purchaser or holder in any of the above categories is deemed to make by purchasing and
holding the offered notes. This is discussed in more detail under “Employee Retirement Income Security Act” below.
S-10
You May Be Required to Accrue Interest in Excess of Interest Payments Following the Initial Fixed Rate
Interest Periods
Under the rules governing variable rate debt instruments discussed below under “Supplemental Discussion of Federal Income
Tax Consequences”, you may be required to accrue an amount of interest in the initial fixed rate interest periods of your note that is less than the stated interest on your note in such periods. Conversely, you may be required to accrue an
amount of interest in the floating rate interest periods of your note that exceeds the stated interest on your note in such periods.
Foreign
Account Tax Compliance Act (FATCA) Withholding May Apply to Payments on Your Notes, Including as a Result of the Failure of the Bank or Broker Through Which You Hold the Notes to Provide Information to Tax Authorities
Please see the discussion under “United States Taxation — Taxation of Debt Securities — Foreign Account Tax Compliance Act (FATCA)
Withholding” in the accompanying prospectus for a description of the applicability of FATCA to payments made on your notes.
S-11
USE OF PROCEEDS
We expect to use the net proceeds we receive from the sale of the offered notes for the purposes we describe in the accompanying prospectus under
“Use of Proceeds”.
HEDGING
In anticipation of the sale of the offered notes, we and/or our affiliates expect to enter into hedging transactions involving purchases of instruments
linked to the
3-month
USD LIBOR rate. In addition, from time to time, we and/or our affiliates expect to enter into additional hedging transactions and to unwind those we have entered into, in connection with
the offered notes and perhaps in connection with other notes we issue, some of which may have returns linked to the
3-month
USD LIBOR rate. Consequently, with regard to your notes, from time to time, we and/or
our affiliates:
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expect to acquire or dispose of positions in
over-the-counter
options, futures or other instruments linked to the
3-month
USD LIBOR rate, and/or
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may take short positions in securities of the kind described above — i.e., we and/or our affiliates may sell securities of the kind that we do not own or that we borrow for delivery to purchaser, and/or
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may take or dispose of positions in interest rate swaps, options swaps and treasury bonds.
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We and/or our
affiliates may also acquire a long or short position in securities similar to your notes from time to time and may, in our or their sole discretion, hold or resell those securities.
In the future, we and/or our affiliates expect to close out hedge positions relating to the offered notes and perhaps relating to other notes with
returns linked to the
3-month
USD LIBOR rate. These steps may also involve sales and/or purchases of some or all of the listed or
over-the-counter
options, futures or other instruments linked to the
3-month
USD LIBOR.
The hedging activity discussed above may adversely affect the market value of your notes from time
to time and the amount we will pay on your notes. See “Additional Risk Factors Specific to Your Notes” above for a discussion of these adverse effects.
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HISTORICAL
3-MONTH
USD LIBOR RATES
The level of the
3-month
USD LIBOR rate has fluctuated in the past and may, in the future, experience
significant fluctuations. Any historical upward or downward trend in the level of the
3-month
USD LIBOR rate during the period shown below is not an indication that the
3-month
USD LIBOR rate is more or less likely to increase or decrease at any time during the floating rate interest periods. See “Additional Risk Factors Specific to Your Notes — Regulation and
Reform of “Benchmarks”, Including LIBOR and Other Types of Benchmarks, May Cause such “Benchmarks” to Perform Differently Than in the Past, or to Disappear Entirely, or Have Other Consequences Which Cannot be Predicted” for
more information about the
3-month
USD LIBOR rate.
You should not take the historical levels of the
3-month
USD LIBOR rate as an indication of future levels of the
3-month
USD LIBOR rate.
We cannot give you any assurance that the future levels of the
3-month
USD LIBOR rate will result in your receiving a return on your notes that is greater than the return you would have realized if you invested in a debt security of comparable maturity that bears interest at a
prevailing market rate and is not subject to a maximum interest rate.
Neither we nor any of our affiliates make any representation to you as to the
performance of the
3-month
USD LIBOR rate during the floating rate interest periods. Before investing in the offered notes, you should consult publicly available information to determine the levels of the
3-month
USD LIBOR rate between the date of this prospectus supplement and the date of your purchase of the offered notes. The actual levels of the
3-month
USD LIBOR rate
during the floating rate interest periods may bear little relation to the historical levels of the
3-month
USD LIBOR rate shown below.
The graph below shows the daily historical last levels of the
3-month
USD LIBOR rate from September 14, 2007
through September 14, 2017. We obtained the last levels in the graph below from Reuters, without independent verification.
S-13
S-14
SUPPLEMENTAL DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES
The following section supplements the discussion of U.S. federal income taxation in the accompanying prospectus.
The following section is the opinion of Sidley Austin
LLP
, counsel to The Goldman Sachs Group, Inc. It applies to you only if you hold
your notes as a capital asset for tax purposes. This section does not apply to you if you are a member of a class of holders subject to special rules, such as:
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a dealer in securities or currencies;
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a trader in securities that elects to use a
mark-to-market
method of accounting for your securities holdings;
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a life insurance company;
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a
tax-exempt
organization;
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a person that owns the notes as a hedge or that is hedged against interest rate risks;
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a person that owns the notes as part of a straddle or conversion transaction for tax purposes; or
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a United States holder (as defined below) whose functional currency for tax purposes is not the U.S. dollar.
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This section is based on the U.S. Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations under the
Internal Revenue Code, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis.
You should consult your tax advisor concerning the U.S. federal income tax, and other tax consequences of your
investment in the notes, including the application of state, local or other tax laws and the possible effects of changes in federal or other tax laws.
United States Holders
This subsection
describes the tax consequences to a United States holder. You are a United States holder if you are a beneficial owner of notes and you are:
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a citizen or resident of the United States;
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a domestic corporation;
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an estate whose income is subject to U.S. federal income tax regardless of its source; or
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a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.
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If you are not a United States holder, this section does not apply to you and you should refer to “— United States Alien
Holders” below.
Tax Treatment.
The notes will be treated as variable rate debt instruments for U.S. federal income tax purposes. Under
this characterization, it is the opinion of Sidley Austin
LLP
that you should include the amounts treated as qualified stated interest in ordinary income at the time you receive or accrue such payments, depending on your regular
method of accounting for tax purposes. In addition, you should be required to include any original issue discount in ordinary income as such original issue discount accrues, regardless of your method of accounting for tax purposes.
As discussed in the accompanying prospectus under “United States Taxation — Taxation of Debt Securities — United States Holders —
Original Issue Discount,” (i) you must include original issue discount, or OID, (if any) in your gross income for U.S. federal income tax purposes as it accrues (regardless of your regular method of accounting) and (ii) you must determine
the amount of interest that is treated as qualified stated interest (“QSI”) on your notes in order to determine the amount of OID in respect of a note. As discussed in the following paragraph and discussed in further detail in the
accompanying prospectus under “United States Taxation — Taxation of Debt Securities — United States Holders — Variable Rate Debt Securities,” in order to determine the amount of QSI and OID in respect of the notes, an
equivalent fixed rate debt instrument must be constructed. The equivalent fixed rate debt instrument is a hypothetical instrument that has terms that are identical to those of the notes, except that the equivalent fixed rate debt instrument provides
for fixed rate substitutes in lieu of the actual rates on the notes. The amount of OID and QSI on the notes is determined for the equivalent fixed rate debt instrument under the rules applicable to fixed rate debt instruments and is generally taken
into account as if the holder held the equivalent fixed rate debt instrument (subject to the adjustment to QSI described below).
S-15
The equivalent fixed rate debt instrument is constructed in the following fashion: (i) first, the
initial fixed rate is replaced with a “qualified floating rate” that would preserve the fair market value of the notes, and (ii) second, each floating rate (including the floating rate determined under (i) above) is converted
into a fixed rate substitute (which, in each case, will generally be the value of each floating rate as of the issue date). If the amount paid in any quarter is greater than (or less than) the amount assumed to be paid in such quarter, you will be
required to increase (or decrease) the amount of QSI you take into income by this difference. In general, your taxable income in each year should include the amount of QSI paid or accrued (subject to the adjustments discussed in this paragraph) and
the annual OID accrual with respect to your notes but should not include payments made in respect of your notes that are in excess of QSI (as adjusted). Any amount you receive in an accrual period which is in excess of the sum of the OID and QSI for
such period will be treated for federal income tax purposes as a return of principal. You should determine the OID that is allocable to each period in the manner described under “United States Taxation — Taxation of Debt Securities —
United States Holders — Original Issue Discount” in the accompanying prospectus.
You will generally recognize gain or loss upon the sale,
exchange or maturity of your notes in an amount equal to the difference, if any, between the amount of cash you receive at such time and your adjusted basis in your notes. See discussion under “United States Taxation — Taxation of Debt
Securities — United States Holders — Purchase, Sale and Retirement of the Debt Securities” for more information.
You should consult
your tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the notes, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the
possible effects of changes in U.S. federal or other tax laws.
If you purchase the notes at a price lower than the original issue price, you will be
subject to the rules governing market discount as described under “United States Taxation — Taxation of Debt Securities — United States Holders — Market Discount” in the accompanying prospectus. Because the notes provide for
payments made prior to maturity that are treated as a return of principal, a holder may not be able to use the straight-line method described therein. If you purchase the notes at a price higher than the original issue price, you will be subject to
the rules governing premium as described under “United States Taxation —Taxation of Debt Securities — United States Holders — Debt Securities Purchased at a Premium” in the accompanying prospectus. The original issue price
of your notes is equal to the principal amount of the notes.
United States Alien Holders
If you are a United States alien holder, please see the discussion under “United States Taxation — Taxation of Debt Securities — United
States Alien Holders” in the accompanying prospectus for a description of the tax consequences relevant to you. You are a United States alien holder if you are the beneficial owner of the notes and are, for U.S. federal income tax purposes:
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a nonresident alien individual;
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a foreign corporation; or
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an estate or trust that in either case is not subject to U.S. federal income tax on a net income basis on income or gain from the notes.
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Backup Withholding and Information Reporting
Please see the discussion under “United States Taxation — Taxation of Debt Securities — Backup Withholding and Information Reporting”
in the accompanying prospectus for a description of the applicability of the backup withholding and information reporting rules to payments made on your notes.
Foreign Account Tax Compliance Act (FATCA) Withholding
Pursuant to Treasury regulations, Foreign Account Tax Compliance Act (FATCA) withholding (as described in “United States Taxation—Taxation of
Debt Securities—Foreign Account Tax Compliance Act (FATCA) Withholding” in the accompanying prospectus) will generally apply to obligations that are issued on or after July 1, 2014; therefore, the notes will generally be subject to
FATCA withholding. However, according to published guidance, the withholding tax described above will not apply to payments of gross proceeds from the sale, exchange or other disposition of the notes made before January 1, 2019.
S-16
EMPLOYEE RETIREMENT INCOME SECURITY ACT
This section is only relevant to you if you are an insurance company or the fiduciary of a pension plan or an employee benefit plan (including a
governmental plan, an IRA or a Keogh Plan) proposing to invest in the notes.
The U.S. Employee Retirement Income Security Act of 1974, as
amended (“ERISA”) and the U.S. Internal Revenue Code of 1986, as amended (the “Code”), prohibit certain transactions (“prohibited transactions”) involving the assets of an employee benefit plan that is subject to the
fiduciary responsibility provisions of ERISA or Section 4975 of the Code (including individual retirement accounts, Keogh plans and other plans described in Section 4975(e)(1) of the Code) (a “Plan”) and certain persons who are
“parties in interest” (within the meaning of ERISA) or “disqualified persons” (within the meaning of the Code) with respect to the Plan; governmental plans may be subject to similar prohibitions unless an exemption applies to the
transaction. The assets of a Plan may include assets held in the general account of an insurance company that are deemed “plan assets” under ERISA or assets of certain investment vehicles in which the Plan invests. Each of The Goldman
Sachs Group, Inc. and certain of its affiliates may be considered a “party in interest” or a “disqualified person” with respect to many Plans, and, accordingly, prohibited transactions may arise if the notes are acquired by or on
behalf of a Plan unless those notes are acquired and held pursuant to an available exemption. In general, available exemptions are: transactions effected on behalf of that Plan by a “qualified professional asset manager” (prohibited
transaction exemption
84-14)
or an
“in-house
asset manager” (prohibited transaction exemption
96-23),
transactions
involving insurance company general accounts (prohibited transaction exemption
95-60),
transactions involving insurance company pooled separate accounts (prohibited transaction exemption
90-1),
transactions involving bank collective investment funds (prohibited transaction exemption
91-38)
and transactions with service providers under Section 408(b)(17)
of ERISA and Section 4975(d)(20) of the Code where the Plan receives no less and pays no more than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA and Section 4975(f)(10) of the Code). The person
making the decision on behalf of a Plan or a governmental plan shall be deemed, on behalf of itself and the plan, by purchasing and holding the notes, or exercising any rights related thereto, to represent that (a) the plan will receive no less
and pay no more than “adequate consideration” (within the meaning of Section 408(b)(17) of ERISA and Section 4975(f)(10) of the Code) in connection with the purchase and holding of the notes, (b) none of the purchase,
holding or disposition of the notes or the exercise of any rights related to the notes will result in a nonexempt prohibited transaction under ERISA or the Code (or, with respect to a governmental plan, under any similar applicable law or
regulation), and (c) neither The Goldman Sachs Group, Inc. nor any of its affiliates is a “fiduciary” (within the meaning of Section 3(21) of ERISA) or, with respect to a governmental plan, under any similar applicable law or
regulation) with respect to the purchaser or holder in connection with such person’s acquisition, disposition or holding of the notes, or as a result of any exercise by The Goldman Sachs Group, Inc. or any of its affiliates of any rights in
connection with the notes, and neither The Goldman Sachs Group, Inc. nor any of its affiliates has provided investment advice in connection with such person’s acquisition, disposition or holding of the notes.
If you are an insurance company or the fiduciary of a pension plan or an employee benefit plan
(including a governmental plan, an IRA or a Keogh plan), and propose to invest in the notes, you should consult your legal counsel.
S-17
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Goldman Sachs Group, Inc. expects to agree to sell to Goldman Sachs & Co. LLC, and Goldman Sachs & Co. LLC expects to agree to
purchase from The Goldman Sachs Group, Inc., the aggregate face amount of the offered notes specified on the front cover of this prospectus supplement. Goldman Sachs & Co. LLC proposes initially to offer the notes to the public at the
original issue price set forth on the cover page of this prospectus supplement and to certain securities dealers at such price less a concession not in excess of % of the face amount. In addition to offers and sales at the
initial price to the public, the underwriters may offer the notes from time to time for sale in one or more transactions at market prices prevailing at the time of sale, at prices related to market prices or at negotiated prices.
In the future, Goldman Sachs & Co. LLC or other affiliates of The Goldman Sachs Group, Inc. may repurchase and resell the offered notes in
market-making transactions, with resales being made at prices related to prevailing market prices at the time of resale or at negotiated prices. The Goldman Sachs Group, Inc. estimates that its share of the total offering expenses, excluding
underwriting discounts and commissions, will be approximately $ . For more information about the plan of distribution and possible market-making activities, see “Plan of
Distribution” in the accompanying prospectus.
We expect to deliver the notes against payment therefor in New York, New York
on October , 2017, which is expected to be the fifth scheduled business day following the date of this prospectus supplement and of the pricing of the notes. Under Rule
15c6-1
of
the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade notes on any date
prior to two business days before delivery will be required, by virtue of the fact that the notes are expected to settle in five business days (T + 5), to specify alternative settlement arrangements to prevent a failed settlement.
We have been advised by Goldman Sachs & Co. LLC that it intends to make a market in the notes. However, neither Goldman Sachs & Co. LLC
nor any of our other affiliates that makes a market is obligated to do so and any of them may stop doing so at any time without notice. No assurance can be given as to the liquidity or trading market for the notes.
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member
State”), Goldman Sachs & Co. LLC has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it
has not made and will not make an offer of notes which are the subject of the offering contemplated by this prospectus supplement, the accompanying prospectus and the accompanying prospectus supplement to the public in that Relevant Member State
except that, with effect from and including the Relevant Implementation Date, an offer of such notes may be made to the public in that Relevant Member State:
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at any time to any legal entity which is a qualified investor as defined in the Prospectus Directive;
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b)
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at any time to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the relevant dealer or dealers nominated by the
issuer for any such offer; or
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at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,
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provided
that no such offer of notes referred to above shall require us or any dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of notes to the public” in relation to any notes in any Relevant Member State
means the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe for the notes, as the same may be varied in that
Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant
implementing measure in the Relevant Member State.
Any invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 (“FSMA”)) in connection with the issue or sale of the notes may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does
not apply to The Goldman Sachs Group, Inc.
All applicable provisions of the FSMA must be complied with in respect to anything done by any person in
relation to the notes in, from or otherwise involving the United Kingdom.
The notes may not be offered or sold in Hong Kong by means of any document
other than (i) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and any rules made
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thereunder, or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance
(Cap. 32 of the Laws of Hong Kong) or which do not constitute an offer to the public within the meaning of that Ordinance; and no advertisement, invitation or document relating to the notes may be issued or may be in the possession of any person for
the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong)
other than with respect to the notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinance and any rules made thereunder.
This prospectus supplement, along with the accompanying prospectus supplement and the accompanying prospectus have not been registered as a prospectus
with the Monetary Authority of Singapore. Accordingly, this prospectus supplement, along with the accompanying prospectus supplement and the accompanying prospectus and any other document or material in connection with the offer or sale, or
invitation for subscription or purchase, of the notes may not be circulated or distributed, nor may the notes be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”)) under Section 274 of the SFA, (ii) to a relevant person (as
defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth in the SFA.
Where the notes are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited
investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, the securities (as defined in
Section 239(1) of the SFA) of that corporation shall not be transferable for six months after that corporation has acquired the notes under Section 275 of the SFA except: (1) to an institutional investor under Section 274 of the
SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer in that corporation’s securities pursuant to Section 275(1A) of the SFA, (3) where no consideration is or will be
given for the transfer, (4) where the transfer is by operation of law, (5) as specified in Section 276(7) of the SFA, or (6) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and
Debentures) Regulations 2005 of Singapore (“Regulation 32”).
Where the notes are subscribed or purchased under Section 275 of the SFA
by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the
beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable for six months after that trust has acquired the notes under Section 275 of the SFA except: (1) to an institutional investor under
Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA), (2) where such transfer arises from an offer that is made on terms that such rights or interest are acquired at a consideration of not less than
S$200,000 (or its equivalent in a foreign currency) for each transaction (whether such amount is to be paid for in cash or by exchange of securities or other assets), (3) where no consideration is or will be given for the transfer, (4) where
the transfer is by operation of law, (5) as specified in Section 276(7) of the SFA, or (6) as specified in Regulation 32.
The notes
have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended), or the FIEA. The notes may not be offered or sold, directly or indirectly, in Japan or to or for the benefit of
any resident of Japan (including any person resident in Japan or any corporation or other entity organized under the laws of Japan) or to others for reoffering or resale, directly or indirectly, in Japan or to or for the benefit of any resident of
Japan, except pursuant to an exemption from the registration requirements of the FIEA and otherwise in compliance with any relevant laws and regulations of Japan.
The notes are not offered, sold or advertised, directly or indirectly, in, into or from Switzerland on the basis of a public offering and will not be
listed on the SIX Swiss Exchange or any other offering or regulated trading facility in Switzerland. Accordingly, neither this prospectus supplement nor any accompanying prospectus supplement, prospectus or other marketing material constitute a
prospectus as defined in article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus as defined in article 32 of the Listing Rules of the SIX Swiss Exchange or any other regulated trading facility in Switzerland. Any
resales of the notes by the underwriters thereof may only be undertaken on a private basis to selected individual investors in compliance with Swiss law. This prospectus supplement and accompanying prospectus and prospectus supplement may not be
copied, reproduced, distributed or passed on to others or otherwise made available in Switzerland without our prior written consent. By accepting this prospectus supplement and accompanying prospectus and prospectus supplement or by subscribing to
the notes, investors are deemed to have acknowledged and
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agreed to abide by these restrictions. Investors are advised to consult with their financial, legal or tax advisers before investing in the notes.
Conflicts of Interest
GS& Co. is an affiliate of The Goldman Sachs Group, Inc. and, as such, will have a “conflict of interest” in this offering of notes within
the meaning of Financial Industry Regulatory Authority, Inc. (FINRA) Rule 5121. Consequently, this offering of notes will be conducted in compliance with the provisions of FINRA Rule 5121. GS&Co. will not be permitted to sell notes in this
offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder.
S-20
We have not authorized anyone to provide any information or to make any representations other than those contained or
incorporated by reference in this prospectus supplement, the accompanying prospectus supplement or the accompanying prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others
may give you. This prospectus supplement, the accompanying prospectus supplement and the accompanying prospectus is an offer to sell only the notes offered hereby, but only under the circumstances and in jurisdictions where it is lawful to do so.
The information contained in this prospectus supplement, the accompanying prospectus supplement and the accompanying prospectus is current only as of the respective dates of such documents.
TABLE OF CONTENTS
Prospectus
Supplement
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Page
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Specific Terms of Your Notes
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S-3
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Hypothetical Examples
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S-6
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Additional Risk Factors Specific to Your Notes
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S-8
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Use of Proceeds
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S-12
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Hedging
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S-12
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Historical
3-Month
USD LIBOR
Rates
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S-13
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Supplemental Discussion of Federal Income Tax Consequences
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S-15
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Employee Retirement Income Security Act
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S-17
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Supplemental Plan of Distribution
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S-18
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Conflicts of Interest
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S-20
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Prospectus Supplement dated July 10, 2017
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Use of Proceeds
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S-2
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Description of Notes We May Offer
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S-3
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Considerations Relating to Indexed Notes
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S-20
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United States Taxation
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S-23
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Employee Retirement Income Security Act
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S-24
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Supplemental Plan of Distribution
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S-25
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Validity of the Notes
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S-27
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Prospectus dated July 10, 2017
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Available Information
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2
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Prospectus Summary
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4
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Risks Relating to Regulatory Resolution Strategies and Long-Term Debt Requirements
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8
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Use of Proceeds
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13
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Description of Debt Securities We May Offer
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14
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Description of Warrants We May Offer
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45
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Description of Purchase Contracts We May Offer
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61
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Description of Units We May Offer
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66
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Description of Preferred Stock We May Offer
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71
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Description of Capital Stock of The Goldman Sachs Group, Inc.
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79
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Legal Ownership and Book-Entry Issuance
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84
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Considerations Relating to Floating Rate Securities
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89
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Considerations Relating to Indexed Securities
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90
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Considerations Relating to Securities Denominated or
Payable in or Linked to a
Non-U.S.
Dollar Currency
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91
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United States Taxation
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94
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Plan of Distribution
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116
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Conflicts of Interest
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118
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Employee Retirement Income Security Act
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119
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Validity of the Securities
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120
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Experts
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120
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Review of Unaudited Condensed Consolidated Financial Statements by Independent Registered Public Accounting
Firm
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121
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Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995
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121
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$
The Goldman Sachs Group, Inc.
Fixed and
Floating Rate Notes due
Goldman Sachs & Co. LLC
Goldman Sachs (NYSE:GS)
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