Prospectus Filed Pursuant to Rule 424(b)(2) (424b2)
March 21 2017 - 11:47AM
Edgar (US Regulatory)
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-198735
The
information in this preliminary pricing supplement is not complete and may be changed. This preliminary pricing 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.
Subject to Completion. Dated March 20, 2017.
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$
The Goldman Sachs Group, Inc.
Callable Fixed Rate Notes due 2024
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We will pay you interest monthly on your notes at a rate of 3.00% per annum from and including March , 2017 to but excluding the
stated maturity date (March , 2024). Interest will be paid on the day of each month. The first such payment will be made on April , 2017.
In addition, we may redeem the notes at our option, in whole but not in part, on the day of each
month on or after March , 2023, upon five business days prior notice, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to but excluding the redemption date.
The notes are not subject to a survivors option to request repayment prior to the stated maturity date upon the death of a beneficial
owner.
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Per Note
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Total
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Initial price to public*
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%
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$
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Underwriting discount*
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%
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$
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Proceeds, before expenses, to The Goldman Sachs Group, Inc.
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%
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$
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*
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The initial price to public will vary between % and 100% for certain investors; see Supplemental Plan of Distribution on page
PS-7.
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The initial price to public set forth above does not include accrued interest, if any. Interest on the notes will accrue from March
, 2017 and must be paid by the purchaser if the notes are delivered after March , 2017.
The return
(whether positive or negative) on your investment in notes will depend in part on the issue price you pay for such notes.
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 may use this
prospectus in the initial sale of the notes. In addition, Goldman, Sachs & Co. or any other affiliate of Goldman Sachs may use this prospectus in a market-making transaction in the notes after their 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.
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Goldman, Sachs & Co.
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Incapital LLC
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Pricing Supplement No. dated March
, 2017.
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 pricing
supplement and the accompanying documents listed below. This pricing supplement constitutes a supplement to the documents listed below and should be read in conjunction with such documents:
The information in this pricing 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.
PS-2
SPECIFIC TERMS OF THE NOTES
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Please note that in this section entitled Specific Terms of the
Notes, references to The Goldman Sachs Group, Inc., we, our and us mean only The Goldman Sachs Group, Inc. and do not include any of its consolidated subsidiaries. Also, in this section,
references to holders mean The Depository Trust Company (DTC) or its nominee and not indirect owners who own beneficial interests in notes through participants in DTC. Please review the special considerations that apply to indirect
owners in the accompanying prospectus, under Legal Ownership and Book-Entry Issuance.
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This pricing supplement no. dated March
, 2017 (pricing supplement) and the accompanying prospectus dated January 6, 2017 (accompanying prospectus), relating to the notes, should be read together. Because the notes are part of a series of our debt securities
called
Medium-Term
Notes, Series N, this pricing supplement and the accompanying prospectus should also be read with the accompanying prospectus supplement, dated January 19, 2017 (accompanying prospectus
supplement). Terms used but not defined in this pricing supplement have the meanings given them in the accompanying prospectus or accompanying prospectus supplement, unless the context requires otherwise.
The notes are part of a separate series of our debt securities under our Medium-Term Notes, Series N program governed by our Senior Debt Indenture, dated
as of July 16, 2008, as amended, between us and The Bank of New York Mellon, as trustee. This pricing supplement summarizes specific terms that will apply to your notes. The terms of the notes described here supplement those described in the
accompanying prospectus supplement and accompanying prospectus and, if the terms described here are inconsistent with those described there, the terms described here are controlling.
Terms of the Callable Fixed Rate Notes due 2024
Issuer:
The Goldman Sachs Group, Inc.
Principal amount:
$
Specified
currency:
U.S. dollars ($)
Type of Notes:
Fixed rate notes (notes)
Denominations:
$1,000 and integral multiples of $1,000 in excess thereof
Trade date:
Original issue
date:
March , 2017
Stated maturity date:
March , 2024
Interest rate:
3.00% per annum
Supplemental discussion of U.S.
federal income tax consequences:
It is the opinion of Sidley Austin
LLP
that interest on a note will be taxable to a U.S. holder as ordinary interest income at the time it accrues or is received in accordance with the U.S. holders normal method of accounting for tax purposes
(regardless of whether we call the notes). Upon the disposition of a note by sale, exchange, redemption or retirement (i.e., if we exercise our right to call the notes or otherwise) or other disposition, a U.S. holder will generally recognize
capital gain or loss equal to the difference, if any, between (i) the amount realized on the disposition (other than amounts attributable to accrued but unpaid interest, which would be treated as such) and (ii) the U.S. holders
adjusted tax basis in the note.
Interest payment dates:
the day of each month,
commencing on April , 2017 and ending on the stated maturity date
Regular record dates:
for interest due on an interest payment date, the day immediately prior to the day
on which payment is to be made (as such payment day may be adjusted under the applicable business day convention specified below)
Day count
convention:
30/360
Business day:
New York
Business day convention:
following unadjusted
Redemption at
option of issuer before stated maturity:
We may redeem the notes at our option, in whole but not in part, on the day of each month on or after March , 2023, upon
five business days prior notice, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to but excluding the redemption date
No survivors option:
the notes are not subject to repayment prior to the stated maturity upon the death of a beneficial owner
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
PS-3
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.
Listing:
None
ERISA:
as described under Employee Retirement Income Security Act on page 122 of the accompanying prospectus
CUSIP no.:
38150A2S3
ISIN no.:
US38150A2S30
Form of notes:
Your notes will be issued in book-entry form and represented by a master global note. You should read the section Legal
Ownership and Book-Entry Issuance in the accompanying prospectus for more information about notes issued in book-entry form
Defeasance applies as follows:
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full defeasance
i.e
., our right to be relieved of all our obligations on the note by placing funds in trust for the holder: yes
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covenant defeasance
i.e
., our right to be relieved of specified provisions of the note by placing funds in trust for the holder: yes
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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
Calculation Agent:
Goldman, Sachs & Co.
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.
PS-4
ADDITIONAL INFORMATION ABOUT THE NOTES
Book-Entry System
We will issue the
notes as a master global note registered in the name of DTC, or its nominee. The sale of the notes will settle in immediately available funds through DTC. You will not be permitted to withdraw the notes from DTC except in the limited situations
described in the accompanying prospectus under Legal Ownership and Book-Entry Issuance What Is a Global Security? Holders Option to Obtain a
Non-Global
Security; Special Situations
When a Global Security Will Be Terminated. Investors may hold interests in a master global note through organizations that participate, directly or indirectly, in the DTC system.
In addition to this pricing supplement, the following provisions are hereby incorporated into the global master note: the description of the
30/360 day count convention appearing under Description of Debt Securities We May Offer Calculations of Interest on Debt Securities Interest Rates and Interest in the accompanying prospectus, the description of New
York business day appearing under Description of Debt Securities We May Offer Calculations of Interest on Debt Securities Business Days in the accompanying prospectus, the description of the following unadjusted business
day convention appearing under Description of Debt Securities We May Offer Calculations of Interest on Debt Securities Business Day Conventions in the accompanying prospectus and the section Description of Debt
Securities We May Offer Defeasance and Covenant Defeasance in the accompanying prospectus.
When We Can Redeem the Notes
We will be permitted to redeem the notes at our option before their stated maturity, as described below. The notes will not be entitled to
the benefit of any sinking fund that is, we will not deposit money on a regular basis into any separate custodial account to repay your note. In addition, you will not be entitled to require us to buy your note from you before its stated
maturity.
We will have the right to redeem the notes at our option, in whole but not in part, on the
day of each month on or after March , 2023, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to but excluding the
redemption date. We will provide not less than five business days prior notice in the manner described under Description of Debt Securities We May Offer Notices in the attached prospectus. If the redemption notice is given
and funds deposited as required, then interest will cease to accrue on and after the redemption date on the notes. If any redemption date is not a business day, we will pay the redemption price on the next business day without any interest or other
payment due to the delay.
What are the Tax Consequences of the Notes
You should carefully consider, among other things, the matters set forth under United States Taxation in the accompanying prospectus
supplement and the accompanying prospectus. The following discussion summarizes certain of the material U.S. federal income tax consequences of the purchase, beneficial ownership, and disposition of each of the notes. This summary supplements
the section United States Taxation in the accompanying prospectus supplement and the accompanying prospectus and is subject to the limitations and exceptions set forth therein.
Interest on a note will be taxable to a U.S. holder as ordinary interest income at the time it accrues or is received in accordance with the
U.S. holders normal method of accounting for tax purposes.
Upon the disposition of a note by sale, exchange, redemption or retirement
(i.e., if we exercise our right to call the notes or otherwise) or other disposition, a U.S. holder will generally recognize capital gain or loss equal to the difference, if any, between (i) the amount realized on the disposition (other
than amounts attributable to accrued but unpaid interest, which would be treated as such) and (ii) the U.S. holders adjusted tax basis in the note. A U.S. holders adjusted tax basis in a note generally will equal the cost
of the note (net of accrued interest) to the U.S. holder. The deductibility of capital losses is subject to significant limitations.
PS-5
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, redemption or other disposition of the notes made before January 1, 2019.
PS-6
SUPPLEMENTAL PLAN OF DISTRIBUTION
The Goldman Sachs Group, Inc. and the underwriters for this offering named below have entered into a distribution agreement with respect to the notes.
Subject to certain conditions, each underwriter named below has severally agreed to purchase the principal amount of notes indicated in the following table.
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Underwriters
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Principal Amount of
Notes
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Goldman, Sachs & Co.
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$
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Incapital LLC
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Total
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$
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Notes sold by the underwriters to the public will initially be offered at the initial price to public set forth on the
cover of this pricing supplement. The underwriters intend to purchase the notes from The Goldman Sachs Group, Inc. at a purchase price equal to the initial price to public less a discount of % of the
principal amount of the notes. Any notes sold by the underwriters to securities dealers may be sold at a discount from the initial price to public of up to % of the principal amount of the notes. The
initial price to public for notes purchased by certain
fee-based
advisory accounts will vary between % and 100% of the face amount of the notes. Any sale of a
note to a
fee-based
advisory account at an initial price to public below 100% of the face amount will reduce the underwriting discount specified on the cover of this pricing supplement with respect to such
note. The initial price to public paid by any
fee-based
advisory account will be reduced by the amount of any fees foregone by the securities dealer or dealers involved in the sale of the notes to such
advisory account, but not by more than % of the face amount of the notes. If all of the offered notes are not sold at the initial price to public, the underwriters may change the offering price and the
other selling terms.
Please note that the information about the initial price to public and net proceeds to The Goldman Sachs Group, Inc. on the
front cover page relates only to the initial sale of the notes. If you have purchased a note in a market-making transaction by Goldman, Sachs & Co. or any other affiliate of The Goldman Sachs Group, Inc. after the initial sale, information
about the price and date of sale to you will be provided in a separate confirmation of sale.
Each underwriter has represented and agreed that it
will not offer or sell the notes in the United States or to United States persons except if such offers or sales are made by or through FINRA member broker-dealers registered with the U.S. Securities and Exchange Commission.
The Goldman Sachs Group, Inc. estimates that its share of the total offering expenses, excluding underwriting discounts and commissions, whether paid to
Goldman, Sachs & Co. or any other underwriter, will be approximately $ .
We expect to
deliver the notes against payment therefor in New York, New York on , 2017, which is expected to be the third scheduled business day following the date of this pricing supplement and of the pricing of
the notes.
The notes are a new issue of securities with no established trading market. The Goldman Sachs Group, Inc. has been advised by Goldman,
Sachs & Co. and Incapital LLC that they may make a market in the notes. Goldman, Sachs & Co. and Incapital LLC are not obligated to do so and may discontinue market-making at any time without notice. No assurance can be given as to
the liquidity of the trading market for the notes.
The Goldman Sachs Group, Inc. has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
Certain of the underwriters and their affiliates have in the past provided,
and may in the future from time to time provide, investment banking and general financing and banking services to The Goldman Sachs Group, Inc. and its affiliates, for which they have in the past received, and may in the future receive, customary
fees. The Goldman Sachs Group, Inc. and its affiliates have in the past provided, and may in the future from time to time provide, similar services to the underwriters and their affiliates on customary terms and for customary fees.
PS-7
Goldman, Sachs & Co., one of the underwriters, is an affiliate of The Goldman Sachs Group, Inc. Please see Plan of DistributionConflicts of Interest on page 121 of
the accompanying prospectus.
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.
PS-8
We have not authorized anyone to provide any information or to make any representations other than those
contained or incorporated by reference in this pricing 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 pricing supplement, the accompanying prospectus supplement and the accompanying prospectus is an offer to sell only the notes offered hereby, but only under circumstances and in jurisdictions where it is lawful to do
so. The information contained in this pricing supplement, the accompanying prospectus supplement and the accompanying prospectus is current only as of the respective dates of such documents.
TABLE OF CONTENTS
Pricing Supplement
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Page
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Specific Terms of the Notes
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PS-3
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Additional Information About the Notes
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PS-5
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Supplemental Plan of Distribution
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PS-7
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Conflicts of Interest
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PS-8
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Prospectus
Supplement dated January 19, 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-19
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United States Taxation
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S-22
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Employee Retirement Income Security Act
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S-23
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Supplemental Plan of Distribution
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S-24
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Validity of the Notes
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S-26
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Prospectus
dated January 6, 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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12
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Description of Debt Securities We May Offer
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13
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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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62
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Description of Units We May Offer
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67
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Description of Preferred Stock We May Offer
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73
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Description of Capital Stock of The Goldman Sachs
Group, Inc.
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81
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Legal Ownership and Book-Entry Issuance
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86
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Considerations Relating to Floating Rate Securities
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91
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Considerations Relating to Indexed Securities
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93
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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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94
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United States Taxation
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97
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Plan of Distribution
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121
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Conflicts of Interest
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124
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Employee Retirement Income Security Act
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125
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Validity of the Securities
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126
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Experts
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126
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Review of Unaudited Condensed Consolidated Financial
Statements by
Independent Registered Public Accounting
Firm
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127
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Cautionary Statement Pursuant to the Private Securities
Litigation Reform Act of
1995
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127
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$
The Goldman Sachs Group, Inc.
Callable Fixed
Rate
Notes due 2024
Goldman, Sachs & Co.
Incapital LLC
Goldman Sachs (NYSE:GS)
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