Transcript Disclaimer - Goldman Sachs

GOLDMAN SACHS INTERNATIONAL
(Incorporated with unlimited liability in England)
Series M Programme for the issuance of Warrants, Notes and Certificates
______________________________________________________________
Issue of U.S.$ 100,000,000* Ten-Year Fixed-to-Floating Rate Notes, due January 20, 2027
(the "Securities" or the "Notes")
(ISIN: XS1457442025)
______________________________________________________________
Guaranteed by
THE GOLDMAN SACHS GROUP, INC.
(A corporation organised under the laws of the State of Delaware)
Prospectus
This document constitutes a prospectus (this "Prospectus") for the purposes of Article 5.3 of Directive
2003/71/EC as amended, including by Directive 2010/73/EU (the "Prospectus Directive") relating to the
above-referenced Securities issued by Goldman Sachs International (the "Issuer" or "GSI") and guaranteed by
The Goldman Sachs Group, Inc. (the "Guarantor" or "GSG"). This Prospectus should be read together with
any documents incorporated by reference within it.
Programme
The Securities are being issued under the Series M Programme for the issuance of Warrants, Notes and
Certificates (the "Programme") of the Issuer and the Guarantor.
Status of the Securities
The Securities are unsecured and unsubordinated general obligations of the Issuer and not of any affiliate of the
Issuer. The Securities are not bank deposits and are not insured or guaranteed by the United States Federal
Deposit Insurance Corporation, the United States Deposit Insurance Fund, the UK Financial Services
Compensation Scheme or any other government or governmental or private agency or deposit protection scheme
in any jurisdiction.
The Guaranty
The payment obligations of the Issuer in respect of the Securities are guaranteed by GSG as Guarantor pursuant
to a guaranty governed by laws of the State of New York dated May 29, 2015 (the "Guaranty"). The Guaranty
will rank pari passu with all other unsecured and unsubordinated indebtedness of GSG.
*Issue Size
On the Issue Date (being January 20, 2017), an aggregate nominal amount of U.S.$ 100,000,000 of Securities
will be issued to and made available for sale by GSI (in its capacity as Dealer), and as soon as practicable
thereafter, listed and admitted to trading on both the Borsa Italiana S.p.A.'s MOT (Electronic bond market) and
the regulated market of the Luxembourg Stock Exchange for purchase by investors. However, GSI reserves the
right to cancel some or all of the Securities that it holds at any time prior to the Maturity Date (being January 20,
2027), such right to be exercised in accordance with applicable laws, the terms and conditions of the Securities
and the applicable rules of Borsa Italiana S.p.A. and the Luxembourg Stock Exchange including as to
notification. In particular, at any time following listing and admission to trading on Borsa Italiana S.p.A.'s MOT
(Electronic bond market) and the regulated market of the Luxembourg Stock Exchange, GSI may cancel some
or all of any Securities which have not been purchased by investors by such time. Accordingly, the aggregate
nominal amount of Securities outstanding at any time may be significantly less than U.S.$ 100,000,000, and this
could have a negative impact on an investor's ability to sell the Securities in the secondary market. Notification
of any such cancellation of Securities will be made on the website of Borsa Italiana S.p.A.
(www.borsaitaliana.it) and in any case according to the rules of Borsa Italiana S.p.A. and on the website of the
Luxembourg Stock Exchange (www.bourse.lu).
Information incorporated by reference
This Prospectus incorporates by reference certain information from the base prospectus in relation to the
Programme dated April 14, 2016 (the "Original Base Prospectus") and the supplement(s) thereto (and the
Original Base Prospectus as supplemented, the "Base Prospectus"). See the section entitled "Documents
Incorporated by Reference" below. You should read this Prospectus together with such information from the
Base Prospectus.
Statements in relation to prospects and financial or trading position
In this Prospectus, where GSI and GSG make statements that "there has been no material adverse change in the
prospects" and "no significant change in the financial or trading position" of GSI and GSG, respectively,
references in these statements to the "prospects" and "financial or trading position" of GSI and GSG are
specifically to their respective ability to meet their full payment obligations under the Securities (in the case of
GSI) or Guaranty (in the case of GSG) in a timely manner. Such statements are made, for example, in Elements
B.12 and B.19 (B.12) of the "Summary". Material information about GSI's and GSG's respective financial
condition and prospects is included in each of GSI's and GSG's annual and/or interim reports, which are
incorporated by reference into this Prospectus.
The date of this Prospectus is January 19, 2017.
TABLE OF CONTENTS
Page
IMPORTANT NOTICES ..........................................................................................................................4
SUMMARY...............................................................................................................................................7
RISK FACTORS .....................................................................................................................................18
DOCUMENTS INCORPORATED BY REFERENCE...........................................................................28
CONTRACTUAL TERMS......................................................................................................................33
OTHER INFORMATION .......................................................................................................................41
EXAMPLES ............................................................................................................................................43
ANNEX – AMENDMENTS TO THE GENERAL TERMS AND CONDITIONS OF THE NOTES ...45
GENERAL INFORMATION ..................................................................................................................46
INDEX OF DEFINED TERMS...............................................................................................................53
Important Notices
IMPORTANT NOTICES
Approval and passporting under the EU Prospectus Directive
Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the "CSSF"),
which is the Luxembourg competent authority for the purpose of the Prospectus Directive for approval of this
Prospectus as a prospectus issued in compliance with the Prospectus Directive and relevant implementing
measures in Luxembourg for the purpose of giving information with regard to the Securities. This Prospectus
constitutes a prospectus for the purposes of Article 5.3 of the Prospectus Directive relating to the Securities, and
should be read together with any documents incorporated by reference within it.
An application has been made for the Securities to be listed on the Official List and admitted to trading on the
Luxembourg Stock Exchange, a regulated market for the purposes of Directive 2004/39/EC on Markets in
Financial Instruments, with effect from as practicable after the Issue Date. No assurances can be given that such
application for listing and admission to trading will be granted. Application will also be made for the Securities
to be listed on Borsa Italiana S.p.A. and admitted to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond
market), a regulated market organised and managed by Borsa Italiana S.p.A, with effect from as practicable
after the Issue Date. No assurances can be given that such application for listing and admission to trading will be
granted.
This Prospectus will be published on the websites of the Luxembourg Stock Exchange (www.bourse.lu) and the
Issuer (www.goldman-sachs.it). On the approval of this Prospectus as a prospectus for the purpose of Article 5.3
of the Prospectus Directive by the CSSF, notification of such approval will be made to the Italian National Stock
Exchange and Companies Commission (Commissione Nazionale per le Società e la Borsa) ("CONSOB") in its
capacity as the competent authority of the Republic of Italy.
CSSF disclaimer
Pursuant to Article 7(7) of the Luxembourg Law on Prospectuses for Securities dated July 10, 2005 (as
amended), by approving this Prospectus, the CSSF gives no undertakings as to the economic and financial
characteristics of the Securities or the quality or solvency of the Issuer.
Credit ratings
The credit ratings of GSG1 and GSI2 referred to in this Prospectus have been issued by in the case of GSG,
The information for this rating has been extracted from information made available by each rating agency referred to below.
The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to
ascertain from information published by such ratings agencies, no facts have been omitted which would render the
reproduced information inaccurate or misleading.
1
As at the date of this prospectus the ratings for GSG were:
Short-term debt:
Fitch, Inc. rating was F1: An 'F1' rating indicates the highest short-term credit quality and the strongest intrinsic capacity for
timely payment of financial commitments; may have an added '+' to denote any exceptionally strong credit feature.
Moody's rating was P-2: 'P-2' Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt
obligations.
S&P rating was A-2: A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.
DBRS rating was R-1 (middle): This indicates superior credit quality. The capacity for the payment of short-term financial
obligations as they fall due is very high. Differs from R-1 (high) by a relatively modest degree. Unlikely to be significantly
vulnerable to future events.
Long-term debt:
-4-
Important Notices
DBRS, Inc. ("DBRS"), Fitch, Inc. ("Fitch"), Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") and Rating and Investment
Information, Inc. ("R&I"), and, in the case of GSI, Fitch, Moody's and S&P, none of which entities is
established in the European Union or registered under Regulation (EC) No. 1060/2009, as amended, including
by Regulation (EU) No. 513/2011 (the "CRA Regulation"), and as further amended. In general, European
regulated investors are restricted from using a rating for regulatory purposes if such rating is not either (1)
issued or validly endorsed by a credit rating agency established in the European Union and registered with the
European Securities and Markets Authority ("ESMA") under the CRA Regulation) or (2) issued by a credit
rating agency established outside the European Union which is certified under the CRA Regulation.
The EU affiliates of DBRS, Fitch, Moody's and S&P are registered under the CRA Regulation. The ESMA has
approved the endorsement by such EU affiliates of credit ratings issued by DBRS, Fitch, Moody's and S&P.
Accordingly, credit ratings issued by Fitch, Moody's and S&P may be used for regulatory purposes in the EU.
The credit rating issued by R&I is incorporated into this Prospectus for information purposes only.
Fitch, Inc. rating was A: An 'A' rating indicates high credit quality and denotes expectations of low default risk. The capacity
for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse
business or economic conditions than is the case for higher ratings.
Moody's rating was A3: Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1
indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
S&P rating was BBB+: An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic
conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation. The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-)
sign to show relative standing within the major rating categories.
DBRS rating was A (high): An A rating indicates good credit quality. The capacity for the payment of financial obligations
is substantial, but of lesser credit quality than AA. May be vulnerable to future events, but qualifying negative factors are
considered manageable.
2
The information for this rating has been extracted from information made available by each rating agency referred to
below. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to
ascertain from information published by such ratings agencies, no facts have been omitted which would render the
reproduced information inaccurate or misleading.
As at the date of this Prospectus the ratings for GSI were:
Short-term debt:
Fitch, Inc. rating was F1: An 'F1' rating indicates the highest short-term credit quality and the strongest intrinsic capacity for
timely payment of financial commitments; may have an added '+' to denote any exceptionally strong credit feature.
Moody's rating was P-1: 'P-1' Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term
debt obligations.
S&P rating was A-1: A short-term obligation rated 'A-1' is rated in the highest category by Standard & Poor's. The obligor's
capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated
with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is
extremely strong.
Long-term debt:
Fitch, Inc. rating was A: An 'A' rating indicates high credit quality and denotes expectations of low default risk. The capacity
for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse
business or economic conditions than is the case for higher ratings.
Moody's rating was A1: Obligations rated 'A' are considered upper-medium grade and are subject to low credit risk. Note:
Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from 'Aa' through 'Caa'. The modifier
1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
S&P rating was A+: An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances
and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong. The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories.
-5-
Important Notices
Credit ratings may be adjusted over time, and there is no assurance that these credit ratings will be effective
after the date of this Prospectus. A credit rating is not a recommendation to buy, sell or hold the Securities.
The list of credit rating agencies registered under the CRA Regulation (as updated from time to time) is
published on the website of the ESMA (www.esma.europa.eu/page/list-registered-and-certified-CRAs).
Important U.S. Notices
The Securities have not been, nor will be, registered under the United States Securities Act of 1933, as amended
(the "Securities Act"), or any state securities laws. Except as provided below, Securities may not be offered,
sold or delivered within the United States or to U.S. persons (as defined in Regulation S under the Securities Act
("Regulation S")). The Securities have not been approved or disapproved by the Securities and Exchange
Commission or any state securities commission in the United States nor has the Securities and Exchange
Commission or any state securities commission passed upon the accuracy or the adequacy of this Prospectus.
Any representation to the contrary is a criminal offence in the United States.
Restrictions and distribution and use of this Prospectus
The distribution of this Prospectus and the offering, sale and delivery of the Securities in certain jurisdictions
may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and
the Guarantor to inform themselves about and to observe any such restrictions. This Prospectus may not be used
for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not
authorised or to any person to whom it is unlawful to make such offer or solicitation, and no action has been
taken or will be taken to permit an offering of the Securities or the distribution of this Prospectus in any
jurisdiction where any such action is required.
-6-
Summary
SUMMARY
Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in
Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of securities and
Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence
of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of securities and
Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short
description of the Element is included in the summary with the mention of "not applicable".
SECTION A – INTRODUCTION AND WARNINGS
A.1
Introduction and
warnings
This summary should be read as an introduction to this Prospectus. Any
decision to invest in the Securities should be based on consideration of this
Prospectus as a whole by the investor. Where a claim relating to the
information contained in this Prospectus is brought before a court, the plaintiff
investor might, under the national legislation of the Member States, have to
bear the costs of translating this Prospectus before the legal proceedings are
initiated. Civil liability attaches only to those persons who have tabled the
summary including any translation thereof, but only if the summary is
misleading, inaccurate or inconsistent when read together with the other parts
of this Prospectus or it does not provide, when read together with the other
parts of this Prospectus, key information in order to aid investors when
considering whether to invest in such Securities.
A.2
Consents
Not applicable; no consent is given for the use of this Prospectus for
subsequent resales of the Securities.
SECTION B – ISSUER AND GUARANTOR
B.1
Legal and
commercial name
of the Issuer
Goldman Sachs International ("GSI" or the "Issuer").
B.2
Domicile, legal
form, legislation
and country of
incorporation of
the Issuer
GSI is a private unlimited liability company incorporated in England and
Wales. GSI mainly operates under English law. The registered office of GSI is
Peterborough Court, 133 Fleet Street, London EC4A 2BB, England.
B.4b
Known trends
with respect to
the Issuer
GSI's prospects will be affected, potentially adversely, by developments in
global, regional and national economies, including in the United Kingdom,
movements and activity levels, in financial, commodities, currency and other
markets, interest rate movements, political and military developments
throughout the world, client activity levels and legal and regulatory
developments in the United Kingdom and other countries where the Issuer does
business.
B.5
The Issuer's
group
Goldman Sachs Group UK Limited, a company incorporated under English
law, has a 100 per cent. shareholding in GSI. Goldman Sachs (UK) L.L.C. is
established under the laws of the State of Delaware and has a 97.208 per cent.
interest in Goldman Sachs Group UK Limited. Goldman Sachs Ireland Group
Limited is established under the laws of Ireland and has a 2.792 per cent.
interest in Goldman Sachs Group UK Limited. Goldman Sachs Ireland LLC is
established under the laws of the State of Delaware and has a 100 per cent.
shareholding in Goldman Sachs Ireland Group Limited. Goldman Sachs Ireland
Group Holdings LLC is established under the laws of the State of Delaware and
has a 75 per cent. interest in Goldman Sachs Ireland LLC. Goldman Sachs
Global Holdings L.L.C. is established under the laws of the State of Delaware
-7-
Summary
and has a 25 per cent. interest in Goldman Sachs Ireland LLC. The Goldman,
Sachs & Co. L.L.C. is established under the laws of the State of Delaware and
has a one per cent. interest in Goldman Sachs Global Holdings L.L.C. The
Goldman Sachs Group, Inc. is established in Delaware and has a 100 per cent.
shareholding in Goldman Sachs Ireland Group Holdings LLC, The Goldman,
Sachs & Co. L.L.C. and Goldman Sachs (UK) L.L.C. and a 99 per cent. interest
in Goldman Sachs Global Holdings L.L.C.
Holding Company Structure of GSI
Note: The percentages given are for direct holdings of ordinary shares or
equivalent. Minority shareholdings are held by other entities which are
themselves owned, directly or indirectly, by The Goldman Sachs Group, Inc.
B.9
Profit forecast or
estimate
Not applicable; GSI has not made any profit forecasts or estimates.
B.10
Audit report
qualifications
Not applicable; there are no qualifications in the audit report of GSI on its
historical financial information.
B.12
Selected historical
key financial
information of the
Issuer
The following table shows selected key historical financial information in
relation to GSI:
As at and for the nine months
ended (unaudited)
As at and for the year ended
(in USD millions)
September 30,
2016
September 30,
2015
December 31,
2015
December 31,
2014
Operating Profit
2,033
2,276
2,939
2,275
Profit on ordinary
activities before
taxation
1,783
2,078
2,661
2,060
Profit for the
financial period
1,321
1,680
2,308
1,608
As of (unaudited)
(in USD millions)
As of
September 30, 2016
December 31,
2015
December 31,
2014
90
12
14
1,072,495
850,219
967,411
Fixed Assets
Current Assets
-8-
Summary
Total
Shareholders'
funds
27,564
26,353
21,997
No material
adverse change
There has been no material adverse change in the prospects of GSI since
December 31, 2015.
Significant
changes
Not applicable; there has been no significant change in the financial or trading
position particular to GSI subsequent to September 30, 2016.
B.13
Recent events
material to the
evaluation of the
Issuer's solvency
Not applicable; there have been no recent events particular to GSI which are to
a material extent relevant to the evaluation of GSI's solvency.
B.14
Issuer's position
in its corporate
group
Please refer to Element B.5 above.
B.15
Principal
activities
The principal activities of GSI consist of securities underwriting and
distribution, trading of corporate debt and equity services, non-U.S. sovereign
debt and mortgage securities, execution of swaps and derivative instruments,
mergers and acquisitions, financial advisory services for restructurings/private
placements/lease and project financings, real estate brokerage and finance,
merchant banking, stock brokerage and research.
B.16
Ownership and
control of the
Issuer
Goldman Sachs Group UK Limited, a company incorporated under English
law, has a 100 per cent. shareholding in GSI. See also Element B.5.
B.17
Rating of the
Issuer or the
Securities
The long term debt of GSI is rated 'A+' by S&P, 'A' by Fitch and 'A1' by
Moody's. The Securities have not been rated.
B.18
Nature and scope
of the Guaranty
The payment obligations of GSI in respect of the Securities are guaranteed by
The Goldman Sachs Group, Inc. "GSG" or the "Guarantor") pursuant to a
guaranty governed by laws of the State of New York dated May 29, 2015 (the
"Guaranty"). The Guaranty will rank pari passu with all other unsecured and
unsubordinated indebtedness of GSG.
B.19
Name of
Guarantor
The Goldman Sachs Group, Inc.
Domicile, legal
form, legislation
and country of
incorporation of
the Guarantor
GSG is incorporated in the State of Delaware in the United States as a
corporation pursuant to the Delaware General Corporation Law. The registered
office of GSG is 200 West Street, New York, New York 10282, USA.
Known trends
with respect to
the Guarantor
GSG's prospects will be affected, potentially adversely, by developments in
global, regional and national economies, including in the U.S. movements and
activity levels, in financial, commodities, currency and other markets, interest
rate movements, political and military developments throughout the world,
client activity levels and legal and regulatory developments in the United States
and other countries where GSG does business.
(B.1)
B.19
(B.2)
B.19
(B.4b)
B.19
(B.5)
The Guarantor's
group
GSI is part of a group of companies of which The Goldman Sachs Group, Inc.
is the holding company (the "Goldman Sachs Group") and transacts with, and
depends on, entities within such group accordingly.
Holding Company Structure of GSG
-9-
Summary
Note: The percentages given are for direct holdings of ordinary shares or
equivalent. Minority shareholdings are held by other entities which are
themselves owned, directly or indirectly, by GSG
B.19
(B.9)
B.19
(B.10)
B.19
(B.12)
Profit forecast or
estimate
Not applicable; GSG has not made any profit forecasts or estimates.
Audit report
qualifications
Not applicable; there are no qualifications in the audit report of GSG.
Selected historical
key financial
information of the
Guarantor
The following table shows selected key historical financial information in
relation to GSG:
As and for the
Nine months ended
(unaudited)
Year ended
(in USD millions)
September
30, 2016
September
30, 2015
December
31, 2015
December
31, 2014
Total non-interest
revenues
20,187
24,183
30,756
30,481
Net revenues,
including net interest
income
22,438
26,547
33,820
34,528
Pre-tax earnings
6,907
7,706
8,778
12,357
As of (unaudited)
(in USD millions)
As of December
September 2016
2015
2014
Total assets
879,987
861,395
855,842
Total liabilities
792,877
774,667
773,045
Total shareholders'
equity
87,110
86,728
82,797
There has been no material adverse change in the prospects of GSG since
December 31, 2015.
Not applicable; there has been no significant change in GSG's financial or
trading position since September 30, 2016.
- 10 -
Summary
B.19
(B.13)
B.19
(B.14)
B.19
(B.15)
B.19
(B.16)
Recent events
material to the
evaluation of the
Guarantor's
solvency
Not applicable; there are no recent events particular to GSG which are to a
material extent relevant to the evaluation of GSG's solvency.
Dependence upon
other members of
the Guarantor's
group
See Element B.19 (B.5).
Principal
activities
The activities of GSG, together with its consolidated subsidiaries ("Goldman
Sachs") are conducted in the following segments:
Ownership and
control of the
Guarantor
GSG is a holding company and, therefore, depends on dividends, distributions
and other payments from its subsidiaries to fund dividend payments and to fund
all payments on its obligations, including debt obligations.
(1)
Investment Banking:
•
Financial Advisory, which includes strategic advisory assignments with
respect to mergers and acquisitions, divestitures, corporate defense
activities, risk management, restructurings and spin-offs, and derivative
transactions directly related to these client advisory assignments; and
•
Underwriting, which includes public offerings and private placements,
including domestic and cross-border transactions, of a wide range of
securities, loans and other financial instruments, and derivative
transactions directly related to these client underwriting activities.
(2)
Institutional Client Services:
•
Fixed Income, Currency and Commodities, which includes client
execution activities related to making markets in interest rate products,
credit products, mortgages, currencies and commodities; and
•
Equities, which includes client execution activities related to making
markets in equity products and commissions and fees from executing
and clearing institutional client transactions on major stock, options and
futures exchanges worldwide, as well as over-the-counter transactions.
Equities also includes our securities services business, which provides
financing, securities lending and other prime brokerage services to
institutional clients, including hedge funds, mutual funds, pension funds
and foundations, and generates revenues primarily in the form of interest
rate spreads or fees.
(3)
Investing & Lending, which includes Goldman Sachs' investing
activities and the origination of loans to provide financing to clients.
These investments, some of which are consolidated, and loans are
typically longer-term in nature. The Goldman Sachs makes investments,
directly and indirectly through funds that it manages, in debt securities
and loans, public and private equity securities, and real estate entities.
(4)
Investment Management, which provides investment management
services and offers investment products (primarily through separately
managed accounts and commingled vehicles, such as mutual funds and
private investment funds) across all major asset classes to a diverse set
of institutional and individual clients. Investment Management also
offers wealth advisory services, including portfolio management and
financial counseling, and brokerage and other transaction services to
high-net-worth individuals and families.
Not applicable; GSG is a publicly-held company listed on the New York Stock
Exchange and not directly or indirectly owned or controlled by any
shareholders or affiliated group of shareholders.
See Element B.19 (B.5).
- 11 -
Summary
B.19
(B.17)
Rating of the
Guarantor
The following table sets forth the Guarantor's unsecured credit ratings. A rating
is not a recommendation to buy, sell or hold any of the notes. Any or all of
these ratings are subject to revision or withdrawal at any time by the assigning
rating organization. Each rating should be evaluated independently of any other
rating:
Short-Term
Debt
Long-Term
Debt
Subordinated
Debt
Preferred
Stock
R-1 (middle)
A (high)
A
BBB (high)
Fitch, Inc.
F1
A
A-
BB+
Moody's Investors
Service
P-2
A3
Baa2
Ba1
Standard & Poor's
A-2
BBB+
BBB-
BB
Rating and Investment
Information, Inc.
a-1
A
A-
N/A
Dominion Bond
Rating Service
Limited
SECTION C – SECURITIES
Type and class of
Securities
Fixed-to-Floating Rate Notes (the "Securities").
C.2
Currency
The currency of the Securities will be United States Dollar ("USD" or "U.S.$
").
C.5
Restrictions on
the free
transferability
The Securities and the Guaranty may not be offered, sold or delivered within
the United States or to U.S. persons as defined in Regulation S under the
Securities Act ("Regulation S"), except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
and applicable state securities law.
C.1
ISIN: XS1457442025; Common Code: 145744202; Valoren: 34309457.
Further, the Securities may not be acquired by, on behalf of, or with the assets
of any plans subject to ERISA or Section 4975 of the U.S. Internal Revenue
Code of 1986, as amended, other than certain insurance company general
accounts.
Subject to the above, the Securities will be freely transferable.
C.8
Rights attached to
the securities
including ranking
and any
limitation to those
rights
Rights: The Securities give the right to each holder of Securities (a "Holder")
to receive a potential return on the Securities (see Element C.9 below), together
with certain ancillary rights such as the right to receive notice of certain
determinations and events and to vote on future amendments. The terms and
conditions are governed under English law.
Ranking: The Securities are direct, unsubordinated and unsecured obligations
of the Issuer and rank equally with all other direct, unsubordinated and
unsecured obligations of the Issuer. The Guaranty will rank equally with all
other unsecured and unsubordinated indebtedness of GSG.
Limitations to rights:

The terms and conditions of the Securities contain provisions for calling
meetings of Holders to consider matters affecting their interests
generally and these provisions permit defined majorities to bind all
Holders, including Holders who did not attend and vote at the relevant
meeting and Holders who voted in a manner contrary to the majority.
Further, in certain circumstances, the Issuer may amend the terms and
conditions of the Securities, without the Holders' consent.

The terms and conditions of the Securities permit the Issuer and the
Calculation Agent (as the case may be), on the occurrence of certain
- 12 -
Summary
events and in certain circumstances, without the Holders' consent, to
make adjustments to the terms and conditions of the Securities, to
redeem the Securities prior to maturity (where applicable), to postpone
scheduled payments under the Securities, to change the currency in
which the Securities are denominated, to substitute the Issuer with
another permitted entity subject to certain conditions, and to take certain
other actions with regard to the Securities.
C.9
Rights attached to
the securities
including interest
provisions, yield
and
representative of
the holders
Please refer to Element C.8 above.
The return on the Securities will derive from:

The payment on the relevant payment date(s) of an amount on account
of Interest;

The potential payment of a Non-scheduled Early Repayment Amount
upon an unscheduled early redemption of the Securities (as described
below); or

If the Securities are not previously redeemed, or purchased and
cancelled, the payment of the Final Redemption Amount on the
maturity date of the Securities.
_______________
Interest
The Securities bear interest from January 20, 2017 ("Interest Commencement
Date") at the Rate of Interest.
The interest amount payable on each Interest Payment Date in respect of each
Security shall be calculated by multiplying the relevant Rate of Interest by the
Calculation Amount, and further multiplying the product by the relevant day
count fraction applicable to the interest period ending on (but excluding) the
date on which such Interest Payment Date is scheduled to fall, and rounding the
resultant figure in accordance with the terms and conditions. If an Interest
Payment Date is not a payment business day, the interest amount for that
Interest Payment Date will be paid on the next succeeding payment business
day but the interest period for the determination of the interest amount shall
remain unadjusted.
The "Rate of Interest" for the interest periods ending on (but excluding)
January 20, 2018 and January 20, 2019 shall be 6.00 per cent. (6.00%) per
annum.
The "Rate of Interest" for the interest periods ending on (but excluding) the
date on which each Interest Payment Date is scheduled to fall (other than the
Interest Payment Dates scheduled to fall on January 20, 2018 and January 20,
2019) shall be equal to the Reference Rate, provided that such Rate of Interest
shall be not less than the Minimum Rate of Interest or greater than the
Maximum Rate of Interest.
Defined terms used above:
•
Calculation Amount: U.S.$ 2,000.
•
Reference Rate: a rate equal to the rate for deposits in USD for a period
of three months which appears on the Reuters Screen LIBOR01 Page as
of 11:00 a.m., London time, on the day that is two London business
days preceding the first day of the relevant interest period.
•
Interest Payment Dates: the 20th day of January in each calendar year
from, and including, January 20, 2018 to, and including, January 20,
2026, and the Maturity Date (as defined below).
•
Maximum Rate of Interest: 4.00 per cent. (4.00%) per annum.
•
Minimum Rate of Interest: 1.75 per cent. (1.75%) per annum.
- 13 -
Summary
_______________
Indication of Yield: Not Applicable.
_______________
Non-scheduled Early Repayment Amount
Unscheduled early redemption: The Securities may be redeemed prior to the
scheduled maturity (i) at the Issuer's option if the Issuer determines a change in
applicable law has the effect that performance by the Issuer or its affiliates
under the Securities or hedging transactions relating to the Securities has
become (or there is a substantial likelihood in the immediate future that it will
become) unlawful or impracticable (in whole or in part), or (ii) upon notice by
a Holder declaring such Securities to be immediately repayable due to the
occurrence of an event of default which is continuing.
In such case, the Non-scheduled Early Repayment Amount payable on such
unscheduled early redemption shall be, for each Security, the Specified
Denomination of U.S.$ 2,000.
_______________
Redemption

The Maturity Date for the Securities shall be January 20, 2027,
provided that if such day is not a payment business day, the final
redemption amount will be paid on the next succeeding payment
business day.

Unless previously redeemed or purchased and cancelled, each Security
will be redeemed by the Issuer on the maturity date by payment of a
Final Redemption Amount of U.S.$ 2,000 per Calculation Amount of
Securities.
Representative of holders of Securities: Not applicable; the Issuer has not
appointed any person to be a representative of the holders of Securities.
C.10
C.11
Derivative
component in the
interest payment
Please refer to Element C.9 above.
Admission to
trading on a
regulated market
Application has been made to admit the Securities to trading on the regulated
market of the Luxembourg Stock Exchange with effect from as soon as
practicable following the Issue Date. No assurances can be given that such
application for admission to trading will be granted.
Not applicable; there is no derivative component in the interest payments made
in respect of the Securities.
Application will be made to admit the Securities to trading on Borsa Italiana
S.p.A.'s MOT (Electronic bond market) with effect from as soon as practicable
following the Issue Date. No assurances can be given that such application for
admission to trading will be granted.
SECTION D – RISKS
D.2
Key risks that
are specific to the
Issuer, the
Guarantor and
Goldman Sachs
The payment of any amount due on the Securities is subject to our credit risk.
The Securities are our unsecured obligations. The Securities are not bank
deposits and are not insured or guaranteed by the U.S. Federal Deposit
Insurance Corporation, the U.S. Deposit Insurance Fund, the UK Financial
Services Compensation Scheme or any other government or governmental or
private agency or deposit protection scheme in any jurisdiction. The value of
and return on your securities will be subject to our credit risk and to changes in
the market's view of our creditworthiness.
References in B.12 and B.19 (B.12) above to the "prospects" and "financial or
trading position" of the Issuer and Guarantor (as applicable), are specifically to
their respective ability to meet their full payment obligations under the
Securities (in the case of GSI) or Guaranty (in the case of GSG) in a timely
- 14 -
Summary
manner. Material information about the Issuer's and Guarantor's respective
financial condition and prospects is included in each of the Issuer's and
Guarantor's annual and/or interim reports. You should be aware, however, that
each of the key risks highlighted below could have a material adverse effect on
the Issuer's and Guarantor's businesses, operations, financial and trading
position and prospects, which, in turn, could have a material adverse effect on
the return investors receive on the Securities.
The Issuer and the Guarantor are subject to a number of key risks of Goldman
Sachs:
•
Goldman Sachs' businesses have been and may continue to be adversely
affected by conditions in the global financial markets and economic
conditions generally.
•
Goldman Sachs' businesses and those of its clients are subject to
extensive and pervasive regulation around the world.
•
Goldman Sachs' businesses have been and may be adversely affected by
declining asset values. This is particularly true for those businesses in
which Goldman Sachs has net "long" positions, receives fees based on
the value of assets managed, or receives or posts collateral.
•
Goldman Sachs' businesses have been and may be adversely affected by
disruptions in the credit markets, including reduced access to credit and
higher costs of obtaining credit.
•
Goldman Sachs' market-making activities have been and may be
affected by changes in the levels of market volatility.
•
Goldman Sachs' investment banking, client execution and investment
management businesses have been adversely affected and may in the
future be adversely affected by market uncertainty or lack of confidence
among investors and CEOs due to general declines in economic activity
and other unfavourable economic, geopolitical or market conditions.
•
Goldman Sachs' investment management business may be affected by
the poor investment performance of its investment products.
•
Goldman Sachs may incur losses as a result of ineffective risk
management processes and strategies.
•
Goldman Sachs' liquidity, profitability and businesses may be adversely
affected by an inability to access the debt capital markets or to sell
assets or by a reduction in its credit ratings or by an increase in its credit
spreads.
•
A failure to appropriately identify and address potential conflicts of
interest could adversely affect Goldman Sachs' businesses.
•
A failure in Goldman Sachs' operational systems or infrastructure, or
those of third parties, as well as human error, could impair Goldman
Sachs' liquidity, disrupt Goldman Sachs' businesses, result in the
disclosure of confidential information, damage Goldman Sachs'
reputation and cause losses.
•
A failure to protect Goldman Sachs' computer systems, networks and
information, and Goldman Sachs' clients' information, against cyber
attacks and similar threats could impair Goldman Sachs' ability to
conduct Goldman Sachs' businesses, result in the disclosure, theft or
destruction of confidential information, damage Goldman Sachs'
reputation and cause losses.
•
The Guarantor is a holding company and is dependent for liquidity on
payments from its subsidiaries, many of which are subject to
restrictions.
- 15 -
Summary
D.3
Key risks that are
specific to the
Securities:
•
The application of regulatory strategies and requirements in the United
States and non-U.S. jurisdictions to facilitate the orderly resolution of
large financial institutions could create greater risk of loss for Goldman
Sachs' security holders.
•
The ultimate impact of the recently proposed rules requiring U.S. global
systemically important banks to maintain minimum amounts of longterm debt meeting specified eligibility requirements is uncertain.
•
The application of GSG's proposed resolution strategy could result in
greater losses for GSG's security holders, and failure to address
shortcomings in Goldman Sachs' resolution plan could subject us to
increased regulatory requirements.
•
Goldman Sachs' businesses, profitability and liquidity may be adversely
affected by deterioration in the credit quality of, or defaults by, third
parties who owe Goldman Sachs money, securities or other assets or
whose securities or obligations Goldman Sachs holds.
•
Concentration of risk increases the potential for significant losses in
Goldman Sachs' market-making, underwriting, investing and lending
activities.
•
The financial services industry is both highly competitive and
interrelated.
•
Goldman Sachs faces enhanced risks as new business initiatives lead it
to transact with a broader array of clients and counterparties and exposes
it to new asset classes and new markets.
•
Derivative transactions and delayed settlements may expose Goldman
Sachs to unexpected risk and potential losses.
•
Goldman Sachs' businesses may be adversely affected if Goldman Sachs
is unable to hire and retain qualified employees.
•
Goldman Sachs may be adversely affected by increased governmental
and regulatory scrutiny or negative publicity.
•
Substantial legal liability or significant regulatory action against
Goldman Sachs could have material adverse financial effects or cause
significant reputational harm to Goldman Sachs, which in turn could
seriously harm its business prospects.
•
The growth of electronic trading and the introduction of new trading
technology may adversely affect Goldman Sachs' business and may
increase competition.
•
Goldman Sachs' commodities activities, particularly its physical
commodities activities, subject Goldman Sachs to extensive regulation
and involve certain potential risks, including environmental,
reputational and other risks that may expose it to significant liabilities
and costs.
•
In conducting its businesses around the world, Goldman Sachs is subject
to political, economic, legal, operational and other risks that are inherent
in operating in many countries.
•
Goldman Sachs may incur losses as a result of unforeseen or
catastrophic events, including the emergence of a pandemic, terrorist
attacks, extreme weather events or other natural disasters.
•
You may lose some or all of your investment in the Securities where:
o
We (as Issuer and Guarantor) fail or are otherwise unable to meet
our payment obligations;
o
You do not hold your Securities to maturity and the secondary
- 16 -
Summary
sale price you receive is less than the original purchase price; or
o
Your Securities are redeemed early due to an unexpected event
and the amount you receive is less than the original purchase
price.
•
The estimated value of your Securities (as determined by reference to
pricing models used by us) at the time the terms and conditions of your
Securities are set on the trade date, will be less than the original issue
price of your Securities.
•
Your Securities may not have an active trading market, and you may be
unable to dispose of them.
•
In the event that the Guarantor becomes insolvent (but the Issuer does
not) you will not be able to declare the Securities to be immediately due
and repayable. The return on the Securities may be significantly less
than what you would have otherwise received had you been able to
declare the Securities immediately due and repayable upon the
insolvency of the Guarantor.
•
We give no assurance that application for listing and admission to
trading will be granted (or, if granted, will be granted by the issue date)
or that an active trading market in the Securities will develop. We may
discontinue any such listing at any time.
•
The initial issue size of U.S.$ 100,000,000 could be reduced following
issuance, and this could have a negative effect on your ability to sell the
Securities in the secondary market.
•
The performance of interest rates is dependent upon a number of factors,
including supply and demand on the international money markets,
which are influenced by measures taken by governments and central
banks, as well as speculations and other macroeconomic factors.
•
Indices which are deemed 'benchmarks' are the subject of recent
national, international and other regulatory guidance and proposals for
reform. Some of these reforms are already effective whilst others are
still to be implemented. These reforms may cause such benchmarks to
perform differently than in the past, or have other consequences which
cannot be predicted.
•
The Issuer of your Securities may be substituted with another company.
•
We may amend the terms and conditions of your Securities in certain
circumstances without your consent.
SECTION E – THE OFFER
E.2b
Reasons for the
offer and use of
proceeds
The net proceeds of the issue of the Securities will be used in the general
business of the Issuer.
E.3
Terms and
conditions of the
offer
No public offer of the Securities is being made. The Issue Price is 100 per cent.
(100%) of the Aggregate Nominal Amount.
E.4
Interests material
to the issue/offer
So far as the Issuer is aware, no person involved in the issue of the Securities
has an interest material to the issue, including conflicting interests.
E.7
Estimated
expenses charged
to the investor by
the issuer or the
offeror
Not applicable. There are no estimated expenses charged to the investor by the
Issuer or the offeror.
- 17 -
Risk Factors
RISK FACTORS
An investment in your Securities is subject to the risks described below. You should carefully review (i) the
applicable risk factors in the section entitled "Risk Factors" from the Base Prospectus incorporated by reference
in this Prospectus (see the section entitled "Documents Incorporated by Reference" below) and (ii) the
additional risk factors set out below, as well as the terms and conditions of the Securities described in this
Prospectus. You should carefully consider whether the Securities are suited to your particular circumstances,
including to consult your own professional advisers as necessary. We do not give to you as a prospective
purchaser of Securities any assurance or guarantee as to the merits, performance or suitability of such
Securities, and you should be aware that we act as an arm's-length contractual counterparty and not as an
advisor or fiduciary.
In these Risk Factors, "we" and "our" mean Goldman Sachs.
RISK WARNING OF POTENTIAL LOSS OF SOME OR ALL OF YOUR INVESTMENT
You may lose some or all of your entire investment in the Securities where:

The Issuer or Guarantor fails or is otherwise unable to meet its payment obligations: The
Securities are our unsecured obligations. They are not bank deposits and are not insured or
guaranteed by the U.S. Federal Deposit Insurance Corporation, the U.S. Deposit Insurance Fund,
the UK Financial Services Compensation Scheme or any other government or governmental or
private agency or deposit protection scheme in any jurisdiction. Therefore, if the Issuer or
Guarantor fails or is otherwise unable to meet its payment obligations under the Securities, you
will lose some or all of your investment.

The secondary sale price is less than the original purchase price: The market price of your
Securities prior to maturity may be significantly lower than the purchase price you pay for them.
Consequently, if you sell your Securities before the stated scheduled redemption date, you may
receive far less than your original invested amount.

There is an insolvency of the Guarantor but not the Issuer: The insolvency of the Guarantor will
not constitute an event of default in relation to your Securities. In the event that the Guarantor
becomes insolvent (but the Issuer does not), you will not be able to declare the Securities to be
immediately due and repayable. Instead, you will need to wait until the earlier of the time that (i)
the Issuer itself becomes insolvent or otherwise defaults on the terms of the Securities and (ii) the
final maturity of the Securities. The return you receive on the Securities may be significantly less
than what you would have otherwise received had you been able to declare the Securities
immediately due and repayable upon the insolvency of the Guarantor.
These circumstances are more fully described below.
A.
FACTORS THAT MAY AFFECT OUR ABILITY TO FULFIL OUR OBLIGATIONS UNDER
THE SECURITIES
The payment of any amount due on the Securities is subject to our credit risk. The Securities are our
unsecured obligations.
The Securities are not bank deposits and are not insured or guaranteed by the U.S. Federal Deposit
Insurance Corporation, the U.S. Deposit Insurance Fund, the UK Financial Services Compensation
Scheme or any other government or governmental or private agency or deposit protection scheme in any
jurisdiction. Investors are dependent on our ability to pay all amounts due on the Securities, and therefore
investors are subject to our credit risk and to changes in the market's view of our creditworthiness.
- 18 -
Risk Factors
You should also read "Risk Factors – 2. Risks relating to GSI" (pages 48 to 62) in the Base
Prospectus incorporated by reference herein.
You should read Part I, Item 1A (Risk Factors) (pages 25 to 43) of GSG's 2015 Form 10-K
incorporated by reference herein.
Risks relating to the potential exercise by a UK resolution authority of its resolution powers in
relation to GSI
The EU Bank Recovery and Resolution Directive ("BRRD") entered into force on July 2, 2014. EU
Member states were required to adopt and publish the laws, regulations and administrative provisions
necessary to comply with the BRRD by December 31, 2014 and to apply those with effect from January
1, 2015, except in relation to the bail-in provisions, which were to apply from January 1, 2016 at the
latest. Its stated aim is to provide national "resolution authorities" with powers and tools to address
banking crises pre-emptively in order to safeguard financial stability and minimise taxpayers' exposure to
losses.
The majority of the requirements of the BRRD have been implemented in the UK through the UK
Banking Act 2009, as amended and related statutory instruments (together, the "UK Banking Act"). The
UK Banking Act provides for a "resolution regime" granting substantial powers to the Bank of England
(or, in certain circumstances, HM Treasury), to implement resolution measures (in consultation with
other UK authorities) with respect to a UK financial institution (for example, such as GSI) where the UK
resolution authority considers that the relevant institution is failing or is likely to fail, there is no
reasonable prospect of other measures preventing the failure of the institution and resolution action is
necessary in the public interest.
The resolution powers available to the UK resolution authority include powers to:
•
write down the amount owing, including to zero, or convert the relevant securities into other
securities, including ordinary shares of the relevant institution (or a subsidiary) – the so-called
"bail-in" tool;
•
transfer all or part of the business of the relevant institution to a "bridge bank";
•
transfer impaired or problem assets to an asset management vehicle; and
•
sell the relevant institution to a commercial purchaser.
In addition, the UK resolution authority is empowered to modify contractual arrangements, suspend
enforcement or termination rights that might otherwise be triggered and disapply or modify laws in the
UK (with possible retrospective effect) to enable the recovery and resolution powers under the UK
Banking Act to be used effectively.
You should assume that, in a resolution situation, financial public support will only be available to GSI
(or any member of Goldman Sachs Group) as a last resort after the relevant UK resolution authorities
have assessed and used, to the maximum extent practicable, the resolution tools, including the bail-in
tool.
You should be aware that the exercise of any such resolution power or even the suggestion of any
such potential exercise in respect of GSI (or any member of the Goldman Sachs Group) could have
a material adverse effect on the rights of holders of Securities, and could lead to a loss of some or
all of the investment. The resolution regime is designed to be triggered prior to insolvency of the
relevant institution, and holders of securities issued by such institution may not be able to
anticipate the exercise of any resolution power (including exercise of the "bail-in" tool) by the UK
- 19 -
Risk Factors
resolution authority. Further, holders of securities issued by an institution which has been taken
into a resolution regime will have very limited rights to challenge the exercise of powers by the UK
resolution authority, even where such powers have resulted in the write down of the securities or
conversion of the securities to equity.
B.
FACTORS WHICH ARE MATERIAL FOR THE PURPOSES OF ASSESSING THE MARKET
RISKS IN RELATION TO THE SECURITIES
1.
Risks associated with the value and liquidity of your Securities
1.1
The estimated value of your Securities (as determined by reference to pricing models used by us) at
the time the terms and conditions of your Securities are set on the trade date, will be less than the
original issue price of your Securities
The original issue price for your Securities will exceed the estimated value of your Securities as from the
trade date, as determined by reference to our pricing models and taking into account our credit spreads.
The difference between the estimated value of your Securities as of the time the terms and conditions of
your Securities were set on the trade date and the original issue price is a result of many factors,
including among others on issuance, the expenses incurred in creating, documenting and marketing the
Securities and our own internal funding costs (being an amount based on what we would pay to holders
of a non-structured security with a similar maturity). The difference may be greater when the Securities
are initially traded on any secondary markets and may gradually decline in value during the term of the
Securities.
In estimating the value of your Securities as of the time the terms and conditions of your Securities were
set on the trade date, our pricing models consider certain variables, including principally our credit
spreads, interest rates (forecasted, current and historical rates), volatility, price-sensitivity analysis and
the time to maturity of the Securities. These pricing models are proprietary and rely in part on certain
assumptions about future events, which may prove to be incorrect. As a result, the actual value you
would receive if you sold your Securities in the secondary market, if any, to others may differ, perhaps
materially, from the estimated value of your Securities determined by reference to our models due to,
among other things, any differences in pricing models or assumptions used by others.
1.2
The value and quoted price of your Securities (if any) at any time will reflect many factors and
cannot be predicted
The value and quoted price of your Securities (if any) at any time will reflect many factors and cannot be
predicted. The following factors, amongst others, many of which are beyond our control, may influence
the market value of your Securities:

interest rates and yield rates in the market;

the time remaining until your Securities mature; and

our creditworthiness, whether actual or perceived, and including actual or anticipated upgrades or
downgrades in our credit ratings or changes in other credit measures.
If we make a market in the Securities, the price quoted by us would reflect any changes in market
conditions and other relevant factors, including any deterioration in our creditworthiness or perceived
creditworthiness. These changes may adversely affect the value of your Securities, including the price
you may receive for your Securities in any market making transaction. To the extent that we make a
market in the Securities, the quoted price will reflect the estimated value determined by reference to our
pricing models at that time, plus or minus its customary bid and ask spread for similar sized trades of
- 20 -
Risk Factors
structured securities and subject to the declining excess amount described in risk factor 1.1 (The
estimated value of your Securities (as determined by reference to pricing models used by us) at the time
the terms and conditions of your Securities are set on the trade date, will be less than the original issue
price of your Securities) above.
Further, if you sell or buy your Securities on the secondary market, you will likely be charged a
commission for secondary market transactions, or, in the case of a sale of the Securities the price will
likely reflect a dealer discount. This commission or discount will further reduce the proceeds you would
receive for your Securities in a secondary market sale.
If you sell your Securities prior to maturity, you may receive less than the face amount or initial purchase
price of your Securities.
There is no assurance that we or any other party will be willing to purchase your Securities at any price
and, in this regard, we are not obligated to make a market in the Securities. See risk factor 1.3 ("Your
Securities may not have an active trading market") below.
1.3
Your Securities may not have an active trading market
Unless we expressly tell you otherwise, or to the extent that the rules of any stock exchange on which the
Securities are listed and admitted to trading require us to provide liquidity in respect of the Securities,
there may be little or no secondary market for your Securities and you may be unable to sell them.
If we do make a market for the Securities, we may cease to do so at any time without notice to you and
we are not obligated to provide any quotation of bid or offer price(s) of the Securities which is favourable
to you.
Application (i) has been made by the Issuer (or on its behalf) for the Securities to be listed on the Official
List and admitted to trading on the regulated market of the Luxembourg Stock Exchange; and (ii) will be
made by the Issuer (or on its behalf) for the Securities to be listed on Borsa Italiana S.p.A. and admitted
to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market), a regulated market organised and
managed by Borsa Italiana S.p.A., however, we give no assurance that such applications will be
accepted, that any particular Securities will be so admitted, or that an active trading market in the
Securities will develop. We may discontinue any such listing at any time.
Even if a secondary market for your Securities develops, it may not provide significant liquidity and
transaction costs in any secondary market could be high. As a result, the difference between bid and
asked prices for your Securities in any secondary market could be substantial. See also risk factor 1.2
(The value and quoted price of your Securities (if any) at any time will reflect many factors and cannot
be predicted) above. There may be less liquidity in the secondary market for the Securities also if they
are exclusively offered to retail investors without any offer to institutional investors.
On the Issue Date (being January 20, 2017), U.S.$ 100,000,000 of Securities will be issued to and made
available for sale by GSI (in its capacity as Dealer), and as soon as practicable thereafter, listed and
admitted to trading on both the Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated
market of the Luxembourg Stock Exchange for purchase by investors. However, GSI (in its capacity as
Dealer) reserves its right to cancel some or all of the Securities that it holds at any time prior to the
Maturity Date (being January 20, 2027), such right to be exercised in accordance with applicable laws,
the terms and conditions of the Securities and the applicable rules of Borsa Italiana S.p.A. and the
Luxembourg Stock Exchange including as to notification. In particular, at any time following listing and
admission to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market
of the Luxembourg Stock Exchange, GSI (in its capacity as Dealer) may cancel some or all of any
Securities which have not been purchased by investors by such time. Accordingly, the total amount of
- 21 -
Risk Factors
Securities outstanding at any time may be significantly less than U.S.$ 100,000,000, and this could have
a negative impact on an investor's ability to sell the Securities in the secondary market. Notification of
any such cancellation of Securities will be made on the website of Borsa Italiana S.p.A.
(www.borsaitaliana.it) and in any case according to the rules of Borsa Italiana S.p.A. and on the website
of the Luxembourg Stock Exchange (www.bourse.lu).
You should therefore not assume that the Securities can be sold at a specific time or at a specific price
during their life, and you should assume that you may need to hold them until they mature.
1.4
Your Securities may lose value if interest rates increase
Particularly in relation to Fixed Rate Notes that are not linked to an underlying asset and have a term of
ten years or more, in most cases an increase in interest rates during the term of the Securities will cause
their value to decrease and if you sell the Securities prior to maturity you will receive less than the face
amount of the Securities.
2.
Risks associated with certain terms of the Securities, including adjustment, substitution and
amendments
2.1
Your Securities may be redeemed prior to maturity due to a change in law event, and you may lose
some or all of your investment
Where, due to a change in law event, our performance under the Securities or hedging transactions
relating to the Securities has become (or there is a substantial likelihood in the immediate future that it
will become) illegal or impractical, we may, in our discretion, redeem the Securities.
Following any such early redemption of the Securities, you may not be able to reinvest the proceeds from
such redemption at a comparable return and/or with a comparable interest rate for a similar level of risk.
You should consider such reinvestment risk in light of other available investments when you purchase
the Securities.
2.2
The Issuer of your Securities may be substituted with another company
The Issuer may be substituted as principal obligor under such Securities by any company from the
Goldman Sachs Group of companies. Whilst the new issuer will provide an indemnity in your favour in
relation to any additional tax or duties that become payable solely as a result of such substitution, you
will not have the right to consent to such substitution.
2.3
We may amend the terms and conditions of your Securities in certain circumstances without your
consent; amendments to the Securities will bind all holders thereof
The terms and conditions of the Securities may be amended by us without your consent as a holder of the
Securities in any of the following circumstances:

to correct a manifest or proven error or omission;

where the amendment is of a formal, minor or technical nature; or

where such amendment will not materially and adversely affect the interests of holders.
In certain other circumstances, the consent of a defined majority of holders is required to make
amendments. The terms and conditions of the Securities contain provisions for holders of Securities to
call and attend meetings to vote upon such matters or to pass a written resolution in the absence of such a
meeting. Resolutions passed at such a meeting, or passed in writing, can bind all holders of Securities,
- 22 -
Risk Factors
including investors that did not attend or vote, or who do not consent to the amendments.
3.
Risks associated with foreign exchange rates
3.1
You may be exposed to foreign exchange risk on your Securities
Foreign exchange fluctuations between your home currency and the currency in which payments under
the Securities is denominated may affect you if you intend to convert gains or losses from the sale of
Securities into your home currency.
Foreign exchange rates are, and have been, highly volatile and determined by supply and demand for
currencies in the international foreign exchange markets; such fluctuations in rates are subject to
economic factors, including, among others, inflation rates in the countries concerned, interest rate
differences between the respective countries, economic forecasts, international political factors, currency
convertibility and safety of making financial investments in the currency concerned, speculation and
measures taken by governments and central banks.
Foreign currency exchange rates can either float or be fixed by sovereign governments. From time to
time, governments use a variety of techniques, such as intervention by a country's central bank or
imposition of regulatory controls or taxes, to affect the exchange rate of their currencies. Governments
may also issue a new currency to replace an existing currency or alter the exchange rate or exchange
characteristics by devaluation or revaluation of a currency. Thus, a particular concern in purchasing
Securities with foreign exchange risks as described above is that their yields or payouts could be
significantly and unpredictably affected by governmental actions. Even in the absence of governmental
action directly affecting currency exchange rates, political or economic developments in the country of
the relevant currency or elsewhere could lead to significant and sudden changes in the exchange rate of
that currency and others. These changes could negatively (or positively) affect the value of and return on
the Securities as participants in the global currency markets move to buy or sell the relevant currency in
reaction to these developments.
Governments have imposed from time to time and may in the future impose exchange controls or other
conditions, including taxes, with respect to the exchange or transfer of a currency that could affect
exchange rates as well as the availability of the currency for a Security at its maturity or on any other
payment date. In addition, your ability to move currency freely out of the country in which payment in
the currency is received or to convert the currency at a freely determined market rate could be limited by
governmental actions.
4.
Risks associated with discretionary powers of the Issuer and the Calculation Agent including in
relation to our hedging arrangements
As described elsewhere in these risk factors, the occurrence of certain events – relating to the Issuer, our
hedging arrangements, taxation, the relevant currency or other matters – may give rise to discretionary
powers on our part (as Issuer or as Calculation Agent) under the terms and conditions of the Securities.
In relation to our hedging arrangements, we (including through one or more affiliates of the Issuer and
the Guarantor) may enter into one or more arrangements to cover our exposure to the relevant cash
amounts to be paid or assets to be delivered under the Securities as these fall due. We describe some of
the potential types of arrangements in risk factor 7.1 (Our hedging, trading, issuance and underwriting
activities may create conflicts of interest between you and us) below. The particular hedging
arrangements (if any) undertaken by us, and their cost, will likely be a significant determinant of the
price and the economic terms and conditions of your Securities. Accordingly, if an event occurs which
negatively impacts our hedging arrangements, we may have discretionary powers under the terms and
conditions of your Securities as described in the paragraph immediately above to account for such impact
- 23 -
Risk Factors
on our heading arrangements. The exercise by us of such discretionary powers may have a negative
impact on the value of and return on your Securities.
5.
Risks associated with Interest Rates as Underlying Assets
5.1
Various unpredictable factors may affect the performance of interest rates
The performance of interest rates is dependent upon a number of factors, including supply and demand
on the international money markets, which are influenced by measures taken by governments and central
banks, as well as speculations and other macroeconomic factors.
5.2
Regulation and reform of "benchmarks", including LIBOR, EURIBOR and other interest rate,
equity, commodity, foreign exchange rate and other types of benchmarks
The London Inter-Bank Offered Rate ("LIBOR"), the Euro Interbank Offered Rate ("EURIBOR") and
other interest rate, equity, commodity, 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 whilst 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 any Securities linked to such a "benchmark".
Key international proposals for reform of "benchmarks" include IOSCO's Principles for Financial Market
Benchmarks (July 2013) (the "IOSCO Benchmark Principles") and the EU Regulation on indices used
as benchmarks in financial instruments and financial contracts or to measure the performance of
investment funds (the "Benchmark Regulation").
The IOSCO Benchmark Principles aim to create an overarching framework of principles for benchmarks
to be used in financial markets, specifically covering governance and accountability as well as the quality
and transparency of benchmark design and methodologies. A review published by IOSCO in February
2015 of the status of the voluntary market adoption of the IOSCO Benchmark Principles noted that, as
the benchmarks industry is in a state of change, further steps may need to be taken by IOSCO in the
future, but that it is too early to determine what those steps should be. The review noted that there has
been a significant market reaction to the publication of the IOSCO Benchmark Principles, with
widespread efforts being made to implement the IOSCO Benchmark Principles by the majority of
administrators surveyed.
On May 17, 2016, the Council of the European Union adopted the Benchmark Regulation. The
Benchmark Regulation was published in the Official Journal of the European Union on June 29, 2016
and entered into force on June 30, 2016. It applies across the EU from January 1, 2018, with the
exception of certain provisions (specified in article 59) that began to apply from June 30, 2016 and
certain provisions which amend Regulation (EU) No 596/2014 on market abuse (the "Market Abuse
Regulation") and therefore became effective on the date of entry into force of the Market Abuse
Regulation, July 3, 2016.
The Benchmark Regulation will apply to "contributors", "administrators" and "users" of "benchmarks" in
the EU, and will, among other things, (i) require benchmark administrators to be authorised (or, if nonEU-based, to have satisfied certain "equivalence" conditions in its local jurisdiction, to be "recognised"
by the authorities of a Member State pending an equivalence decision or to be "endorsed" for such
purpose by an administrator authorised or registered in the EU, following authorisation of such
endorsement by the relevant competent authority) and to comply with requirements in relation to the
administration of "benchmarks" and (ii) ban the use of "benchmarks" of unauthorised administrators. The
scope of the Benchmark Regulation is wide and, in addition to so-called "critical benchmark" indices
- 24 -
Risk Factors
such as EURIBOR, it will apply to many other interest rate indices, as well as equity, commodity and
foreign exchange rate indices and other indices (including "proprietary" indices or strategies) which are
referenced in certain financial instruments (securities or OTC derivatives listed on an EU regulated
market, EU multilateral trading facility (MTF), EU organised trading facility (OTF) or "systematic
internaliser"), certain financial contracts and investment funds. Different types of "benchmark" are
subject to more or less stringent requirements, and in particular a lighter touch regime will apply where a
"benchmark" is not based on interest rates or commodities and the total average value of financial
instruments, financial contracts or investment funds referring to a benchmark over the past six months is
less than €50bn, subject to further conditions.
The Benchmark Regulation could have a material impact on Securities linked to a "benchmark" rate or
index, including in any of the following circumstances:
•
a rate or index which is a "benchmark" could not be used as such if its administrator does not
obtain authorisation or is based in a non-EU jurisdiction which (subject to applicable transitional
provisions) does not satisfy the "equivalence" conditions, is not "recognised" pending such a
decision and is not "endorsed" for such purpose. In such event, depending on the particular
"benchmark" and the applicable terms of the Securities, the Securities could be de-listed, adjusted,
redeemed prior to maturity or otherwise impacted; and
•
the methodology or other terms of the "benchmark" could be changed in order to comply with the
terms of the Benchmark Regulation, and such changes could have the effect of reducing or
increasing the rate or level or affecting the volatility of the published rate or level, and could lead
to adjustments to the terms of the Securities, including Calculation Agent determination of the rate
or level in its discretion.
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 adjustment to the terms and conditions, early
redemption, discretionary valuation by the Calculation Agent, delisting or other consequence in relation
to Securities linked to such "benchmark". Any such consequence could have a material adverse effect on
the value of and return on any such Securities.
6.
Risks associated with taxation
Tax laws may change and this may have a negative impact on your Securities
Tax law and practice is subject to change, possibly with retrospective effect and this could adversely
affect the value of your Securities to you and/or their market value generally. Any such change may (i)
cause the tax treatment of the Securities to change from what you understood the position to be at the
time of purchase; (ii) render the statements in this Prospectus concerning relevant tax law and practice in
relation to the Securities inaccurate or inapplicable in some or all respects to certain Securities or have
the effect that this Prospectus does not include material tax considerations in relation to certain
Securities; or (iii) give us the right to redeem the Securities early, if such change has the effect that our
performance under the Securities or hedging transaction relating to the Securities is unlawful or
impracticable (see risk factor 2.1 (Your Securities may be redeemed prior to maturity due to a change in
law event, and you may lose some or all of your investment)). You should consult your own tax
advisers about the tax implications of holding any Security and of any transaction involving any
- 25 -
Risk Factors
Security.
7.
Risks associated with conflicts of interest between Goldman Sachs Group and purchasers of
Securities
The various roles and trading activities of Goldman Sachs could create conflicts of interest between you
and us.
7.1
Our hedging, trading, issuance and underwriting activities may create conflicts of interest between
you and us
In anticipation of the sale of the Securities, we and/or our affiliates may (but are not obligated to) enter
into hedging transactions involving purchase of indices designed to track the performance of the relevant
markets or components of such markets or other transactions on or before the trade date. In addition,
from time to time after we issue the Securities, we and/or our affiliates expect to enter into additional
hedging transactions and to unwind those we have entered into, in connection with the Securities and
perhaps in connection with other Securities we issue, some of which may have returns linked to
commodities or foreign currencies or other assets. Consequently, with regard to your Securities, from
time to time, we may acquire or dispose of the specified currency of the Securities in foreign exchange
transactions involving other currencies.
We and/or our affiliates may acquire a long or short position in securities similar to your Securities 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 Securities and
perhaps relating to other Securities with returns linked to foreign currencies. We expect these steps to
involve sales of instruments linked to the foreign currencies on or shortly before the trade date. These
steps also may involve sales and/or purchases of listed or over-the-counter options, futures or other
instruments linked to the foreign currencies, constituent indices or indices designed to track the
performance of the exchange or other markets or other components of such markets, as applicable.
7.2
As Calculation Agent, we will have the authority to make determinations that could affect the
market value and return on your Securities
The Calculation Agent is GSI. The Calculation Agent has the authority (i) to determine whether certain
specified events and/or matters so specified in the conditions relating to the Securities have occurred, and
(ii) to determine the consequence of such event, including potentially, revised calculations, adjustments,
postponements or early redemption of the Securities. See risk factor 4 (Risks associated with
discretionary powers of the Issuer and the Calculation Agent including in relation to our hedging
arrangements) above. Any such determination made by the Calculation Agent (in the absence of
manifest or proven error) shall be binding on the Issuer and all purchasers of the Securities. Any such
determinations may have an adverse impact on the value of and return on the Securities.
8.
Risks associated with an insolvency of the Guarantor but not the Issuer
The insolvency of the Guarantor will not constitute an event of default in relation to the Securities. In the
event that the Guarantor becomes insolvent (but the Issuer does not), you will not be able to declare the
Securities to be immediately due and repayable. Instead, you will need to wait until the earlier of the time
that (i) the Issuer itself becomes insolvent or otherwise defaults on the terms of the Securities and (ii) the
final maturity of the Securities. The return you receive on the Securities may be significantly less than
what you would have otherwise received had you been able to declare the Securities immediately due
and repayable upon the insolvency of the Guarantor.
- 26 -
Risk Factors
9.
As a participant or contributor to certain "benchmarks" we may have conflicts with you
We may act as a participant or contributor to certain "benchmarks", which could create conflicts of
interest between you and us. In its capacity as a participant or contributor to a "benchmark", we will
provide input data which will affect the price or level or such "benchmark", and this could affect the
value of and return on any Securities linked to a "benchmark".
10.
Risks associated with potential 'bail-in' of Securities
See "Risks relating to the potential exercise by a UK resolution authority of its resolution powers in
relation to GSI" above.
- 27 -
Documents Incorporated by Reference
DOCUMENTS INCORPORATED BY REFERENCE
This Prospectus should be read and construed in conjunction with the documents incorporated by reference into
this Prospectus. The information contained in the following documents (other than any documents which are
incorporated by reference into such following documents) is hereby incorporated by reference into this
Prospectus and deemed to form a part of this Prospectus:
(i)
the base prospectus dated April 14, 2016 relating to issues of non-equity securities under the Programme
by Goldman Sachs International and Goldman Sachs & Co. Wertpapier GmbH (the "Original Base
Prospectus");
(ii)
Supplement No. 3 to the Original Base Prospectus dated May 24, 2016 ("Base Prospectus Supplement
No. 3");
(iii)
Supplement No. 4 to the Original Base Prospectus dated July 5, 2016 ("Base Prospectus Supplement
No. 4");
(iv)
Supplement No. 5 to the Original Base Prospectus dated July 22, 2016 ("Base Prospectus Supplement
No. 5");
(v)
Supplement No. 6 to the Original Base Prospectus dated August 1, 2016 ("Base Prospectus Supplement
No. 6");
(vi)
Supplement No. 11 to the Original Base Prospectus dated November 8, 2016 ("Base Prospectus
Supplement No. 11");
(vii)
Supplement No. 12 to the Original Base Prospectus dated November 21, 2016 ("Base Prospectus
Supplement No. 12" and the Original Base Prospectus as so supplemented, the "Base Prospectus");
(viii) the Unaudited Quarterly Financial Report for the period ended September 30, 2016 of GSI ("GSI's 2016
Third Quarter Financial Report"), containing, in Part II, the Unaudited Financial Statements of GSI
for the period ended September 30, 2016 ("GSI's 2016 Third Quarter Financial Statements");
(ix)
the Annual Report for the fiscal year ended December 31, 2015 of GSI ("GSI's 2015 Annual Report"),
containing, in Part II, the Directors' Report and Audited Financial Statements of GSI for the period ended
December 31, 2015 ("GSI's 2015 Financial Statements");
(x)
the Annual Report for the fiscal year ended December 31, 2014 of GSI ("GSI's 2014 Annual Report"),
containing, in Part 2, the Directors' report and audited financial statements of GSI for the period ended
December 31, 2014 ("GSI's 2014 Financial Statements");
(xi)
the Quarterly Report on Form 10-Q for the third fiscal quarter ended September 30, 2016 of The
Goldman Sachs Group, Inc. (the "GSG's 2016 Third Quarter Form 10-Q"), as filed with the SEC on
November 3, 2016;
(xii)
the Annual Report on Form 10-K of GSG for the fiscal year ended December 31, 2015 (the "GSG's 2015
Form 10-K"), containing financial statements relating to the fiscal years ended December 31, 2015 and
December 31, 2014;
(xiii) the Proxy Statement relating to the 2016 Annual Meeting of Shareholders on May 20, 2016 (the "GSG's
2016 Proxy Statement");
(xiv) the Current Report on Form 8-K dated May 20, 2016 of The Goldman Sachs Group, Inc. ("GSG's May
20, 2016 Form 8-K"), as filed with the U.S. Securities and Exchange Commission on May 20, 2016;
- 28 -
Documents Incorporated by Reference
(xv)
the Current Report on Form 8-K dated November 21, 2016 of The Goldman Sachs Group, Inc. ("GSG's
November 21, 2016 Form 8-K"), as filed with the U.S. Securities and Exchange Commission on
November 21, 2016;
(xvi) the Current Report on Form 8-K dated December 12, 2016 of The Goldman Sachs Group, Inc. ("GSG's
December 12, 2016 Form 8-K"), as filed with the U.S. Securities and Exchange Commission on
December 15, 2016; and
(xvii) the Current Report on Form 8-K dated January 18, 2017 of The Goldman Sachs Group, Inc. ("GSG's
January 18, 2017 Form 8-K"), as filed with the U.S. Securities and Exchange Commission on January
18, 2017.
The table below sets out the relevant page references for the information incorporated into this Prospectus by
reference. The information incorporated by reference that is not included in the cross-reference list is considered
as additional information and is not required by the relevant schedules of Commission Regulation (EC) No.
809/2004 (as amended). Information not incorporated by reference are not relevant for the investor or are
covered in other parts of this Prospectus.
The Luxembourg Stock Exchange will publish such documents on its website at www.bourse.lu.
Information incorporated by reference
Page reference
From the Original Base Prospectus
Risk Factors
2.
Risks relating to GSI
Commonly Asked Questions about the Programme
General Terms and Conditions of the Notes
Coupon Payout Conditions
Form of Guaranty
Forms of the Notes
Book-Entry Clearing Systems
Use of Proceeds
Goldman Sachs International
General Information on Goldman Sachs International
Capitalisation
Corporate Governance
Management of GSI
EMEA Conduct Risk Committee
The Goldman Sachs Group, Inc.
The proposed financial transactions tax ("FTT")
United Kingdom Tax Considerations
Italian Tax Considerations
Selling Restrictions
Offers and Sales and Distribution Arrangements
Index of Defined Terms
Pages 48-62
Pages 106-117
Pages 171-218
Pages 219-227
Pages 541-542
Pages 554-555
Pages 556-558
Page 559
Pages 560-563
Page 560
Pages 560-561
Page 561
Page 561
Pages 561-563
Page 567
Pages 568
Pages 568-572
Pages 592-599
Pages 615-636
Page 637
Pages 646-654
From Base Prospectus Supplement No. 3
Additional changes to the Base Prospectus
Item 4 – Amendments to the sub-heading "Management of GSI" in the
section entitled "Goldman Sachs International"
Page 5
From Base Prospectus Supplement No. 4
Amendments to the Base Prospectus
Item 2 – Amendments to the sub-heading "Capitalisation" in the section
entitled "Goldman Sachs International"
- 29 -
Page 2
Documents Incorporated by Reference
From Base Prospectus Supplement No. 5
Amendments to the Base Prospectus
Item 3 – Amendments to the section entitled "The General Terms and
Conditions of the Notes"
Page 5
From Base Prospectus Supplement No. 6
Amendments to the Base Prospectus
Item 1 – Amendments to the sub-section entitled "The proposed financial
transactions tax ("FTT")"
Items 2, 3 and 4 – Amendments to the sub-section entitled "Italian Tax
Considerations"
Pages 1-2
Pages 2-3
From Base Prospectus Supplement No. 11
Amendments to the Base Prospectus
Item 3 – Amendments to the sub-heading "EMEA Conduct Risk
Committee" in the section entitled "Goldman Sachs International"
Page 8
From Base Prospectus Supplement No. 12
Amendments to the Base Prospectus
Item 3 – Amendments to the sub-heading "General Information on
Goldman Sachs International" in the section entitled "Goldman Sachs
International"
Page 11
From GSI's 2016 Third Quarter Financial Report
Management Report
Profit and Loss Account
Balance Sheet
Statement of Cash Flows
Notes to the Financial Statements
Pages 2-25
Page 26
Page 27
Page 29
Pages 30-48
From GSI's 2015 Annual Report
Strategic Report
Directors' Report
Balance Sheet
Profit and Loss Account
Statements of Cash Flows
Notes to the Financial Statements
Independent Auditors' Report
Pages 2-48
Pages 49-50
Page 54
Page 53
Page 56
Pages 57-94
Pages 51-52
From GSI's 2014 Annual Report
Strategic Report
Directors' Report
Balance Sheet
Profit and Loss Account
Statement of Cash Flows
Notes to the Financial Statements
Independent Auditors' Report
Pages 2-54
Pages 56-58
Page 62
Page 61
Page 63
Pages 64-103
Pages 59-60
From GSG's May 20, 2016 Form 8-K*
Item 5.07: Submission of Matters to a Vote of Security Holders
Signature
- 30 -
Pages 2-3
Page 4
Documents Incorporated by Reference
From GSG's November 21, 2016 Form 8-K*
Item 5.02: Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Signature
Page 2
Page 3
From GSG's December 12, 2016 Form 8-K*
Item 5.02: Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers
Item 9.01: Financial Statements and Exhibits
Signature
Exhibit 99.1: Goldman Sachs Names David M. Solomon and Harvey M.
Schwartz Presidents and Co-Chief Operating Officers; R. Martin Chavez Deputy
Chief Financial Officer; Richard J. Gnodde and Pablo J. Salame Vice Chairmen
Pages 2-3
Page 3
Page 4
Pages 5-6
From GSG's January 18, 2017 Form 8-K*
Item 2.02: Results of Operations and Financial Condition
Item 9.01: Financial Statements and Exhibits
Signature
Exhibit 99.1: Press release of GSG dated January 18, 2017 containing financial
information for its fourth quarter and year ended December 31, 2016
Page 3
Page 3
Page 4
Pages 5-16
From GSG's 2016 Third Quarter Form 10-Q
Condensed Consolidated Statements of Earnings (Unaudited)
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Condensed Consolidated Statements of Financial Condition (Unaudited)
Condensed Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Condensed Consolidated Statements of Cash Flows (Unaudited)
Notes to Condensed Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Management's Discussion and Analysis
Page 2
Page 3
Page 4
Page 5
Page 6
Pages 7-92
Page 93
97-160
From GSG's 2015 Form 10-K and GSG's 2016 Proxy Statement
Information required by the Prospectus Regulation
Document/Location
Risk factors relating to GSG (Annex IV, Section 4 of the Prospectus Regulation)
GSG's 2015 Form 10-K (pp.
25–43)
Information about GSG
History and development of the company (Annex IV, Section 5.1 of the
Prospectus Regulation)
GSG's 2015 Form 10-K (p.
1)
Business overview
GSG's principal activities (Annex IV, Section 6.1 of the Prospectus Regulation)
GSG's principal markets (Annex IV, Section 6.2 of the Prospectus Regulation)
Organizational Structure (Annex IV, Section 7 of the Prospectus Regulation)
Trend information (Annex IV, Section 8 of the Prospectus Regulation)
- 31 -
GSG's 2015 Form 10-K (pp.
1-6, 121)
GSG's 2015 Form 10-K (pp.
1, 46, 50-51, 195-196)
GSG's 2015 Form 10-K (pp.
34-35, Exhibit 21.1)
GSG's 2015 Form 10-K (pp.
47-112)
Documents Incorporated by Reference
Administrative, management and supervisory bodies, including conflicts of
interest (Annex IV, Section 10 of the Prospectus Regulation)
Audit committee (Annex IV, Section 11.1 of the Prospectus Regulation)
Beneficial owners of more than five per cent. (Annex IV, Section 12 of the
Prospectus Regulation)
GSG's 2015 Form 10-K (p.
45)
GSG's
2016
Proxy
Statement (pp. 1, 4, 7-8, 1132, 72-74)
GSG's
2016
Proxy
Statement (pp. 21, 64-65)
GSG's
2016
Proxy
Statement (p. 77)
Financial information
Audited historical financial information for the fiscal years ended December 31,
2015 and December 31, 2014 (Annex IV, Section 13.1-13.4 of the Prospectus
Regulation)
GSG's 2015 Form 10-K (pp.
116-208)
Audit report (Annex IV, Section 13.1 of the Prospectus Regulation)
Cash flow statement (Annex IV, Section 13.1 of the Prospectus
Regulation)
Accounting policies and explanatory notes (Annex IV, Section 13.1 of the
Prospectus Regulation)
GSG's 2015 Form 10-K (p.
115)
GSG's 2015 Form 10-K (p.
118)
GSG's 2015 Form 10-K (pp.
118-119, 180-182)
GSG's 2015 Form 10-K (pp.
116)
GSG's 2015 Form 10-K (p.
120)
GSG's 2015 Form 10-K (pp.
51-54, 121-208)
Legal and arbitration proceedings (Annex IV, Section 13.6 of the Prospectus
Regulation)
Financial or trading position (Annex IV, Section 13.7 of the Prospectus
Regulation)
GSG's 2015 Form 10-K (pp.
44, 198-205)
GSG's 2015 Form 10-K (pp.
116-208)
Balance sheet (Annex IV, Section 13.1 of the Prospectus Regulation)
Shareholder's equity statement (Annex IV, Section 13.1 of the Prospectus
Regulation)
Income statement (Annex IV, Section 13.1 of the Prospectus Regulation)
Additional information
Share capital (Annex IV, Section 14.1 of the Prospectus Regulation)
Credit ratings (Annex V, Section 7.5 of the Prospectus Regulation)
GSG's 2015 Form 10-K (pp.
118, 180-182)
GSG's 2015 Form 10-K (pp.
96-97)
* The page numbers referenced above in relation to the GSG's May 20, 2016 Form 8-K, GSG's November 21, 2016 Form 8-K, GSG's
December 12, 2016 Form 8-K and GSG's January 18, 2017 Form 8-K relate to the order in which the pages appear in the PDF version of
such document.
Additional information relating to "Alternative Performance Measures" (as defined in the Guidelines published
by the European Securities and Markets Authority) contained in GSI's 2015 Annual Report and GSI's 2014
Annual Report is set out in the section "General Information" on pages 51 to 52 of this Prospectus.
GSI will provide without charge to each person to whom this Prospectus is delivered, upon his or her written or
oral request, a copy of the documents referred to above which has been incorporated by reference into this
Prospectus, excluding exhibits to the documents unless they are specifically incorporated by reference into the
documents. Investors can request the documents from Investor Relations, 200 West Street, New York, New
York 10282, USA, telephone +1 (212) 902-0300. This Prospectus has been filed with the Commission de
Surveillance du Secteur Financier, and will be published on the website of the Luxembourg Stock Exchange
(www.bourse.lu).
- 32 -
Contractual Terms
CONTRACTUAL TERMS
ISIN: XS1457442025
Common Code: 145744202
Valoren: 34309457
PIPG Tranche Number: 72891
The terms and conditions ("Conditions") of the Securities shall comprise (i) the General Terms and Conditions
of the Notes (the "Original General Note Conditions") as amended by (ii) the Annex below (and subsequent to
such amendments, the "General Note Conditions") as completed and/or amended by (iii) the terms of the
Coupon Payout Conditions specified to be applicable by these Contractual Terms, as further completed and/or
amended by (iv) these Contractual Terms. In the event of any inconsistency between the General Note
Conditions as completed and/or amended by the Coupon Payout Conditions and these Contractual Terms, these
Contractual Terms shall prevail.
All references in the General Note Conditions and the applicable Coupon Payout Conditions to "Final Terms"
shall be deemed to be references to these Contractual Terms.
The Original General Note Conditions and the Coupon Payout Conditions are incorporated by reference
herein: see the section entitled "Documents Incorporated by Reference" above.
Terms used herein shall be deemed to be defined as such for the purposes of the General Note Conditions set
forth in the Base Prospectus.
1.
Tranche Number:
One.
2.
Specified Currency or Currencies:
United States Dollar ("USD" or "U.S.$ ").
3.
Aggregate Nominal Amount:
(i)
Series:
U.S.$ 100,000,000.
(ii)
Tranche:
U.S.$ 100,000,000.
On the Issue Date (being January 20, 2017), an
aggregate nominal amount of U.S.$ 100,000,000 of
Securities will be issued to and made available for sale
by Goldman Sachs International (in its capacity as
Dealer) ("GSI"), and as soon as practicable thereafter,
listed and admitted to trading on both the Borsa Italiana
S.p.A.'s MOT (Electronic bond market) and the
regulated market of the Luxembourg Stock Exchange
for purchase by investors. However, GSI reserves its
right to cancel some or all of the Securities that it holds
at any time prior to the Maturity Date (being January 20,
2027), such right to be exercised in accordance with
applicable laws, the terms and conditions of the
Securities and the applicable rules of Borsa Italiana
S.p.A. and the Luxembourg Stock Exchange including
as to notification. In particular, at any time following
listing and admission to trading on Borsa Italiana
- 33 -
Contractual Terms
S.p.A.'s MOT (Electronic bond market) and the
regulated market of the Luxembourg Stock Exchange,
GSI may cancel some or all of any Securities which
have not been purchased by investors by such time.
Accordingly, the aggregate nominal amount of
Securities outstanding at any time may be significantly
less than U.S.$ 100,000,000, and this could have a
negative impact on an investor's ability to sell the
Securities in the secondary market. Notification of any
such cancellation of Securities will be made on the
website of Borsa Italiana S.p.A. (www.borsaitaliana.it)
and in any case according to the rules of Borsa Italiana
S.p.A. and on the website of the Luxembourg Stock
Exchange (www.bourse.lu).
4.
Issue Price:
100 per cent. (100%) of the Aggregate Nominal
Amount.
5.
Specified Denomination:
U.S.$ 2,000.
6.
Calculation Amount:
U.S.$ 2,000.
7.
Issue Date:
January 20, 2017.
8.
Maturity Date:
Scheduled Maturity Date is January 20, 2027. The
Maturity Date shall not be subject to any adjustment.
For the avoidance of doubt, General Note Condition
11(i) (Payments on Business Days) shall apply to the
Maturity Date.
9.
(i)
Strike Date:
Not Applicable.
(ii)
Relevant Determination Date (General
Note Condition 2(a)):
Not Applicable.
(iii)
Scheduled Determination Date:
Not Applicable.
(iv)
First
Maturity
Adjustment:
(v)
Second
Maturity
Adjustment:
(vi)
Business Day Adjustment:
Underlying Asset(s):
Date
Date
Specific
Not Applicable.
Specific
Not Applicable.
Not Applicable.
Not Applicable.
VALUATION PROVISIONS
10.
Valuation Date(s):
Not Applicable.
11.
Initial Valuation Date:
Not Applicable.
- 34 -
Contractual Terms
12.
Averaging:
Not Applicable.
13.
Asset Initial Price:
Not Applicable.
14.
Adjusted Asset Final Reference Date:
Not Applicable.
15.
Adjusted Asset Initial Reference Date:
Not Applicable.
16.
FX (Final) Valuation Date:
Not Applicable.
17.
FX (Initial) Valuation Date:
Not Applicable.
18.
Final FX Valuation Date:
Not Applicable.
19.
Initial FX Valuation Date:
Not Applicable.
COUPON PAYOUT CONDITIONS
20.
Coupon Payout Conditions:
Applicable.
21.
Interest Basis:
In respect of:
(i)
the Interest Payment Dates scheduled to fall on
January 20, 2018 and January 20, 2019, 6.00 per
cent. (6.00%) Fixed Rate; and
(ii)
each Interest Payment Date (other than the
Interest Payment Dates scheduled to fall on
January 20, 2018 and January 20, 2019), USDLIBOR Floating Rate.
22.
Interest Commencement Date:
Issue Date.
23.
Fixed Rate Note Conditions (General Note
Condition 7):
Applicable.
(i)
Rate(s) of Interest:
6.00 per cent. (6.00%) per cent. per annum payable
annually in arrear.
(ii)
Interest Payment Date(s):
January 20, 2018 and January 20, 2019.
For the avoidance of doubt, General Note Condition
11(i) (Payments on Business Days) shall apply to the
Interest Payment Dates.
The Interest Periods shall be "Unadjusted".
(iii)
Fixed Coupon Amount(s):
Not Applicable.
(iv)
Broken Amount(s):
Not Applicable.
(v)
Day Count Fraction:
30/360.
(vi)
Step Up Fixed Rate Note Conditions
(General Note Condition 7(e)):
Not Applicable.
- 35 -
Contractual Terms
24.
BRL FX Conditions
Condition 1.1(c)):
Payout
Not Applicable.
25.
FX Security Conditions (Coupon Payout
Condition 1.1(d)):
Not Applicable.
26.
Floating Rate Note Conditions (General
Note Condition 8):
Applicable.
(i)
Unadjusted.
(Coupon
Interest Period(s):
For the purposes of applying the Floating Rate Note
Conditions, the first Interest Period shall commence on,
and include, January 20, 2019.
(ii)
Interest Payment Dates:
The 20th day of January in each calendar year from, and
including, January 20, 2020 to, and including, January
20, 2026, and each such date shall not be subject to any
adjustment in accordance with a Business Day
Convention, and the Maturity Date.
For the avoidance of doubt, General Note Condition
11(i) (Payments on Business Days) shall apply to the
Interest Payment Dates.
(iii)
Business Day Convention:
Not Applicable.
(iv)
Manner in which the Rate(s) of Interest
is/are to be determined:
Screen Rate Determination.
(v)
Screen Rate Determination (General
Note Condition 8(c)):
Applicable.
(a)
Reference Rate:
Reuters Screen shall prevail.
(b)
Reference Rate Currency:
USD.
(c)
Interest Determination Date(s):
In respect of each Interest Payment Date scheduled to
fall on or after January 20, 2020, the Interest
Determination Date shall be the second London Banking
Day falling prior to the first day of the Interest Period
ending on (but excluding) the day on which such Interest
Payment Date is scheduled to fall.
Where "London Banking Day" means any day on
which commercial banks are open for general business
(including dealings in foreign exchange and foreign
currency deposits) in London.
(d)
Relevant Screen Page(s):
Reuters Screen: LIBOR01.
(e)
Relevant Maturity:
Three months.
(f)
Relevant Time:
11:00 a.m., London time.
- 36 -
Contractual Terms
(g)
Relevant Financial Centre:
London.
(h)
Specified Time for the purposes
of General Note Condition
8(c)(iii):
The Specified Time shall be 11:00 a.m., New York City
time.
Reference Rate 0% Floor:
Not Applicable.
(vi)
ISDA Determination (General Note
Condition 8(d)):
Not Applicable.
(vii)
Steepener Floating Rate Conditions
(General Note Condition 8(e)):
Not Applicable.
(i)
For the purposes of applying General Note Condition
8(c)(iii), the Principal Financial Centre of the Specified
Currency shall be deemed to be New York City.
(viii) Margin(s):
Not Applicable.
(ix)
Participation Rate:
Not Applicable.
(x)
Minimum Rate of Interest:
1.75 per cent. (1.75%) per annum.
(xi)
Maximum Rate of Interest:
4.00 per cent. (4.00%) per annum.
(xii)
Day Count Fraction:
30/360.
(xiii) Specified Period:
Not Applicable.
(xiv) Capped Floored Floating Rate Note
Conditions (General Note Condition
8(g)):
Not Applicable. General Note Condition 8(f) shall apply
to the Notes.
(xv)
Applicable.
Substitute or Successor Rate of Interest
(General Note Condition 8(h)):
27.
Change of Interest Basis (General Note
Condition 9):
Not Applicable.
28.
Conditional Coupon
Condition 1.3)
Payout
Not Applicable.
29.
Automatic Early Redemption (General Note
Condition 10(i):
Not Applicable.
30.
Autocall Payout Conditions:
Not Applicable.
(Coupon
AUTOCALL PAYOUT CONDITIONS
REDEMPTION PROVISIONS
31.
Redemption/Payment Basis:
Redemption at par.
32.
Redemption at the option of the Issuer
(General Note Condition 10(b)):
Not Applicable.
- 37 -
Contractual Terms
33.
Redemption at the option of Noteholders
(General Note Condition 10(c)):
Not Applicable.
34.
Zero Coupon Note Conditions:
Not Applicable.
35.
Final Redemption Amount of each Note
(General Note Condition 10(a)):
U.S.$ 2,000 per Calculation Amount.
FINAL REDEMPTION AMOUNT PAYOUT CONDITIONS
36.
Single Limb Payout (Payout Condition 1.1):
Not Applicable.
37.
Multiple Limb Payout (Payout Condition
1.2):
Not Applicable.
38.
Downside Physical
Condition 1.2(c)(ii):
(Payout
Not Applicable.
39.
Barrier
Event
Condition 2):
Conditions
(Payout
Not Applicable.
40.
Trigger
Event
Condition 3):
Conditions
(Payout
Not Applicable.
41.
Currency Conversion:
42.
Physical
Settlement
Condition 12(a)):
43.
Non-scheduled Early Repayment Amount:
Settlement
Not Applicable.
(General
Note
Not Applicable.
Par.
SHARE LINKED NOTE / INDEX LINKED NOTE / COMMODITY LINKED NOTE / FX LINKED
NOTE / INFLATION LINKED NOTE
44.
Type of Notes:
The Notes are Fixed Rate Notes and Floating Rate Notes
– the Fixed Rate Note Conditions and the Floating Rate
Note Conditions are applicable.
45.
Share Linked Notes:
Not Applicable.
46.
Index Linked Notes:
Not Applicable.
47.
Commodity
Linked
Notes
(Single
Commodity or Commodity Basket):
Not Applicable.
48.
Commodity Linked Notes (Commodity
Index or Commodity Index Basket):
Not Applicable.
49.
FX Linked Notes:
Not Applicable.
50.
Inflation Linked Notes:
Not Applicable.
51.
EIS Notes:
Not Applicable.
52.
Multi-Asset Basket Linked Notes:
Not Applicable.
- 38 -
Contractual Terms
GENERAL PROVISIONS APPLICABLE TO THE NOTES
53.
FX Disruption Event/CNY FX Disruption
Event/Currency
Conversion
Disruption
Event (General Note Condition 13):
54.
Rounding (General Note Condition 22):
55.
56.
Not Applicable.
(i)
Non-Default Rounding − calculation
values and percentages:
Not Applicable.
(ii)
Non-Default Rounding − amounts due
and payable:
Not Applicable.
(iii)
Other Rounding Convention:
Not Applicable.
Additional Business Centre(s):
TARGET.
−
Not Applicable.
Non-Default Business Day:
Registered Notes.
Form of Notes:
Global Registered Note registered in the name of a
nominee for a common depositary for Euroclear and
Clearstream, Luxembourg exchangeable for Individual
Note Certificates in the limited circumstances
described in the Global Registered Note.
57.
58.
Additional Financial Centre(s) relating to
Payment Business Days:
TARGET.
−
Not Applicable.
Non-Default Payment Business Day:
Principal Financial Centre:
The Principal Financial Centre in relation to USD is the
State of New York.
−
Applicable.
Non-Default Principal Financial Centre:
59.
Instalment Notes (General Note Condition
10(p)):
Not Applicable.
60.
Minimum Trading Number (General Note
Condition 5(f)):
The minimum trading lot indicated by Borsa Italiana
S.p.A. in the first trading day notice.
61.
Permitted Trading Multiple (General Note
Condition 5(f)):
An integral multiple of the minimum trading lot
indicated in paragraph 60 in accordance with Article
4.3.2, paragraph 9 of the Rules of the Markets
organised and managed by Borsa Italiana S.p.A.
62.
Record Date (General Note Condition 11):
Not Applicable.
63.
Calculation Agent (General Note Condition
18):
Goldman Sachs International.
DISTRIBUTION
- 39 -
Contractual Terms
64.
65.
Method of distribution:
Non-syndicated.
(i)
If syndicated, names and addresses of
Managers/placers and underwriting
commitments:
Not Applicable.
(ii)
Date of Subscription Agreement:
Not Applicable.
(iii)
If non-syndicated, name and address of
Dealer:
Goldman Sachs International, Peterborough Court, 133
Fleet Street, London EC4A 2BB, England.
Non-exempt Offer:
Not Applicable.
Signed on behalf of Goldman Sachs International:
By: .................................................
Duly authorised
52627954(Ver10)/Ashurst(AKIM)/EK
- 40 -
Other Information
OTHER INFORMATION
1.
LISTING AND ADMISSION TO TRADING
(i)
Application has been made by the Issuer (or on
its behalf) for the Notes to be listed on the
Official List and admitted to trading on the
regulated market of the Luxembourg Stock
Exchange with effect from as soon as
practicable after the Issue Date. No assurances
can be given that such application for listing
and admission to trading will be granted; and
(ii)
Application will be made by the Issuer (or on
its behalf) for the Notes to be listed on Borsa
Italiana S.p.A. and admitted to trading on
Borsa Italiana S.p.A.'s MOT (Electronic bond
market), a regulated market organised and
managed by Borsa Italiana S.p.A, with effect
from as soon as practicable after the Issue Date.
No assurances can be given that such
application for listing and admission to trading
will be granted.
The Issuer has no duty to maintain the listing (if any)
of the Notes on the relevant stock exchange(s) over
their entire lifetime. The Notes may be suspended
from trading and/or de-listed at any time in
accordance with applicable rules and regulations of
the relevant stock exchange(s).
2.
ESTIMATED
TOTAL
EXPENSES
RELATED TO THE ADMISSION TO
TRADING
Not Applicable.
3.
LIQUIDITY
AGREEMENTS
Not Applicable.
4.
RATINGS
5.
INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER
ENHANCEMENT
Not Applicable.
Save as discussed in risk factor 7, "Risks associated with conflicts of interest between Goldman Sachs
Group and purchasers of Securities" on page 26 of this Prospectus, so far as the Issuer is aware, no
person involved in the issue of the Notes has an interest material to the issue.
6.
7.
REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES
(i)
Reasons for the offer:
Not Applicable.
(ii)
Estimated net proceeds:
Not Applicable.
(iii)
Estimated total expenses:
Not Applicable.
YIELD
- 41 -
Other Information
Indication of yield:
8.
Not Applicable.
PERFORMANCE AND VOLATILITY OF THE UNDERLYING ASSET
Not Applicable.
9.
OPERATIONAL INFORMATION
Any Clearing System(s) other than Euroclear
Bank S.A./N.V. and Clearstream Banking,
société anonyme and the relevant identification
number(s):
Not Applicable.
Delivery:
Delivery against payment.
Names and addresses of additional Paying
Agent(s) (if any):
Not Applicable.
Operational contact(s) for Fiscal Agent:
[email protected].
Intended to be held in a manner which would
allow Eurosystem eligibility:
No.
For the avoidance of doubt, and to the extent
applicable in the event of listing on Borsa Italiana
S.p.A., Italian investors may participate via an account
with, or have an account with a participant of, Monte
Titoli S.p.A. Monte Titoli S.p.A. will, in turn, have an
account ("bridge") with Euroclear or Clearstream,
Luxembourg
- 42 -
Examples
EXAMPLES
THE EXAMPLES PRESENTED BELOW ARE FOR ILLUSTRATIVE PURPOSES ONLY.
For the purposes of each Example:
(i)
the Issue Price is 100 per cent. (100%) of the Aggregate Nominal Amount, the Aggregate Nominal
Amount is U.S.$ 100,000,000 and the Calculation Amount is U.S.$ 2,000;
(ii)
in respect of any Interest Amount payable pursuant to General Note Condition 7 (Fixed Rate Note
Conditions), the Interest Payment Dates are January 20, 2018 and January 20, 2019;
(iii)
in respect of any Interest Amount payable pursuant to General Note Condition 8 (Floating Rate Note
Conditions), the Interest Payment Dates are the 20th day of January in each calendar year from, and
including, January 20, 2020 to, and including, January 20, 2026, and the Maturity Date; and
(iv)
the day count fraction is deemed to be one.
FINAL REDEMPTION
The Notes will be redeemed on the Maturity Date and the Final Redemption Amount payable in respect of each
Calculation Amount of the Notes will be U.S.$ 2,000.
FIXED COUPON
An Interest Amount of U.S.$ 120.00 will be payable on the Interest Payment Dates scheduled to fall on January
20, 2018 and January 20, 2019.
FLOATING COUPON
Example 1 – Negative floating rate (subject to Minimum Rate of Interest): The 3-Month-USD-LIBOR for
the Interest Period commencing on (and including) January 20, 2019 is -1.00 per cent. (-1.00%).
An Interest Amount of U.S.$ 35.00 will be payable on the Interest Payment Date scheduled to fall on January
20, 2020.
Example 2 – Zero floating rate (subject to Minimum Rate of Interest): The 3-Month-USD-LIBOR for the
Interest Period commencing on (and including) January 20, 2019 is zero.
An Interest Amount of U.S.$ 35.00 will be payable on the Interest Payment Date scheduled to fall on January
20, 2020.
Example 3 – Positive floating rate: The 3-Month-USD-LIBOR for the Interest Period commencing on (and
including) January 20, 2019 is 3.00 per cent. (3.00%).
An Interest Amount of U.S.$ 60.00 will be payable on the Interest Payment Date scheduled to fall on January
20, 2020.
Example 4 – Positive floating rate: The 3-Month-USD-LIBOR for the Interest Period commencing on (and
including) January 20, 2019 is 3.50 per cent. (3.50%).
An Interest Amount of U.S.$ 70.00 will be payable on the Interest Payment Date scheduled to fall on January
20, 2020.
Example 5 – Positive floating rate (subject to Maximum Rate of Interest): The 3-Month-USD-LIBOR for
the Interest Period commencing on (and including) January 20, 2019 is 4.00 per cent. (4.00%) or more.
- 43 -
Examples
An Interest Amount of U.S.$ 80.00 will be payable on the Interest Payment Date scheduled to fall on January
20, 2020.
- 44 -
Annex – Amendments to the General Terms and Conditions of the Notes
ANNEX
AMENDMENTS TO THE GENERAL TERMS AND CONDITIONS OF THE NOTES
The General Terms and Conditions of the Notes are amended as described below for the purposes of this
Prospectus only.
1.
General Note Condition 17 (Change in law)
General Note Condition 17 (Change in law) shall be deleted in its entirety and replaced with the
following:
"Upon a Change in Law Event, the Issuer shall have the right to redeem the Notes on such day as shall
be notified to the Holders in accordance with General Note Condition 20 (Notices) and will, if and to the
extent permitted by applicable law, pay to the Holder in respect of each Note the Non-scheduled Early
Repayment Amount (which may be determined taking into account the change of applicable law) on such
day. A "Change in Law Event" shall be deemed to have occurred upon the Issuer becoming aware that,
due to (a) the adoption of, or any change in, any applicable law, rule, regulation, judgment, order,
sanction, or directive of any governmental, administrative, legislative or judicial authority or power
("applicable law"), or (b) the promulgation of, or any change in, the formal or informal interpretation of
any applicable law by a court, tribunal or regulatory authority with competent jurisdiction, which has
the effect (as determined by the Issuer in its discretion, acting in good faith and in a commercially
reasonable manner, according to generally accepted practices or methodologies) that:
(a)
its performance under the Notes or its performance or that of any of its affiliates under any
related Hedge Positions (whether with respect to the Underlying Asset(s) or any constituent
thereof); or
(b)
the performance of any of its affiliates under the Notes had such affiliate been an issuer of the
Notes or under any related Hedge Positions (whether with respect to the Underlying Asset(s) or
any constituent thereof) had such affiliate been a party to any such hedging arrangement,
has or will become unlawful or impractical in whole or in part or there is a substantial likelihood of the
same in the immediate future."
2.
General Note Condition 18 (Agents)
The last paragraph of General Note Condition 18 (Agents) shall be deleted in its entirety and replaced
with the following:
"The Calculation Agent shall not act as an agent for the Holders but shall be the agent of the Issuer and
all its calculations, determinations and adjustments hereunder shall be made in good faith and in a
commercially reasonable manner, according to generally accepted practices or methodologies, and
(save in the case of manifest or proven error) shall be final and binding on the Issuer and the Holders.
All calculation functions required of the Calculation Agent under these General Note Conditions may be
delegated to any such person as the Calculation Agent, in its discretion, acting in good faith and in a
commercially reasonable manner, according to generally accepted practices or methodologies, may
decide."
- 45 -
General Information
GENERAL INFORMATION
1.
Authorisations
The Programme has been authorised pursuant to a written resolution of the Executive Committee of the
Board of Directors of GSI passed on September 28, 1998.
2.
Financial Statements
The statutory financial statements of GSI for the periods ended December 31, 2015 and December 31,
2014 have been audited without qualification by PricewaterhouseCoopers LLP, Chartered Accountants
and Statutory Auditors, 7 More London Riverside, London, SE1 2RT in accordance with the laws of
England. PricewaterhouseCoopers LLP is a registered member of the Institute of Chartered Accountants
in England and Wales.
PricewaterhouseCoopers LLP, which is a member of the American Institute of Certified Public
Accountants and regulated as an independent registered public accounting firm under the rules of the
Public Company Accounting Oversight Board, of 300 Madison Avenue, New York, New York 10017,
USA, audited GSG's consolidated statements of financial condition as of December 31, 2015 and
December 31, 2014 and the related consolidated statements of earnings, cash flows and changes in
shareholders' equity for the fiscal years ended December 31, 2015 and December 31, 2014 and issued
unqualified audit opinions thereon.
The consolidated statements of GSG incorporated by reference in this Prospectus by reference from the
GSG's 2015 Form 10-K for the fiscal year ended December 31, 2015 and management's assessment of
the effectiveness of internal control over financial reporting (which is included in management's report
on internal control over financial reporting) have been incorporated in reliance on the report of
PricewaterhouseCoopers LLP included therein given on the authority of said firm as experts in auditing
and accounting.
3.
No significant change and no material adverse change
There has been no significant change in the financial or trading position of GSI or GSG since September
30, 2016.
There has been no material adverse change in the prospects of GSI or GSG since December 31, 2015.
In this Prospectus, references to the "prospects" and "financial or trading position" of GSI and GSG are
specifically to the ability of GSI and GSG to meet its full payment obligations under the Securities (in the
case of GSI) or Guaranty (in the case of GSG) in a timely manner. In addition, all such statements should
be read in conjunction with and are qualified by the information contained in the documents incorporated
by reference into this Prospectus.
4.
Litigation
Save as disclosed in (i) "Legal Proceedings" of Note 25 to GSI's 2015 Financial Statements (pages 77
and 78) of GSI's 2015 Annual Report, (ii) "Legal Proceedings" in Part 1, Item 3 (page 44) and Note 27 to
the Consolidated Financial Statements (pages 198 to 205) of GSG's 2015 Form 10-K, (iii) "Legal
Proceedings" in Part II, Item 1 (page 161) and Note 27 to the Condensed Consolidated Financial
Statements (pages 85 to 92) of GSG's 2016 Third Quarter Form 10-Q and (iv) "Legal Proceedings" of
Note 15 to GSI's 2016 Third Quarter Financial Statements (pages 35 to 36) of GSI's 2016 Third Quarter
Financial Report, there have been no governmental, legal or arbitration proceedings (including any such
proceedings which are pending or threatened of which GSI or GSG is aware) during the 12 months
before the date of this Prospectus which may have, or have had in the recent past, significant effects on
- 46 -
General Information
GSI's or GSG's financial position or profitability.
5.
Availability of Documents
For so long as any Securities shall be outstanding, copies of the following documents may be obtained
free of charge upon request during normal business hours from the specified office of the Issuer and the
office of the Luxembourg Paying Agent and each of the Paying Agents:
6.
(a)
the certificate of incorporation of GSG;
(b)
the constitutional documents of GSI;
(c)
the Guaranty;
(d)
the programme agency agreement in relation to the Securities dated May 29, 2015;
(e)
the deed of covenant made by the Issuer dated May 29, 2015;
(f)
a copy of this Prospectus and any document incorporated by reference herein; and
(g)
all reports, letters and other documents, balance sheets, valuations and statements by any expert
any part of which is extracted or referred to in this Prospectus.
Responsibility statement
The Issuer and the Guarantor accept responsibility for the information contained in this Prospectus. To
the best of the knowledge of GSI and GSG (which have taken all reasonable care to ensure that such is
the case) the information contained in this Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information. Where information contained in this Prospectus
has been sourced from a third party, this information has been accurately reproduced and, so far as GSI
and GSG is aware and is able to ascertain from information published by that third party, no facts have
been omitted which would render the reproduced information inaccurate or misleading.
7.
Content of websites does not form part of this Prospectus
No content of any website, cited or referred to in this Prospectus, shall be deemed to form part of, or be
incorporated by reference into this Prospectus.
8.
De-listing
Although no assurance is made as to the liquidity of the Securities as a result of their listing on the
Official List of the Luxembourg Stock Exchange or Borsa Italiana S.p.A., as the case may be, delisting
the Securities from the Luxembourg Stock Exchange or Borsa Italiana S.p.A., as the case may be, may
have a material adverse effect on a purchaser's ability to resell its Securities in the secondary market.
9.
Non-equity securities
The Securities will not constitute "equity securities" for the purposes of Article 2(1)(b) of the Prospectus
Directive and Article 2(1)(v) of the Luxembourg Law dated July 10, 2005 as amended on July 3, 2012 on
prospectuses for securities (the "Luxembourg Prospectus Law").
10.
Objects and Purposes of the Issuer
The objects and purposes of the Issuer are provided for in paragraph 3 of the Memorandum of
Association of GSI.
- 47 -
General Information
11.
Selected Financial Information
The selected financial information set out below has been extracted from (as applicable) (i) GSI's 2015
Financial Statements, which have been audited by PricewaterhouseCoopers LLP and on which
PricewaterhouseCoopers LLP issued an unqualified audit report and (ii) GSI's 2016 Third Quarter
Financial Statements, which have not been audited.
GSI's 2015 Financial Statements have been prepared in accordance with FRS 101. GSI's 2016 Third
Quarter Financial Statements have been prepared in accordance with FRS 104. GSI's 2015 Financial
Statements and GSI's 2016 Third Quarter Financial Statements are incorporated by reference into this
Prospectus. The financial information presented below should be read in conjunction with the financial
statements included in such document, the notes thereto and report thereon.
The following table shows selected key historical financial information in relation to GSI:
As at and for the nine months
ended (unaudited)
As at and for the year ended
(in USD millions)
September 30,
2016
September 30,
2015
December 31,
2015
December 31,
2014
Operating Profit
2,033
2,276
2,939
2,275
Profit on ordinary
activities before
taxation
1,783
2,078
2,661
2,060
Profit for the
financial period
1,321
1,680
2,308
1,608
As at (unaudited)
(in USD millions)
As at
September 30, 2016
December 31,
2015
December 31,
2014
90
12
14
Current Assets
1,072,495
850,219
967,411
Total
Shareholders'
funds:
27,564
26,353
21,997
Fixed Assets
The following table shows selected key historical financial information in relation to GSG:
As and for the nine months
ended (unaudited)
As and for the Year ended
(in USD millions)
September
30, 2016
September
30, 2015
December
2015
Total non-interest
revenues
20,187
24,183
30,756
30,481
Net revenues,
including net interest
income
22,438
26,547
33,820
34,528
Pre-tax earnings
6,907
7,706
8,778
12,357
As at (unaudited)
(in USD millions)
September 30, 2016
- 48 -
December
2014
As at
December 31,
2015
December 31,
2014
General Information
12.
Total assets
879,987
861,395
855,842
Total liabilities
792,877
774,667
773,045
Total shareholders'
equity:
87,110
86,728
82,797
Luxembourg Tax Considerations
The following overview is of a general nature and is included herein solely for information purposes. It is
a general description of certain Luxembourg tax considerations relating to the purchasing, holding and
disposing of Securities.
This description is based on the laws, regulations and applicable tax treaties as in effect in Luxembourg
on the date hereof, all of which are subject to change, possibly with retroactive effect. It is not intended
to be, nor should it be construed to be, legal or tax advice.
The following overview does not purport to be a comprehensive description of all tax considerations that
may be relevant to a particular prospective holder with regard to a decision to purchase, own or dispose
of Securities.
Prospective holders are advised to consult their own tax advisers as to the tax consequences, under the
tax laws of the country of which they are resident and under the laws of the all relevant jurisdictions, to
which they may be subject.
The residence concept used under the respective headings below applies for Luxembourg income tax
assessment purposes only. Any reference in the present section to a tax, duty, levy, impost or other
charge or withholding of a similar nature refers to Luxembourg tax law and/or concepts only.
Withholding tax
Non-Luxembourg tax resident holders
Under the Luxembourg general tax laws currently in force, there is no withholding tax to be withheld by
the debtor of Securities on payments of principal, premium or arm's length interest (including accrued but
unpaid interest) to non-Luxembourg tax resident holders. Nor is any Luxembourg withholding tax
payable upon redemption or repurchase of Securities held by non-Luxembourg tax resident holders to the
extent said Securities do not (i) give entitlement to a share of the profits generated by the issuing
company and (ii) the issuing company is not thinly capitalised.
Luxembourg tax resident holders
Under Luxembourg general tax laws currently in force and subject to the law of December 23, 2005, as
amended (hereinafter the "Law"), there is no withholding tax to be withheld by the debtor of Securities
on payments of principal, premium or arm's length interest (including accrued but unpaid interest) to
Luxembourg tax resident holders. Nor is any Luxembourg withholding tax payable upon redemption or
repurchase of Securities held by Luxembourg tax resident holders to the extent said Securities do not (i)
give entitlement to a share of the profits generated by the issuing company and (ii) the issuing company
is not thinly capitalised.
Under the Law, payments of interest or similar income made or ascribed by a paying agent established in
Luxembourg to or for the immediate benefit of an individual beneficial owner who is tax resident of
Luxembourg will be subject to a withholding tax of 20 per cent.
Luxembourg resident individuals can opt to self declare and pay a 20 per cent levy on interest payments
made or ascribed by paying agents located in a Member State of the European Union other than
Luxembourg or a Member State of the European Economic Area.
In case the individual beneficial owner is an individual acting in the course of the management of his/her
private wealth, said withholding tax will be in full discharge of income tax. Responsibility for the
withholding tax will be assumed by the Luxembourg Paying Agent. Payments of interest under Securities
coming within the scope of the Law would be subject to withholding tax at a rate of 20 per cent.
- 49 -
General Information
Registration tax
Neither the issuance nor the transfer of Securities will give rise to any Luxembourg stamp duty, issuance
tax, registration tax, transfer tax or similar taxes or duties. Notwithstanding, documents relating to the
Securities, other than the Securities themselves, presented in a notarial deed or in the course of litigation
may require registration. In this case, and based on the nature of such documents, registration duties may
apply.
Automatic exchange of information
Under the law of December 18, 2015 implementing the Directive on Administrative Cooperation
("DAC2") and the OECD Common Reporting Standard (the "CRS") (the "Law"), since January 1, 2016,
the Luxembourg financial institutions are required to provide to the fiscal authorities of other EU
Member States and jurisdictions participating to the CRS details of payments of interest, dividends and
similar type of income, gross proceeds from the sale of financial assets and other income, and account
balances held on reportable accounts, as defined in the DAC2 and the CRS, of account holders residents
of, or established in, an EU Member State and certain dependent and associated territories of EU
Member States or in a jurisdiction which has introduced the CRS in its domestic law.
Payment of interest and other income derived from the Securities will fall into the scope of the Law and
are therefore subject to reporting obligations.
Prospective investors should consult their own tax advisor with respect to the application of the DAC2
and the CRS to such investor in light of such investor's individual circumstances.
- 50 -
General Information
13.
Alternative Performance Measures
The table below presents the Alternative Performance Measures (as defined in the Guidelines published by the European Securities and Markets Authority) ("APMs"
and each an "APM") in respect of GSI's 2015 Annual Report that is prepared in accordance with U.K. Generally Accepted Accounting Practices ("U.K. GAAP").
APM
Effective tax rate
Page
number
7
Definition, components and
basis of calculation of the APM
The effective tax rate is the tax
expense divided by the accounting
profit.
Components/basis of calculation:
"Tax on profit on ordinary
activities" divided by "Profit on
ordinary
activities
before
taxation".
Effective tax rate excluding
one-time benefit on the
revaluation of GSI's deferred
tax asset as a result of the
Finance (No. 2) Act 2015
being enacted
7
This APM and its components
relate to the performance of the
past reporting period.
The effective tax rate excluding
one-time benefit is the tax expense
excluding the one-time effect of
increased U.K. corporate tax rates
divided by the accounting profit.
Components/basis of calculation:
Sum of "Tax on profit on ordinary
activities" less "Effect of increased
U.K. corporate tax rates" divided
by "Profit on ordinary activities
before taxation".
This APM and its components
relate to the performance of the
past reporting period.
Reconciliation of the APM
Use of the APM
Comparative APM
GSI's effective tax rate for the full
year of 2015 was 13.3%.
This APM is meaningful as it is
used as a comparison to the U.K.
tax rate applicable to GSI.
GSI's effective tax rate for the full
year of 2014 was 21.9%.
Reconciliation: $353M/$2,661M.
Both numbers are presented on
page 53 of GSI's 2015 Annual
Report.
GSI's effective tax rate for the full
year 2015 excluding the one-time
benefit was 19.1%.
Reconciliation:
($353M- $(155M))/$2,661M.
"Tax on profit on ordinary
activities" is disclosed on page 53
of GSI's 2015 Annual Report.
"Effect
of
increased
U.K.
corporate tax rates" is disclosed on
page 72 of GSI's 2015 Annual
Report. "Profit on ordinary
activities before taxation" is
disclosed on page 53 of GSI's
2015 Annual Report.
- 51 -
Reconciliation: $452M/$2,060M.
Both numbers are presented on
page 53 of GSI's 2015 Annual
Report.
This APM is meaningful as it is
used as a comparison to the U.K.
tax rate applicable to GSI.
There was no equivalent one-time
benefit in 2014, i.e. the effect of
increased U.K. corporate tax rates
is Nil. Hence the comparable APM
is GSI's effective tax rate for the
full year of 2014 of 21.9%.
General Information
The table below presents the APMs in respect of GSI's 2014 Annual Report that is prepared in accordance with U.K. GAAP.
APM
Effective tax rate
Page
number
8
Definition, components and basis
of calculation of the APM
The effective tax rate is the tax
expense divided by the accounting
profit.
Components/basis of calculation:
"Tax on profit on ordinary
activities" divided by "Profit on
ordinary activities before taxation".
Reconciliation of the APM
Use of the APM
Comparative APM
GSI's effective tax rate for the full
year of 2014 was 21.9%.
This APM is meaningful as it is
used as a comparison to the U.K.
tax rate applicable to GSI.
GSI's effective tax rate for the full
year of 2013 was 43.3%.
Reconciliation: $456M/$2,080M.
Both numbers are presented on
page 61 of GSI's 2014 Annual
Report.
This APM and its components
relate to the performance of the
past reporting period.
- 52 -
Reconciliation: $129M/$298M.
Both numbers are presented on
page 61 of GSI's 2014 Annual
Report.
Index of Defined Terms
INDEX OF DEFINED TERMS
Page
Page
APM .....................................................................51
APMs....................................................................51
applicable law.......................................................45
Base Prospectus................................................2, 28
Base Prospectus Supplement No. 11 ....................28
Base Prospectus Supplement No. 12 ....................28
Base Prospectus Supplement No. 3 ......................28
Base Prospectus Supplement No. 4 ......................28
Base Prospectus Supplement No. 5 ......................28
Base Prospectus Supplement No. 6 ......................28
Benchmark Regulation .........................................24
BRRD...................................................................19
Change in Law Event ...........................................45
Conditions ............................................................33
CONSOB................................................................4
CRA Regulation .....................................................5
CSSF ......................................................................4
DBRS .....................................................................5
ESMA.....................................................................5
EURIBOR ............................................................24
Fitch........................................................................5
General Note Conditions ......................................33
Goldman Sachs.....................................................11
Goldman Sachs Group............................................9
GSG....................................................................1, 9
GSG's 2015 Form 10-K........................................28
GSG's 2016 Proxy Statement ...............................28
GSG's 2016 Third Quarter Form 10-Q.................28
GSG's December 12, 2016 Form 8-K...................29
GSG's January 18, 2017 Form 8-K.......................29
GSG's May 20, 2016 Form 8-K............................28
GSG's November 21, 2016 Form 8-K ..................29
GSI ...............................................................1, 7, 33
GSI's 2014 Annual Report ................................... 28
GSI's 2014 Financial Statements ......................... 28
GSI's 2015 Annual Report ................................... 28
GSI's 2015 Financial Statements ......................... 28
GSI's 2016 Third Quarter Financial Report ......... 28
GSI's 2016 Third Quarter Financial Statements .. 28
Guarantor ........................................................... 1, 9
Guaranty ............................................................ 1, 9
Holder .................................................................. 12
Interest Commencement Date.............................. 13
IOSCO Benchmark Principles ............................. 24
Issuer.................................................................. 1, 7
LIBOR ................................................................. 24
Luxembourg Prospectus Law .............................. 47
Market Abuse Regulation .................................... 24
Moody's ................................................................. 5
Notes...................................................................... 1
Original Base Prospectus................................. 2, 28
Original General Note Conditions ....................... 33
Programme ............................................................ 1
Prospectus.............................................................. 1
Prospectus Directive .............................................. 1
R&I ........................................................................ 5
Rate of Interest..................................................... 13
Regulation S .................................................... 6, 12
S&P ....................................................................... 5
Securities ......................................................... 1, 12
Securities Act......................................................... 6
U.K. GAAP ......................................................... 51
U.S.$ .............................................................. 12, 33
UK Banking Act .................................................. 19
USD ............................................................... 12, 33
- 53 -
Registered Office of GSI
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
England
Registered Office of GSG
The Goldman Sachs Group, Inc.
200 West Street
New York, New York 10282
USA
Principal Programme Agent and Registrar (Notes)
Citigroup Global Markets Deutschland AG
Reuterweg 16
60323 Frankfurt am Main
Federal Republic of Germany
Transfer Agents
Banque Internationale à Luxembourg, société
anonyme
69 route d'Esch
L-2953 Luxembourg
Grand Duché de Luxembourg
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LB
England
Fiscal Agent and Paying Agent
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LB
England
Calculation Agent
Goldman Sachs International
Peterborough Court
133 Fleet Street
London EC4A 2BB
England
Auditors to GSI
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
- 54 -
England
Independent Accountants of the Guarantor
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, New York 10017
USA
Legal Advisers to the Issuer
as to English law
Ashurst LLP
Broadwalk House
5 Appold Street
London EC2A 2HA
England
as to Italian securities law
Simmons & Simmons LLP
Via Tommaso Grossi 2
20121 Milan
Italy
- 55 -
NOTA DI SINTESI
Le note di sintesi sono costituite da obblighi di informativa conosciuti come “Elementi”. Questi elementi sono numerati nelle Sezioni
A - E (A.1 - E.7).
La presente nota di sintesi contiene tutti gli Elementi che devono essere inclusi in una nota di sintesi per questa tipologia di strumenti
finanziari ed Emittente. Poiché alcuni Elementi non devono essere trattati, vi possono essere intervalli nella sequenza numerica degli
Elementi.
Anche qualora l'inclusione di un Elemento nella nota di sintesi sia richiesta in ragione della tipologia degli strumenti finanziari e
dell'Emittente, è possibile che nessuna informazione rilevante possa essere fornita in merito a quell'Elemento. In questo caso, una
breve descrizione dell'Elemento è inclusa nella nota di sintesi con la menzione “non applicabile”.
SEZIONE A – INTRODUZIONE E AVVERTENZE
A.1
Introduzione e
avvertenze
La presente nota di sintesi va letta come un'introduzione al Prospetto. Qualsiasi decisione di investire
negli Strumenti Finanziari dovrebbe basarsi sull'esame da parte dell'investitore del presente Prospetto
nel suo complesso. Qualora sia proposta un'azione legale in merito alle informazioni contenute nel
presente Prospetto dinanzi all'autorità giudiziaria, l'investitore ricorrente, ai sensi della legislazione
nazionale degli Stati membri, potrebbe essere tenuto a sostenere le spese di traduzione del presente
Prospetto prima dell'inizio del procedimento. La responsabilità civile incombe solo sulle persone che
hanno preparato la nota di sintesi, compresa la sua eventuale traduzione, ma solo quando la nota di
sintesi sia fuorviante, imprecisa o incoerente se letta insieme con le altre parti del presente Prospetto
oppure, se letta insieme con le altre parti del presente Prospetto, non contenga informazioni chiave che
aiutino gli investitori nello stabilire se investire in tali Strumenti Finanziari.
A.2
Autorizzazioni
Non applicabile; non viene concessa alcuna autorizzazione all'utilizzo del presente Prospetto per la
successiva rivendita degli Strumenti Finanziari.
SEZIONE B – EMITTENTE E GARANTE
B.1
Denominazione
legale e
commerciale
dell'Emittente
Goldman Sachs International (“GSI” o l’“Emittente”)
B.2
Domicilio e
forma giuridica
dell'Emittente,
legislazione in
base alla quale
opera e paese di
costituzione
GSI è una società privata a responsabilità illimitata (private unlimited liability company) costituita in
Inghilterra e nel Galles. GSI opera principalmente ai sensi della legge inglese. La sede legale di GSI è
Peterborough Court, 133 Fleet Street, Londra EC4A 2BB, Inghilterra.
B.4b
Tendenze note
riguardanti
l’Emittente
Le prospettive di GSI saranno influenzate, potenzialmente in modo negativo, dagli sviluppi nelle
economie globali, regionali e nazionali, incluso il Regno Unito, dai movimenti e livelli di attività nei
mercati finanziari, delle merci, delle valute e altri mercati, dalle variazioni dei tassi di interesse, dagli
sviluppi politici e militari in tutto il mondo, dai livelli delle attività dei clienti e dagli sviluppi legali e
regolamentari nel Regno Unito e negli altri paesi dove l’Emittente opera.
B.5
Gruppo
dell'Emittente
Goldman Sachs Group UK Limited, una società costituita ai sensi della legge inglese, detiene una
partecipazione azionaria del 100 per cento in GSI. Goldman Sachs (UK) L.L.C. è costituita ai sensi
delle leggi dello Stato del Delaware e ha una partecipazione del 97,208 per cento in Goldman Sachs
Group UK Limited. Goldman Sachs Ireland Group Limited è costituita ai sensi della legge irlandese
1
ed ha una partecipazione del 2,792 per cento in Goldman Sachs Group UK Limited. Goldman Sachs
Ireland LLC è costituita ai sensi delle leggi dello Stato del Delaware ed ha una partecipazione del 100
per cento in Goldman Sachs Ireland Group Limited. Goldman Sachs Ireland Group Holdings LLC è
costituita ai sensi delle leggi dello Stato del Delaware ed ha una partecipazione del 75 per cento in
Goldman Sachs Ireland LLC. Goldman Sachs Global Holdings L.L.C. è costituita ai sensi delle leggi
dello Stato del Delaware ed ha una partecipazione del 25 per cento in Goldman Sachs Ireland LLC.
The Goldman, Sachs & Co. L.L.C. è costituita ai sensi delle leggi dello Stato del Delaware ed ha una
partecipazione dell’1 per cento in Goldman Sachs Global Holdings L.L.C.. The Goldman Sachs
Group, Inc. è costituita nel Delaware e ha una partecipazione del 100 per cento in Goldman Sachs
Ireland Group Holdings LLC, The Goldman, Sachs & Co. L.L.C. e Goldman Sachs (UK) L.L.C. ed
una partecipazione del 99 per cento in Goldman Sachs Global Holdings L.L.C.
Struttura della Holding Company di GSI
The Goldman Sachs Group, Inc.
100%
99%
100%
100%
The Goldman, Sachs & Co. L.L.C.
Goldman, Sachs & Co.
Wertpapier GmbH
1%
Goldman Sachs Global Holdings L.L.C.
25%
Goldman Sachs Ireland Group
Holdings LLC.
75%
Goldman Sachs Ireland LLC
100%
100%
Goldman Sachs (UK) L.L.C
Goldman Sachs Ireland Group Limited
97,208%
2,792%
Goldman Sachs Group UK Limited
100%
Goldman Sachs International
Nota: Le percentuali indicate sono per la detenzione diretta di azioni ordinarie o per l'equivalente.
Partecipazioni di minoranza sono detenute da altre entità che a loro volta appartengono, direttamente o
indirettamente, a The Goldman Sachs Group, Inc.
B.9
Previsione o
stima degli utili
Non applicabile; GSI non ha fatto previsioni o stime degli utili.
B.10
Rilievi contenuti
nella relazione di
Non applicabile; non ci sono rilievi nella relazione di revisione di GSI sulle informazioni finanziarie
relative ai propri esercizi passati.
2
revisione
B.12
Informazioni
finanziarie
fondamentali
selezionate
sull’Emittente
relative agli
esercizi passati
La seguente tabella mostra informazioni finanziarie fondamentali selezionate in relazione agli esercizi
passati di GSI:
al e per i nove mesi chiusi al (non
al e per l’Esercizio chiuso al
sottoposto a revisione contabile)
(in milioni di USD)
30 settembre 2016
30 settembre 2015
31 dicembre 2015
31 dicembre 2014
Risultato operativo
2.033
2.276
2.939
2.275
Utile delle attività
1.783
2.078
2.661
2.060
1.321
1.680
2.308
1.608
ordinarie al lordo delle
imposte
Utile per l’anno
finanziario
Al
Al 30 settembre 2016
31 dicembre 2015
31 dicembre 2014
90
12
14
1.072.495
850.219
967.411
27.564
26.353
21.997
(non sottoposto a revisione
contabile)
(in milioni di USD)
Immobilizzazioni
Attività correnti
Fondi Patrimoniali
Totali
Assenza di
cambiamenti
negativi
sostanziali
Non si sono verificati cambiamenti negativi sostanziali delle prospettive di GSI dal 31 dicembre 2015.
Cambiamenti
significativi
Non applicabile, non vi è stato alcun cambiamento significativo nella situazione finanziaria o
commerciale di GSI successivamente al 30 settembre 2016.
B.13
Fatti recenti
sostanzialmente
rilevanti per la
valutazione della
solvibilità
dell'Emittente
Non applicabile; non vi sono fatti recenti riguardanti GSI che siano rilevanti in misura sostanziale per
la valutazione della solvibilità di GSI.
B.14
Posizione
dell'Emittente
nel proprio
gruppo
Si prega di fare riferimento all'Elemento B.5 di cui sopra.
GSI fa parte di un gruppo di società delle quali The Goldman Sachs Group, Inc. rappresenta la holding
company (il “Gruppo Goldman Sachs”) e di conseguenza effettua operazioni con, e dipende da,
3
societario
entità all'interno di tale gruppo.
B.15
Principali
attività
Le attività principali di GSI consistono nella sottoscrizione e nella distribuzione di strumenti
finanziari, nel commercio di servizi relativi al debito e al capitale societario, di strumenti finanziari di
debito pubblico non USA e di strumenti finanziari garantiti da ipoteca, nell'esecuzione di contratti di
swap e relativi a strumenti derivati, nelle fusioni e acquisizioni, nei servizi di consulenza finanziaria
per le ristrutturazioni/i collocamenti privati/i leasing ed il project financings, nell'intermediazione e
nella finanza immobiliare, nelle attività di merchant banking, nell'intermediazione sulle azioni e nella
ricerca.
B.16
Proprietà e
controllo
dell'Emittente
Goldman Sachs Group UK Limited, una società costituita ai sensi della legge inglese detiene una
partecipazione azionaria del 100 per cento in GSI. Si veda l’Elemento B.5
B.17
Rating
dell'Emittente o
degli Strumenti
Finanziari
Il debito di lungo termine di GSI è valutato ‘A+’ da S&P, ‘A’ da Fitch e ‘A1’ da Moody’s. Gli
Strumenti Finanziari non sono stati oggetto di rating.
B.18
Natura e portata
della Garanzia
Le obbligazioni di pagamento con riferimento agli Strumenti Finanziari sono garantite da The
Goldman Sachs Group, Inc. (“GSG” o il “Garante”) ai sensi di una garanzia regolata dalla legge
dello Stato di New York datata 29 maggio 2015 (la “Garanzia”). La Garanzia concorrerà pari passu
con tutti gli altri debiti non garantiti e non subordinati di GSG.
B.19
Denominazione
del Garante
The Goldman Sachs Group, Inc.
Domicilio, forma
giuridica del
Garante,
legislazione in
base alla quale
opera e paese di
costituzione
GSG è una società costituita nello Stato del Delaware negli Stati Uniti ai sensi della Delaware
General Corporation Law. La sede legale di GSG è 200 West Street, New York, New York 10282,
USA.
Tendenze note
riguardanti il
Garante
Le prospettive di GSG saranno influenzate, potenzialmente in modo negativo, dagli sviluppi delle
economie globali, regionali e nazionali, compresi gli Stati Uniti, dai movimenti e dai livelli di attività,
nei mercati finanziari, delle materie prime, delle valute e in altri mercati, dai movimenti dei tassi di
interesse, dagli sviluppi politici e militari in tutto il mondo, dai livelli di attività dei clienti e dagli
sviluppi legislativi e regolamentari negli Stati Uniti e in altri paesi in cui opera GSG.
(B.1)
B.19
(B.2)
B.19
(B.4b)
4
B.19
(B.5)
Struttura della Holding Company di GSG
Gruppo del
Garante
Nota: Le percentuali indicate sono per la detenzione diretta di azioni ordinarie o per l'equivalente.
Partecipazioni di minoranza sono detenute da altre entità che a loro volta appartengono, direttamente o
indirettamente, a GSG.
B.19
(B.9)
B.19
(B.10)
B.19
(B.12)
Previsione o
stima
Non applicabile; GSG non ha fatto previsioni o stime degli utili.
Rilievi contenuti
nella relazione di
revisione
Non applicabile; non ci sono rilievi nella relazione di revisione di GSG.
Informazioni
finanziarie
fondamentali
selezionate sul
Garante relative
agli esercizi
passati
La seguente tabella mostra informazioni finanziarie fondamentali selezionate in relazione agli esercizi
passati di GSG:
(in milioni di
USD)
Ricavi totali non
derivanti da
interessi
Al e per i nove mesi chiusi al
(non sottoposto a revisione contabile)
30 settembre 2016
30 settembre 2015
Al e per l’Esercizio concluso al
31 Dicembre 2015
31 Dicembre 2014
20.187
24.183
30.756
30.481
Ricavi netti,
incluso il
reddito
derivante
dall’interesse
netto
22.438
26.547
33.820
34.528
Utili prima delle
imposte
6.907
7.706
8.778
12.357
Al settembre
(non sottoposto a revisione contabile)
2016
(in milioni di
5
Al dicembre
2015
2014
USD)
Totale attivo
879.987
861.395
855.842
Totale passivo
792.877
774.667
773.045
Patrimonio
netto
87.110
86.728
82.797
Non si sono verificati cambiamenti negativi sostanziali delle prospettive di GSG dal 31 dicembre
2015.
Non applicabile; non vi è stato alcun cambiamento significativo nella situazione finanziaria o
commerciale di GSG dal 30 settembre 2016.
B.19
(B.13)
B.19
(B.14)
B.19
(B.15)
Fatti recenti
sostanzialmente
rilevanti per la
valutazione della
solvibilità del
Garante
Non applicabile; non vi sono fatti recenti riguardanti GSG che siano rilevanti in misura sostanziale per
la valutazione della solvibilità di GSG.
Dipendenza del
Garante da altri
membri del
gruppo
Vedere Elemento B.19 (B.5).
Principali
attività
Le attività di GSG, insieme alle sue controllate consolidate (“Goldman Sachs”) sono svolte nei
seguenti settori:
GSG è una holding company e, pertanto, dipende dai dividendi, dalle distribuzioni e dagli altri
pagamenti delle sue controllate per finanziare il pagamento dei dividendi e di tutti i pagamenti dovuti,
incluse le obbligazioni.
(1)
Investment Banking:

Consulenza Finanziaria, che include incarichi di consulenza strategica in relazione a fusioni e
acquisizioni, disinvestimenti, attività di difesa aziendale, gestione del rischio, ristrutturazioni
e spin-off, e operazioni in derivati direttamente collegate a questi incarichi di consulenza dei
clienti; e

Sottoscrizione, che include offerte pubbliche e private placements, incluse operazioni
domestiche e cross-border, di un ampia gamma di titoli, finanziamenti e altri strumenti
finanziari, e operazioni in derivati direttamente collegate alle attività di sottoscrizione dei
clienti.
(2)
Servizi ai Clienti Istituzionali:

Reddito Fisso, Valuta e Materie Prime, che includono l’esecuzione di attività per i clienti
connesse al market making di prodotti di tassi di interesse, prodotti di credito, mutui, valute e
materie prime; e

Azionario, che include l’esecuzione di attività per i clienti connesse al market making di
prodotti azionari e commissioni e spese derivanti dalla esecuzione e compensazione di
transazioni dei clienti istituzionali sulle maggiori borse, scambi di opzioni e futures in tutto il
mondo e operazioni over-the counter. Azionario inoltre include la nostra offerta di custodia
dei titoli, che prevede servizi di finanziamento, prestito titoli e intermediazione principale
(prime brokerage) a clienti istituzionali, tra i quali fondi speculativi (hedge funds), fondi
comuni (mutual funds), fondi pensione e fondazioni, e genera ricavi principalmente nella
forma di tassi di interesse e commissioni.
(3)
Investing & Lending, che include le attività di investimento di Goldman Sachs e la
concessione di finanziamenti per fornire risorse finanziarie ai clienti. Siffatti investimenti,
alcuni dei quali sono consolidati, ed i finanziamenti sono tipicamente a lungo termine.
6
Goldman Sachs effettua investimenti, direttamente e indirettamente per mezzo dei fondi che
gestisce, in titoli di debito e finanziamenti, titoli azionari pubblici e privati, ed entità
immobiliari.
(4)
B.19
(B.16)
B.19
(B.17)
Investment Management, che fornisce servizi di gestione degli investimenti e offre prodotti
di investimento (principalmente attraverso conti di gestione separati e veicoli di vario tipo,
quali mutual funds e fondi private investment) in tutte le maggiori asset class a una diversa
gamma di investitori istituzionali e individuali. Il segmento Investment Management offre
inoltre servizi di consulenza patrimoniale, inclusi gestione del portafoglio e consulenza
finanziaria, intermediazione ed altri servizi a investitori con patrimoni ingenti e a famiglie.
Proprietà e
controllo del
Garante
Non applicabile; GSG è una società indipendente quotata sulla Borsa di New York e non è detenuta nè
è controllata, direttamente o indirettamente, da azionisti o da un gruppo di azionisti affiliati.
Rating del
Garante
La seguente tabella rappresenta i rating del credito non garantito del Garante. Il rating non è una
raccomandazione ad acquistare, vendere o detenere obbligazioni. Alcuni o tutti i rating sono soggetti a
revisione o a ritiro in qualsiasi momento da parte delle organizzazioni che assegnano i rating. Ciascun
rating dovrebbe essere valutato indipendentemente da qualsiasi altro rating:
Vedere Elemento B.19 (B.5).
Debito a Breve
Termine
Debito a Lungo
Termine
Debito
Subordinato
Azioni Privilegiate
R-1 (middle)
A (high)
A
BBB (high)
Fitch, Inc.
F1
A
A-
BB+
Moody's Investors
Service
P-2
A3
Baa2
Ba1
Standard & Poor's
A-2
BBB+
BBB-
BB
Rating and Investment
Information, Inc.
a-1
A
A-
N/A
Dominion Bond Rating
Service Limited
SEZIONE C – STRUMENTI FINANZIARI
C.1
Tipo e classe
degli Strumenti
Finanziari
Obbligazioni a tasso da Fisso a Variabile (Fixed-to-Floating Rate) (gli “Strumenti Finanziari”).
C.2
Valuta
La valuta degli Strumenti Finanziari sarà il dollaro statunitense (“USD”)
C.5
Restrizioni alla
libera
trasferibilità
Gli Strumenti Finanziari e la Garanzia non possono essere offerti, venduti o consegnati negli Stati
Uniti o a soggetti statunitensi (U.S. persons), come definiti nel Regulation S ai sensi del Securities Act
(“Regulation S”), salvo che ai sensi di un'esenzione dai, o in una operazione non soggetta ai, requisiti
di registrazione del Securities Act e della legislazione di stato sui valori mobiliari applicabile.
ISIN: XS1457442025; Common Code: 145744202; Valoren: 34309457.
Inoltre, gli Strumenti Finanziari non possono essere acquisiti da, per conto di o con il patrimonio di
piani soggetti a ERISA o alla Sezione 4975 del U.S. Internal Revenue Code del 1986, come
modificato, oltre che da taluni conti generali di società di assicurazione.
Fatto salvo quanto precede, gli Strumenti Finanziari saranno liberamente trasferibili.
C.8
Diritti connessi
agli strumenti
finanziari
compresi il
ranking e ogni
Diritti: Gli Strumenti Finanziari danno il diritto a ciascun portatore di Strumenti Finanziari (un
“Portatore”) di ricevere un rendimento potenziale sugli Strumenti Finanziari (vedere l’Elemento C.9
di seguito), unitamente a taluni diritti ancillari come il diritto di ricevere avviso di talune
determinazioni ed eventi e di votare su modifiche future. I termini e le condizioni (le terms and
7
limitazione a tali
diritti
conditions) sono regolati ai sensi della legge inglese.
Ranking: Gli Strumenti Finanziari sono obbligazioni dirette, non subordinate e non garantite
(unsecured) dell'Emittente ed hanno pari grado rispetto alle altre obbligazioni dirette, non subordinate
e non garantite (unsecured) dell'Emittente. La Garanzia ha pari grado rispetto alle altre obbligazioni
non subordinate e non garantite (unsecured) di GSG.
Limitazioni ai diritti:
C.9
Diritti connessi
agli strumenti
finanziari,
comprese le
previsioni sugli
interessi,
l’indicazione del
tasso di
rendimento e il
rappresentante
dei Portatori
•
I termini e le condizioni degli Strumenti Finanziari contengono previsioni per la convocazione
delle assemblee dei Portatori per valutare questioni che influenzano i loro interessi in generale e
queste previsioni consentono a maggioranze definite di impegnare tutti i Portatori, compresi i
Portatori che non hanno partecipato e votato alla relativa assemblea e i Portatori che hanno
votato in modo contrario alla maggioranza. Inoltre, in determinate circostanze, l'Emittente può
modificare i termini e le condizioni degli Strumenti Finanziari, senza il consenso dei Portatori.
•
I termini e le condizioni degli Strumenti Finanziari consentono all'Emittente e all'Agente di
Calcolo (a seconda del caso), al verificarsi di determinati eventi e, in determinate circostanze,
senza il consenso dei Portatori, di apportare modifiche ai termini e alle condizioni degli
Strumenti Finanziari, di rimborsare gli Strumenti Finanziari prima della scadenza (se
applicabile), di rinviare i pagamenti prestabiliti ai sensi degli Strumenti Finanziari, di cambiare la
valuta in cui gli Strumenti Finanziari sono denominati, di sostituire l'Emittente con un altro
soggetto consentito subordinatamente a determinate condizioni, e di adottare talune altre azioni
per quanto riguarda gli Strumenti Finanziari.
Si prega di fare riferimento all’Elemento C.8 sopra.
Il rendimento degli Strumenti Finanziari deriverà da:

Il pagamento alla/e relativa/e data/e di di pagamento di un importo a titolo di Interesse;

Il potenziale pagamento di un Importo del Pagamento Anticipato Non Programmato a
seguito di rimborso anticipato non programmato degli Strumenti Finanziari (Come descritto
sotto); o

Se gli Strumenti Finanziari non sono precedentemente rimborsati, o acquistati e cancellati, il
pagamento dell’Ammontare di Rimborso Finale alla data di scadenza degli Strumenti
Finanziari.
_______________
Interessi
Gli Strumenti Finanziari maturano interessi a partire dal 20 gennaio 2017 (“Data di Decorrenza degli
Interessi”) al Tasso di Interesse.
L'importo Data di Pagamento degli Interessi con riferimento a ciascuno Strumento Finanziario deve
essere calcolato moltiplicando il relativo Tasso di Interesse per l’Ammontare di Calcolo, e
moltiplicando poi il prodotto per il relativo day count franction applicabile al periodo di interesse che
termina alla data in cui in tale Data di Pagamento degli Interessi (esclusa) è previsto che cada e
arrotondando la cifra risultante ai sensi delle terms and conditions. Qualora una Data di Pagamento
degli Interessi non sia un payment business day, l’ammontare degli interessi relativi a tale Data di
Pagamento degli Interessi sarà pagato nel successivo payment business day, ma il periodo di interessi
ai fini della determinazione dell’ammontare degli interessi rimarrà non modificato (unadjusted).
Il “Tasso di Interessi” per i periodi di interessi che finiscono il 20 gennaio 2018 ed il 20 gennaio
2019 è pari al 6% per cento (6%) annuo.
Il “Tasso di Interessi” per i periodi di interessi che finiscono nelle date (escluse) in cui ciascuna Data
di Pagamento degli Interessi è prevista cadere (tranne le Date di Pagamento degli Interessi che cadono
il 20 gennaio 2018 ed il 20 gennaio 2019) è pari al Tasso di Riferimento, fermo restando che tale
Tasso di Interesse non sarà inferiore del Tasso di Interessi Minimo o superiore al Tasso di Interessi
Massimo.
Definizioni dei termini utilizzati in precedenza:
8
•
Importo di Calcolo: USD 2.000.
•
Tasso di Riferimento: un tasso pari al tasso per i depositi in USD per un periodo di tre mesi che
appare sulla schermata di Reuters, alla pagina LIBOR01 alle 11:00, ora di Londra, nel secondo
London business day precedente il primo giorno del relativo periodo di interessi.
•
Date di Pagamento degli Interessi: il 20 gennaio di ogni anno di calendario a partire dal 20
gennaio 2018 (incluso) fino al 20 gennaio 2026 ed alla Data di Scadenza (come definita di
seguito) (inclusi).
•
Tasso di Interessi Massimo: 4% annuo.
•
Tasso di Interessi Minimo: 1,75% annuo.
Indicazione del Tasso di Rendimento: Non applicabile
______________
Importo del Pagamento Anticipato Non Programmato
Pagamento anticipato non programmato: Gli Strumenti Finanziari possono essere rimborsati prima
della scadenza programmata (i) ad opzione dell’Emittente se l’Emittente determina che una modifica
delle normativa applicabile abbia come effetto che l’adempimento degli obblighi nascenti dagli
Strumenti Finanziari da parte dell’Emittente o da parte della di sue controllate, collegate o società
sottoposte a comune controllo, ovvero nascenti da operazioni di copertura relative agli Strumenti
Finanziari sono diventate (o è sostanzialmente probabile che diventino nel prossimo futuro) illecite o
non praticabili (totalmente o parzialmente), o (ii) a seguito di avviso da parte di un Portatore che
dichiara questi Strumenti Finanziari immediatamente rimborsabili a causa del verificarsi di un event of
default che persiste.
In tali casi, l’Importo del Pagamento Anticipato Non Programmato (Non-scheduled Early Repayment
Amount) pagabile con riferimento a tale rimborso anticipato non programmato sarà, per ogni
Strumento Finanziario, la Denominazione Specificata di USD 2.000.
______________
Rimborso
•
La Data di Scadenza degli Strumenti Finanziari sarà il 20 gennaio 2027, fermo restando che,
qualora tale giorno non sia un payment business day, l’ammontare di rimborso finale sarà pagato
nel successivo payment business day.
•
A meno che non sia stato rimborsato anticipatamente o acquistato e cancellato, ciascuno
Strumento Finanziario sarà rimborsato dall'Emittente alla data di scadenza con il pagamento di
un Ammontare di Rimborso Finale pari a USD 2.000 per Importo di Calcolo degli Strumenti
Finanziari.
Rappresentante dei portatori degli Strumenti Finanziari: Non applicabile; l'Emittente non ha
nominato alcuna persona come rappresentante dei portatori degli Strumenti Finanziari.
C.10
C.11
Componente
derivata nel
pagamento degli
interessi
Si veda l’Elemento C.9 sopra
Ammissione alle
negoziazioni su
un mercato
regolamentato
È stata presentata domanda di ammissione degli Strumenti Finanziari alla negoziazione sul mercato
regolamentato della Borsa del Lussemburgo con effetto da appena possibile dopo la Data di
Emissione. Non può essere fornita alcuna assicurazione che tale domanda di ammissione alla
negoziazione sarà accolta. Sarà presentata domanda per l’ammissione alla negoziazione degli
Strumenti Finanziari sul mercato MOT (Mercato Telematico delle Obbligazioni) di Borsa Italiana
S.p.A. con effetto da appena possibile dopo la Data di Emissione. Non può essere fornita alcuna
Non applicabile; non vi è alcuna componente derivata nei pagamenti degli interessi effettuati con
riferimento agli Strumenti Finanziari.
9
assicurazione che tale domanda ammissione alla negoziazione sarà accolta.
SEZIONE D - RISCHI
D.2
Principali rischi
che sono specifici
per l’Emittente,
il Garante e
Goldman Sachs
Il pagamento di qualsiasi importo dovuto sugli Strumenti Finanziari è soggetto al nostro rischio di
credito. Gli Strumenti Finanziari sono nostre obbligazioni non garantite. Gli Strumenti Finanziari non
sono depositi bancari e non sono assicurati o garantiti dal U.S. Federal Deposit Insurance Corporation,
dal U.S. Deposit Insurance Fund, dal UK Financial Services Compensation Scheme o qualsiasi altro
ente governativo o governamentale o agenzia privata, o schema di protezione di deposito in alcuna
giurisdizione. Il valore o il rendimento sugli strumenti finanziari sarà soggetto al nostro rischio di
credito e a cambiamenti nella visione di mercato del nostro merito di credito.
I riferimenti nel B.12 e B.19 (B.12) di cui sopra alle "prospettive" e alla "situazione finanziaria o
commerciale" dell'Emittente e del Garante (a seconda dei casi), sono specificamente alle rispettive
capacità di soddisfare per intero le proprie obbligazioni di pagamento ai sensi degli Strumenti
Finanziari (nel caso di GSI) o della Garanzia (nel caso di GSG) in modo tempestivo. Informazioni
sostanzialmente rilevanti sulla situazione finanziaria e sulle prospettive dell’Emittente e
rispettivamente del Garante sono incluse nelle relazioni annuali e/o infrannuali dell’Emittente e del
Garante. Tuttavia, è necessario che voi siate consapevole che ciascuno dei principali rischi evidenziati
di seguito potrebbe avere un effetto negativo sostanzialmente rilevante sull'attività, sulle operazioni,
sulla situazione finanziaria e commerciale e sulle prospettive dell'Emittente e del Garante, che, a sua
volta, potrebbe avere un effetto negativo sostanzialmente rilevante sul rendimento che gli investitori
ricevono sugli Strumenti Finanziari.
L'Emittente e il Garante sono soggetti ad una serie di rischi fondamentali di Goldman Sachs:
•
Le attività di Goldman Sachs sono state, e possono continuare ad essere, negativamente
influenzate dalle condizioni dei mercati finanziari globali e dalle condizioni economiche in
generale.
•
Le attività di Goldman Sachs e quelle dei suoi clienti sono soggette ad un’ampia e diffusa
regolamentazione in tutto il mondo.
•
Le attività di Goldman Sachs sono state, e potrebbero essere, negativamente influenzate da valori
patrimoniali in declino. Questo è particolarmente vero per quelle attività in cui Goldman Sachs
ha posizioni nette "lunghe", riceve un compenso in base al valore del patrimonio gestito, o riceve
o conferisce garanzie (collateral).
•
Le attività di Goldman Sachs sono state, e potrebbero essere, negativamente influenzate da
disfunzioni nei mercati del credito, compreso il ridotto accesso al credito e costi più elevati di
ottenimento del credito.
•
Le attività di market-making di Goldman Sachs sono state e possono essere influenzate dalle
variazioni dei livelli di volatilità del mercato.
•
Le attività di investment banking, client execution e investment management di Goldman Sachs
sono state influenzate negativamente e possono essere colpite in futuro da incertezze di mercato
o da mancanza di fiducia tra gli investitori e gli amministratori delegati a causa di diminuzioni
generali dell'attività economica ed altre condizioni economiche, geopolitiche o di mercato
sfavorevoli.
•
Le attività di gestione degli investimenti di Goldman Sachs possono essere influenzate dalla
scarsa performance dei propri prodotti di investimento.
•
Goldman Sachs può incorrere in perdite a causa di processi e strategie di gestione del rischio
inefficaci.
•
La liquidità, la redditività e le attività di Goldman Sachs potrebbero essere negativamente
influenzate dall'incapacità di accedere ai mercati dei capitali di debito o di vendere attività o da
una riduzione dei suoi credit rating o da un aumento dei suoi spread creditizi.
•
La mancata identificazione e risoluzione appropriata dei potenziali conflitti di interesse potrebbe
influenzare negativamente le attività di Goldman Sachs.
10
•
Una carenza nei sistemi operativi o nelle infrastrutture di Goldman Sachs, o in quelle di terze
parti, così come un errore umano, potrebbero mettere in pericolo la liquidità di Goldman Sachs,
interrompere le attività di Goldman Sachs, comportare la divulgazione di informazioni riservate,
danneggiare la reputazione di Goldman Sachs e causare perdite.
•
La mancanza di protezione dei sistemi di computer di Goldman Sachs, delle reti e delle
informazioni, e delle informazioni dei clienti di Goldman Sachs, contro attacchi informatici e
minacce simili potrebbero compromettere la capacità di Goldman Sachs di condurre le attività di
Goldman Sachs, causare la divulgazione, il furto o la distruzione di informazioni riservate,
danneggiare la reputazione di Goldman Sachs e causare perdite.
•
Il Garante è una holding company e dipende per la propria liquidità dai pagamenti delle sue
controllate, molti dei quali sono soggetti a restrizioni.
•
L’applicazione di strategie regolamentari e dei requisiti negli Stati Uniti e nelle giurisdizioni non
U.S. per facilitare la risoluzione ordinata di grandi istituti finanziari potrebbe determinare un
maggiore rischio di perdita per portatori di strumenti finanziari Goldman Sachs.
•
É incerto l’impatto finale delle regole recentemente proposte che richiedono ad importanti banche
U.S. di rilevanza sistemica globale di mantenere importi minimi di debito di lungo termine che
soddisfino dei requisiti specifici di idoneità.
•
L’applicazione della proposta strategia di risoluzione di GSG potrebbe comportare maggiori
perdite per i portatori di strumenti finanziari Goldman Sachs, e l’incapacità di affrontare le
carenze nel piano di risoluzione di Goldman Sachs potrebbe sottoporci a maggiori requisiti
regolamentari.
•
Le attività di Goldman Sachs, la redditività e la liquidità possono essere negativamente
influenzate dal deterioramento della qualità del credito, o dal default, di terzi parti che devono a
Goldman Sachs denaro, strumenti finanziari o altre attività, o terze parti di cui Goldman Sachs
detiene strumenti finanziari o obbligazioni.
•
La concentrazione del rischio aumenta il potenziale di perdite significative nelle attività di
market-making, sottoscrizione (underwriting), investimento e prestito di Goldman Sachs.
•
Il settore dei servizi finanziari è sia altamente competitivo sia intercorrelato.
•
Goldman Sachs affronta rischi maggiori dal momento che nuove iniziative di business portano a
negoziare con una gamma più ampia di clienti e controparti e lo espone a nuove classi di attività
e nuovi mercati.
•
Le operazioni in derivati e la ritardata liquidazione potrebbero esporre Goldman Sachs a rischi
imprevisti e perdite potenziali.
•
Le attività Goldman Sachs potrebbero essere negativamente influenzate se Goldman Sachs non è
in grado di assumere e mantenere personale qualificato.
•
Goldman Sachs potrebbe essere negativamente influenzata da un maggiore controllo
regolamentare e governativo o pubblicità negativa.
•
Una significativa responsabilità giuridica o un significativo intervento normativo nei confronti di
Goldman Sachs potrebbero avere effetti finanziari negativi sostanziali o causare notevoli danni
alla reputazione di Goldman Sachs, che a sua volta potrebbe seriamente danneggiare le
prospettive di business di Goldman Sachs.
•
La crescita del commercio elettronico e l'introduzione di nuove tecnologie di trading potrebbe
influenzare negativamente l'attività di Goldman Sachs e potrebbe aumentare la concorrenza.
•
Le attività di Goldman Sachs relative alle merci, soprattutto quelle relative alle materie prime
fisiche, sottopongono Goldman Sachs ad un'ampia regolamentazione e comportano alcuni rischi
potenziali, inclusi rischi ambientali, di reputazione e ad altri rischi che potrebbero esporla a
significative responsabilità e costi.
•
Nello svolgimento delle proprie attività nel mondo, Goldman Sachs è soggetta a rischi politici,
economici, giuridici, operativi e ad altri rischi che sono insiti nel fatto di operare in molti paesi.
•
Goldman Sachs può incorrere in perdite a seguito di eventi imprevisti o catastrofici, tra cui
l'emergere di una pandemia, attacchi terroristici, eventi meteorologici estremi o altre calamità
11
naturali.
D.3
Principali rischi
che sono specifici
per gli Strumenti
Finanziari:
•
Potreste perdere parte o tutto l’investimento negli Strumenti Finanziari qualora:
°
Noi (quali Emittente e Garante) fallissimo o fossimo comunque non in grado di far
fronte alle nostre obbligazioni di pagamento;
°
Non deteniate i vostri Strumenti Finanziari fino a scadenza e il prezzo secondario di
vendita sia inferiore al prezzo originario di acquisto; o
°
I vostri Strumenti Finanziari siano rimborsati anticipatamente a seguito di un evento
imprevisto e l’ammontare che voi riceviate sia inferiore al prezzo originario di
acquisto.
•
Il valore stimato dei vostri Strumenti Finanziari (come determinato con riferimento ai modelli di
prezzo utilizzati da noi) al momento in cui i termini e le condizioni dei vostri Strumenti
Finanziari sono stabiliti alla trade date, sarà inferiore al prezzo di emissione iniziale dei vostri
Strumenti Finanziari.
•
I vostri Strumenti Finanziari potrebbero non avere un mercato delle negoziazioni attivo e voi
potreste non essere in grado di venderli.

Nel caso in cui il Garante (ma non l’Emittente) dovesse diventare insolvente, non sareste in grado
di chiedere che gli Strumenti Finanziari siano immediatamente dovuti e rimborsabili. Il
rendimento degli Strumenti Finanziari potrebbe essere significativamente inferiore rispetto a
quello che avreste ottenuto se aveste avuto la possibilità di chiedere che gli Strumenti Finanziari
fossero dovuti ed esigibili immediatamente in occasione dell’insolvenza del Garante.
•
Non forniamo alcuna assicurazione che la domanda di quotazione sarà accolta e l’ammissione
alla negoziazione sarà concessa (o, se concessa, sarà concessa dalla data di emissione) o che sarà
sviluppata una attiva negoziazione sui mercati degli Strumenti Finanziari. Possiamo interrompere
tale quotazione in ogni momento.
•
L’iniziale importo di emissione di USD 100.000.000 potrebbe essere ridotto in seguito
all’emissione, e questo potrebbe avere un effetto negativo sulla vostra capacità di vendere gli
Strumenti Finanziari nel mercato secondario.
•
La performance dei tassi di interesse dipende da numerosi fattori, inclusi l’offerta e la domanda
sui mercati internazionali monetari, che sono influenzate da misure prese da governi e banche
centrali, così come speculazioni e altri fattori macroeconomici.
•
Gli indici che si ritengono 'benchmarks' sono soggetti alle recenti linee guida e proposte di
riforma nazionali, internazionali e altre. Alcune di queste riforme sono già in vigore mentre altre
devono ancora essere implementate. Queste riforme potranno determinare che tali benchmarks
rendano diversamente rispetto al passato, o abbiano altre conseguenze che non possono essere
previste.
•
L'Emittente degli Strumenti Finanziari può essere sostituito con un’altra società.
•
Potremmo modificare le terms and conditions degli Strumenti Finanziari in determinate
circostanze senza il vostro consenso.
SEZIONE E – L’OFFERTA
E.2b
Ragioni
dell'offerta e
impiego dei
proventi
I proventi netti dell'emissione degli Strumenti Finanziari saranno utilizzati nell'attività generale
dell'Emittente.
12
E.3
Termini e
condizioni
dell'offerta
Non viene effettuata alcuna offerta pubblica degli Strumenti Finanziari. Il Prezzo di Emissione è pari
al 100% del Valore Nominale Complessivo
E.4
Interessi che
sono significativi
per
l’emissione/l’offe
rta
Per quanto di conoscenza dell'Emittente, nessun soggetto coinvolto nell'emissione degli Strumenti
Finanziari ha un interesse rilevante nell'emissione, compresi interessi confliggenti.
E.7
Spese
stimate
addebitate
all’investitore
dall’emittente o
dall’offerente
Non applicabile. Non ci sono spese stimate addebitate all'investitore da parte dell'Emittente o
dell’offerente.
13