Goldman Sachs Finance Issues $3.48 Billion Callable Contingent Coupon Notes Linked to European and Technology Sector Indices

Structure and Underlier Performance Mechanics

The notes are structured as contingent coupon instruments where monthly coupon payments depend on the performance of three distinct underliers: the EURO STOXX 50 Index, the State Street Technology Select Sector SPDR ETF, and the State Street Utilities Select Sector SPDR ETF. On each coupon observation date, if the closing level of each underlier remains at or above 60% of its initial underlier level (the coupon trigger level), the notes will pay $10 per $1,000 face amount, equivalent to 1% monthly or a potential 12% annualized coupon. However, if the closing level of any single underlier falls below the coupon trigger level, no coupon payment is made for that month.

The initial underlier levels established for calculation purposes are 6,285.63 for the EURO STOXX 50 Index, $180.78 for the Technology Select Sector SPDR ETF, and $44.92 for the Utilities Select Sector SPDR ETF, as determined on the trade date of July 21, 2026. The underlier return calculation divides the difference between the final and initial underlier level by the initial level, with the final underlier level determined as the closing level on the determination date, which is set for July 23, 2029. This multi-underlier structure exposes investors to diversified market risks across European equities and two distinct U.S. equity sector segments.

Maturity Payoff and Downside Protection Features

At maturity on July 26, 2029, if the notes have not been redeemed by the issuer, investors will receive a payment amount dependent on the performance of the underlier with the lowest return among the three referenced indices and ETFs. If the final underlier level of each underlier is greater than or equal to its trigger buffer level (60% of initial underlier level), investors will receive the full $1,000 face amount per note plus any final coupon payment due. However, if the final underlier level of any underlier falls below the trigger buffer level of 60%, investors will receive $1,000 plus an amount equal to $1,000 multiplied by the lesser performing underlier return.

This payoff structure creates a significant downside risk for investors. Because the calculation uses the underlier with the lowest return, even strong performance in two of the three underliers cannot offset substantial declines in a single underlier. An investor could lose a substantial portion or their entire investment if the weakest-performing underlier declines significantly from its initial level. The pricing supplement explicitly warns that investors could lose their entire investment in the notes, highlighting the importance of understanding this downside exposure before purchasing these instruments.

Issuer Redemption Rights and Early Call Feature

The issuer retains a significant advantage through its redemption right, which permits GS Finance Corp. to redeem the notes in whole (but not in part) at its option on any coupon payment date commencing in July 2027 and continuing through June 2029. This call feature means the issuer can buy back the notes when market conditions become favorable for redemption, subject to at least three business days' prior notice to note holders and the trustee. Upon redemption, the company will pay $1,000 per $1,000 face amount along with any coupon then due on the following coupon payment date.

The early redemption feature creates asymmetry in the notes' risk-reward profile, as the issuer can terminate the investment when conditions become unfavorable for the issuer or when interest rates decline, capping the potential upside for investors. From the issuer's perspective, this right provides valuable optionality to manage its liability exposure and refinance at potentially lower costs if market conditions permit. The redemption dates align with coupon payment dates, which occur monthly, providing the issuer with frequent windows to execute this option if desired.

Calculation Agent Role and Administrative Framework

Goldman Sachs & Co. LLC has been appointed as the calculation agent responsible for determining underlier levels, calculating underlier returns, and assessing whether trigger conditions have been satisfied on observation dates. The calculation agent's determinations regarding coupon eligibility, final underlier levels, and settlement amounts are central to the economic returns investors will receive. The prospectus indicates that some terms or features described in accompanying documents may not apply to these specific notes, and the pricing supplement supersedes conflicting information in related documents including the general terms supplement, underlier supplements, and master prospectus materials dated between February 2025 and June 2026.

The administrative structure includes monthly coupon observation dates, commencing August 21, 2026, with corresponding coupon payment dates occurring approximately five business days later. The final coupon observation date is scheduled for July 23, 2029, with the stated maturity date three business days later on July 26, 2029. This monthly cadence creates frequent instances where coupon eligibility will be reassessed based on closing levels of all three underliers. Investors must remain attentive to these observation dates and understand how closing levels on specific dates will determine their monthly income.

Underlying Index and ETF Reference Mechanisms

The notes' returns depend not on direct holdings of the underlying indices themselves but rather on the performance of two State Street exchange-traded funds and one established European equity index. The Technology Select Sector SPDR ETF (XLK) provides exposure to large-cap U.S. technology companies, while the Utilities Select Sector SPDR ETF (XLU) offers exposure to U.S. utility sector companies. The EURO STOXX 50 Index tracks the 50 largest blue-chip companies in the eurozone, spanning multiple sectors and providing geographic diversification to continental Europe.

A critical distinction noted in the prospectus is that the notes are linked to the performance of the State Street ETFs themselves, not to the underlying indices that these ETFs track. This distinction matters because ETF performance may diverge from their underlying indices due to management fees, tracking error, and operational costs. Investors should recognize that they are making a bet on the specific investment vehicles and their management, not directly on the broader index performance. The combination of European equities with two distinct U.S. equity sectors creates a portfolio-like structure within a single note instrument, though with the important caveat that the weakest performer determines the payoff.

Pricing, Costs, and Net Proceeds to Issuer

The notes were offered at an original issue price of 100% of face amount, representing $3.482 billion in aggregate issuance. Goldman Sachs & Co. LLC charged an underwriting discount of 0.5% of the face amount, resulting in net proceeds to the issuer of 99.5% of the face amount, or approximately $3.465 billion. The pricing supplement notes that GS Finance Corp. estimated the value of the notes on the trade date to be not less than the face amount, though it acknowledges that the estimated value of the notes at any time will reflect many factors and cannot be predicted.

The pricing supplement explicitly states that GS Finance Corp. may sell additional notes after this issuance at different issue prices and with varying underwriting discounts, indicating that the terms disclosed here apply specifically to this tranche. The return on any investor's investment will depend in part on the issue price paid, meaning that purchases in secondary market transactions could yield different economic outcomes than the initial offering price. The prospectus also clarifies that Goldman Sachs & Co. LLC or other affiliates of GS Finance Corp. may use the prospectus in market-making transactions for these notes after their initial sale, unless the purchaser receives written confirmation indicating otherwise.

Credit Support and Guarantee Structure

The notes are fully and unconditionally guaranteed by The Goldman Sachs Group, Inc., the parent company of GS Finance Corp. This guarantee means that investors have recourse to The Goldman Sachs Group's credit if GS Finance Corp. becomes unable to meet its payment obligations. However, the notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. The prospectus emphasizes that the notes are not obligations of, or guaranteed by, a bank, despite the involvement of a major financial institution in their issuance and guarantee structure.

The credit quality of the notes is therefore dependent on the creditworthiness of The Goldman Sachs Group, Inc., one of the world's largest investment banking and financial services firms. While the explicit guarantee provides structural protection, investors bear the credit risk of The Goldman Sachs Group in the event of financial stress. The prospectus directs investors to page PS-8 for further detail regarding the credit risk of both GS Finance Corp. and The Goldman Sachs Group, Inc., suggesting that a thorough analysis of counterparty credit quality is essential for investors considering these notes.

Risk Considerations and Total Loss Potential

The prospectus contains explicit and repeated warnings that investors could lose their entire investment in these notes. This extreme downside risk stems from the payoff structure that uses the worst-performing underlier to determine the final payment amount. If any of the three underliers declines more than 60% from its initial level, investors will receive less than par value at maturity. If any underlier declines more than 100% from its initial level—an outcome that is theoretically possible for equity-based underliers, though extreme—the additional payment (the lesser performing underlier return multiplied by $1,000) would be deeply negative, potentially offsetting the $1,000 base payment and resulting in a substantial net loss.

Beyond the maturity payoff risk, investors also face the risk of receiving no coupon payments in months when any single underlier closes below its coupon trigger level of 60%. This creates a scenario where investors could experience both coupon losses (due to trigger breaches) and principal losses (due to final level assessments below 60% at maturity). The monthly frequency of coupon observation dates means that market volatility and short-term downturns in any underlier could repeatedly prevent coupon payments, even if final levels at maturity remain above trigger buffers. Investors should carefully evaluate their risk tolerance and investment objectives before committing capital to these callable contingent coupon instruments.

Market-Making Activity and Secondary Trading Considerations

The pricing supplement indicates that unless GS Finance Corp. or its agent informs the purchaser otherwise in the confirmation of sale, the prospectus is being used in a market-making transaction. This language suggests that Goldman Sachs and its affiliates may actively trade these notes in the secondary market after their initial issuance, providing liquidity for investors who wish to exit their positions before maturity. However, the availability and pricing of secondary market transactions cannot be guaranteed, and bid-ask spreads in secondary trading may be substantial given the complexity of these structured products.

Investors should understand that their ability to liquidate these notes prior to maturity will depend on market demand and the spreads offered by market makers. The structured nature of the notes and their dependence on multiple underliers and observation dates create complexity that may limit the depth of secondary market liquidity compared to more vanilla fixed-income instruments. Investors should factor in the potential difficulty and cost of exiting their position before maturity when evaluating the suitability of these notes for their investment portfolio.

Program Framework and Regulatory Context

The notes are issued as part of the Medium-Term Notes, Series F program of GS Finance Corp., a structured financing vehicle established to issue medium-term notes with various embedded features and underlier linkages. The prospectus materials supporting this issuance include a general terms supplement dated January 20, 2026, underlier supplements dated May 4 and June 24, 2026, and a master prospectus supplement and prospectus both dated February 14, 2025. These supporting documents establish the legal framework for the notes and contain additional terms and conditions that investors should review in conjunction with the pricing supplement.

The prospectus explicitly states that neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or passed upon the accuracy or adequacy of the prospectus, and any representation to the contrary would constitute a criminal offense. This standard disclaimer underscores the importance of independent due diligence by investors and highlights that regulatory bodies do not independently verify the accuracy of offering documents for structured notes. Investors are encouraged to consult with qualified financial and legal advisors to assess the suitability of these instruments for their specific circumstances and investment objectives.