Goldman Sachs Finance Issues Autocallable Equity-Linked Notes Tied to Three Energy and Aerospace Stocks

Structure and Automatic Call Mechanism

The Autocallable Equity-Linked Notes represent a structured debt offering where investors receive returns based on the performance of three reference stocks rather than traditional interest payments. The notes include an automatic call feature, which is a critical component of the product design. If the closing price of each of the three index stocks—Casey's General Stores Inc., Marathon Petroleum Corporation, and Howmet Aerospace Inc.—reaches or exceeds 80 percent of its initial price on the call observation date expected October 26, 2026, the notes will be automatically called and redeemed early.

Upon early call, investors would receive $1,105 per $1,000 face amount on the call payment date expected October 29, 2026. This represents a roughly 10.5 percent return if the notes are called on their first call observation date. The automatic call feature essentially allows the issuer to redeem the notes early if market conditions move favorably for the underlyings, which means investors may not retain their investment for the full five-year term if the linked stocks perform well in the first few months of the offering.

Maturity Payoff Structure and Performance Scenarios

The maturity payout mechanics involve multiple scenarios based on how the worst-performing of the three index stocks performs relative to its initial price. The filing describes a "lesser performing index stock return" concept, meaning the calculation focuses on whichever of the three stocks shows the smallest percentage gain or largest percentage loss from trade date to maturity. If all three stocks finish at or above 80 percent of their initial prices, investors receive $1,000 face amount plus a leveraged payoff equal to 1.25 times the sum of the lesser performing stock's return plus 20 percent.

A middle scenario occurs if the worst-performing stock finishes between 70 and 80 percent of its initial price while the others remain at or above 80 percent. In this case, investors receive exactly $1,000 per $1,000 face amount—a full return of principal with no gain or loss. However, if any index stock declines below 70 percent of its initial price, the payoff becomes negative. The filing discloses that for every 1 percent the worst-performing stock falls below 70 percent of its initial price, investors lose approximately 1.4286 percent of the face amount. This means the notes carry significant downside exposure and investors could lose their entire investment if the worst-performing stock declines sharply enough.

Leverage and Upside Participation

The product provides upside leverage to investors through a 1.25 multiplier applied to returns in the best-case scenario where all stocks finish above 80 percent of their initial prices. This 25 percent leverage is designed to offer enhanced returns compared to a direct stock investment. For example, if the lesser-performing stock appreciated 20 percent from its initial price and all stocks remained above the 80 percent threshold, the return on the notes would be 1.25 multiplied by the sum of 20 percent plus 20 percent, equaling 50 percent. This structure appeals to investors seeking amplified gains from bullish equity market moves.

However, the filing emphasizes that this leverage operates only when stringent performance hurdles are met. The notes provide a buffer against modest declines through the 70 percent protection level, which offers full principal return even if the worst stock falls moderately. But this buffer disappears entirely once the 70 percent threshold is breached, and losses then accumulate rapidly. Investors should recognize that the enhanced upside comes paired with potentially substantial downside risk that extends beyond typical stock investment losses.

Index Stock Selection and Reference Prices

The three reference stocks represent diverse sectors: Casey's General Stores Inc. operates convenience stores, Marathon Petroleum Corporation is an energy refiner, and Howmet Aerospace Inc. (formerly Arconic Inc.) manufactures engineered forgings and castings for aerospace and defense applications. The filing indicates that the initial prices for these stocks will be set on the trade date expected July 24, 2026, and will be determined as an intra-day price or the closing price on that date. All subsequent performance measurements—whether at the call observation date or at maturity—will reference these baseline prices.

The prospectus notes that each index stock "may be replaced or adjusted from time to time as provided herein," suggesting that the issuer retains discretion to modify the reference stocks under certain circumstances. This adjustment capability introduces an additional element of complexity and potential risk for note holders, as changes to the underlying stocks could materially affect investment outcomes. Investors should carefully review the full prospectus for detailed terms governing when and how such replacements or adjustments may occur.

Valuation and Secondary Market Pricing

The filing discloses that the estimated value of the notes at the time terms are set on the trade date is expected to be between $885 and $935 per $1,000 face amount, despite the notes being issued at 100 percent of face value. This valuation gap reflects the embedded costs of the structured product, including the value attributed to Goldman Sachs' issuer credit risk and the cost of the embedded derivatives that enable the call feature and payoff structure. The estimated value represents what Goldman Sachs' pricing models determine the notes are worth economically at inception, whereas the issue price represents what investors will pay.

Goldman Sachs & Co. LLC may make a market in the notes after their initial sale, though the filing explicitly states it is not obligated to do so. The secondary market bid-ask price at which Goldman Sachs might buy or sell the notes will initially equal the then-current estimated value plus an additional amount that declines on a straight-line basis over a specified period. After that period ends, the secondary market price would equal solely the estimated value as recalculated using Goldman Sachs' pricing models. This structure means that the notes may trade significantly below their issue price in the secondary market, and investors considering a sale before maturity should be prepared for substantial losses.

Credit Quality and Guarantor Strength

The notes are fully and unconditionally guaranteed by The Goldman Sachs Group Inc., meaning that if GS Finance Corp. were unable to meet its obligations, Goldman Sachs would be obligated to pay note holders. The prospectus directs investors to review credit risk information on page S-19 of the full prospectus supplement. The guarantee links the credit quality of the notes to Goldman Sachs' own creditworthiness rather than that of a smaller, standalone financing entity. However, the filing also notes that the notes are not bank deposits, are not insured by the Federal Deposit Insurance Corporation, and are not obligations of any bank, emphasizing their status as unsecured debt securities.

Investors relying on the Goldman Sachs guarantee should consider that their investment's safety ultimately depends on Goldman Sachs' financial condition and willingness to honor its obligations. Like all unsecured debt, the notes rank equally with other unsecured liabilities of Goldman Sachs in a bankruptcy or distressed scenario. The filing makes clear that investors should conduct thorough due diligence on Goldman Sachs' creditworthiness before committing capital to these notes.

Program Details and Indenture Framework

The notes are issued under GS Finance Corp.'s Medium-Term Notes Series F program and are governed by a senior debt indenture dated October 10, 2008, as supplemented. The indenture has been further supplemented by a First Supplemental Indenture dated February 20, 2015, with The Bank of New York Mellon serving as trustee. This well-established indenture framework provides the legal structure governing note holders' rights and the issuer's obligations. The notes will be issued in book-entry form, meaning investors will not receive physical certificates but rather electronic entries in the clearing system.

The prospectus supplement is part of a broader prospectus package that includes a prospectus supplement dated February 14, 2025, and a prospectus dated February 14, 2025. The filing indicates that information in the prospectus supplement supersedes any conflicting information in these earlier documents. Prospective investors should obtain and carefully review all prospectus documents, as the preliminary prospectus supplement notes that "the information in this preliminary prospectus supplement is not complete and may be changed."

Underwriting and Distribution Terms

The filing presents the offering on a preliminary basis, with key terms including the underwriting discount and net proceeds shown as blank or partially redacted placeholders. Goldman Sachs & Co. LLC is identified as the underwriter, and the prospectus notes that the underwriting discount also includes a structuring fee of up to an undisclosed percentage of the face amount. The original issue price is set at 100 percent of face amount, meaning investors pay full principal value when purchasing at issuance. The expected original issue date is July 29, 2026.

The filing explicitly states that Goldman Sachs & Co. LLC or other Goldman Sachs affiliates may use the prospectus in market-making transactions after the notes' initial sale. The prospectus also notes that unless GS Finance Corp. or its agent informs purchasers otherwise in the confirmation of sale, the prospectus should be presumed to be used in a market-making transaction. This language is designed to ensure transparency about whether a purchaser is buying directly from the issuer or from a dealer making a secondary market. The prospectus confirms that GS Finance Corp. may decide to sell additional notes after this prospectus supplement at issue prices and underwriting discounts that differ from those initially offered.

Risk Considerations and Investment Suitability

Structured equity-linked notes of this type carry multiple layers of risk that prospective investors must carefully weigh. The primary market risk stems from the performance of the three underlying stocks. If even one of the three stocks performs poorly—declining more than 30 percent from its initial price—note holders will begin to experience capital losses that accelerate as declines deepen. Unlike owning stocks directly, note holders have no voting rights, no dividend rights, and receive only the contractually specified cash payment at maturity. The leverage embedded in the product amplifies both gains and losses, meaning that a decline in the worst-performing stock directly translates into proportionally larger losses for note holders compared to stock investors.

Additionally, note holders assume credit risk on GS Finance Corp. and its guarantor Goldman Sachs. While Goldman Sachs is a major financial institution, any deterioration in its creditworthiness could affect the value of the notes, independent of how the underlying stocks perform. The notes also introduce call risk—if the underlying stocks perform well and the notes are called early, investors lose the opportunity to capture further upside over the full five-year term and must reinvest proceeds in a potentially different market environment. Investors should assess whether the potential returns justify these multiple risks and whether the product aligns with their investment objectives and risk tolerance.

Filing Status and Investor Action Items

This filing represents a preliminary prospectus supplement dated July 17, 2026, marked as "subject to completion," indicating that certain terms remain unfilled and may be revised before the final prospectus supplement is filed. The Securities and Exchange Commission has not approved or disapproved these securities, and the filing includes standard SEC language noting that any representation of approval is a criminal offense. Prospective investors should anticipate a final prospectus supplement before trading begins.

Investors considering a purchase of these notes should obtain the complete, final prospectus supplement and prospectus documents and review them thoroughly before committing capital. Particular attention should be paid to the full risk factor disclosures, the detailed terms and conditions governing maturity payoffs, and any information about the three reference stocks and their current trading levels. Investors may also wish to consult with financial advisors to determine whether these complex structured products are suitable for their investment profile and financial goals.