Goldman Sachs Issues $500 Million Autocallable Basket-Linked Notes Due 2027

Structure and Composition of the Basket-Linked Notes

GS Finance Corp. disclosed that the notes are structured around an equally weighted basket of eight common stocks or ordinary shares, with each basket stock representing an initial weighting of 12.5% and an initial weighted value of 12.5. The eight constituent companies include Constellation Energy Corporation trading on The Nasdaq Stock Market with an initial basket stock price of $253.50; Eaton Corporation plc listed on the New York Stock Exchange at an initial price of $401.41; Equinix, Inc. on The Nasdaq Stock Market at $1,017.31; and GE Vernova Inc. The filing states that declines in any single basket stock may offset increases in other stocks, meaning investors face compounded risk from multiple equity positions.

The initial basket level is set at 100, with the closing level calculated as the sum of products derived from each basket stock's closing price on observation dates divided by its initial price, multiplied by its initial weighted value. This calculation methodology means the basket's performance reflects a normalized view of all eight companies' price movements from the initial pricing date of July 20, 2026 through the final observation date of August 3, 2027. The prospectus supplement notes that the initial weighted value of each constituent is 12.5, maintaining equal representation in the basket across all observation periods.

Autocall Feature and Early Redemption Provisions

The disclosure reveals that the notes include an automatic call feature that can terminate the investment early if certain market conditions are met. Beginning with the first observation date in November 2026 and continuing through May 2027, if the closing level of the basket is greater than or equal to the initial basket level of 100, the notes will be automatically called. Upon automatic call, investors receive a payment on the next payment date (the third business day after the relevant observation date) equal to the face amount plus an applicable coupon.

The filing indicates that observation dates occur on November 3, 2026, February 3, 2027, May 3, 2027, and August 3, 2027. This structure means investors could see their notes redeemed early if the equally weighted basket of eight stocks returns to or exceeds its initial level at any of the first three observation dates. For investors seeking longer-term exposure, early redemption represents a constraint on the investment horizon, though it provides certainty of face value recovery plus coupon if triggered.

Conditional Coupon Payment Mechanics

The notes feature a contingent coupon structure that only pays if specific performance thresholds are met. The filing discloses that on any observation date where the closing level of the basket is greater than or equal to 75% of the initial basket level, investors receive a coupon for each $1,000 face amount equal to the product of $25.40 times the number of observation dates that have occurred up to and including that date, minus the sum of all coupons previously paid. This means the maximum coupon accumulation rate is $25.40 per observation date, with coupons only accruing if the basket maintains at least 75% of its initial value.

The announcement clarifies that if basket performance falls below 75% of the initial level on any observation date, no coupon payment occurs on that date. The structure creates a participation threshold where investors must see the basket decline no more than 25% from its initial level to receive any coupon payments. For investors holding through maturity without an early call, total coupon payments depend on how many observation dates the basket remains above the 75% threshold, creating variable income potential rather than fixed income characteristics typical of traditional notes.

Maturity Payment Scenarios and Buffer Protection

The filing outlines two distinct payment scenarios at maturity on August 6, 2027, depending on the basket's final performance. If the basket return is greater than or equal to negative 25% (meaning the closing level is greater than or equal to 75% of the initial basket level), investors receive $1,000 per note face amount plus any applicable coupon calculated under the contingent coupon formula. However, if the basket return is less than negative 25%, investors face a more complex calculation involving principal impairment.

In the impairment scenario where basket performance declines more than 25%, investors receive the sum of $1,000 plus the product of $1,000 times a buffer rate of approximately 133.33% times the sum of the basket return plus 25%. This calculation creates a stepped protection mechanism where losses beyond 25% are reduced by the buffer factor. The disclosure states that in this scenario, "you will receive less than the face amount of your notes and no coupon," indicating that principal loss is possible if the basket declines more than 25% from its initial level. The filing does not disclose a maximum loss scenario, but investors could lose substantial principal if all eight basket stocks decline significantly.

Pricing and Initial Valuation Details

The offering documents state that the estimated value of the notes at the time terms were set on the trade date is approximately $956 per $1,000 face amount, which is less than the original issue price of 100% of face amount. This $44 per $1,000 difference represents the option value embedded in the autocall feature, contingent coupons, and barrier protection mechanisms. The filing notes that value cannot be predicted and will reflect many factors over the notes' life.

Goldman Sachs & Co. LLC indicated it would initially buy or sell notes at approximately the estimated value plus an additional amount initially equal to $39 per $1,000 face amount. Prior to November 6, 2026, this additional amount will decline on a straight-line basis to zero, affecting the market-making bid-ask spreads. On and after November 6, 2026, the bid-ask pricing will equal approximately the then-current estimated value as determined by Goldman Sachs' pricing models. This pricing structure means secondary market liquidity may vary significantly between the initial offering period and post-November 2026.

Underwriting Terms and Distribution Structure

The disclosure reveals that GS Finance Corp. issued the notes with an original issue price of 100% of face amount and an underwriting discount of 1% of face amount, resulting in net proceeds to the issuer of 99% of face amount. The underwriting discount includes a selling concession of up to 1%. Goldman Sachs & Co. LLC served as the placement agent and underwriter for the offering, alongside JPMorgan as a co-placement agent. The notes were priced on July 21, 2026, with an original issue date of July 24, 2026.

The filing indicates that GS Finance Corp. may sell additional notes after the initial prospectus supplement at different issue prices and with different underwriting discounts and net proceeds than those listed. The prospectus notes that investment returns will depend in part on the issue price paid for such notes. The announcement clarifies that Goldman Sachs & Co. LLC or any other affiliate of GS Finance Corp. may use the prospectus in market-making transactions after the initial sale, and unless otherwise informed in the confirmation of sale, the prospectus is being used for a market-making transaction.

Guarantor Profile and Debt Structure

The filing states that the notes are "fully and unconditionally guaranteed by The Goldman Sachs Group, Inc." This parental guarantee provides investors with recourse to Goldman Sachs Group if GS Finance Corp. defaults. However, the disclosure emphasizes that "the notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency, nor are they obligations of, or guaranteed by, a bank." Investors should recognize that the guarantee depends on the creditworthiness of The Goldman Sachs Group, Inc. itself.

The notes are issued under the senior debt indenture dated October 10, 2008, as supplemented by the First Supplemental Indenture dated February 20, 2015, with The Bank of New York Mellon serving as trustee. The notes are issued in book-entry form and represented by master note no. 3 dated March 22, 2021, under the Medium-Term Notes, Series F program of GS Finance Corp. The CUSIP and ISIN identifiers are 40054XSW9 and US40054XSW91, respectively. This framework places the notes within Goldman Sachs' established debt issuance infrastructure.

Risk Factors and Credit Considerations

The announcement acknowledges that investors should read the disclosure to better understand the risks of the investment, specifically highlighting "the credit risk of GS Finance Corp. and The Goldman Sachs Group, Inc." The prospectus supplement directs investors to page S-25 for further risk discussion, though the filing excerpt provided does not include that detailed risk section. The structure itself presents multiple risk vectors: equity market risk from the eight basket stocks, correlation risk where all stocks decline together, early redemption risk if the basket appreciates, and the possibility of principal loss if the basket declines more than 25%.

The filing discloses that declines in one basket stock may offset increases in other basket stocks, meaning concentrated performance in a few constituents cannot fully compensate for broad weakness. Investors face the risk that even if some stocks appreciate significantly, others could decline, and the equally weighted structure means no individual stock has greater influence. Additionally, the contingent coupon structure creates the risk of receiving no coupon income if the basket falls below 75% of its initial level, even if it recovers later, since coupons only accrue on observation dates when the barrier is breached.

Registration and Prospectus Documentation

The disclosure indicates the notes are issued pursuant to Rule 424(b)(2) under the Securities Act of 1933, with a registration statement number 333-284538. The prospectus consists of the prospectus supplement dated July 21, 2026 (Prospectus Supplement No. 26,073), a prospectus supplement dated February 14, 2025, and a prospectus dated February 14, 2025. The filing states that "the information in this prospectus supplement supersedes any conflicting information in the documents listed above" and notes that "some of the terms or features described in the listed documents may not apply to your notes."

This documentation structure indicates that the notes represent a specialized product within Goldman Sachs' medium-term notes program, with specific terms tailored to this offering. Investors must review all component documents to fully understand their rights and obligations. The statement that not all terms from prior prospectuses apply suggests investors should focus on the specific supplement rather than making assumptions based on prior Goldman Sachs note offerings.

Observation Dates and Timeline to Maturity

The filing establishes four observation dates spanning the notes' approximately one-year term: November 3, 2026, February 3, 2027, May 3, 2027, and August 3, 2027. The final observation date of August 3, 2027 is also designated as the determination date for calculating basket return at maturity. With the original issue date of July 24, 2026, the notes offer investors observation points approximately every three months, creating regular checkpoints for potential early redemption and coupon qualification.

Investors face a compressed timeline where investment decisions must account for quarterly observation dates rather than the annual structures common in many equity-linked products. The early call window spans from November 2026 through May 2027, meaning investors could see their positions terminated after just four to ten months if basket appreciation triggers the autocall feature. Those seeking full-term exposure face the risk of truncated returns if positive basket performance occurs early, though they also benefit from early redemption certainty.