Goldman Sachs Launches Autocallable Buffered Basket-Linked Notes Tied to Six-Stock Portfolio

Structure and Payoff Mechanics of the Basket-Linked Notes

The notes are structured as non-interest-bearing instruments whose value depends entirely on the performance of an equally weighted basket of six company stocks. Each basket stock receives an initial weighting of approximately 16.667%, translating to an initial weighted value of 100 divided by 6. The initial basket level is set at 100, and the final basket level is calculated by summing the products of each stock's price change multiplied by its initial weighted value. This structure allows investors to gain exposure to a diversified equity portfolio without directly holding the underlying shares, with Goldman Sachs managing the pricing and settlement mechanics throughout the note's life.

The disclosure outlines how the basket level will be determined on both the call observation date (expected August 6, 2027) and the maturity determination date (expected July 24, 2028). For each basket stock, Goldman Sachs will divide its closing price on the relevant date by its initial basket stock price, then multiply that ratio by the stock's initial weighted value. This calculation methodology ensures that each component contributes proportionally to the overall basket performance, reflecting gains or losses in each underlying security.

Automatic Call Feature and Early Redemption Conditions

The notes incorporate an automatic call feature that triggers if the basket level reaches or exceeds the initial basket level of 100 on the call observation date. Under this scenario, investors would receive a payment of at least $1,202 per $1,000 face amount on the call payment date (expected August 11, 2027). This automatic call provision effectively caps the investor's holding period and provides a predetermined exit mechanism if the underlying basket appreciates sufficiently within the first year of the offering.

The automatic call structure represents a common feature in structured notes, designed to benefit the issuer if equity markets perform strongly while limiting the investor's upside participation beyond the initial call level. If the basket level fails to reach 100 on the call observation date, the notes will continue to maturity, and investors will receive their final payment based on the basket's performance calculation at maturity.

Maturity Payoff Structure with Leveraged Gains and Buffered Losses

The disclosure specifies three potential payoff scenarios at maturity, each dependent on the basket's percentage return from the initial level. If the basket return is positive, meaning the final basket level exceeds the initial level, investors receive $1,000 plus 1.5 times the basket return multiplied by $1,000. This 1.5x leverage feature amplifies gains, allowing investors to participate in equity upside at a rate 1.5 times the basket's actual performance. For example, if the basket rises 10%, the investor would receive $1,000 plus $150, totaling $1,150 per $1,000 face amount.

When the basket return is zero or modestly negative but not exceeding negative 20%, investors receive the full $1,000 principal. This buffered protection means that basket declines of up to 20% result in no additional loss beyond the implicit cost of the note's structure. However, if the basket return falls below negative 20%, the notes employ a buffer rate calculation. The filing states that investors would receive $1,000 plus 125% of the sum of the basket return plus 20%. This formula effectively limits losses beyond the 20% buffer threshold, converting losses exceeding 20% into a discounted payoff amount that still provides partial principal recovery.

Credit Quality and Guarantor Backing

The notes are fully and unconditionally guaranteed by The Goldman Sachs Group, Inc., the parent company of GS Finance Corp. This guarantee structure means that investors have recourse to Goldman Sachs' balance sheet and creditworthiness if GS Finance Corp. were unable to meet its obligations. The guarantee does not, however, eliminate the credit risk associated with Goldman Sachs itself, as the notes remain subject to the financial condition and credit standing of the guarantor. Investors evaluating the notes must assess Goldman Sachs' credit profile as a critical component of the investment decision.

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 a bank. This language clarifies that despite being issued by a Goldman Sachs subsidiary, the notes lack the deposit insurance protections available to traditional bank savings products. The credit exposure is therefore direct to GS Finance Corp. and The Goldman Sachs Group, Inc., making the issuer's financial stability a material consideration for investors.

Pricing, Valuation, and Secondary Market Considerations

The disclosure provides guidance on estimated valuation and secondary market pricing. At the time terms are set on the trade date (expected July 24, 2026), the estimated value of the notes is expected to be between $900 and $930 per $1,000 face amount, lower than the 100% original issue price. This valuation reflects the cost of the embedded options, the issuer's credit spreads, and the structure's complexity. Goldman Sachs & Co. LLC may initially buy or sell notes in the secondary market at approximately the estimated value plus an additional amount that will decline over time on a straight-line basis until it reaches zero.

The filing indicates that after a specified date, Goldman Sachs' secondary market pricing would reflect only the then-current estimated value determined by pricing models, with no additional amount. This declining pricing support reflects typical structured note market-making practices, where issuers provide initial liquidity assistance that gradually expires. Investors considering secondary market sales should be aware that the spreads offered by Goldman Sachs may widen significantly after the initial period, potentially reducing the prices available for exit or transfer of the notes.

Basket Composition and Equally Weighted Methodology

The notes are linked to a basket of six equally weighted stocks, with each security representing approximately 16.667% of the initial basket composition. The filing references that a complete list of the basket stocks appears on page S-3 of the prospectus supplement. The equally weighted structure means that each component contributes equally to the basket's return calculation, regardless of the absolute price or market capitalization differences among the underlying securities. This approach differs from market-weighted baskets, where larger-cap stocks have greater influence on basket performance.

The use of an equally weighted structure can introduce concentration risk if one or more stocks significantly underperforms the others, as that underperformance cannot be offset by the diversification benefits of larger-cap weighting. Conversely, if smaller or mid-cap stocks in the basket significantly outperform larger holdings, the equal weighting may amplify those gains more than a market-weighted approach would.

Registration Status and Regulatory Framework

The disclosure is filed as a preliminary prospectus supplement pursuant to Rule 424(b)(2) under the Securities Act of 1933, with registration statement number 333-284538. The prospectus supplement is marked "Subject to Completion" and dated July 21, 2026, indicating that final pricing information and certain numerical terms remain subject to change before the notes are issued. The filing includes explicit regulatory language stating that neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved the securities or passed upon the accuracy or adequacy of the prospectus.

The notes are issued under the senior debt indenture dated October 10, 2008, supplemented by the First Supplemental Indenture dated February 20, 2015, with The Bank of New York Mellon serving as trustee. The notes will be issued in book-entry form represented by master note number 3, dated March 22, 2021. This regulatory and structural framework ensures that the notes comply with applicable securities laws and are governed by clearly documented indenture provisions that define investor rights and issuer obligations.

Market-Making and Secondary Trading Considerations

Goldman Sachs & Co. LLC and other Goldman Sachs affiliates may use the prospectus for market-making transactions in the notes after their initial sale. The disclosure indicates that unless GS Finance Corp. or its agent specifically informs purchasers otherwise in the confirmation of sale, a prospectus is being used in connection with a market-making transaction. This language alerts investors that Goldman Sachs retains discretionary authority to trade the notes and that such trading is not obligated but may occur at the firm's discretion.

Investors should recognize that market-making activities create potential conflicts of interest, as the same entity issuing the notes may also be profiting from the bid-ask spreads in secondary trading. The customary bid and ask spreads charged by Goldman Sachs would be in addition to any valuation adjustments made by the firm, further reducing the effective returns available to secondary market buyers or sellers of the notes.

Risk Factors and Investor Considerations

The disclosure explicitly warns that investors may receive less than the face amount of their notes and that declines in individual basket stocks may offset increases in other holdings. This risk highlights the concentration effect in a six-stock basket, where poor performance by one or more components could meaningfully impair overall returns even if other stocks appreciate. Additionally, the notes' non-interest-bearing structure means investors receive no coupon payments during the holding period, with all returns dependent on the basket's performance and the structured payoff mechanics.

The estimated value of $900 to $930 per $1,000 face amount at pricing implies an implicit cost of approximately 7% to 10% of the principal amount, reflecting the cost of the embedded options, the issuer's credit spread, and distribution costs. Investors should carefully evaluate whether the potential upside from the 1.5x leverage feature and the downside protection to negative 20% adequately compensate for this initial discount to par value and the credit risk of the guarantor. The filing suggests that investors should read the full prospectus and related documents to understand all terms and risks before committing capital.