Goldman Sachs Launches One-Year Callable Fixed Rate Notes with 4.56% Annual Interest

Coupon Rate and Interest Payment Terms

The notes feature a fixed interest rate of 4.56% per annum, payable annually in arrears. The disclosure states that interest on the notes will accrue from the expected original issue date of August 24, 2026, and will be paid on the interest payment date expected to be the stated maturity date of September 24, 2027, unless Goldman Sachs exercises its redemption right prior to maturity. The day count convention for interest calculations follows the Actual/360 (ISDA) methodology, which is commonly used in fixed income markets and affects the precise amount of accrued interest between payment periods.

Purchasers who receive their notes after the original issue date will be required to pay accrued interest as part of the purchase price. The pricing supplement indicates that the initial price to public may vary between an undisclosed percentage and 100% for certain investors, and the document notes that the initial price to public does not include accrued interest if applicable. This structure is typical for debt securities, as it ensures that the issuer compensates for the time value of money between the issuance date and the settlement date for any particular investor purchase.

Callable Feature and Redemption Rights

A distinguishing feature of these notes is the issuer's embedded call option. The filing discloses that Goldman Sachs may redeem the notes at its option, in whole but not in part, on the 24th day of each month on or after February 24, 2027. This means the issuer has the right to call the notes beginning approximately six months into the one-year maturity period. The redemption price is fixed at 100% of the outstanding principal amount plus all accrued and unpaid interest up to but excluding the redemption date.

For investors, this call feature introduces reinvestment risk if the notes are redeemed prior to maturity. If rates decline significantly and Goldman Sachs exercises its call option, investors would receive par value plus accrued interest but would then be required to reinvest the proceeds in a potentially lower-rate environment. The requirement for at least five business days' prior notice before redemption provides investors with advance warning should the issuer exercise this right. The call feature generally benefits the issuer in a declining rate environment and represents a value trade-off for investors who accept this potential for early redemption in exchange for the stated coupon rate.

Issuance Timeline and Settlement Details

The offering is structured with specific dates that establish the timing for investors and the issuer. The expected trade date is August 20, 2026, with the original issue date set for August 24, 2026, and the stated maturity date expected to be September 24, 2027. This represents a one-year maturity from the issuance date. The preliminary pricing supplement filed on July 23, 2026, remains subject to completion, meaning that certain pricing details and terms remain to be finalized in a final pricing supplement expected to be dated August 2026.

Settlement of the notes will occur through The Depository Trust Company (DTC) in immediately available funds, meaning investors will not receive physical certificates. Instead, the notes will be issued in book-entry form as a master global note registered in the name of DTC or its nominee. This electronic settlement mechanism is standard for institutional fixed income securities and streamlines the clearance and settlement process. The filing indicates that notes will be denominated in $1,000 principal amounts and integral multiples of $1,000 in excess thereof, establishing the minimum investment and increment sizes for this offering.

Tax Considerations for Debt Security Holders

The pricing supplement includes specific guidance on U.S. federal income tax consequences relating to original issue discount (OID). According to the opinion of Sidley Austin LLP provided in the disclosure, the notes will be issued with more than a de minimis amount of OID for U.S. federal income tax purposes. This means that U.S. holders will be required to include OID in income for federal tax purposes as it accrues, using a constant yield method based on compounding of interest, regardless of when cash payments are actually received. This is an important distinction from the cash payment schedule, which involves only one interest payment at maturity.

Upon disposition of the notes through sale, exchange, redemption, retirement (including if Goldman Sachs exercises its call option), or other disposition, U.S. holders will generally recognize capital gain or loss based on the difference between the amount realized on the disposition and their adjusted tax basis in the note. The filing also references Foreign Account Tax Compliance Act (FATCA) withholding provisions that may apply to payments on the notes, particularly if the bank or broker through which an investor holds the notes fails to provide required information to tax authorities. Investors should consult with tax advisors regarding the specific tax treatment of these notes based on their individual circumstances.

Defeasance Provisions and Investor Protections

The disclosure confirms that both full and covenant defeasance provisions apply to these notes. Full defeasance provides Goldman Sachs with the right to be relieved of all obligations on the notes by placing funds in trust for the holders, while covenant defeasance allows the issuer to be relieved of specified provisions of the notes through similar trust arrangements. These defeasance mechanisms are standard protections in debt securities that give issuers flexibility in managing their capital structure while ensuring that investors are protected through trust arrangements for their principal and interest payments.

The filing explicitly states that the notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. Additionally, the notes are not obligations of or guaranteed by any bank. This disclosure is required to clarify investor protections and is an important distinction for those accustomed to traditional bank deposit products that carry FDIC insurance. The notes are direct obligations of The Goldman Sachs Group, Inc., and investors' recourse in the event of default would be limited to remedies available under the debt indenture and applicable law.

Legal Structure and Program Framework

These notes are part of The Goldman Sachs Group, Inc.'s Medium-Term Notes, Series N program, which is governed by a Senior Debt Indenture dated July 16, 2008, as amended, between Goldman Sachs and The Bank of New York Mellon acting as trustee. The pricing supplement is part of a larger regulatory filing structure that includes a prospectus supplement dated February 14, 2025, and a prospectus also dated February 14, 2025. These foundational documents establish the general terms, conditions, and procedures applicable to the Medium-Term Notes program, while this specific pricing supplement establishes the particular terms applicable to this issuance.

The filing clarifies that in the specific terms section, references to The Goldman Sachs Group, Inc., "we," "our," and "us" refer only to the parent company and do not include any subsidiaries or affiliates. Additionally, holders for purposes of the indenture documentation technically refer to DTC or its nominee rather than indirect owners who own beneficial interests in notes through DTC participants. This legal structure is designed to accommodate the book-entry system used for modern debt securities trading and settlement while maintaining clear legal responsibility for payment obligations.

Underwriting and Distribution Arrangements

The preliminary pricing supplement indicates that Goldman Sachs & Co. LLC will serve as the calculation agent for these notes, responsible for computing interest payments and other numerical calculations required under the note terms. Goldman Sachs will use this prospectus in the initial sale of the notes, and Goldman Sachs & Co. LLC or any other affiliate of Goldman Sachs may use this prospectus in market-making transactions in the notes after their initial sale. Unless Goldman Sachs or its agent informs the purchaser otherwise in the confirmation of sale, any prospectus provided after the initial offering is being used in a market-making transaction.

The pricing supplement indicates that underwriting discount rates and net proceeds to Goldman Sachs will be disclosed in the final pricing supplement. The document also notes that in addition to offers and sales at the initial price to public, underwriters may offer the notes from time to time for sale in one or more transactions at market prices prevailing at the time of sale, at prices related to market prices, or at negotiated prices. This flexibility in distribution allows for different pricing throughout any marketing period and is typical for medium-term note programs that may distribute securities over an extended timeline.

Identification Numbers and Book-Entry Administration

The notes have been assigned the CUSIP number 38151VAJ7 and the ISIN number US38151VAJ70, which are the standard identification codes used in U.S. and international securities markets respectively. These identifiers are essential for trading, clearing, and settlement purposes and allow market participants to uniquely identify these specific notes in all trading systems and records. No listing on any securities exchange is contemplated; these notes are intended to trade in the over-the-counter secondary market among qualified institutional investors.

The notes will be issued in book-entry form and represented by a master global note held in the name of The Depository Trust Company. Individual investors will hold their notes through DTC participants such as brokers and custodians rather than receiving physical certificates. This arrangement streamlines settlement, reduces custodial costs, and is the standard structure for corporate debt securities issued in the institutional markets. The prospectus referenced in the filing contains additional details about book-entry issuance, including limited circumstances under which investors may obtain non-global certificated notes.

Market Context and Investment Considerations

The immediate share price impact was not clear from available public information. These notes represent a debt obligation distinct from equity securities and would not directly impact Goldman Sachs' share price in the manner that earnings announcements or strategic developments might. The offering provides the company with a source of one-year term funding at the stated 4.56% coupon rate. The callable feature embedded in the notes benefits Goldman Sachs by providing the option to refinance at lower rates should market conditions change favorably during the note's term.

Investors considering these notes should evaluate them in the context of current interest rate environments, credit spreads on financial sector debt, and their own liquidity and return requirements. The one-year maturity and fixed coupon provide certainty regarding cash flows until maturity or early redemption, but the call feature introduces the possibility of early redemption if Goldman Sachs determines refinancing is advantageous. As with all debt securities, investors should carefully review all prospectus documents and consult with financial advisors before making investment decisions.