Download GUARANTEED SENIOR SECURED NOTES PROGRAMME issued

GUARANTEED SENIOR SECURED NOTES PROGRAMME
issued by
GOLDMAN SACHS BANK (EUROPE) PLC
incorporated with limited liability in Ireland,
GOLDMAN SACHS INTERNATIONAL
incorporated with unlimited liability in England,
and guaranteed by
THE GOLDMAN SACHS GROUP, INC.
a corporation organised under the laws of the State of Delaware, United States of America.
Goldman Sachs Bank (Europe) Plc (“GSBE”) and Goldman Sachs International (“GSI”, and together
with GSBE, the “Issuers”, and each an “Issuer”), subject to compliance with all relevant laws,
regulations and directives, may each from time to time issue debt securities (the “Notes”) under the
programme (the “Programme”) as described in this base prospectus (the “Base Prospectus”) as may
be supplemented or replaced from time to time under the terms and conditions of the Notes, as
completed in the case of any series of Notes (each a “Series”), by final terms (the “Final Terms”) to
this Base Prospectus. Notes of a Series will, in the circumstances described in the relevant Final Terms,
give the holder of Notes (each a “Noteholder”) thereof certain rights against the relevant Issuer as
described herein and in the relevant Final Terms, which rights may include the right to have the
principal amount of such Notes repaid by the relevant Issuer at maturity, the right to receive interest
based on the principal amount of such Notes or otherwise, the right to receive a cash amount from such
Issuer calculated in accordance with the relevant Final Terms or the right to receive delivery of a
specified asset or assets against payment of a specified sum, all as more particularly described in the
Final Terms. The Notes will be issued in such denominations as specified in the applicable Final
Terms, save that the minimum denomination of each Note will be such amount as may be allowed or
required from time to time by the relevant central bank (or equivalent body) or any laws or regulations
applicable to the relevant currency specified in the Final Terms relating to the Notes of a Series and
save that the minimum denomination of each Note admitted to trading on a regulated market situated or
operating within the European Economic Area (the “EEA”) and/or offered to the public in an EEA
state in circumstances which require the publication of a prospectus under the Prospectus Directive will
be €100,000 (or, if the Notes are denominated in a currency other than euro, the equivalent amount in
such currency).
The payment obligations of an Issuer in respect of any Series of Notes are secured on certain specified
assets (the “Collateral”), such Collateral being granted as a first priority security interest to The Bank
of New York Mellon, acting through its London Branch, as trustee (the “Trustee”), for the benefit and
security of the Noteholders of a particular Series, pursuant to and as specified in an indenture dated 12
February 2009 (as amended and restated, supplemented or otherwise modified from time to time) (the
“Indenture”), and, where applicable, any additional security agreement between the relevant Issuer
and The Bank of New York Mellon, acting through its London Branch. The payment of all obligations
of any Issuer arising out of or under any Series of Notes are guaranteed by The Goldman Sachs Group,
Inc. (the “Guarantor”) in respect of all Series of Notes pursuant to a guaranty dated 11 March 2011
(the “Guaranty”). The Guaranty will be a direct senior unsecured obligation of the Guarantor and will
rank pari passu with the obligations of the Guarantor under its unsubordinated and unsecured
obligations.
The Base Prospectus has been approved by the Central Bank of Ireland, (the “Central Bank”) as
competent authority under the Prospectus Directive 2003/71/EC (the “Prospectus Directive”). The
Central Bank only approves this Base Prospectus as meeting the requirements imposed under Irish and
EU law pursuant to the Prospectus Directive 2003/71/EC. Such approval has been sought for the
purpose of giving information with regard to the issue of certain Notes under the Programme on and
during the period of 12 months after the date hereof. Such approval relates only to Notes which are to
be admitted to trading on the regulated market of the Irish Stock Exchange (the “Irish Stock
Exchange”) or other regulated markets for the purposes of Directive 2004/39/EC or which are to be
offered to the public in any member state (each a “Member State”) of the European Economic Area
(“EEA”). Application will be made to the Irish Stock Exchange for certain Notes issued under the
Programme to be admitted to the official list (the “Official List”) and trading on its regulated market.
This Base Prospectus will be filed with the Irish Companies Registration Office in accordance with
Regulation 38(1)(b) of the Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus
Regulations”). However, unlisted Notes may be issued pursuant to the Programme. The relevant Final
Terms, in the respect of any Series will specify whether or not the relevant Notes will be listed on the
Irish Stock Exchange (or any other stock exchange).
AN INVESTMENT IN THE NOTES MAY INVOLVE A HIGH DEGREE OF RISK, WHICH
INVESTORS SHOULD ENSURE THEY FULLY UNDERSTAND. SEE “RISK FACTORS” ON
PAGES 14 TO 19 OF THIS BASE PROSPECTUS.
THE NOTES AND THE GUARANTY HAVE NOT BEEN, AND WILL NOT BE, REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, “U.S. PERSONS” (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT (“REGULATION S”)). THIS BASE
PROSPECTUS AND ANY FINAL TERMS ARE NOT FOR USE INSIDE, AND MAY NOT BE
DELIVERED TO, THE UNITED STATES.
THE CREDIT RATINGS INCLUDED OR REFERRED TO IN THIS BASE PROSPECTUS HAVE
BEEN ISSUED, FOR THE PURPOSES OF REGULATION (EC) NO 1060/2009 AS AMENDED BY
REGULATION (EU) NO 513/2011 (AS AMENDED, THE “CRA REGULATION”), BY MOODY’S
INVESTORS SERVICE, INC. (“MOODY’S”), FITCH, INC. (“FITCH”) AND STANDARD &
POOR’S FINANCIAL SERVICES LLC (“S&P”). NONE OF MOODY’S, FITCH OR S&P IS
ESTABLISHED IN THE EUROPEAN UNION AND NONE OF THEM HAS APPLIED FOR
REGISTRATION UNDER THE CRA REGULATION. THE EUROPEAN SECURITIES AND
MARKETS AUTHORITY (“ESMA”) IS CURRENTLY ASSESSING THE RELEVANT
REGULATORY FRAMEWORK OF THE THIRD COUNTRIES FROM WHICH CREDIT RATING
AGENCIES HAVE INDICATED THEIR INTENTION TO ENDORSE CREDIT RATINGS, WITH A
VIEW TO VERIFYING COMPLIANCE WITH THE CRA REGULATION.
SUBJECT TO THE FULFILMENT OF THE CONDITIONS SET OUT SET OUT IN ARTICLE 4(3)
OF THE CRA REGULATION, A CREDIT RATING AGENCY ESTABLISHED IN THE
EUROPEAN UNION AND REGISTERED IN ACCORDANCE WITH THE CRA REGULATION
(AN “EU CRA”) MAY ENDORSE (FOR REGULATORY PURPOSES IN THE EUROPEAN
UNION) CREDIT RATINGS ISSUED OUTSIDE THE EUROPEAN UNION WHERE (I) THE
CREDIT RATING ACTIVITIES RESULTING IN THE ISSUING OF THE CREDIT RATING ARE
UNDERTAKEN IN WHOLE OR IN PART BY A CREDIT RATING AGENCY OR CREDIT
RATING AGENCIES BELONGING TO THE SAME GROUP (A “NON-EU CRA”); AND (II) THE
EU CRA HAS VERIFIED AND IS ABLE TO DEMONSTRATE ON AN ONGOING BASIS TO
ESMA THAT THE CONDUCT OF THE CREDIT RATING ACTIVITIES BY THE NON-EU CRA
RESULTING IN THE ISSUING OF THE CREDIT RATING TO BE ENDORSED FULFILS
REQUIREMENTS WHICH ARE “AT LEAST AS STRINGENT AS” THE REQUIREMENTS OF
THE CRA REGULATION. ON 15 MARCH 2012, ESMA ANNOUNCED THAT IT CONSIDERS
THE REGULATORY FRAMEWORK FOR CREDIT RATING AGENCIES IN THE UNITED
STATES TO BE "AS STRINGENT AS" THE REQUIREMENTS OF THE CRA REGULATION.
WHILE THE RECOGNITION PROCESS FOR THOSE NON-EU COUNTRIES IS ONGOING,
CREDIT RATINGS ISSUED BY MOODY’S, FITCH AND S&P CAN CONTINUE TO BE USED
FOR REGULATORY PURPOSES FOR A TRANSITIONAL PERIOD ENDING ON 30 APRIL 2012.
FOLLOWING THE EXPIRY OF THE TRANSITIONAL PERIOD ENDING ON 30 APRIL 2012,
THE CREDIT RATINGS ISSUED BY MOODY'S, S&P AND FITCH MAY BE ENDORSED BY
THE RELEVANT EU CRA FOR REGULATORY PURPOSES IN THE EUROPEAN UNION.
THERE CAN BE NO ASSURANCE THAT SUCH ENDORSEMENTS OF THE CREDIT RATINGS
ISSUED BY MOODY’S, FITCH AND S&P WILL BE MADE. IN GENERAL, AND SUBJECT TO
CERTAIN EXCEPTIONS, EUROPEAN INVESTORS ARE RESTRICTED FROM USING A
CREDIT RATING FOR REGULATORY PURPOSES IF SUCH A CREDIT RATING IS NOT
ISSUED BY A CREDIT RATING AGENCY ESTABLISHED IN THE EUROPEAN UNION AND
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REGISTERED UNDER THE CRA REGULATION UNLESS THE RATING IS PROVIDED BY A
CREDIT RATING AGENCY OPERATING IN THE EUROPEAN UNION BEFORE 7 JUNE 2010
WHICH HAS SUBMITTED AN APPLICATION FOR REGISTRATION IN ACCORDANCE WITH
THE CRA REGULATION AND SUCH REGISTRATION IS NOT REFUSED.
The date of this Base Prospectus is 4 May 2012
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IMPORTANT INFORMATION
EACH OF THE ISSUERS ACCEPTS RESPONSIBILITY FOR THE INFORMATION CONTAINED
IN THIS BASE PROSPECTUS AND, NOTWITHSTANDING THE FOREGOING, THE
GUARANTOR ACCEPTS RESPONSIBILITY FOR THE INFORMATION RELATING TO ITSELF
AND THE INFORMATION RELATING TO THE GUARANTEE. TO THE BEST OF THE
KNOWLEDGE OF EACH OF THE ISSUERS AND THE GUARANTOR (WHO HAVE TAKEN
ALL REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE) THE INFORMATION
CONTAINED IN THIS BASE PROSPECTUS IS IN ACCORDANCE WITH THE FACTS AND
DOES NOT OMIT ANYTHING LIKELY TO AFFECT THE IMPORT OF SUCH INFORMATION.
ANY PERSON (AN “INVESTOR”) INTENDING TO ACQUIRE OR ACQUIRING ANY NOTES
FROM ANY PERSON (AN “OFFEROR”) SHOULD BE AWARE THAT, IN THE CONTEXT OF
AN OFFER OF SECURITIES TO THE PUBLIC AS DEFINED IN ARTICLE 2(1)(D) OF THE
PROSPECTUS DIRECTIVE, THE ISSUERS MAY BE RESPONSIBLE TO THE INVESTOR FOR
THE BASE PROSPECTUS UNDER ARTICLE 6 OF THE PROSPECTUS DIRECTIVE ONLY IF
THE ISSUER(S) HAS AUTHORISED THAT OFFEROR TO MAKE THE OFFER TO THE
INVESTOR. EACH INVESTOR SHOULD THEREFORE ENQUIRE WHETHER THE OFFEROR
IS SO AUTHORISED BY THE RELEVANT ISSUER. IF THE OFFEROR IS NOT AUTHORISED
BY THE RELEVANT ISSUER, THE INVESTOR SHOULD CHECK WITH THE OFFEROR
WHETHER ANYONE IS RESPONSIBLE FOR THE BASE PROSPECTUS FOR THE PURPOSES
OF ARTICLE 6 OF THE PROSPECTUS DIRECTIVE IN THE CONTEXT OF THE OFFER TO THE
PUBLIC, AND, IF SO, WHO THAT PERSON IS. IF THE INVESTOR IS IN ANY DOUBT ABOUT
WHETHER IT CAN RELY ON THE BASE PROSPECTUS AND/OR WHO IS RESPONSIBLE FOR
ITS CONTENTS IT SHOULD TAKE LEGAL ADVICE.
THIS BASE PROSPECTUS SHOULD BE READ AND CONSTRUED TOGETHER WITH ANY
SUPPLEMENTS HERETO AND WITH ANY OTHER DOCUMENTS INCORPORATED BY
REFERENCE HEREIN AND THE RELEVANT FINAL TERMS. THIS BASE PROSPECTUS MAY
ONLY BE USED FOR THE PURPOSES FOR WHICH IT HAS BEEN PUBLISHED. NEITHER
THE ISSUERS NOR THE GUARANTOR INTENDS TO PROVIDE ANY POST-ISSUANCE
INFORMATION OR HAVE AUTHORISED THE MAKING OR PROVISION OF ANY
REPRESENTATION OR INFORMATION REGARDING THE ISSUERS, THE GUARANTOR OR
THE NOTES OTHER THAN AS CONTAINED OR INCORPORATED BY REFERENCE IN THIS
BASE PROSPECTUS, IN ANY OTHER DOCUMENT PREPARED IN CONNECTION WITH THE
PROGRAMME OR ANY FINAL TERMS OR AS EXPRESSLY APPROVED FOR SUCH
PURPOSE BY THE ISSUERS OR THE GUARANTOR. ANY SUCH REPRESENTATION OR
INFORMATION SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORISED BY THE
ISSUERS OR THE GUARANTOR.
THIS BASE PROSPECTUS OR ANY FINAL TERMS DO NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY NOTES OFFERED HEREBY BY
ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO
MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS BASE
PROSPECTUS NOR THE DELIVERY OF ANY FINAL TERMS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THERE HAS BEEN NO
ADVERSE CHANGE IN THE FINANCIAL SITUATION OF THE ISSUERS OR THE
GUARANTOR SINCE THE DATE HEREOF OR, AS THE CASE MAY BE, THE DATE UPON
WHICH THIS BASE PROSPECTUS HAS BEEN MOST RECENTLY SUPPLEMENTED.
THE DISTRIBUTION OF THIS BASE PROSPECTUS AND ANY FINAL TERMS AND THE
OFFERING, SALE AND DELIVERY OF THE NOTES IN CERTAIN JURISDICTIONS MAY BE
RESTRICTED BY LAW. PERSONS INTO WHOSE POSSESSION THIS BASE PROSPECTUS OR
ANY FINAL TERMS COMES ARE REQUIRED BY THE ISSUERS AND THE GUARANTOR TO
INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. FOR A
DESCRIPTION OF CERTAIN RESTRICTIONS ON OFFERS, SALES AND DELIVERIES OF
NOTES AND THE DISTRIBUTION OF THIS BASE PROSPECTUS, ANY FINAL TERMS AND
OTHER OFFERING MATERIAL RELATING TO THE NOTES SEE “SELLING RESTRICTIONS”
BELOW. NEITHER THIS BASE PROSPECTUS NOR ANY FINAL TERMS MAY BE USED FOR
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THE PURPOSE OF AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORISED OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION, AND NO ACTION
HAS BEEN TAKEN OR WILL BE TAKEN TO PERMIT AN OFFERING OF THE NOTES OR THE
DISTRIBUTION OF THIS BASE PROSPECTUS IN ANY JURISDICTION WHERE ANY SUCH
ACTION IS REQUIRED.
AN INVESTOR INTENDING TO ACQUIRE OR ACQUIRING ANY NOTES FROM AN
OFFEROR WILL DO SO, AND OFFERS AND SALES OF THE NOTES TO AN INVESTOR BY
AN OFFEROR WILL BE MADE, IN ACCORDANCE WITH ANY TERMS AND OTHER
ARRANGEMENTS IN PLACE BETWEEN SUCH OFFEROR AND SUCH INVESTOR
INCLUDING AS TO PRICE, ALLOCATIONS AND SETTLEMENT ARRANGEMENTS. THE
RELEVANT ISSUER WILL NOT A BE PARTY TO ANY SUCH ARRANGEMENTS WITH
INVESTORS IN CONNECTION WITH THE OFFER OR SALE OF THE NOTES AND,
ACCORDINGLY, THIS BASE PROSPECTUS AND ANY FINAL TERMS WILL NOT CONTAIN
SUCH INFORMATION AND AN INVESTOR MUST OBTAIN SUCH INFORMATION FROM
THE OFFEROR. AN INVESTOR SHOULD CONDUCT SUCH INDEPENDENT INVESTIGATION
AND ANALYSIS REGARDING THE RELEVANT ISSUER, THE GUARANTOR AND THE
NOTES AS THEY DEEM APPROPRIATE TO EVALUATE THE MERITS AND RISKS OF AN
INVESTMENT IN THE NOTES. INVESTORS SHOULD HAVE REGARD TO THE FACTORS
DESCRIBED UNDER THE SECTION HEADED “RISK FACTORS” IN THIS BASE
PROSPECTUS.
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY STATE SECURITIES
COMMISSION IN THE UNITED STATES OR REGULATORY AUTHORITY, NOR HAS THE
SEC OR ANY STATE SECURITIES COMMISSION OR ANY REGULATORY AUTHORITY
PASSED UPON THE ACCURACY OR THE ADEQUACY OF THIS BASE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
THE NOTES ARE NOT BANK DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY
THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION, THE DEPOSIT
INSURANCE FUND OR ANY OTHER GOVERNMENTAL AGENCY. THE NOTES ARE
GUARANTEED BY THE GOLDMAN SACHS GROUP, INC. AND THE GUARANTY WILL
RANK PARI PASSU WITH ALL OTHER UNSECURED AND UNSUBORDINATED
INDEBTEDNESS OF THE GUARANTOR.
UNLESS OTHERWISE DEFINED HEREIN, CAPITALISED TERMS USED IN THIS BASE
PROSPECTUS HAVE THE MEANINGS SET OUT IN THE INDENTURE.
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TABLE OF CONTENTS
Page
1.
OVERVIEW OF THE PROGRAMME…………………………………………………..…....7
2.
RISK FACTORS……………………………………………………………………………...14
3.
USE OF PROCEEDS………………………………………………………………………....20
4.
THE ISSUERS………………………………………………………………………………..21
5.
THE GUARANTOR………………………………………………………………………….28
6.
BASE TERMS AND CONDITIONS OF THE NOTES……………………………………...33
7.
FORM OF FINAL TERMS…………………………………………………………………...42
8.
TAXATION…………………………………………………………………………………...49
9.
SELLING RESTRICTIONS…...……………………………………………………………..54
10.
GENERAL INFORMATION………………………………………………………………....58
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OVERVIEW OF THE PROGRAMME
The following overview (the “Overview”) should be read as an introduction to the Base Prospectus
and is qualified in its entirety by the more detailed information appearing elsewhere in the Base
Prospectus. Any decision to invest in the Notes should be based on consideration of the Base
Prospectus as a whole by the Investor, including the documents incorporated by reference. Where a
claim relating to the information contained in the Base Prospectus is brought before a court in an EEA
Member State, the plaintiff Investor might, under the national legislation of the relevant EEA Member
State, have to bear the costs of translating the Base Prospectus before the legal proceedings are
initiated. Civil liability attaches to the persons who are responsible for the Overview but only if the
Overview is misleading, inaccurate or inconsistent when read together with the other parts of the Base
Prospectus. Terms used in this Overview but not defined have the meanings given to them elsewhere in
the Base Prospectus, and unless otherwise defined in the Base Prospectus, capitalised terms used in the
Base Prospectus shall have the meanings set out in the Indenture.
Description of Programme ..... Subject to compliance with all relevant laws, regulations and directives,
offerings of debt securities from time to time of Series of Notes by an Issuer,
guaranteed by the Guarantor.
Issuers ....................................... (1) Goldman Sachs Bank (Europe) Plc (“GSBE”) is a public company with
limited liability under the laws of Ireland, with company registration number
440142 and registered address Second Floor, Hardwicke House, Upper Hatch
Street, Dublin 2, Ireland. GSBE operates as a commercial and investment bank
that engages in, among others things, banking business and financial services.
GSBE is an indirect wholly owned subsidiary of the Guarantor; and
(2) Goldman Sachs International (“GSI”, and together with GSBE, the
“Issuers”, and each an “Issuer”) is a private company with unlimited liability
under the laws of England and Wales, with company registration number
02263951, and registered address Peterborough Court, 133 Fleet Street,
London, EC4A 2BB. GSI is a leading global investment banking, securities and
investment management firm that provides a wide range of financial services to
a substantial and diversified client base that includes corporations, financial
institutions, governments and high-net-worth individuals.
Guarantor ................................. The Goldman Sachs Group, Inc. (“GS Group”, otherwise the “Guarantor”)
is a Delaware corporation with registration number 2923466 and business
address, 200 West Street, New York, New York 10282. The Guarantor is a
leading global investment banking, securities and investment management firm
that provides a wide range of financial services to a substantial and diversified
client base that includes corporations, financial institutions, governments and
high-net-worth individuals.
Guaranty .................................. The payment of obligations of the Issuers arising out of or under all Series of
Notes will be unconditionally and irrevocably guaranteed by GS Group under a
guaranty dated 11 March 2011 in favour of the Trustee for the benefit of itself
and the Noteholders of any Series, the form of which is set out herein (the
“Guaranty”). The Guaranty is a direct senior unsecured obligation of GS
Group and will rank pari passu with the obligations of the Guarantor under its
unsubordinated and unsecured obligations.
Notes ......................................... The Notes of each Series (the “Notes”) are senior secured direct obligations of
the relevant Issuer, ranking pari passu between themselves, and issued pursuant
to the Indenture. The principal amount of Notes and number of Series of Notes
that may be issued under the Indenture is not limited by the Indenture.
Method of Issue ........................ The Notes will be issued in series (each a “Series”), having one or more issue
dates and on terms otherwise identical (or identical other than in respect of the
first payment of interest), the Notes of each Series being intended to be
interchangeable with all other Notes of that Series. The specific terms of each
Series will be set out in a Final Terms supplement to this Base Prospectus,
which shall supplement the base terms and conditions of the Notes as set out in
the Indenture, and as described herein (the “Base Terms and Conditions”).
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Trustee ...................................... The Bank of New York Mellon, acting through its London Branch (the
“Trustee”) is a New York banking corporation and its corporate trust office in
the United Kingdom is located at One Canada Square, London E14 5AL.
Pursuant to the Indenture, a first priority security interest in all of the Issuers’
right, title and interest in collateral securing the relevant Issuer’s obligations
under the Notes will be granted to the Trustee, on behalf of the Noteholders.
Currency ................................... Subject to compliance with all relevant laws, regulations and directives, Notes
may be issued in any currency, as specified in the relevant Final Terms.
Maturity Date .......................... Subject to compliance with all relevant laws, regulations and directives, Notes
may be issued with any maturity, as specified in the relevant Final Terms.
Call Right ................................. If specified in the Final Terms, the Notes may be callable on any Business Day
in whole but not in part on or after a nominated Interest Payment Date. Unless
otherwise specified in the Final Terms, called Notes may be redeemed without
breakage at a price equal to the sum of (a) 100 per cent. of the Note principal
amount and (b) any accrued and unpaid interest on the Note principal amount
to but excluding the relevant call date.
Put Option ............................... If specified in the Final Terms, the Notes may provide the Noteholder with the
right to require the relevant Issuer to redeem the Notes, in whole but not in part,
by written notice to the relevant Issuer prior to a nominated Interest Payment
Date. Upon the Noteholder exercising such right, the Issuer will be required to
redeem the Notes on the following Interest Payment Date at par plus accrued
and unpaid interest thereon.
Issue Price ................................ The Notes will be sold at the price specified in the Final Terms.
Interest ..................................... The Notes may be issued on a fixed rate or a floating rate basis, as specified in
the relevant Final Terms.
Registrar, Paying Agent and The Trustee will be appointed as the Issuers’ Registrar. GSI will be appointed
Calculation Agent .................... as the Issuers’ Calculation Agent with respect to the determination of the
interest rate on the Notes. The Bank of New York Mellon, acting through its
London Branch, will be appointed as the Issuers’ Paying Agent with respect to
the payments of the interest payable on the Notes.
Eligible Transactions ............... The relevant Issuer will use the proceeds from the issuance of each Series to
enter into Eligible Transactions with Eligible GS Entities, pursuant to which
certain assets will be sold or pledged to such Issuer, or, where applicable,
otherwise enter into Eligible Derivatives Agreements which will be pledged by
the relevant Issuer. These transactions and the assets related thereto will serve
as collateral for such Series. “Eligible GS Entity” means any entity wholly
owned and controlled, directly or indirectly, by GS Group.
Indenture Collateral
Each Series will be separately secured by the relevant Issuer’s grant to the
Trustee, pursuant to the Indenture, for the benefit of the Noteholders of such
Series of a first priority security interest in the Issuer’s rights in the Eligible
Transactions and the assets acquired and/or pledged to the Issuer thereunder.
Those assets may include:
(i)
the assets purchased by and pledged to the Issuer in transactions under
any master repurchase agreement (each a “Repo”) between the Issuer and
an Eligible GS Entity entered into solely with respect to such Series and
the Issuer’s rights under such agreement;
(ii) the assets pledged to the Issuer as collateral for any secured loan (each a
“Secured Loan”) made by the Issuer to an Eligible GS Entity solely with
respect to such Series and the Issuer’s rights under such loan;
(iii) any Eligible Securities of GSI held in a Securities Account opened solely
with respect to such Series, held with the Trustee on a custodian basis,
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pursuant to a securities agreement, and any payments related thereto;
(iv) any Eligible Investments purchased solely with respect to such Series;
(v)
any Currency Swap Transaction entered into solely with respect to such
Series and the Issuer’s rights in any collateral pledged to secure the
obligations of the Swap Counterparty (as defined below); and
(vi) any account in which any of the assets listed in (i) to (v) above may be
deposited.
Additional Collateral
In addition, any Series may be separately or additionally secured by the
relevant Issuer’s grant to the Trustee, pursuant to any Additional Security
Agreement, for the benefit of the Noteholders of such Series of a first priority
security interest in the Issuer’s rights in certain other assets held by the Issuer.
Those assets may include:
(i) certain agreements relating to derivative transactions between the relevant
Issuer and a derivatives counterparty and related assets; and
(ii) certain bank loan agreements held by the relevant Issuer made between the
relevant Issuer and a borrowing counterparty.
Collateral Pool .......................... Each time the relevant Issuer issues a Series, it intends to invest an amount
equal to the principal amount of such Series in any combination, as specified in
the Final Terms, of the investments listed below. The Issuer may change the
mix of such investments from time to time based on such considerations as it
deems relevant.
1. Bank Loan Repos: Participation Interests in Bank Loans purchased or cash
pledged or sold under a master repurchase agreement entered into between an
Issuer and an Eligible GS Entity solely with respect to such Series.
2. Mortgage Loan Repos: Mortgage Loans purchased or cash pledged under a
master repurchase agreement entered into between an Issuer and an Eligible GS
Entity solely with respect to such Series.
3. Securities Repos: Purchased Securities purchased or sold under a master
repurchase agreement entered into between an Issuer and an Eligible GS Entity
solely with respect to such Series.
4. Loans Secured by Bank Loans: One or more loans made by an Issuer to an
Eligible GS Entity that are secured by a first priority security interest in all of
such borrower’s rights in a specified principal amount of each Pledged Bank
Loan identified by the borrower from time to time, and any proceeds of the
foregoing.
5. Loans Secured by Derivative Receivables: One or more loans made by the
relevant Issuer to an Eligible GS Entity that are secured by a first priority
security interest in all of such borrower’s rights in or under (i) specified
Derivative Receivables pledged to a Collateral Agent for the benefit of such
borrower’s funding counterparties, including the relevant Issuer, and allocated
to such loan (ii) the portion of any amounts credited to a controlled account
maintained by the Collateral Agent for the benefit of such borrower’s funding
counterparties (including the relevant Issuer) attributable to termination
payments made in respect of Derivative Receivables allocated to such loan and
(iii) cash pledged to a controlled account of such borrower maintained for the
benefit of the Issuer.
6. Eligible Securities: One or more debt and equity securities and other
instruments and intangible assets (including instruments representing the right
to receive, purchase or subscribe to the foregoing or representing other rights or
interests in the foregoing) held by GSI as Issuer (“Eligible Securities”), as may
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be agreed from time to time by the Trustee and which shall be from time to
time delivered to or received by the Trustee and/or any sub-custodian for
deposit in a designated Securities Account, pursuant to the GSI Securities
Agreement.
7. Eligible Investments: Certain specified investments as defined within the
Indenture (the “Eligible Investments”), whereby the proceeds received from
repurchases of assets under a repo or payments received under a secured loan,
any currency swap transactions, any eligible securities, or any specified
investments as set forth in the Indenture securing a Series are used to (i)
purchase additional assets pursuant to a new or existing master repurchase
agreement, (ii) lend to an Eligible GS Entity under a new or existing secured
loan (iii) pending reinvestment in repos or secured loans, purchase any of the
obligations, loans or other Eligible Investments (iv) purchase Eligible
Securities in the case of GSI as Issuer (v) acquire Eligible Bank Loans in the
case of GSBE as Issuer, which form security for a Series of Notes.
8. Eligible Derivatives Agreements: One or more master agreements or standalone agreement, between GSI as Issuer and a derivatives counterparty, relating
to derivative transactions, regardless of governing law, in each case including
any amendments, annexes, schedules, credit support documents and
confirmations relating to any of the foregoing pursuant to the GSI Derivatives
Security Agreement.
9. Eligible Bank Loans: One or more corporate secured or unsecured bank
loans held by GSBE as Issuer, the contractual right to receive the income
relating to the bank loan, funded portions of revolving or delayed drawdown
credit facilities, participations or sub-participations in any such loans or
facilities, divided or undivided interests in any of the foregoing or pools
thereof, or the contractual rights granted by the bank loan counterparty to
receive the income related to the foregoing pursuant to the GSBE Bank Loans
Security Agreement.
Eligible Custodian .................... In respect of any underlying assets that are the subject of Collateral or
Additional Collateral, the relevant Issuer may enter into an Eligible Custody
Agreement with an Eligible Custodian pursuant to which such assets may be
held on behalf of the relevant Issuer.
At the time of issuance of the Notes, the Issuer may, in its sole discretion:
Currency Hedging
Requirements ...........................
(i) enter into a Currency Swap Agreement, pursuant to which amounts of Note
Currency and USD are exchanged, and apply the USD proceeds thereof to
acquire the USD Collateral, or
(ii) apply an amount equal to the proceeds from the issuance of such Notes to
acquire the Note Currency Assets, under which the payment obligations owing
to the Issuer are denominated and payable in the Note Currency to secure the
Notes.
The Issuer may subsequently terminate a Currency Swap Agreement entered
into at issuance, in which case it will use all proceeds from the termination of
such Currency Swap Agreement to acquire Note Currency Asset.
Events of Default ..................... Each of the following will constitute an “Event of Default” for a Series:
(i) failure by an Issuer to pay interest on any Note of such Series when due and
payable, which failure continues for 30 days, unless the Guarantor shall have
made a payment under the Guaranty applicable to such Series in the amount of
such defaulted payment on or prior to such 30th day;
(ii) failure by an Issuer to pay principal of any outstanding Note of such Series
when due and payable, unless the Guarantor shall have made a payment under
the Guaranty applicable to such Series in the amount of such defaulted payment
on or prior to the relevant payment date;
(iii) failure by the Guarantor in making (a) any payment due under the
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Guaranty applicable to such Series in respect of principal of any Note of such
Series, when and as the same shall become due and payable, or (b) any
payment due under the Guaranty in respect of interest on any outstanding Note
of such Series, when and as the same shall become due and payable, and such
default shall have continued for 30 days;
(iv) as of any date of determination, the aggregate margin value of the collateral
securing such Series is less than the required margin value with respect to such
Series, and such default continues for a period of four Business Days (or
shorter period specified in the Final Terms) after the earlier of (a) receiving
notice of such deficiency from the Trustee or (b) the first Business Day after
the relevant Issuer obtains actual knowledge of a continuing deficiency that is
not apparent from information furnished to the Trustee by the Repo
counterparties and Secured Loan borrowers; and
(v) certain events of insolvency or bankruptcy, whether voluntary or not, with
respect to an Issuer or the Guarantor.
If an Event of Default (other than an Event of Default described in clause (v)
above) shall have occurred, unless all Events of Default shall theretofore have
been remedied, the Trustee may and at the written direction of a majority-ininterest of the holders of the Notes of the Series affected, the Trustee shall,
declare the Notes of such Series to be due and payable. If an Event of Default
described in clause (v) above shall occur, all outstanding Notes of all Series
under the Indenture shall automatically become due and payable. If such an
acceleration should occur, the Trustee is required to demand that the relevant
Issuer transfer to the Trustee any Collateral in respect of the affected Series not
in the possession of the Trustee and sell or cause the sale of such Collateral
received from the Issuer and all other collateral in its possession at public or
private sales.
If any Notes of a Series are held or beneficially owned by an affiliate of the
Redemption of Affiliate
Notes .......................................... relevant Issuer, such Issuer will have the right pursuant to the Indenture to
redeem such Notes without offering to redeem, or prior to redeeming, Notes
held or beneficially owned by any other holders. Notes of a Series held by an
affiliate of such Issuer will not be considered “outstanding” for purposes of any
request, demand, authorisation, direction, notice, consent or waiver under the
Indenture, as more fully set forth therein.
Rating ........................................ On or about the Issue Date, the Notes of a Series will be rated by at least one of
Fitch, Moody’s and S&P. Any change in a rating assigned by Fitch, Moody’s
or S&P to the senior unsecured debt securities of GS Group and/or the relevant
Issuer (where it is lower) is likely to result in a similar change in the rating
assigned by such rating agency to the Notes. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision at
any time.
Please refer to the disclosure on pages 2 and 3 of this Base Prospectus for
further details.
Listing ...................................... Where specified in the relevant Final Terms, application will be made for a
Series of Notes to be admitted to the Official List of the Irish Stock Exchange
and traded on its regulated market. Otherwise such Series of Notes shall remain
unlisted.
The Offering ........................... The Notes will not be registered under the U.S. Securities Act of 1933, as
amended (the “Securities Act”). The Notes are being offered for sale solely to
certain non-U.S. persons in offshore transactions in reliance on Regulation S
under the Securities Act (“Regulation S”).
Each purchaser of the Notes will be required to represent that it is a non-U.S.
person within the meaning of Regulation S and that it is purchasing its Notes in
an offshore transaction as defined in Regulation S.
11
Clearing Systems ...................... Unless otherwise specified in the Final Terms, the Notes shall be cleared
through Euroclear, Belgium and Clearstream Luxembourg.
Global Note Provisions ............ Each Global Registered Note may (i) be registered in the name of the Common
Depositary or the nominee of the Common Depositary, (ii) be delivered to the
Common Depositary, and (iii) bear the appropriate legend, as set forth in the
Indenture. Each Global Bearer Note shall (i) be held by the Trustee in its
capacity as the custodian and (ii) bear the appropriate legend, as set forth in the
Indenture. The Trustee shall issue a Book-Entry receipt to the Common
Depositary in respect of each Global Bearer Note. Owners of beneficial interest
in any of the Global Bearer Notes shall not be entitled to exchange their
interests for Notes in definitive certificated form except as provided in the
Indenture.
Transfer and Exchange of
Global Registered Notes: The Global Registered Notes can be transferred in
Notes .......................................... whole, but not partially. Such transfers are limited to a nominee of the
Common Depositary or to a successor of the Common Depositary or such
successor’s nominee. An owner of the beneficial interest in a Global Registered
Note may, subject to the rules and procedures of Euroclear or Clearstream, as
the case may be, transfer all or part of such interest provided that (i) such
transfer is not made to a U.S. Person (as defined in Regulation S) or for the
account or benefit of a U.S. Person (as defined in Regulation S) and is effected
through Euroclear or Clearstream in an offshore transaction as required by
Regulation S and (ii) such transferee shall be deemed to have made the
applicable certifications set forth in the Indenture. Beneficial Interests in the
Global Registered Notes may be exchanged for Definitive Registered Notes
only under the limited circumstances described in the Indenture.
Global Bearer Notes: Definitive Registered Notes shall be issued to all owners
of beneficial interests in a Global Bearer Note in exchange for such interests in
the event of occurrence of certain specified events as described in the
Indenture. Subject to the foregoing, transfer of a Global Bearer Note shall be
limited to transfers of such Global Bearer Note in whole, but not in part, to a
successor Trustee that is a Book-Entry Registrar.
Denomination …………….. .... Unless otherwise provided in the Final Terms related to Notes of a given
Series, the Notes of a Series will be issued and transferable in minimum
denominations of Euro 500,000 and integral multiples of Euro 500,000 in
excess thereof and the Notes of a Non-USD Series will be issued and
transferable in the approximate USD equivalent thereof (as determined by the
relevant Issuer) as set forth in such Final Terms. For the avoidance of doubt,
the minimum denomination of each Note will be such amount as may be
allowed or required from time to time by the relevant central bank (or
equivalent body) or any laws or regulations applicable to the relevant currency
specified in the Final Terms relating to the Notes of a particular Series and save
that the minimum denomination of each Note admitted to trading on a regulated
market situated or operating within the EEA and/or offered to the public in an
EEA state in circumstances which require the publication of a prospectus under
the Prospectus Directive will be €100,000 (or, if the Notes are denominated in a
currency other than euro, the equivalent amount in such currency).
Subscription and Sale ............. No registration or other action will be taken by the relevant Issuer to permit any
offering or sale of the Notes to any person in any jurisdiction where such action
is required. Purchasers of the Notes will be required to give suitable
representations to satisfy the relevant Issuer that the sale of Notes to them will
be lawful.
Certain Tax Considerations .... Payments of principal and interest in respect of the Notes will be made free of
Irish withholding taxes and deposit interest retention tax (“DIRT”), U.K.
withholding taxes and United States withholding taxes, unless such deductions
are required by law. In the event such withholding tax or DIRT applies, the
relevant Issuer will not gross up or otherwise pay additional amounts. For a
full description of the Irish and U.K. tax analysis, see “Taxation” on pages 4953 of this Base Prospectus.
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ERISA Considerations............. Placement of the Notes will be restricted to persons that are not acting on
behalf of (and for so long as it holds any Note or any interest therein will not be
acting on behalf of) (1) an “employee benefit plan” (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”)) that is subject to Title I of ERISA, (2) a “plan” (as defined in
Section 4975(e)(1) of the Internal Revenue Code 1986 (the “Code”)) to which
Section 4975 of the Code applies, (3) an entity whose underlying assets include
the assets of such an “employee benefit plan” or “plan”, or (4) a foreign,
governmental or church plan that is subject to any non-U.S., federal, state or
local law that is similar to the applicable provisions of ERISA or the Code with
respect to the treatment of plan assets or prohibited transactions.
Governing Law ........................ The Indenture, the Notes and the Guaranty will be governed by and construed
in accordance with the law of the State of New York.
Certain Risk Factors ............... Investment in the Notes of a Series may involve a certain degree of risk. See
“Risk Factors” on pages 14 to 19 of this Base Prospectus. Each of the Issuers
is part of the GS Group of companies and may be affected by uncertain or
unfavourable economic, market, legal and other conditions that are likely to
affect the GS Group of companies as a whole, including GS Group’s ability to
perform its payment obligations as a Guarantor. The risks relating to GS Group
can be found in GS Group’s 2011 Form 10-K, Part I, Item 1A in the section
titled “Risk Factors” on pages 21-34, which is incorporated by reference. These
risks remain subject to any update or modification to risks referenced in
Guarantor filings made with the United States Securities and Exchange
Commission (the “SEC”) subsequent to the date of this Base Prospectus.
Additional Notes ...................... The Indenture permits the Issuer to issue additional Notes of a Series at any
time, provided that such Notes rank pari passu with outstanding Notes of the
same Series.
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RISK FACTORS
This Base Prospectus does not describe all of the risks of an investment in the Notes. The Issuers and
the Guarantor disclaim any responsibility to advise Investors of such risks as they change from time to
time. Further, none of the Issuers or the Guarantor makes any representations as to (i) the suitability of
any Notes for any particular Investor, (ii) the appropriate accounting treatment or possible tax
consequences of an investment in any Notes or (iii) the expected performance of any Notes, either in
absolute terms or relative to competing investments. Prospective Noteholders should obtain their own
independent accounting, tax and legal advice and should consult their own professional investment
advisor to ascertain the suitability of the Notes as an investment and should conduct such independent
investigation and analysis regarding the risks and cash-flows associated with the Notes as they deem
appropriate to evaluate the merits and risks of an investment in the Notes. In particular, prospective
Noteholders should note that an investment in the Notes is only suitable for persons who (i) have the
knowledge and experience in financial and business matters necessary to enable them to evaluate the
information contained in the Base Prospectus and Final Terms and the risks of the Notes in the context
of their own financial, tax and regulatory circumstances and investment objectives; (ii) are able to
bear the economic risk of an investment in the Notes for an indefinite period of time; (iii) are acquiring
the Notes for their own account for investment, not with a view to resale and (iv) recognise it may not
be possible to transfer the Notes for a substantial period of time, if at all.
Risks related to the Issuers and the Guarantor
Creditworthiness
This risk factor applies to each of the Issuers and the Guarantor. Each of the Issuers and the Guarantor
is a member of the GS Group of companies, and as such may be affected by uncertain or unfavourable
economic, market, legal and other conditions that are likely to affect the GS Group of companies as a
whole, including the Guarantor’s ability to perform its payment obligations under the Guaranty.
The risks relating to GS Group have been incorporated by reference and can be found in GS Group’s
2011 Form 10-K, Part I, Item 1A in the section titled “Risk Factors” on pages 21-34. These risks
remain subject to any update or modification to risks referenced in GS Group filings made with the
SEC subsequent to the date of this Base Prospectus, pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act 1934. Actual or anticipated changes in the credit ratings of GS Group may affect the
value of a security.
Irish Law- fixed and floating charges
The essence of a fixed charge is that the person creating the charge does not have liberty to deal with
the assets which are the subject matter of the security in the sense of disposing of such assets or
expending or appropriating the moneys or claims constituting such assets and accordingly, if and to the
extent that such liberty is given to GSBE any charge constituted by the Indenture may operate as a
floating, rather than a fixed charge. In particular, the Irish courts have held that in order to create a
fixed charge on receivables it is necessary to oblige the chargor to pay the proceeds of collection of the
receivables into a designated bank account and to prohibit the chargor from withdrawing or otherwise
dealing with the monies standing to the credit of such account without the consent of the chargee.
Depending upon the level of control actually exercised by the chargor, there is therefore a possibility
that security created over GSBE’s assets may be regarded by the Irish courts as a floating charge.
Floating charges have certain weaknesses, including the following:
(i)
they have weak priority against purchasers (who are not on notice of any negative pledge
contained in the floating charge) and the chargees of the assets concerned and against lien
holders, execution creditors and creditors with rights of set-off;
(ii)
they rank after certain preferential creditors, such as claims of employees and certain
taxes on winding-up;
(iii)
they rank after certain insolvency remuneration expenses and liabilities;
(iv)
the examiner of a company has certain rights to deal with the property covered by the
floating charge; and
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(v)
they rank after fixed charges.
English law – fixed and floating charges
Pursuant to the terms of the Indenture, the Issuer has purported to grant a fixed security interest over
the Collateral.
The law in England and Wales relating to the characterisation of a fixed security interest is unsettled.
The fixed security interest purported to be granted by the Issuer (other than by way of assignment in
security) may take effect under English law as a floating charge only, if, for example, it is determined
that the Trustee does not exert sufficient control over the secured assets. If the security interest takes
effect as a floating charge instead of a fixed charge, then, as a matter of law, certain claims would have
priority over the claims of the Trustee in respect of the floating charge assets. In particular, the
expenses of any winding up or administration, and the claims of any preferential creditors, would rank
ahead of the claims of the Trustee in this regard. The Enterprise Act 2002 abolished the preferential
status of certain Crown debts (including the claims of the U.K. tax authorities). However, certain
employee claims (in respect of contributions to pension schemes and wages) still have preferential
status.
Examinership
Examinership is a court procedure available under the Irish Companies (Amendment) Act, 1990, as
amended (the “1990 Act”) to facilitate the survival of Irish companies in financial difficulties. During
the period of examinership, an examiner will formulate proposals for a compromise or scheme of
arrangement to assist the survival of the company or the whole or any part of its undertaking as a going
concern.
The primary risks to the holders of Notes if an examiner were appointed to GSBE are as follows:
(a)
the potential for a compromise or scheme of arrangement being approved involving the
writing down or rescheduling of the debt due by GSBE to the Noteholders;
(b)
the potential for the examiner to seek to set aside any negative pledge in the documents
pertaining to the Notes prohibiting the creation of security or the incurring of borrowings
by GSBE to enable the examiner to borrow to fund GSBE during the protection period;
and
(c)
in the event that a scheme of arrangement is not approved and GSBE subsequently goes
into liquidation, the examiner’s remuneration and expenses (including certain borrowings
incurred by the examiner on behalf of the Issuer and approved by the Irish High Court)
will take priority over the monies and liabilities which from time to time are or may
become due, owing or payable by GSBE to each of the secured creditors under the Notes.
It is possible that Section 5(2)(f) of the 1990 Act may have the effect of prohibiting enforcement of the
Guarantor’s obligations under the Guaranty during any period where GSBE is in examinership.
Directions by the Central Bank to Banking Licence Holders
Under Section 21 of the Central Bank Act, 1971 (as amended by Section 38 of the Central Bank Act,
1989 and as further amended by the Central Bank Act and Financial Services Authority of Ireland Act,
2004) (the “Central Bank Act 1971”), where the Central Bank is satisfied that it is in the public
interest to do so or that one of a number of circumstances has occurred in relation to the holder of a
banking licence (which can include an Irish branch of an EU credit institution), it may give a written
direction to the licence holder requiring the holder to suspend, for a specified period not exceeding six
months, any specified banking activity except as authorised by the Central Bank. The term “banking
activity” includes the making of payments other than those that are specifically connected with the
carrying on of banking business. The circumstances in which a direction may be given include where
the Central Bank is satisfied that the licence holder has become or is likely to become unable to meet
its obligations to its creditors. It is possible for the Central Bank to extend a direction for up to a 12month period.
15
While the direction has effect, no winding up or bankruptcy proceedings may be commenced in
relation to the licence holder, unless approved by the Irish courts. A scheme may also be prepared
during this time in respect of the orderly termination of the banking business of the licence holder and
this would have to be submitted for approval to the Central Bank. In the event that a holder of a
licence fails to comply with a direction under Section 21 of the Central Bank Act 1971 or fails to
comply with the terms of a scheme approved by the Central Bank, then the Irish courts have wide
powers to make such orders as they think appropriate, including an order to wind up the licence holder.
Risks related to the Market
Limited Liquidity
Although application will be made to admit the Notes on the Official List of the Irish Stock Exchange
and admit them to trading on the regulated market of the Irish Stock Exchange, the Notes may have no
liquidity. An investor must be prepared to hold them until maturity. GSI and its affiliates do not intend
to make a market in the Notes and accordingly a secondary market is unlikely to develop. In addition,
the Notes are subject to certain transfer restrictions and can only be transferred to certain transferees
meeting specified criteria. Such restrictions on the transfer of Notes may further limit their liquidity.
Consequently, an investor in the Notes must be prepared to hold the Notes for an indefinite period of
time or until their scheduled maturity date.
Price discrepancies in secondary market
The value or quoted price of the Notes at any time will reflect many factors and cannot be predicted,
and if a purchaser sells his or her Notes prior to its maturity, such purchaser may receive less than its
issue price. Such factors, most of which are beyond the control of the Issuers, will influence the market
price of the Notes, and will include national and international economic, financial, regulatory, political,
terrorist, military and other events that affect securities generally, interest and yield rates in the market,
the time remaining until the Notes mature, the creditworthiness of the relevant Issuer and the
Guarantor, whether actual or perceived, and including actual or anticipated upgrades or downgrades in
the credit rating of the Guarantor, and, if applicable, the performance of the Collateral. Furthermore, if
any purchaser sells their Notes, the purchaser will likely be charged a commission for secondary
market transactions, or the price will likely reflect a dealer discount.
Risks related to the Notes and Collateral
Custody of Assets and Exercise of Remedies
An Issuer will neither take possession of any assets sold or pledged to it under any Repo or pledged to
it under a Secured Loan nor deliver, to the extent capable of being delivered, any such asset to the
Trustee prior to an Event of Default. Except for certain supplemental assets or interests in a cash
account, all such assets will continue to be held by the Repo counterparties, Secured Loan borrower or
a custodian, as applicable. In the event of a default by a Repo counterparty or Secured Loan borrower,
it is highly unlikely that the relevant Issuer (or the Trustee acting on its own and the Noteholders’
behalf after an Event of Default) will be able to obtain possession of such assets for purposes of
exercising remedies thereunder or to become the lender of record or mortgagee, as applicable, in
respect of assets purchased or pledged thereunder.
Collection Risk
The ability of the Repo counterparty or Secured Loan borrower and, in turn, the relevant Issuer (or the
Trustee acting on its own and the Noteholders’ behalf after an Event of Default), to collect amounts
due from an obligor (the “Underlying Obligor”) in respect of assets purchased under a Repo or
pledged to secure a Secured Loan is subject to certain risks. These include, but are not limited to, (i)
the default or bankruptcy of the Underlying Obligor, (ii) the assertion by the Underlying Obligor of
contractual or legal defenses to its payment obligation and (iii) the difficulty of enforcing payment
obligations against an Underlying Obligor or its assets in foreign jurisdictions.
As with assets under “hold in custody” repurchase transactions generally, the assets securing a Series
of Note and held by a Repo counterparty or a Secured Loan borrower will at times be commingled with
16
other assets of such counterparty or borrower and with those of their counterparties to repurchase
and/or other financing transactions. Each Repo counterparty and Secured Loan borrower has retained
the right to pledge, use or sell such assets. Following any such pledge, use or sale, the relevant Issuer’s
interest will continue in proceeds of such assets, subject to the ability of the Issuer to identify those
proceeds.
Valuation Risk
The valuation of assets purchased or pledged under a Repo or pledged to secure a Secured Loan is
subjective. The market value assigned to such assets by the party authorised to make such valuation
for purposes of calculating the margin value of collateral securing a Series or Notes may be materially
greater than the value that would be assigned to such assets by others. In the case of a default by a
Repo counterparty or Secured Loan borrower, the value last assigned to such assets immediately prior
to such default may be materially greater than the value realised in liquidation of such asset, including
as a result of market movements between the date of the occurrence of the relevant termination event
and the date on which such asset is liquidated.
Access to Cash Collateral
In the case of collateral consisting of an interest in certain supplemental assets or amounts allocated
and pledged to a cash account, such cash collateral will be commingled with similar assets in which
other counterparties to repurchase and/or other financing transactions with the Repo counterparties
and/or Secured Loan Borrowers, as applicable, have interests. In addition, prior to an Event of Default,
the Repo counterparties and Secured Loan borrowers are permitted to withdraw and use such cash
collateral. Furthermore, the relevant Issuer (or, after an Event of Default, the Trustee acting on its own
and the Noteholders’ behalf) must exercise remedies within the time period prescribed in the relevant
account control agreements in order to successfully preserve its rights with respect to such cash
collateral and realise the benefit thereof. In the case of supplemental assets, the relevant Issuer is not
permitted to exercise remedies against such assets prior to a GS Group bankruptcy event.
Segregation of Collateral
Certain provisions of the Indenture are intended to segregate any collateral pledged by the relevant
Issuer to the Trustee as secured party for the Noteholders of the relevant Series. However, such
provisions and segregation may not be sufficient to, and none of such Issuer or its affiliates has
represented that they will, eliminate the risks that such collateral may become subject to the claims of
the Noteholders of other Series or other creditors of the relevant Issuer.
Commingled Currency Accounts
An Issuer may deposit any funds it receives in connection with a Series in one or more bank accounts
(any such account, a “Commingled Currency Account”), denominated in USD or any other relevant
currencies, into which funds it receives in respect of other Series may also be deposited. Such funds
will be held on behalf of the Noteholders of the respective Series to which the funds are attributable. A
Noteholder’s security interest in funds deposited in a Commingled Currency Account will be perfected
to the extent that such funds are traceable and identifiable so that they can be allocated to the relevant
Series. The Indenture requires the relevant Issuer to take certain steps to permit such amounts to be
identifiable to the relevant Series. Upon the occurrence of a default or an Event of Default with respect
to any Series, it is possible that the designated depository institution maintaining a Commingled
Currency Account may refuse to continue administering such account and may “freeze” such account
and disallow any transfers to or from such accounts.
Derivatives Receivables as Collateral
Set-off Risk
Each obligor in respect of any Swap Agreement (a “Swap Obligor”) may have the right to set off any
termination payments it owes to the secured borrower against amounts owed to it by the Swap
Receivables Secured Borrower under any other obligation. The secured borrower will value swap
exposures by taking into account any adjustments for potential setoffs. The amount of obligations that
17
a Swap Obligor may actually set off against the termination payments under a Swap Transaction may
differ from the amount assumed by the secured borrower for purposes of valuing the related swap
exposure. This could be the result of numerous factors, including, but not limited to, different values
being assigned to these mutual obligations by the secured borrower and the Swap Obligor or the
existence of claims against the secured borrower that are not known to it at the time of (or arise
subsequent to) such valuation. Under English law, mandatory insolvency set-off rules will apply under
certain circumstances if an English Swap Obligor is liquidated or enters into administration. Any
contractual set-off which is inconsistent with the mandatory insolvency set-off rules may be
unenforceable and may be superseded by the mandatory insolvency set-off rules, which may affect the
valuation of amounts due from the insolvent English Swap Obligor. Similar laws may apply to Swap
Obligor insolvencies in other jurisdictions.
Collection Risk
The ability of a secured borrower in respect of any secured Swap Agreements and, in turn, the
Collateral Agent acting on behalf of the relevant Issuer, to collect amounts due from a Swap Obligor is
subject to certain risks. In addition to the risks identified above in “– Custody of Assets and Exercise of
Remedies”, these risks include, but are not limited to, (i) the possibility that the Swap Obligor may
refuse to make termination payments during a secured borrower insolvency event and (ii) following a
secured borrower insolvency event, the payment by a Swap Obligor to the secured borrower’s accounts
rather than the Collateral Agent. In addition, the payment of termination payments by a Swap Obligor
may be subject to delay as a result of the Swap Obligor’s failure to deliver a timely valuation to the
secured borrower, as required in the Swap Transaction documentation. Furthermore, an insolvent Swap
Obligor may be able to recover, under a “preference” or similar theory, payments already made under a
related swap agreement.
Exchange Rate Risk
Payments due under a Swap Transaction may be in currencies other than the currency of the Series.
Consequently, there may be a mismatch in currencies between payments the secured borrower receives
in respect of a Swap Transaction and the payments it must make to the relevant Issuer. There may be
circumstances in which payments in respect of receivables under any Swap Agreements in the Note
currency would be insufficient to pay all amounts owed by the secured borrower to the relevant Issuer
in such currency, requiring the parties to pursue currency conversions of proceeds from swap
receivables in other currencies at adverse currency exchange rates. Currency exchange rates may vary
over time and may vary considerably as a result of the interaction of many factors directly or indirectly
affecting economic and political conditions.
Stay Risk
The ability of the relevant Issuer and, in turn, the relevant pledgee representative on behalf of the
counterparty, to collect amounts due from an obligor is subject to certain risks. These include, but are
not necessarily limited to, (i) the default or bankruptcy of the obligor, (ii) the possibility that the obligor
may refuse to make termination payments during an Issuer insolvency event, (iii) the assertion by the
obligor of contractual or legal defenses to its payment obligation, (iv) the difficulty of enforcing
payment obligations against obligors or their assets in foreign jurisdictions; and (v) following an Issuer
insolvency event, the payment by an obligor to accounts of the relevant Issuer rather than the pledgee
representative. In addition, the payment of Derivative Receivables Agreements by an obligor may be
subject to delay as a result of the failure of the obligor to deliver a timely valuation to the relevant
Issuer.
Goldman Sachs Bank USA as Counterparty or Borrower
In the event that it becomes unsound or insolvent, Goldman Sachs Bank USA (“GS Bank”), an
indirect, wholly owned GS Group subsidiary and, therefore, an Eligible GS Entity, a Federal Deposit
Insurance Corporation (“FDIC”) receiver or conservator may, within one business day of its
appointment, transfer certain financial contracts to which GS Bank is a counterparty, including
Mortgage Loan Repos and Currency Swap Transactions (each, an “Transferable Transaction”), to a
third party U.S. or non-U.S. financial institution, provided that the FDIC transfers all such Transferable
Transactions between GS Bank and the relevant Issuer or any of the relevant Issuer’s affiliates to such
third party financial institution. Furthermore, starting from the date of such appointment, payments in
18
respect of interest or price differential will cease to accrue. In the event that GS Bank fails to maintain
certain physical records memorializing any Repo or Secured Loan under which it is a counterparty of a
borrower, the relevant Issuer may be unable to exercise its remedies or assert claims in respect of such
transaction.
Processing and Operational Risks
The allocation of assets that the relevant Issuer receives from a counterparty to a Repo or a borrower
under a Secured Loan and in turn pledges or repledges to secure a specified Series may, as a result of
processing delays, be based on non-current information. Therefore, as a result of such processing
delays, the confirmations and statements that the Trustee receives from the relevant Issuer or a third
party describing the related collateral may not always contain the most current information regarding
the value of the assets listed on such documents. Such counterparty or borrower may also grant a
charge over, sell or pledge certain interests in the assets sold under a Repo or pledged under a Secured
Loan either (i) to its counterparties under other master repurchase agreements or indebtedness
documents (including Repos and Secured Loans securing another Series) or (ii) to its secured financing
creditors. If the assets so charged, pledged or sold by such Repo counterparty or Secured Loan
borrower to any counterparty or creditor described in (i) or (ii) above are insufficient, the relevant
Issuer may have to share pro rata in any such shortfall. Any such shortfall may result in a pro rata
reduction in the value of the assets that are collateral securing the relevant Series. Accordingly, since
the collateral pledged to secure each Series consists in part of the assets purchased and/or pledged by
the relevant Issuer under the Repos and pledged under the Secured Loans in respect of such Series, the
quantity of such assets pledged by the relevant Issuer to the Trustee in such a case will also be reduced
pro rata from the amount specified on the face of the relevant collateral schedule. In addition, it is
anticipated that, from time to time, other operational factors may negatively affect the Repo
counterparties and Secured Loan borrowers’ allocation of assets to the relevant Issuer and consequently
the relevant Issuer’s pledge of such assets to the Trustee in respect of a Series. These operational
factors could include computer system failures that result in the failure to allocate the required amount
of assets to the relevant Issuer until such failures are cured. Any such failure that results in a shortfall
by the relevant Issuer to pledge sufficient assets to secure the relevant Series will not constitute an
Event of Default with respect to such Notes until such Issuer obtains actual knowledge of such failure
and fails to restore the required margin value within four Business Days after the date it is required to
notify the Trustee of such failure.
Certain of the provisions of the Repos and the Secured Loans, such as those relating to the provision of
rights to the relevant Issuer in Supplemental Assets are intended to address processing and operational
risks but may not, and none of the relevant Issuer, the Repo counterparties, the Secured Loan borrowers
or any of their affiliates has represented that they will, eliminate these risks to such Issuer or any holder
of the Notes.
19
USE OF PROCEEDS
The net proceeds from the issue of each Series of the Notes will be used toward the general business of
the Issuers.
20
THE ISSUERS
(1)
Goldman Sachs Bank (Europe) Plc
Goldman Sachs Bank (Europe) Plc (“GSBE”) was established and incorporated as a public company
with limited liability in Ireland on 22 May 2007, under the Companies Acts 1963 to 2009 with
company registration number 440142. The registered office of GSBE is at Second Floor, Hardwicke
House, Upper Hatch Street, Dublin 2, Ireland, telephone number +353 1 439 6100. GSBE does not
have any subsidiaries.
Business Activities
Since its incorporation, GSBE has concentrated on its infrastructure and the execution of “spread
banking” which would involve taking deposits primarily from private wealth management clients and
the execution of reverse repurchase trades against a broad and appropriately controlled range of
collateral. GSBE intends to offer a broad range of banking products including, but not limited to,
banking deposits, personal loans, mortgages, corporate loans, vanilla and structured bonds, certificates
of deposit and letters of credit. GSBE was granted a licence to carry on banking activity on 29
November 2007 by the Central Bank in pursuance of its powers under Section 9 of the Central Bank
Act 1971 and commenced operations on 3 December 2007. The business of GSBE also includes the
issuing of securities, entering into the agreements and arrangements contemplated in this Base
Prospectus and exercising the rights and performing the obligations under each such agreement and
arrangement and other transactions incidental thereto. As set out in clause 3 of its Memorandum of
Association, GSBE’s principal objects include carrying on the business of banking in its branches,
undertaking all manner of financial services, trading in and issuing money market and financial
instruments and administering securities on behalf of third parties.
Organisational Structure
Goldman Sachs Ireland Holdings Limited is a limited liability company incorporated under the laws of
Ireland and has a 100 per cent. shareholding in GSBE. Goldman Sachs Ireland Group Limited is a
limited liability company incorporated under the laws of Ireland and has a 100 per cent. shareholding in
Goldman Sachs Ireland Holdings Limited. Goldman Sachs Ireland Group Limited is 100 per cent.
owned by Goldman Sachs Ireland LLC, a U.S. limited liability company established under the laws of
the State of Delaware. Goldman Sachs Global Holdings L.L.C. and GS Ireland Group Holdings LLC
are U.S. limited liability companies established under the laws of the State of Delaware and have 25
per cent. and 75 per cent. shareholding in Goldman Sachs Ireland LLC, respectively. The Goldman,
Sachs & Co. L.L.C. is a U.S. limited liability company established under the laws of the State of
Delaware and has a 1 per cent. shareholding in Goldman Sachs Global Holdings L.L.C. with the
remaining 99 per cent. shares held by the Goldman Sachs Group, Inc. (also the Guarantor) a U.S.
corporation established under the laws of the State of Delaware. The Goldman Sachs Group, Inc. also
holds a 100 per cent. shareholding in GS Ireland Group Holdings LLC, a U.S. limited liability
company established under the laws of the State of Delaware.
Capitalisation
The authorised share capital of GSBE amounts to EUR 5,000,000,000 divided into 5,000,000,000
ordinary shares of EUR 1.00 each and US$ 5,000,000,000 divided into 5,000,000,000 ordinary shares
of US$ 1.00 each, EUR 38,100 of which has been issued and has been paid in full and US$
205,154,412 of which has been issued and has been paid in full. EUR 38,094 shares and US$
205,154,412 shares are held by Goldman Sachs Ireland Holdings Limited and each of Goldman Sachs
(UK) L.L.C., Goldman Sachs Asset Management International, Goldman Sachs Group Holdings
(U.K.), Goldman Sachs Holdings (U.K.), Goldman Sachs International and GSPS Investments Limited
hold EUR 1.00 share. All shareholders are subsidiaries of The Goldman Sachs Group, Inc.
Corporate Governance
GSBE complies with the corporate governance regime applicable under the laws of Ireland.
21
Management
The directors of GSBE and their business occupations and business addresses are as follows:
Name
Occupation
Business Address
Peter D. Sutherland (Chairman)
Investment Banker
The registered office of GSBE
Stephen Davies
Investment Banker
The registered office of GSBE
Ralf Hafner
Investment Banker
The registered office of GSBE
Robert Keogh
Investment Banker
The registered office of GSBE
Dermot McDonogh
Investment Banker
The registered office of GSBE
Patrick Mulvihill
Independent Director
The registered office of GSBE
James O’Dwyer
Independent Director
The registered office of GSBE
Cornelius O’ Sullivan
Independent Director
The registered office of GSBE
Richard O’Toole
Independent Director
The registered office of GSBE
Bryan Strahan
Independent Director
The registered office of GSBE
David Went
Independent Director
The registered office of GSBE
The directors of GSBE do not hold any direct or indirect, beneficial or economic interest in any of the
shares of GSBE. No director of GSBE has any interest in the promotion of, or any property acquired or
proposed to be acquired by, GSBE. There are no potential conflicts of interest between any duties owed
by the directors to GSBE and their private interests and/or other duties.
Credit Rating
As of the date of this Base Prospectus, GSBE was rated by Moody’s and it had assigned GSBE a longterm deposit and issuer rating of A1.
Selected Financial Information
Documents Incorporated by Reference
The following tables set out in summary form the balance sheet and profit and loss account relating to
GSBE. Such information is derived from the audited financial statements of GSBE for the 52-week
period ended 31 December 2010 and the 52-week period ended 31 December 2011, which are
incorporated by reference into this Base Prospectus. The financial information below should be read in
conjunction with such financial statements and reports therein.
Auditors
The financial statements of GSBE have been prepared in accordance with accounting standards
recognised in Ireland. The financial statements of GSBE for the 52-week period ended 31 December
2010 and the 52-week period ended 31 December 2011 have been independently audited by
PricewaterhouseCoopers LLP of One Spencer Dock, North Wall Quay, Dublin 1, Ireland, and on
which PricewaterhouseCoopers LLP has issued an unqualified audit report. PricewaterhouseCoopers
LLP are chartered accountants and registered auditors, members of the Institute of Chartered
Accountants in Ireland (ICAI) and are qualified to practice as auditors in Ireland.
22
GSBE Profit and Loss Account
Period
52-week period ended
31 December 2011
US$’000
Period
52-week period ended
31 December 2010
US$’000
75,817
(48,343)
27,474
93,101
(56,997)
36,104
Fees and commission income
Net gain/(loss) on financial instruments at fair value
46,245
1,726
41,930
9,130
Total Operating Income
75,445
87,164
(26,289)
(29,146)
Profit/ (Loss) on Ordinary Activities Before
Taxation
49,156
58,018
Tax on profit on ordinary activities
(6,273)
(7,257)
Profit/ (Loss) on Ordinary Activities After
Taxation
42,883
50,761
Interest receivable and similar income
Interest payable and similar charges
Net interest income
Operating expenses
GSBE Balance Sheet
As at
31 December 2011
US$’000
As at
31 December 2010
US$’000
4,018
4,506
230,673
81,830
11,351,063
9,457
14,616
11,687,639
209,937
163,385
9,426,047
–
23,846
9,823,215
(6,825,475)
–
(2,353,633)
(1,906,498)
(11,085,606)
(6,752,008)
–
(1,109,665)
(1,402,728)
(9,264,401)
Net Current Assets
602,033
558,814
Total Assets Less Current Liabilities
606,051
563,320
(135,020)
(135,172)
Net Assets
471,031
428,148
Capital and Reserves
Called-up share capital
205,210
205,210
Fixed Assets
Tangible fixed assets
Current Assets
Cash and balances at central bank
Loans and advances to banks
Securities purchased under agreements to resell
Other financial assets at fair value
Other assets
Creditors – Amounts Falling Due Within One Year
Customer accounts
Securities sold under agreements to repurchase
Other financial liabilities at fair value
Other liabilities
Creditors – Amounts Falling Due After More Than
One Year
23
Capital reserve
Retained profit/ (loss)
Total Shareholders’ Funds
24
As at
31 December 2011
US$’000
As at
31 December 2010
US$’000
65,000
200,821
471,031
65,000
157,938
428,148
(2)
Goldman Sachs International
Goldman Sachs International (“GSI”) is a private company with unlimited liability under the laws of
England and Wales, with company registration number 02263951, and registered address Peterborough
Court, 133 Fleet Street, London, EC4A 2BB, England, telephone number +44 20-7774-1000. GSI was
formed as an English company on 2 June 1988 and is successor to a company formed in 1966. GSI was
re-registered as a private unlimited liability company in England and Wales with the Registrar of
Companies on 25 February 1994, having previously been registered as a limited liability company
under the name “Goldman Sachs International Limited”.
Business Activities
GSI is a leading international investment-banking organisation. Its activities and sources of revenue
include and are derived from securities underwriting and distribution, trading of corporate debt and
equity securities, non-U.S. sovereign debt and mortgage securities, execution of swaps and derivative
instruments, mergers and acquisitions, financial advisory services for restructurings, private placements
and lease and project financings, real estate brokerage and finance, merchant banking and stock
brokerage and research. Services are provided to a substantial and diversified client base, which
includes corporations, financial institutions, governments and individual investors. As set out in clause
3 of its Memorandum of Association, GSI’s principal objects include carrying on the business of stock
brokers or dealers in securities, investment banking and investment management and advising,
subscribing for securities or investments of any kind, underwriting, or investing the money of GSI. GSI
is regulated by the United Kingdom Financial Services Authority (the “FSA”), and is an authorised
person under the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”), and is
subject to their rules. GSI and certain of its affiliates are members of various exchanges and are subject
to their rules, including those of the London Stock Exchange Plc and the London International
Financial Futures and Options Exchange. Certain affiliates of GSI are also subject to regulation by the
FSA.
Organisational Structure
Goldman Sachs Holdings (U.K.) is an unlimited liability company incorporated under the laws of
England and has a 99 per cent. shareholding in Goldman Sachs International. Goldman Sachs Group
Holdings (U.K.) is an unlimited liability company incorporated under the laws of England and
beneficially owns 100 per cent. of the shares in Goldman Sachs Holdings (U.K.) and 1 per cent.
shareholding in Goldman Sachs International. Goldman Sachs (UK) L.L.C. is a U.S. limited liability
company established under the laws of the State of Delaware and has a 100 per cent. shareholding in
Goldman Sachs Group Holdings (U.K.). The Goldman Sachs Group, Inc. is a U.S. corporation
established under the laws of the State of Delaware and has a 100 per cent. interest in Goldman Sachs
(U.K.) L.L.C.
Capitalisation
GSI is authorised to issue 950,000,000 ordinary shares of US$ 1.00 each, 1,500,000,000 A preference
shares of US$ 0.01 each and 500,000,000 B preference shares of US$ 0.01 each. As at the date of this
prospectus, GSI has issued 499,257,654 ordinary shares, 958,659,363 A preference shares and
227,906,977 B preference shares. The issue of additional shares by GSI shall be at the discretion of the
directors of GSI in accordance with Article 2(G) of the Articles of Association of GSI. All of the issued
shares are fully paid and are owned by Goldman Sachs Holdings (U.K.) and Goldman Sachs Group
Holdings (U.K.).
Corporate Governance
GSI complies with the corporate governance regime applicable under the laws of England and Wales.
Management
The directors of GSI and their business occupations and business addresses are as follows:
25
Name
Occupation
Business Address
Peter D. Sutherland (Chairman)
Investment Banker
Michael S. Sherwood
Investment Banker
Richard J. Gnodde
Investment Banker
Lord Griffiths of Fforestfach
Investment Banker
Robin A. Vince
Investment Banker
1 St. James’s Square
London SW1Y 4PD
Peterborough Court
133 Fleet Street
London EC4A 2BB
Peterborough Court
133 Fleet Street
London EC4A 2BB
Peterborough Court
133 Fleet Street
London EC4A 2BB
Peterborough Court
133 Fleet Street
London EC4A 2BB
The directors of GSI do not hold any direct, indirect, beneficial or economic interest in any of the
shares of GSI. There are no potential conflicts of interest between any duties owed by the Board of
Directors to GSI and their private interests and/or other duties.
Credit Rating
As of the date of this Base Prospectus, GSI was rated by S&P and it had assigned GSI a long-term
deposit and issuer rating of A.
Selected Financial Information
Documents Incorporated by Reference
The following tables set out in summary form the balance sheet and profit and loss account relating to
the GSI. Such information is derived from the audited financial statements for GSI for the 52-week
period ended 31 December 2011 and the audited financial statements of GSI for the 52-week period
ended 31 December 2010, which are incorporated by reference into this Base Prospectus. The financial
information presented below should be read in conjunction with such financials statements and reports
therein.
Auditors
The financial statements have been prepared in accordance with accounting standards recognised in the
United Kingdom, which differs in certain respect from International Accounting Standards. The
financial statements of GSI for the 52-week period ended 31 December 2010 and the 52-week period
ended 31 December 2011 have been independently audited by PricewaterhouseCoopers LLP, and on
which PricewaterhouseCoopers LLP has issued an unqualified audit report. PricewaterhouseCoopers
LLP are chartered accountants, members of the Institute of Chartered Accountants (ICA), and are
qualified to practice as auditors in the United Kingdom.
26
GSI Profit and Loss Account
Net revenue
Administrative expenses
Operating Profit
Period
52-week
period ended
31 December 2011
US$’000
5,131,538
(2,059,618)
3,071,920
Period
52-week
period ended
31 December 2010
US$’000
7,373,167
(6,095,843)
1,277,324
115,087
-
(105,826)
(98,585)
28,180
8,636
3,109,361
1,187,375
(683,958)
(412,329)
2,425,403
775,046
Other interest receivable and
similar income
Interest payable and similar
charges
Net finance income
Profit on Ordinary Activities
Before Taxation
Tax on profit on ordinary
activities
Profit on Ordinary Activities
After Taxation and for the
Financial Period
GSI Balance Sheet
As at
31 December 2011
US$’000
As at
31 December 2010
US$’000
8,211
5,236
13,447
5,193
2,721
7,914
603,488,261
473,443,028
19,390,650
238,648,388
65,821,968
14,776,833
942,126,100
21,805,808
198,297,034
45,593,097
11,588,242
750,727,209
(557,537,032)
(177,025,702)
(173,298,319)
(907,861,053)
(426,274,193)
(147,338,499)
(147,420,573)
(721,033,265)
Net Current Assets
34,265,047
29,693,944
Total Assets Less Current
Liabilities
34,278,494
29,701,858
(14,941,638)
(12,624,872)
(5,991)
19,330,865
(65,000)
17,011,986
Fixed Assets
Tangible assets
Investments
Current Assets
Financial instruments owned
Financial instruments owned
pledged as collateral
Collateralised agreements
Debtors
Cash at bank and in hand
Creditors – Amounts Falling
Due Within One Year
Financial instruments sold, but
not yet purchased
Collateralised financing
Other creditors
Creditors – Amounts Falling
Due After More than One Year
Provisions for Liabilities and
Charges
Net Assets Excluding Pension
27
As at
31 December 2011
US$’000
As at
31 December 2010
US$’000
132,154
164,002
19,463,019
17,175,988
Surplus/ (Deficit)
Pension surplus/ (deficit)
Net Assets Including Pension
Surplus/ (Deficit)
Capital and Reserves
Called-up share capital
Share premium account
Capital reserve (nondistributable)
Profit and loss account
511,123
2,885,260
511,123
2,885,260
17,286
16,049,350
17,286
13,762,319
Total Shareholders’ Funds
19,463,019
17,175,988
28
THE GUARANTOR
The Goldman Sachs Group, Inc.
The Goldman Sachs Group, Inc. (“GS Group” and the “Guarantor”, and together with its subsidiaries
“Goldman Sachs”) is a Delaware corporation with registration number 2923466 incorporated on 21
July 1998, with business address 200 West Street, New York, New York 10282, telephone +1 (212)
902 1000. The Guarantor is a bank holding company and a leading global investment banking,
securities and investment management firm that provides a wide range of financial services to a
substantial and diversified client base that includes corporations, financial institutions, governments
and high-net-worth individuals. Pursuant to the third clause of its Certificate of Incorporation, the
purpose of the Guarantor is to engage in any lawful act or activity for which corporations may be
organised under the Delaware General Corporation Law.
Business Activities
The Guarantor’s business activities are divided into four segments:
(i)
(ii)
Investment Banking. Investment Banking is comprised of:
•
Financial Advisory, which includes advisory assignments with respect to mergers and
acquisitions, divestitures, corporate defense activities, risk management, restructurings
and spin-offs; and
•
Underwriting, which includes public offerings and private placements of a wide range of
securities, loans and other financial instruments, and derivative transactions directly
related to these client underwriting activities.
Institutional Client Services. Institutional Client Services is comprised of:
•
Fixed Income, Currency and Commodities Client Execution, which includes client
execution activities related to making markets in interest rate products, credit products,
mortgages, currencies and commodities; and
•
Equities, which includes client execution activities related to making markets in equity
products, as well as commissions and fees from executing and clearing institutional client
transactions on major stock, options and futures exchanges worldwide. Equities also
includes our securities services business, which provides financing, securities lending
and other prime brokerage services to institutional clients, including hedge funds, mutual
funds, pension funds and foundations, and generates revenues primarily in the form of
interest rate spreads or fees.
(iii)
Investing and Lending which includes our investing activities and the origination of loans to
provide financing to clients. These investments and loans are typically longer-term in nature.
We make investments, directly and indirectly through funds that we manage, in debt securities,
loans, public and private equity securities, real estate, consolidated investment entities and
power generation facilities.
(iv)
Investment Management which provides investment management services and offers investment
products (primarily through separately managed accounts and commingled vehicles, such as
mutual funds and private investment funds) across all major asset classes to a diverse set of
institutional and individual clients. Investment Management also offers wealth advisory
services, including portfolio management and financial counseling, and brokerage and other
transaction services to high-net-worth individuals and families.
29
The Guaranty
All payment obligations of the Issuers are guaranteed by the Guarantor pursuant to a guaranty
substantially in the form set out below.
The Bank of New York Mellon,
acting through its London Branch
One Canada Square,
London E14 5AL
United Kingdom
For value received, The Goldman Sachs Group, Inc. (the “Guarantor”), a corporation duly organized
under the laws of the State of Delaware, hereby unconditionally and irrevocably guarantees the prompt
and complete payment when and to the extent due, whether by acceleration or otherwise, of all
obligations, whether now in existence or hereafter arising, of Goldman Sachs Bank (Europe) Plc and
Goldman Sachs International (the “Issuers”), each a subsidiary of the Guarantor and in the case of
Goldman Sachs Bank (Europe) Plc, a public company incorporated with limited liability under the laws
of Ireland and in the case of Goldman Sachs International, a private company incorporated with
unlimited liability under the laws of England and Wales, to The Bank of New York Mellon, acting
through its London Branch, as trustee (together with any successor trustee, the “Counterparty”) for
the benefit of the holders from time to time of the notes issued after the date hereof by either of the
Issuers under and in respect of the Guaranteed Senior Secured Notes Programme (the “Notes”),
pursuant to the Indenture between the Issuers and the Counterparty dated as of February 12, 2009 (as
amended, restated, supplemented or otherwise modified from time to time) arising out of or under the
Notes, subject to the terms and conditions described in the Indenture that are applicable to the Notes
(the “Obligations”). This Guaranty is one of payment and not of collection.
The Guarantor hereby waives notice of acceptance of this Guaranty and notice of the Obligations, and
waives presentment, demand for payment, protest, notice of dishonor or non-payment of the
Obligations, suit or the taking of other action by Counterparty against, and any other notice to, the
Issuers, the Guarantor or others.
The Counterparty may at any time and from time to time without notice to or consent of the Guarantor
and without impairing or releasing the obligations of the Guarantor hereunder: (1) agree with the
Issuers to make any change in the terms of the Obligations; (2) take or fail to take any action of any
kind in respect of any security for the Obligations; (3) exercise or refrain from exercising any rights
against the Issuers or others in respect of the Obligations; or (4) compromise or subordinate the
Obligations, including any security therefor. The Guarantor hereby waives, to the extent permitted by
law, any other suretyship defense and any defenses based on lack of authority or the validity or
enforceability of the Obligations or this Guaranty. Any payment by the Guarantor under this Guaranty
shall be made without setoff or counterclaim. In addition, with respect to any amount that remains due
and owing under the Obligations, the Guarantor hereby waives, to the extent permitted by law, (x) any
setoff, counterclaim, recoupment or defense which may be available to the Issuers and (y) its right to
exercise any rights of subrogation, reimbursement, contribution or indemnification unless and until all
of the Obligations shall have been previously paid in full. Notwithstanding any provision to the
contrary herein, nothing in this Guarantee shall be deemed to waive any claim the Guarantor may have
with regard to whether and the extent to which an amount was due and owing under the Obligations.
The Guarantor further agrees that this Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the Obligations, or interest thereon,
is rescinded or must otherwise be restored or returned by the Counterparty as a result of the
bankruptcy, insolvency, dissolution or reorganization of the Issuers.
The obligations of the Guarantor hereunder shall rank pari passu with the obligations of the Guarantor
under its unsubordinated and unsecured obligations.
The Guarantor may not assign its rights nor delegate its obligations under this Guaranty, in whole or in
part, without prior written consent of the Counterparty, and any purported assignment or delegation
absent such consent is void, except for an assignment and delegation of all of the Guarantor's rights and
obligations hereunder in whatever form the Guarantor determines may be appropriate to a partnership,
30
corporation, trust or other organization in whatever form that succeeds to all or substantially all of the
Guarantor's assets and business and that assumes such obligations by contract, operation of law or
otherwise. Upon any such delegation and assumption of obligations, the Guarantor shall be relieved of
and fully discharged from all obligations hereunder, whether such obligations arose before or after such
delegation and assumption.
This Guaranty shall continue in full force and effect until all of the Obligations have been paid in full.
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW. THE GUARANTOR AGREES TO THE EXCLUSIVE
JURISDICTION OF COURTS LOCATED IN THE STATE OF NEW YORK, UNITED STATES OF
AMERICA, OVER ANY DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.
Very truly yours,
THE GOLDMAN SACHS GROUP, INC.
The Notes issued prior to 11 March 2011 benefit from the note guaranty granted pursuant to the
Indenture when such Notes were issued.
Documents Incorporated by Reference
The Guarantor files documents and information with SEC, pursuant to Section 13(a), 13(c), 14 and
15(d) of the Exchange Act 1934. The following documents, which the Guarantor has filed with the
SEC and with the Irish Stock Exchange, are hereby incorporated by reference into this Base
Prospectus:
•
Annual Report on Form 10-K for the fiscal year ended 31 December 2011 (the “2011 Form 10K”), containing financial statements relating to the fiscal year ended 31 December 2011 which was
filed with the SEC on 28 February 2011.
•
Proxy Statement relating to the 2012 Annual Meeting of Shareholders on 24 May 2012 (the “2012
Proxy Statement”) which was filed with the SEC on 13 April 2012.
•
Current Report on Form 8-K of GS Group dated 17 April 2012 (the “17 April Form 8-K”).
The Guarantor will provide without charge to each person to whom this Base Prospectus is delivered,
upon his or her written or oral request, a copy of any or all documents referred to above which have
been incorporated by reference into this Base Prospectus, excluding exhibits to those documents unless
they are specifically incorporated by reference into those documents or this Base Prospectus. Investors
can request those documents from The Goldman Sachs Group, Inc., Investor Relations, 200 West
Street, New York, New York 10282, telephone +1 (212) 902-0300. The Guarantor’s filings with the
SEC are also available through the SEC’s website at http://www.sec.gov. In addition, physical copies
of such documents will be available free of charge from the Irish listing agent, Matheson Ormsby
Prentice, from its principal office in Ireland.
Information
Information Location
Selected financial information for the fiscal years ended 31
December 2011, 31 December 2010 and 31 December 2009
2011 Form 10-K (p. 215)
Risk factors relating to GS Group
2011 Form 10-K (pp. 21-34)
History and development of the company
2011 Form 10-K (p. 1; p. 34; pp. 37-107; pp. 213214; pp. 216-223)
17 April Form 8-K (pp. 2-6)
31
Information
Information Location
Principal activities
2011 Form 10-K (pp. 1-20; p. 115)
Organisational structure
2011 Form 10-K (p. 26; Exhibit 21.1)
Administrative, management and supervisory bodies, including
conflicts of interest
2012 Proxy Statement (pp. 1-22, 55-57)
2011 Form 10-K (pp. 35-36; pp. 223-224)
The business address of the Directors is:
200 West Street
New York, New York 10282
Beneficial owners of more than five per cent.
2012 Proxy Statement (p. 58)
2011 Form 10-K (p. 224)
Audited historical financial information for the fiscal years
ended 31 December 2011, 31 December 2010 and 31 December
2009
2011 Form 10-K (pp. 110-212)
Audit report
2011 Form 10-K (p. 109)
Balance sheet
2011 Form 10-K (p. 111)
Income statement
2011 Form 10-K (p. 110)
Cash flow statement
2011 Form 10-K (p. 113)
Accounting policies and explanatory notes
2011 Form 10-K (pp. 45-48; pp. 115-212)
Legal and arbitration proceedings
2011 Form 10-K (p. 34; pp. 195-207)
Material contracts
2011 Form 10-K (pp. 79-82)
Unaudited interim historical financial information and
explanatory notes
17 April Form 8-K (pp. 8-12)
Share capital
2011 Form 10-K (p. 112; pp. 177-179)
17 April Form 8-K (p. 4)
Credit ratings
2011 Form 10-K (pp. 91-92)
Any information included in the documents incorporated by reference but not listed in the table above
is given to provide investors with additional information.
Auditors
The financial statements of the Guarantor have been prepared in accordance with the accounting
principles generally accepted in the United States of America. The financial statement of the Guarantor
for the fiscal years ended 31 December 2011 and 31 December 2010 have been independently audited
by PricewaterhouseCoopers LLP, of 300 Madison Avenue, New York, New York 10017, United States
of America, an independent registered public accounting firm (a member of the American Institute of
Certified Public Accountants and registered with the Public Company Accounting Oversight Board).
32
BASE TERMS AND CONDITIONS OF THE NOTES
The following is a summary description of the base terms and conditions of the Notes (the “Base
Terms and Conditions”) as set out in the Indenture that, subject to completion and amendment and as
supplemented or varied in accordance with the provisions of the terms and conditions specified in the
relevant Final Terms of any Series (the “Series Terms and Conditions”), shall be collectively
applicable to the Notes in definitive form (if any) issued in exchange for the Global Note(s)
representing each Series (collectively the “Notes Terms and Conditions”). All capitalised terms that
are not defined in these Base Terms and Conditions will have the meanings given to them in the
Indenture and Final Terms and all section numbers and exhibits refer to the relevant sections and
exhibits of the Indenture. This summary description is not a substitute to the detailed provisions
contained in the Indenture and therefore to the extent any differences arise between the following text
and that of the Indenture, the provisions of the Indenture shall prevail. A copy of the Indenture is
available from the specified office of the Issuers.
Information
Brief Summary of the information and its location in the
Indenture
Introduction.................................................... GSI and GSBE (each, an “Issuer” and together, the “Issuers”)
have established the Guaranteed Senior Secured Notes Programme
(the “Programme”) for the issuance of Notes. The payment and
delivery obligations of the Issuers are guaranteed by the GS
Group.
Form of Notes ................................................. The Notes shall be in substantially the form set forth in Exhibits A1, A-2 or, A-3 of the Indenture, that may be applicable, or in such
other form as shall be established by or pursuant to a Series
Authorisation. The Issuer may issue Global Registered Notes,
Global Bearer Notes, or Definitive Registered Notes or a
combination thereof. (Section 2.1).
Amount and denomination of the Notes ....... The principal amount of the Notes, issuable under a Series is
unlimited and unless otherwise provided in the Final Terms, the
minimum denomination of the Notes will be Euro 500,000. (Subsection. 2.2-2.3).
Execution and Authentication ...................... The Notes shall be signed by a manual or facsimile signature of an
officer of the Issuer and subsequently authenticated by the Trustee
or the Authenticating Agent appointed by the Trustee. A Note shall
not be valid until manually authenticated by an authorised
signatory of the Trustee or the Authenticating Agent. The
signature of an authorised signatory of the Trustee or an
Authenticating Agent on a Note shall be conclusive evidence that
such Note has been duly and validly authenticated and issued
under this Indenture. (Section 2.4).
Registrar and Paying Agent .......................... The Issuers shall appoint and ensure that continuance of the
existence of a Registrar, for the service of notices and demands to
or upon the Issuers in respect of the Notes and the Indenture, and a
Paying Agent, where the Registered Notes may be presented for
payment. (Sub-section.2.5 – 2.6).
Clearing Systems ............................................ Unless otherwise specified in the Final Terms, the Notes shall be
cleared through Euroclear, Belgium and Clearstream Luxembourg.
Global Note Provisions .................................. Global Registered Notes: The Global Registered Notes can be
transferred in whole, but not partially. Such transfers are limited
to a nominee of the Common Depositary or to a successor of the
Common Depositary or such successor’s nominee. An owner of a
the beneficial interest in a Global Registered Note may, subject to
the rules and procedures of Euroclear or Cleanstream, as the case
may be, transfer all or part of such interest provided that (i) such
33
transfer is not made to a U.S. Person (as defined in Regulation S)
or for the account or benefit of a U.S. Person (as defined in
Regulation S) and is effected through Euroclear or Clearstream in
an offshore transaction as required by Regulation S and (ii) such
transferee shall be deemed to have made the applicable
certifications set forth in the Indenture Beneficial Interests in the
Global Registered Notes may be exchanged for Definitive
Registered Notes only under the limited circumstances described
in the Indenture.
Transfer and Exchange of Notes ................... Global Registered Notes: The Global Registered Notes can be
transferred in whole, but not partially. Such transfers are limited
to a nominee of the Common Depositary or to a successor of the
Common Depositary or such successor’s nominee. An owner of a
the beneficial interest in a Global Registered Note may, subject to
the rules and procedures of Euroclear or Cleanstream, as the case
may be, transfer all or part of such interest provided that (i) such
transfer is not made to a U.S. Person (as defined in Regulation S)
or for the account or benefit of a U.S. Person (as defined in
Regulation S) and is effected through Euroclear or Clearstream in
an offshore transaction as required by Regulation S and (ii) such
transferee shall be deemed to have made the applicable
certifications set forth in the Indenture Beneficial Interests in the
Global Registered Notes may be exchanged for Definitive
Registered Notes only under the limited circumstances described
in the Indenture.
Global Bearer Notes: Definitive Registered Notes shall be issued
to all owners of beneficial interests in a Global Bearer Note in
exchange for such interests in the event of the occurrence of
certain specified events as described in the Indenture. Subject to
the foregoing, transfer of a Global Bearer Note shall be limited to
transfers of such Global Bearer Note in whole, but not in part, to a
successor Trustee that is a Book-Entry Registrar.
Mutilated, Destroyed, Lost or Wrongfully A replacement Note for a mutilated, lost or wrongfully taken Note
Taken Notes .................................................... shall be issued by the relevant Issuer, after following the
procedures listed in Section 2.11.
Payment Currency ......................................... All payments of principal, premium, if any or interest in respect of
Note shall be made in the Note Currency specified in the Final
Terms. (Section 2.13).
Cancellation of Notes ..................................... An Issuer may (a) deliver Notes of any Series to the Trustee for
cancellation or, (b) if it acquires the beneficial interest in all or a
portion of any Global Notes, notify the Trustee that it has become
the owner of such interest and instruct the Trustee to reduce
permanently the principal amount of such Global Notes by the
principal amount represented by the interest so represented.
(Section 2.14).
Payment of Defaulted Interest ...................... The payment of Defaulted Interest including any interest on such
Defaulted Interest shall be paid in accordance with the detailed
terms listed in Section 2.15.
Guaranty ......................................................... The GS Group is the Note Guarantor and payment of obligations
of the Issuers arising out of or under all Series of Notes will be
unconditionally and irrevocably guaranteed by GS Group under a
guaranty in favour of the Trustee for the benefit of itself and the
Noteholders of any Series (the “Guaranty”). The Guaranty is a
direct senior unsecured obligation of GS Group and will rank pari
passu with the obligations of the Guarantor under its
unsubordinated and unsecured obligations.
Collateral Securing the Notes and the
The Notes of each Series are secured by the Collateral and/or
34
various types of Collateral ............................. Additional Collateral securing the Notes of such Series, as
described in the Indenture. Please refer to the Granting Clauses
and Section 3.6. The Collateral securing the Notes may be
classified into two broad categories: (i) “Indenture Collateral”,
i.e., the collateral granted pursuant to the Indenture, and (ii)
“Additional Collateral”, i.e., the collateral granted pursuant to
any Additional Security Agreement.
1. Indenture Collateral: Each Series will be separately secured by
the relevant Issuer’s grant to the Trustee, pursuant to the Indenture,
for the benefit of the Noteholders of such Series of a first priority
security interest in the Issuer’s rights in the Eligible Transactions
and the assets acquired and/or pledged to the Issuer thereunder.
Those assets may include:
(i)
the assets purchased, by and pledged to, the Issuer in
transactions under any master repurchase agreement between
the Issuer and an Eligible GS Entity entered into solely with
respect to such Series and the Issuer’s rights under such
agreement (each a “Repo”);
(ii) the assets pledged to the Issuer as collateral for any secured
loan made by the Issuer to an Eligible GS Entity solely with
respect to such Series and the Issuer’s rights under such loan
(each a “Secured Loan”);
(iii) any Eligible Securities of the relevant Issuer held in a
Securities Account opened solely with respect to such Series,
held with the Trustee on a custodian basis, pursuant to the
GSI Securities Agreement, and any payments related thereto;
(iv) any Eligible Investments purchased solely with respect to
such Series; and
(v)
any Currency Swap Transaction entered into solely with
respect to such Series and the Issuer’s rights in any collateral
pledged to secure the obligations of the Swap Counterparty
(as defined below).
2. Additional Collateral: In addition, any Series may be
separately or additionally secured by the relevant Issuer’s grant to
the Trustee, pursuant to any Additional Security Agreement, for
the benefit of the Noteholders of such Series of a first priority
security interest in the Issuer’s rights in certain other assets held by
the Issuer. Those assets may include:
(i) certain agreements relating to derivative transactions between
GSI as Issuer and a derivatives counterparty and related
assets pursuant to the GSI Derivatives Security Agreement;
and
(ii) certain bank loan agreements held by GSBE as Issuer made
between GSBE and a borrowing counterparty pursuant to the
GSBE Bank Loans Security Agreement.
Eligible Transactions ..................................... Each time any relevant Issuer issues a Series, it intends to invest an
amount equal to the principal amount of such Series in any
combination, as determined by the Issuer, of the transactions
described in the numbered Sections below (collectively, the
“Eligible Transactions”). The Issuer may change the mix of such
investments from time to time based on such considerations, as it
deems relevant.
The Issuer may apply any proceeds from repurchases of assets
under a Repo or payments received under a Secured Loan, any
Currency Swap Transactions, any Eligible Securities, Eligible
35
Investments, any Eligible Derivative Agreements or any Eligible
Bank Loans securing a Series to (i) purchase additional assets
pursuant to a new or existing master repurchase agreement, (ii)
lend to an Eligible GS Entity under a new or existing Secured
Loan (iii) pending reinvestment in Repos or Secured Loans,
purchase any of the specified obligations, loans or other assets as
set out in the Indenture (the “Eligible Investments”), (iv) purchase
additional Eligible Securities (v) enter into additional Eligible
Derivative Agreements, and (vi) acquire additional Eligible Bank
Loans, in each case, subject to certain limitations set forth in the
Indenture and any Additional Security Agreement. The Issuer and
the Repo counterparty, Secured Loan borrower, derivatives
agreement counterparty may from time to time agree to amend the
terms of such Repo, Secured Loan, securities agreement,
derivatives agreement, bank loan or any Additional Security
Agreement, including to change the definitions of the assets
eligible to be purchased or pledged thereunder, provided that doing
so does not materially and adversely affect the Series secured by
such Repo, Secured Loan, securities, derivatives agreement or
bank loan. Under any Repo, the Repo counterparty will have the
right to substitute assets on a daily basis and, during the day, to
pledge, use or sell such assets in connection with other transactions
with third parties. Similarly, the borrower under any Secured
Loan will have the right to substitute at any time the assets
securing such loan and may pledge, use or sell such assets in
connection with other transactions with third parties. Where assets
purchased and/or pledged under a Repo, Secured Loan or Eligible
Derivatives Agreement are sold to third parties, the Issuer’s
security interest in such assets will terminate but will continue in
the proceeds of such sale until a new allocation of assets is made
under such Repo, Secured Loan or Eligible Derivatives
Agreement.
Collateral Pool securing the Notes ................ 1. Bank Loan Repo
Participation Interests in Bank Loans purchased or cash pledged or
sold under a master repurchase agreement (a “Bank Loan Repo”)
entered into between an Issuer and an Eligible GS Entity (the
“Bank Loan Counterparty”) solely with respect to such Series.
“Participation Interests in Bank Loans” may include
participations or contractual rights granted by the Bank Loan
Counterparty to the relevant Issuer in secured and unsecured bank
loans, funded portions of revolving or delayed drawdown credit
facilities, participations or sub-participations in any such loans or
facilities, divided or undivided interests in any of the foregoing or
pools thereof. In the case of Participation Interests in Bank Loans
relating to underlying bank loans governed by the laws of the
United States, a state thereof or the District of Columbia (“U.S.
Participation Interests”), the Bank Loan Repo involves the
purchase and sale of undivided participation interests in such
loans. In the case of Participation Interests in Bank Loans relating
to underlying bank loans governed by the law of England and
Wales (“U.K. Participation Interests”), the Bank Loan Repos
consist of contractual rights to receive the income from the
applicable loans and, upon the Bank Loan Counterparty’s default
under the Bank Loan Repo, to obtain its assistance with
assignment of the applicable loans.
Issuer’s Security Interest in Bank Loan Repos: In respect of
each Bank Loan Repo, the transfers of U.S. Participation Interests
and the filing of Uniform Commercial Code (“UCC”) financing
statements by the relevant Issuer against the Bank Loan
Counterparty create in favour of the Issuer perfected first priority
security interests in such assets as security for the Bank Loan
Counterparty’s obligations under such Bank Loan Repo. In the
36
case of U.K. Participation Interests under a Bank Loan Repo, the
relevant Issuer will have a valid first ranking charge over the Bank
Loan Counterparty’s rights to receive payment under the loan
documents relating to the underlying bank loan to which such U.K.
Participation Interest relates as security for such Bank Loan
Counterparty’s obligations under such Bank Loan Repo upon the
execution and delivery of a deed of charge and security trust deed
between such Bank Loan Counterparty and the relevant Issuer in
respect of such U.K. Participation Interest subject to the timely
delivery of an English charge to the U.K. Registrar of Companies
at Companies House.
2. Mortgage Loan Repos
Mortgage Loans purchased or cash pledged under a master
repurchase agreement, (a “Mortgage Loan Repo”) entered into
between the Issuer and an Eligible GS Entity (the “Mortgage
Loan Counterparty”) solely with respect to such Series.
“Mortgage Loans” may include any secured or unsecured loans,
such as residential or commercial U.S. mortgage loans, chattel
paper, loans secured by direct or indirect equity interests in
commercial or multifamily residential properties, equity interests
in entities holding commercial or multifamily residential
properties, equity interests in entities formed or operated for the
purpose of holding any of the foregoing, or divided or undivided
interests or participations in any of the foregoing or pools thereof.
Issuer’s Security Interest in the Mortgage Loan Repos: In
respect of each Mortgage Loan Repo, the transfers of Mortgage
Loans and the filing of Uniform Commercial Code financing
statements by the Issuer against the Mortgage Loan Counterparty
create in favour of the Issuer perfected first priority security
interests in such assets as security for the Mortgage Loan
Counterparty’s obligations under such Mortgage Loan Repo.
3. Securities Repos
Purchased Securities purchased or sold under a master repurchase
agreement (a “Securities Repo”) entered into between the Issuer
and an Eligible GS Entity (the “Securities Repo Counterparty”)
solely with respect to such Series.
“Purchased Securities” may include any fixed-income or equity
security other than “margin stock” as defined under Regulation U
promulgated by the Board of Governors of the U.S. Federal
Reserve System.
Issuer’s Security Interest in Securities Repos: In respect of each
Securities Repo, the transfers of Purchased Securities creates in
favour of the Issuer a perfected first priority security interest in
such Purchased Securities as security for the Securities Repo
Counterparty’s obligations under such Securities Repo.
4. Loans Secured by Bank Loans
One or more loans (each, a “Loan Secured by Bank Loans”)
made by an Issuer to an Eligible GS Entity (the “Bank Loan
Borrower”) that are secured by a first priority security interest in
all of such borrower’s rights in (i) a specified principal amount of
each Pledged Bank Loan identified by the borrower from time to
time, (ii) any proceeds of the foregoing, (iii) the allocated cash
pledged to secure such loan, and (iv) the Issuer’s pro rata
undivided interest in any Supplemental Assets of such borrower.
37
“Pledged Bank Loans” may include corporate secured and
unsecured bank loans, the contractual right to receive the income
relating to bank loan (other than U.S. Bank Loans), funded
portions of revolving or delayed drawdown credit facilities,
participations or subparticipations in any such loans or facilities,
divided or undivided interests in any of the foregoing or pools
thereof or, except in the case of U.S. Bank Loans, the contractual
rights granted by the Bank Loan Borrower to receive the income
relating to the foregoing. Each Loan Secured by Bank Loans will
be documented under a master loan and security agreement entered
into between the Issuer and the secured borrower solely with
respect to a specific Series.
Issuer’s Security Interest in Pledged Bank Loans: In respect of
each Loan Secured by Bank Loans, the Bank Loan Borrower’s
grant to the Issuer of a security interest in Pledged Bank Loans
(other than U.K. Bank Loans or U.K. Participation Interest) and
the proceeds of any U.K. Bank Loan, together with the Issuer’s
filing of a UCC financing statement against the Bank Loan
Borrower, create in favour of the Issuer a perfected first priority
security interest in such assets as security for the Bank Loan
Borrower’s obligations under such loan. In the case of Pledged
Bank Loans that are U.K. Bank Loans, the Issuer will have a valid
first ranking charge over the Bank Loan Borrower’s right to
receive payments under each U.K. Bank Loan. Such charge will
secure the Bank Loan Borrower’s obligations under such Loan
Secured by Bank Loans upon the execution and delivery of the
deed of charge between such Bank Loan Borrower and the Issuer
in respect of such Pledged Bank Loans subject to the timely
delivery of the same to the U.K. Registrar of Companies at
Companies House.
5. Loans Secured by Swap Receivables
One or more loans (each, a “Loan Secured by Derivative
Receivables”) made by the relevant Issuer to an Eligible GS Entity
(the “Derivative Receivables Borrower”) that are secured by a
first priority security interest in all of such borrower’s rights in or
under (i) specified Derivative Receivables pledged to a collateral
agent (the “Collateral Agent”) for the benefit of such borrower’s
funding counterparties, including the relevant Issuer, and allocated
to such loan (ii) the portion of any amounts credited to a controlled
account (in respect of each Derivative Receivables Borrower, the
“Early Termination Payment Account”) maintained by the
Collateral Agent for the benefit of such borrower’s funding
counterparties (including the relevant Issuer) attributable to
termination payments made in respect of Derivative Receivables
allocated to such loan and (iii) cash pledged to a controlled
account of such borrower maintained for the benefit of the Issuer.
“Derivative Receivables” are certain rights of the Derivative
Receivables Borrower under transactions entered into pursuant to
swap agreements between such borrower and its counterparties
documented under an ISDA Master Agreement (each, a “Swap
Transaction”) and include the Derivative Receivables Borrower’s
rights (i) to receive amounts payable by the counterparty upon
early termination of any Swap Transaction, (ii) in any amounts
credited to the Early Termination Payment Account and
attributable to a payment made pursuant to clause (i) above, (iii)
under any credit support agreement in respect of a Swap
Transaction and any collateral thereunder, subject to the Derivative
Receivables Borrower’s right to use, pledge or repledge such
collateral in transactions unrelated to the Swap Transaction, and
(iv) under the Swap Transaction, including the rights to collection
and enforcement. The counterparties to such ISDA Master
Agreements may be organized under the laws of any jurisdiction.
38
Such agreements may be governed by either New York or English
law.
Each Loan Secured by Derivative Receivables will be documented
under a master loan and security agreement entered into between
the Issuer and the Derivative Receivables Borrower solely with
respect to a specific Series. Furthermore, the Issuer, along with
certain of the Derivative Receivables Borrower’s other funding
counterparties, will have the benefit of a security agreement
entered into between the Derivative Receivables Borrower and the
Collateral Agent, initially expected to be the Bank of New York
Mellon, for the benefit of such funding counterparties.
Issuer’s Security Interest in Pledged Derivative Receivables: In
respect of a Loan Secured by Derivative Receivables, the
Derivative Receivables Borrower’s pledge to the Collateral Agent
of Derivative Receivables, allocation of Derivative Receivables (or
portions thereof) to such loan on a collateral statement provided to
the Collateral Agent and establishment and maintenance of the
control arrangements governing the Early Termination Payments
Account and the account to which any cash is pledged in respect of
such loan, together with the relevant Issuer’s filing of UCC
financing statements against such borrower, create in favour of
such Issuer a first priority interest in the assets pledged as security
for the borrower’s obligations under such loan. Where such loan is
secured by ISDA Master Agreements governed by English law or
entered into with English counterparties, the foregoing (excluding
the filing of UCC financing statements), together with the
execution and delivery of the deed of charge between such
borrower and the relevant Issuer in respect of such Derivative
Receivables and the timely delivery of the same to the U.K.
Registrar of Companies at Companies House, creates in favour of
the relevant Issuer a valid first ranking charge over the assets
pledged as security for the borrower’s obligations under such loan.
6. Eligible Securities
In the case of GSI as Issuer, one or more debt and equity securities
and other instruments and intangible assets (including instruments
representing the right to receive, purchase or subscribe to the
foregoing or representing other rights or interest in the foregoing)
(“Eligible Securities”) as may be agreed from time to time by the
Trustee and GSI under and pursuant to the GSI Securities
Agreement, and which shall be from time to time delivered to or
received by the Trustee and/or any sub-custodian for deposit in the
relevant Securities Account established in respect of a specified
Series of Notes.
7. Eligible Investments
Certain specified investments as defined within the Indenture
including one or more of the following obligations or securities: (i)
Cash; (ii) U.S. Government Obligations; (iii) Qualified Foreign
Government Obligations; and, if issued by an affiliate of the
Issuer, representing an obligation of an Eligible GS Entity
provided that no amount earned by the relevant Issuer with respect
to such investment may be subject to withholding tax.
8. Eligible Derivatives Agreements
In the case of GSI as Issuer, one or more master agreements or
stand-alone agreement, between the GSI and a derivatives
counterparty, relating to derivative transactions, regardless of
governing law (“Eligible Derivatives Agreements”), including
without limitation (i) any ISDA Master Agreement, (ii) any
Rahmenvertrag
fur
Finanztermingeschafte
or
Lander-
39
Rahmenvertrag master agreement, and (iii) any stand-alone or
long-form confirmations of derivative transactions whether or not
governed by an ISDA Master Agreement, in each case including
any amendments, annexes, schedules, credit support documents
and confirmations relating to any of the foregoing pursuant to the
GSI Derivatives Security Agreement.
9. Eligible Bank Loans
In the case of GSBE as Issuer, one or more corporate secured or
unsecured bank loans held by the GSBE (“Eligible Bank Loans”),
the contractual right to receive the income relating to the bank
loan, funded portions of revolving or delayed drawdown credit
facilities, participations or sub-participations in any such loans or
facilities, divided or undivided interests in any of the foregoing or
pools thereof, or the contractual rights granted by the bank loan
counterparty to receive the income related to the foregoing.
(Granting Clauses, Sections 3.6, 3.8 &3.9).
Currency Hedging Requirements ................. At the time of issuance of the Notes, the Issuer will, in its sole
discretion:
(a) apply an amount equal to the proceeds from the issuance of
such Notes to enter into a cross-currency rate swap transaction
with an Eligible GS Entity (such entity, a “Swap Counterparty”
and such transaction, a “Currency Swap Transaction”), pursuant
to which amounts of Note Currency and U.S. dollars (“USD”) are
exchanged, and apply the USD proceeds thereof to acquire Repos,
Secured Loans, Eligible Investments and/or Eligible Derivatives
Agreements (collectively, the “USD Collateral”); or
(b) apply an amount equal to the proceeds from the issuance of
such Notes to acquire Repos, Secured Loans, Eligible Investments
and/or Eligible Derivatives Agreements (collectively, the “Note
Currency Collateral”), under which the payment obligations
owing to the Issuer are denominated and payable in the Note
Currency to secure the Notes.
The Issuer may subsequently terminate a Currency Swap
Transaction entered into at issuance, in which case it will use all
proceeds from the termination of such Currency Swap Transaction
to acquire Note Currency Collateral.
Under a Currency Swap Transaction, the Swap Counterparty and,
in certain circumstances, the Issuer will be required to collateralize
their respective exposures with margin calculated on a periodic
basis. Any collateral posted by the Swap Counterparty will either
be applied by the Issuer to Eligible Transactions or held by the
Trustee in a separate account and invested at the instruction of the
relevant issuer in Eligible Investments, in either case for the
benefit of the Issuer and the Trustee as secured party for the
Noteholders of the relevant Series, subject to the rights of the
Swap Counterparty.
(Sections 3.13 & 9.4).
Redemption of Notes ...................................... If the Final Terms state that the Notes are redeemable prior to their
stated Maturity Date, then such Notes can be redeemed in
accordance with the provisions of Article IV. (Sections 4.1-4.10).
Events of Default and remedies .................... In relation to a Series of Notes, each of the following will
constitute an Event of Default for a Series:
(i) failure by an Issuer to pay interest on any Note of such Series
when due and payable, which failure continues for 30 days, unless
40
the Guarantor shall have made a payment under the Guaranty in
the amount of such defaulted payment on or prior to such 30th day;
(ii) failure by an Issuer to pay principal of any outstanding Note of
such Series when due and payable, unless the Guarantor shall have
made a payment under the Guaranty in the amount of such
defaulted payment on or prior to the relevant payment date;
(iii) failure by the Guarantor in making (a) any payment due under
the Guaranty in respect of principal of any Note of such Series,
when and as the same shall become due and payable, or (b) any
payment due under the Guaranty in respect of interest on any
outstanding Note of such Series, when and as the same shall
become due and payable, and such default shall have continued for
30 days;
(iv) as of any date of determination, the aggregate margin value of
the collateral securing such Series is less than the required margin
value with respect to such Series, and such default continues for a
period of four Business Days after the earlier of (1) receiving
notice of such deficiency from the Trustee or (2) the first Business
Day after the relevant Issuer obtains actual knowledge of a
continuing deficiency that is not apparent from information
furnished to the Trustee by the Repo counterparties and Secured
Loan borrowers; and
(v) certain events of insolvency or bankruptcy, whether voluntary
or not, with respect to an Issuer or the Guarantor.
If an Event of Default (other than an Event of Default described in
clause (v) above) shall have occurred, unless all Events of Default
shall theretofore have been remedied, the Trustee may and at the
written direction of a majority-in-interest of the holders of the
Notes of the Series affected, the Trustee shall, declare the Notes of
such Series to be due and payable. If an Event of Default described
in clause (v) above shall occur, all outstanding Notes of all Series
under the Indenture shall automatically become due and payable. If
such an acceleration should occur, the Trustee is required to
demand that the relevant Issuer transfer to the Trustee any
collateral in respect of the affected Series not in the possession of
the Trustee and sell or cause the sale of such collateral received
from the Issuer and all other collateral in its possession at public or
private sales. (Section 5.1).
Holder’s Right to Information ...................... The beneficial owner of an interest in a Note may request that the
Trustee provide it with reports or information relating to the
collateral for such Series that the Trustee receives from time to
time from the Repo counterparties, Secured Loan borrower, or the
Issuer. The Issuer or the Trustee may elect to provide such reports
or information by means of a secure website. In respect of any
collateral consisting of a Bank Loan purchased under a Repo or
pledged under a Secured Loan, the Trustee will provide such
reports or information or afford such website access only after the
beneficial owner has executed and delivered a confidentiality
agreement to the Issuer and the Trustee in the form attached to the
Indenture. (Section 6.7).
Governing Law ............................................... The Indenture and the Notes shall be governed by, and construed
in accordance with, the law of the State of New York. The parties
to the Indenture have waived any right to trial by jury in any
action, proceeding or counterclaim arising out of or relating to the
Indenture, the Notes or the Note guarantee or any related
transaction to the fullest extent permitted by applicable law.
(Section10.6).
41
FORM OF FINAL TERMS
The following is an indicative form for the Final Terms to a Series of Notes, which is also the Series
Authorisation as set out in the Indenture. The following form is not prescriptive and the actual form of
Final Terms may differ in whole or in parts to the below according to the requirements of a particular
Series, and depending on terms and conditions a particular Series of Notes agreed between the
relevant Issuer and Investor. All capitalised terms that are not defined in this form of Final Terms will
have the meanings given to them in the Indenture.
GUARANTEED SENIOR SECURED NOTES PROGRAMME
issued by
[GOLDMAN SACHS BANK (EUROPE) PLC]
[GOLDMAN SACHS INTERNATIONAL]
in respect of which the payment and delivery obligations are guaranteed by
THE GOLDMAN SACHS GROUP, INC.
(the “PROGRAMME”)
FINAL TERMS
DATED [●]
SERIES 20[●]-[●] SENIOR SECURED [FIXED][FLOATING] RATE NOTES, DUE
[●]
(the “SERIES”)
ISIN: []
Common Code: []
This document must be read in conjunction with the Base Prospectus dated 4 May 2012, as
supplemented from time to time, and in particular, the Base Terms and Conditions of the
Notes, as set out therein. Full information on the Issuer, The Goldman Sachs Group. Inc. (the
“Guarantor”), and the terms and conditions of the Notes, is only available on the basis of
the combination of the Final Terms and the Base Prospectus. The Base Prospectus is
available for viewing at www.centralbank.ie and during normal business hours at the
registered office of the Issuer, and copies may be obtained from the specified office of the
listing agent in Ireland.
The Issuer accepts responsibility for the information contained in these Final Terms. To the
best of the knowledge and belief of the Issuer and the Guarantor (which have taken all
reasonable care to ensure that such is the case) the information contained in the Base
Prospectus, as completed and/or amended by these Final Terms in relation to the Series of
Notes referred to above, is true and accurate in all material respects and, in the context of the
issue of this Series, there are no other material facts the omission of which would make any
statement in such information misleading.
Unless terms are defined herein, capitalized terms shall have the meanings given to them in
the Base Prospectus or in the indenture between Goldman Sachs Bank (Europe) Plc,
Goldman Sachs International and The Bank of New York Mellon, acting through its London
Branch, dated 12 February 2009 (as amended and restated, supplemented or otherwise
modified from time to time).
The Final Terms of the above Series of Notes (the “Notes”) comprise the following:
Issuer:
[Goldman Sachs International / Goldman Sachs
Bank (Europe) Plc].
Guarantor:
The Goldman Sachs Group, Inc.
42
Series Number:
[•].
Note Currency:
[•].
Aggregate Note [Principal]
Amount:
[•]
Issue Price:
[•]
Denominations:
The Notes shall be issuable in minimum
denominations of [•] and integral multiples of [•]
in excess thereof.
Issue Date:
The Notes shall be issued on [•].
Maturity Date:
[All of the principal] [The Principal Amount] of
the Notes shall be payable on [•] and if such date
is not a Global Business Day (as defined below)
then on the succeeding day that is a Global
Business Day. [For the avoidance of doubt, the
Principal Amount of the Notes is fixed and
payment of such Principal Amount on the
Maturity Date is not subject to any condition
under the terms of the Notes, including the
performance of the Collateral.]
Collateral
Schedule 1 hereto identifies the [Eligible
Repurchase
Agreements]
[Eligible
Loan
Documents] [Eligible Custody Agreement]
[Securities Account] [Brokerage Account
Agreement] [Brokerage Account] [Eligible
Derivatives Agreement] [Eligible Bank Loans]
[Trustee Custody Account Agreement] [Eligible
Repurchase Agreements] and details of the
[Eligible Repo Securities], to be entered into with
respect to the Notes, [the Brokerage Account],
[the Trustee Custody Account], the Tripartite
Custody Accounts, and [the USD Account]
established on or prior to the Issue Date in which
funds and/or property allocable to the collateral
may be credited.
INTEREST PROVISIONS
Interest Rate
[For fixed rate notes: The Notes shall bear
interest during the Interest Period at a rate of [•]
per cent. per annum]
[For floating rate notes: The Notes shall bear
interest during each Interest Period at a rate per
annum equal to [insert base rate] for such
Interest Period plus [insert spread] per cent.
[For notes that do not bear interest: Not
applicable]
Defaulted Interest
Defaulted Interest will accrue on [describe the
amount on which defaulted interest will accrue]
provided that the default has been continuing for
[•] Global Business Days, for the period from and
including the date of such default, to but excluding
the date of actual payment at a rate which is equal
to [•] per cent. per annum plus the then applicable
Interest Rate.
43
Defaulted Interest with respect to any [describe
the amount on which defaulted interest will
accrue] will continue to accrue so long as
[describe the amount on which defaulted interest
will accrue] remains outstanding and will be due
and payable on the [•] day following the payment
of [describe the amount on which defaulted
interest will accrue] by the Issuer or Guarantor,
or, if any such date is not a Global Business Day,
on the first succeeding day that is a Global
Business Day.
Interest Amount Payable
Interest due on any Interest Payment Date will be
an amount equal to the product of (a) the
principal amount of the Notes outstanding on the
first day of the related Interest Period, (b) the Day
Count Fraction, and (c) the Interest Rate.
Interest due will be rounded [up][down] to the
nearest whole [•].
“Day Count Fraction” means the number of
days in the Interest Period in respect of which
payment is being made divided by 360,
calculated on a formula basis as follows:
Day Count Fraction =
[360 × (Y 2 – Y 1 )] + [30 × (M 2 – M 1 )] + [D 2 – D 1 ]
360
where:
“Y 1 ” is the year, expressed as a number, in which
the first day of the Interest Period falls;
“Y 2 ” is the year, expressed as a number, in which
the day immediately following the last day
included in the Interest Period falls;
“M 1 ” is the calendar month, expressed as a
number, in which the first day of the Interest Period
falls;
“M 2 ” is the calendar month, expressed as a
number, in which the day immediately following
the last day included in the Interest Period falls;
“D 1 ” is the first calendar day, expressed as a
number, of the Interest Period, unless such number
would be 31, in which case D 1 will be 30; and
“D 2 ” is the calendar day, expressed as a number,
immediately following the last day included in
the Interest Period, unless such number would be
31 and D 1 is greater than 29, in which case D 2
will be 30.
Interest Commencement
Date
[•]
Interest Period
The period from and including the Interest
Commencement Date for the Notes to but
excluding the first Interest Payment Date for the
Notes, and each successive period from and
including the first day following the end of the
44
preceding Interest Period to but excluding the
following Interest Payment Date until the
principal of the Notes is paid or made available
for payment. [Interest Period is unadjusted.]
Interest Payment Dates
Interest will be payable (a) quarterly in arrear on
the [•] day of the month, commencing on [•], and
(b) on the Maturity Date (to the extent of any
accrued and unpaid interest due in respect of the
Interest Period ending on the Maturity Date), or,
if any such date is not a Global Business Day, on
the first succeeding day that is a Global Business
Day, however if such day falls in the next
calendar month, then on the preceding Global
Business Day.
[Interest
Dates]
[For floating rate notes:[The Calculation Agent
shall calculate interest due on the next Interest
Payment Date no later than [•].]
Determination
[Interest Reset Dates
[For floating rate notes: With respect to an
Interest Period, the first day of that Interest
Period.]
Calculation Basis
Interest and redemption payments will be
calculated on the Principal Amount.
Calculation Agent
Goldman Sachs International.
Regular Record Dates
[For registered notes: The date on which the
Holders of the Notes who are entitled to receive a
payment in respect of principal or interest, as the
case may be, at the next Interest Payment Date,
Maturity Date, Redemption Date or other
payment date, as applicable, are determined will
be (i) in case of Notes held in Clearstream or
Euroclear (a) in the case of payments of interest,
on the day (whether or not a Business Day) prior
to the applicable Interest Payment Date, and (b)
in the case of payments of principal, on the day
(whether or not a Business Day) prior to the
Maturity Date, Redemption Date or other
payment date on which such principal is to be
paid and (ii) in case of Definitive Registered
Notes (a) in the case of payments of interest,
fifteen days (whether or not a Business Day)
prior to the applicable Interest Payment Date, and
(ii) in the case of payments of principal, fifteen
days (whether or not a Business Day) prior to the
Maturity Date, Redemption Date or other
payment date on which such principal is to be
paid.]
Global Business Day
Global Business Day means a day other than a
Saturday, Sunday, or other day on which
commercial banking institutions are authorised or
required by law to close in New York City,
Dublin, London and [specify any other relevant
location].
REDEMPTION PROVISIONS
Redemption/Payment Basis:
[Redemption at par]
[Other (specify)].
45
Call Option:
[Applicable / Not Applicable].
(i)
Optional Redemption Date(s)
(Call):
[].
(ii)
Optional
Redemption
Amount(s) (Call) of each Note
and method, if any, of
calculation of such amount(s):
[].
(iii)
Notice period:
[].
Put Option:
[Applicable / Not Applicable].
Redemption
Optional
(Put):
(v)
Optional Redemption Amount(s)
(Put) of each Note and method,
if any, of calculation of such
amount(s):
[].
(vi)
Notice period:
[].
Form of Notes:
Date(s)
[].
(iv)
[Bearer Notes / Registered Notes]:
OTHER INFORMATION
LISTING AND ADMISSION
TO TRADING
[Application will be made to the Irish Stock
Exchange for the Notes to be admitted to the
Official List and trading on its regulated market
on or about [•].] [Not Applicable].
(Where documenting a fungible issue need to
indicate that original Notes are already admitted
to trading.)
Ratings:
The Notes to be issued have been rated:
[Moody’s: []].
[Fitch: []].
[[Other]: []].
Other Terms
46
SCHEDULE 1: DETAILS OF COLLATERAL
[The following is indicative only. Details of Series Collateral may be specified on a Series-by-Series
basis in any alternative format.]
[Eligible Repurchase Agreements
1.
The master repurchase agreement, dated as of [●], entered into by [●] and the
Issuer for the Notes of Series [●], relating to [Participation Interests in Bank
Loans/Mortgage Loans/ Purchased Securities], (the “[Enter reference to Eligible
GS Entity counterparty] Repo Agreement”), and the related Repo Transactions
thereunder. The Issuer shall provide a copy of the [•] Repo Agreement [and any
relevant Eligible Custody Agreement in connection with such [•] Repo
Agreement] to the Holders of the Notes of such Series, upon their written or oral
request.]
[Eligible Loan Documents
2.
The master loan and security agreement, dated as of [●], entered into by [●] and
the Issuer acting with respect to the Notes of Series [●], relating to [Bank
Loans/Purchased Securities], (the “[Enter reference to Eligible GS Entity
counterparty] Loan Agreement”), and the related advances thereunder. The Issuer
shall provide a copy of the [•] Loan Agreement [and any relevant Eligible Custody
Agreement in connection with such [•] Repo Agreement] to the Holders of the
Notes of such Series, upon their written or oral request.]
[Eligible Securities
3.
The Securities Account information, opened as of [●], for the account of the
relevant Issuer, with the Trustee as Eligible Custodian with respect to the Notes of
Series [●], and any Eligible Securities on deposit therein or credited thereto. The
Issuer shall provide details of the Eligible Securities, and any relevant Eligible
Custody Agreement in connection with such Securities Account to the Holders of
the Notes of such Series, upon their written or oral request.]
[Eligible Derivatives Agreements
4.
The master agreements effecting derivatives transactions, entered into by the
relevant Issuer and the applicable derivatives agreements counterparties secured in
respect of the Notes of Series [●]. The Issuer shall provide details of the Eligible
Derivatives Agreement to the Holders of the Notes of such Series, upon their
written or oral request.]
[Eligible Bank Loans
5.
6.
7.
Details of the Eligible Bank Loans secured by the relevant Issuer in respect of the
Notes of Series [●]. The Issuer shall provide details of the Eligible Derivatives
Agreement to the Holders of the Notes of such Series, upon their written or oral
request.]
[Eligible Custody Account
The Eligible Custody Account opened for the account of the Issuer with [•] as
Eligible Custodian with the respect to the Notes of Series [•], pursuant to an
Eligible Custody Agreement, dated as of [•] between [•] and the Issuer. The Issuer
shall provide a copy of the Eligible Custody Agreement to the Holders of the
Notes of such Series, upon their written or oral request.]
Brokerage Account
The Brokerage Account opened for the account of the relevant Issuer pursuant to a
Brokerage Account Agreement, dated as of 17 July 2009, entered into between
Goldman Sachs International and the Issuer. The Issuer shall provide a copy of the
Brokerage Account Agreement to the Holders of the Notes of such Series, upon
their written or oral request.
47
Trustee Custody Account Agreement
8.
The Trustee Custody Account opened for the account of the Trustee pursuant to a
Trustee Custody Account Agreement,, dated as of [●], entered into between The
Bank of New York Mellon, as securities intermediary (the “Intermediary”), and
The Bank of New York Mellon, acting through its London Branch, as Trustee. The
Issuer shall provide a copy of the Trustee Custody Account Agreement to the
Holders of the Notes of such Series, upon their written or oral request.]
Account Details:
The following accounts will be established with respect to the Notes:
1.
The [Brokerage Account] maintained at Goldman Sachs International. with
account no. [●]
2.
The [Eligible Custody Account] maintained at [•] with account no. [•]
3.
The [Securities Account] maintained at [•] with account no. [•]
4.
The Trustee Custody Account maintained at the Intermediary with account no. [●]
5.
The [USD Account] maintained at [●] (the “USD Account”) with account no. [●].
Overcollateralization Percentage
The Overcollateralization Percentage for each type of Underlying Asset (other than
cash) with respect to the Notes is [●].
Determination of Margin Value
The method of determining Margin Value for any Underlying Asset, or group of
Underlying Assets with respect to the Notes is [●].
48
TAXATION
The following is a general description of certain United Kingdom and Irish tax considerations relating
to the Notes. It does not constitute legal or tax advice. It does not purport to be a complete analysis of
all tax considerations relating to the Notes, whether in the United Kingdom or Ireland or elsewhere.
Prospective purchasers of Notes should be aware that ownership of the Notes, and any transactions
involving the Notes, including the issue of any Notes, any purchase, disposal, lapse or redemption of,
or other dealings in, the Notes and any transaction involved in the exercise and settlement of the Notes,
may have tax consequences (including but not limited to withholding taxes and possible liabilities to
stamp duties, transfer and registration taxes). The tax consequences may depend, amongst other things,
upon the status and circumstances of the prospective purchaser, the terms and conditions of the
particular Notes specified by the relevant Final Terms, and the applicable law and practice of taxation
authorities in relevant jurisdictions. The following is a general guide and should be treated with
appropriate caution. Prospective purchasers of any Notes should consult their own tax advisers in
relevant jurisdictions about the tax implications of holding any Notes and of any transaction
involving any Notes.
Irish Tax Considerations
The following discussion is a summary of certain material Irish withholding tax considerations relating
to income payments in respect of Notes issued by the Issuers. The discussion is based on Irish law and
revenue practice in effect on the date of this Base Prospectus. The discussion relates only to the
position of persons who are the absolute beneficial owners of their Notes and is for general information
only. The discussion does not address other Irish tax aspects of acquiring, holding, disposing,
abandoning, exercising or dealing in Notes. The discussion does not constitute taxation or legal advice.
Irish Withholding Tax
There are three forms of Irish withholding tax which may apply to interest payments in respect of the
Notes. These are (a) interest withholding tax, (b) deposit interest retention tax (“DIRT”), and (c)
encashment tax. The following paragraphs describe in broad outline the operation of these withholding
taxes and set out relevant exemptions.
Interest Withholding Tax
Irish interest withholding tax at a rate of (currently) 20 per cent. applies to yearly interest paid by Irish
resident companies (such as GSBE) unless a specific exemption applies.
(a)
Banking Business Exemption
Interest payments by GSBE under the Notes will be exempt from Irish interest withholding tax
if the interest is paid by GSBE in the ordinary course of GSBE carrying on its bona fide
banking business in Ireland. GSBE intends that interest on any Notes will be paid by GSBE in
the ordinary course of the Issuer carrying on its bona fide banking business in Ireland. Once
this is the case, such interest should be exempt from Irish interest withholding tax.
(b)
Quoted Eurobond Exemption
Interest payments by GSBE under the Notes will also be exempt from Irish interest
withholding tax if the relevant Notes qualify as ‘quoted eurobonds’ and the Notes are held in a
recognised clearing system (Euroclear, Clearstream Banking SA and Clearstream Banking AG
are ‘recognised clearing systems’). If the Notes are not held in a recognised clearing system,
the exemption will still apply if either (a) the person by or through whom the payment is made
is not in Ireland, or (b) the beneficial owner of the Notes is not Irish resident and has made a
declaration to that effect. The Notes will be ‘quoted eurobonds’ if they (a) carry a right to
interest, and (b) are quoted on a ‘recognised stock exchange’ (the Irish Stock Exchange is a
‘recognised stock exchange’).
49
Interest payments made by GSI in respect of Notes issued by GSI under the Programme should not be
subject to Irish interest withholding tax, provided GSI does not issue such Notes from a branch of GSI
in Ireland.
Deposit Interest Retention Tax
DIRT is a form of Irish withholding tax that can apply to the return paid in respect of notes by financial
institutions. In most cases, the rate of DIRT is currently 30 per cent. A higher rate of 33 per cent. can
apply where the return is payable less frequently than annually.
If none of the exemptions outlined immediately below apply, GSBE will be obliged to deduct DIRT
from interest payments on the Notes (or any other return on the Notes) unless the beneficial owner of
the interest is a non-Irish resident person and has provided GSBE with a completed declaration of nonIrish residency in the approved format in advance.
(a)
Listed Debt Exemption
Payments of interest by GSBE on the Notes will be exempt from DIRT if the Notes constitute
a debt on a security for Irish tax purposes and are listed on a stock exchange.
(b)
Wholesale Debt Instrument Exemption
Payments of interest by GSBE on the Notes will be exempt from DIRT if the ‘wholesale debt
instrument’ exemption applies. There are two forms of this exemption.
(i)
The ‘wholesale debt instrument’ exemption applies if the Notes are (a) either
‘commercial paper’ or ‘certificates of deposit’, (b) of an ‘approved denomination’, and
(c) held in a ‘recognised clearing system’.
Notes issued by GSBE are ‘commercial paper’ if they are debt instruments (in physical
or electronic form) which recognise an obligation to pay a stated amount, carry a right
to interest (or are issued at a premium or discount), and mature within two years.
Notes issued by GSBE are ‘certificates of deposit’ if they are instruments (in physical
or electronic form) which recognise an obligation to pay a stated amount to bearer or to
order, with or without interest. Where the instruments are held in physical form, the
right to receive the stated amount must be transferable by the delivery of the
instruments (with or without endorsement). Where the instruments are held in
electronic form, the right to receive the stated amount must be transferable.
Notes are of an ‘approved denomination’ where their denomination is at least Euro
500,000 or US$ 500,000 (or, in another currency, the equivalent of Euro500,000). The
equivalent of an amount of Euro in another currency is to be denominated by reference
to the rate of exchange at the time the Programme under which the Notes are to be
issued is first publicised.
(ii)
The ‘wholesale debt instrument’ exemption also applies where the person by whom or
through whom the interest payment on the Notes is made is either (a) an Irish resident
person, or (b) a non-Irish resident company where the payment is made by or through
its Irish branch/agency through which it carries a trade or business in Ireland, and the
‘wholesale debt instrument’ is not held in a ‘recognised clearing system’.
In these circumstances, if a non-Irish resident person is beneficially entitled to the
interest payment and is the beneficial owner of the relevant Note, the exemption from
DIRT arises once that person has provided GSBE or its paying agent with a completed
declaration of non-Irish residency in the approved format in advance of the interest
payment.
If an Irish resident person is beneficially entitled to the interest being paid by GSBE,
the exemption from DIRT arises once that person has provided their Irish tax
registration number to GSBE or its paying agent in advance of the interest payment.
50
(c)
Medium-Term Note Revenue Practice
The Irish Revenue Commissioners have, by their practice, allowed a further relevant
exemption from DIRT. Payments of interest (or any other return) on the Notes issued by
GSBE should not be subject to DIRT in accordance with this practice once all the following
conditions are met:
(i)
the Notes are medium-term notes;
(ii)
the Issuer does not sell the Notes to Irish resident persons and does not offer the
Notes for sale in Ireland;
(iii)
dealers undertake to the Issuer, as a matter of contract, that their action in any
jurisdiction will comply with applicable laws and regulations and that they will not
knowingly make primary sales to any Irish residents or persons (or knowingly offer
to do so or distribute any material in that connection in Ireland);
(iv)
the offering documentation includes wording to the effect that each dealer has
confirmed that, with respect to the Notes, it will not knowingly offer to sell the Notes
to an Irish resident or to persons whose usual place of abode is Ireland and that it will
not knowingly distribute or cause to be distributed in Ireland any offering material in
connection with such debt securities;
(v)
the Notes are cleared through a ‘recognised clearing system’ (see above); and
(vi)
the Notes are denominated in amounts of not less than EUR 300,000 or its
equivalent.
An obligation to deduct DIRT should not apply to GSI in respect of Notes issued by GSI
under the Programme, provided GSI does not issue Notes from a branch of GSI in Ireland.
Encashment Tax
Encashment tax is a form of Irish withholding tax which can apply where Irish collecting agents have
been appointed in respect of Notes issued by GSBE which qualify as ‘quoted eurobonds’ (see above).
In these circumstances, if no Irish withholding tax has been deducted by the person paying the interest,
an Irish collecting agent must deduct encashment tax (at a rate of 20 per cent.) when it obtains the
interest payment (whether in Ireland or elsewhere) in respect of those Notes. An Irish collecting agent
must also deduct encashment tax (at a rate of 20 per cent.) if it is a bank in Ireland and realises any
interest in Ireland on behalf of the holder of those Notes. Encashment tax will not apply to a banker by
virtue only of the clearing of a cheque or the arranging for the clearing of a cheque by the banker.
An exemption from encashment tax applies to non-Irish resident persons who are the beneficial owner
of the relevant Notes where they provide a completed declaration of non-Irish residency in the
approved format in advance of the interest payment.
Holders of Notes should note that the appointment of an Irish collecting agent may bring them within
the change to Irish encashment tax.
Encashment tax may also apply to payments of interest on the Notes issued by GSI if GSI appoints an
Irish paying agent in respect of such interest or a Noteholder appoints an Irish collecting agent to
collect interest payments in respect of such Notes.
In those circumstances, Irish withholding tax (at a rate of 20 per cent.) will apply unless the paying
agent or collecting agent receives a completed declaration from the Noteholder in the approved format
certifying its non-resident status.
United Kingdom Tax Considerations
The following comments are of a general nature, based on current United Kingdom tax law and what is
understood to be the practice of Her Majesty’s Revenue & Customs as at the date of this Base
51
Prospectus, all of which may change at any time, possibly with retrospective effect. The following is a
general summary only of the United Kingdom withholding taxation treatment of payments of interest
on the Notes together with some very general statements about stamp duty and stamp duty reserve tax.
The comments below only apply to persons who are beneficial owners of the Notes and do not
necessarily apply where any payment on the Notes is deemed for tax purposes to be the income of any
other person. The comments are not exhaustive, and do not deal with other United Kingdom tax
aspects of acquiring, holding, disposing of, abandoning, exercising or dealing in the Notes. Any
prospective purchasers of any Notes who are in doubt as to their own tax position, or who may be
subject to tax in a jurisdiction other than the United Kingdom, should consult their professional
adviser.
United Kingdom withholding tax
Interest payments
References to “interest” in this section mean interest as understood under United Kingdom tax law.
For example, any redemption premium or, in the case of Notes issued at a discount, the difference
between the face value and the issue price, may be “interest” for United Kingdom tax purposes,
depending upon the particular terms and conditions of the relevant Notes.
Where a payment under the Notes constitutes (or, in certain circumstances, is treated as if it were)
interest for United Kingdom tax purposes, the payment may be made without withholding or deduction
for or on account of United Kingdom income tax in the following circumstances:
(i)
so long as the relevant Issuer is authorised for the purposes of the Financial Services and
Markets Act 2000 and its business consists wholly or mainly of dealing in financial
instruments (as defined by section 984 of the Income Tax Act 2007) as principal, provided the
payment is made in the ordinary course of that business; or
(ii)
if the Notes are and continue to be “quoted Eurobonds” as defined in section 987 of the
Income Tax Act 2007. The Notes will constitute “quoted Eurobonds” if they carry a right to
interest and are and continue to be listed on a “recognised stock exchange” within the meaning
of section 1005 of the Income Tax Act 2007. The Irish Stock Exchange is a recognised stock
exchange for these purposes. The Notes will be treated as listed on the Irish Stock Exchange
if they are both admitted to trading on the Irish Stock Exchange and are officially listed in
Ireland in accordance with provisions corresponding to those generally applicable in EEA
states.
In cases falling outside the exemptions described above, interest on the Notes may fall to be paid under
deduction of United Kingdom income tax at the basic rate (currently 20 per cent.) subject to such relief
as may be available under the provisions of any applicable double taxation treaty or to any other
exemption which may apply. However this withholding will not apply if the relevant interest is paid on
Notes with a maturity date of less than one year from the date of issue and which are not issued under
arrangements the effect of which is to render such Notes part of a borrowing with a total term of a year
or more.
United Kingdom stamp duty and stamp duty reserve tax
Depending on the terms and conditions specified by the Final Terms of any Note, there may be a
charge to stamp duty and/or stamp duty reserve tax on the issue, transfer and/or exercise, of a Note, and
in respect of transactions involving Notes.
European Union Savings Directive
Under Council Directive 2003/48/EC on the taxation of savings income (the “Savings Directive”),
each Member State of the EU is required to provide to the tax authorities of another Member State
details of payments of interest or other similar income paid by a person within its jurisdiction to, or
secured by such a person for, an individual beneficial owner resident in, or certain limited types of
entity established in, that other Member State.
52
However, for a transitional period, Austria and Luxembourg will (unless during such period they elect
otherwise) instead operate a withholding system in relation to such payments. Under such a
withholding system, the beneficial owner of the interest payment must be allowed to elect that certain
provision of information procedures should be applied instead of withholding. The rate of withholding
is 35 per cent..
The transitional period is to terminate at the end of the first full fiscal year following agreement by
certain non-EU countries to exchange of information procedures relating to interest and other similar
income.
A number of non-EU countries, and certain dependent or associated territories of certain Member
States have adopted similar measures (either provision of information or transitional withholding) in
relation to payments made by a person within their respective jurisdictions to, or secured by such a
person for, an individual beneficial owner resident in, or certain limited types of entity established in, a
Member State. In addition, the Member States have entered into provision of information or
transitional withholding arrangements with certain of those countries and territories in relation to
payments made by a person in a Member State to, or secured by such a person for, an individual
beneficial owner resident in, or certain limited types of entity established in, one of those countries or
territories.
A proposal for amendments to the Savings Directive has been published, including a number of
suggested changes which, if implemented, would broaden the scope of the rules described above.
Investors who are in any doubt as to their position should consult their professional advisers.
53
SELLING RESTRICTIONS
Save for the approval of this Base Prospectus as a Base Prospectus for the purpose of Article 5.4 of the
Prospectus Directive by the Central Bank, no action has been or will be taken by the Issuers or the
Guarantor that would permit a public offering of the Notes or possession or distribution of any offering
material in relation to the Notes in any jurisdiction where action for that purpose is required. No offers
or sales of any Notes, or distribution of any offering material relating to the Notes, may be made in or
from any jurisdiction except in circumstances, which will result in compliance with any applicable laws
and regulations and will not impose any obligation on the Issuers or the Guarantor.
The United States
Neither the Notes nor the Guaranty in respect of the relevant Issuer’s obligations in relation to the
Notes has been or will be registered under the United States Securities Act of 1933, as amended, (the
“Securities Act”) and neither the Notes nor the Guaranty may be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in transactions exempt from the
registration requirements of the Securities Act. Trading in the Notes has not been and will not be
approved by an exchange or board of trade. Each dealer is required to agree, among other things, that it
will not offer or sell the Notes other than to affiliates in transactions exempt from registration under the
Securities Act or to non-U.S. persons in offshore transactions in compliance with Regulation S under
the Securities Act. The purchaser further represents and agrees that offers and sales of the Notes have
been and will be made by it in accordance with the transfer restrictions in the Indenture, as applicable.
In addition, until 40 days after the commencement of offering of Notes comprising any series, an offer
or sale of Notes within the United States by any dealer (whether or not participating in the offering)
may violate the registration requirements of the Securities Act.
As used in the preceding paragraphs “United States” have the meanings given to them in Regulation S
under the Securities Act.
In addition, unless otherwise specified in the Final Terms relating to a Note, by its purchase of the
securities, the purchaser (or transferee) and each person directing such purchase (or transfer) on behalf
of such holder will represent, or will be deemed to have represented and warranted, on each day from
the date on which the purchaser (or transferee) acquires the Notes through and including the date on
which the purchaser (or transferee) disposes of its interest in the Notes, that the purchaser (or
transferee) is not (and for so long as it holds any Note or any interest therein will not be), and is not
acting on behalf of (and for so long as it holds any Note or any interest therein will not be acting on
behalf of) (1) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I
of ERISA, (2) a “plan” (as defined in Section 4975(e)(1) of the Code) to which Section 4975 of the
Code applies, (3) an entity whose underlying assets include the assets of such an “employee benefit
plan” or “plan”, or (4) a foreign, governmental or church plan that is subject to any non-U.S., federal,
state or local law that is similar to the applicable provisions of ERISA or the Code with respect to the
treatment of plan assets or prohibited transactions.
If the Final Terms for any Series of Notes of which GSI is the Issuer permit the Collateral to include
Eligible Securities that are “margin stock”, as defined in Regulation U promulgated by the Board of
Governors of the United States Federal Reserve System (“Regulation U”), then GSI hereby notifies
each Holder of Notes of such Series that any margin stock included among the Collateral for such
Notes will be eligible for the “hypothecation loan” exception of Section 221.5(c)(1) of Regulation U.
Any Holder or prospective Holder of such Notes with a principal office in the United States should
consult its legal adviser regarding the applicability of Regulation U to its investment in such Notes
(including the applicability of the registration requirements of Section 221.3(b) of Regulation U).
Transfer Restrictions
Each purchaser of a beneficial interest in any Note will be deemed to have represented and agreed,
inter alia, as follows (terms used in this paragraph that are defined in Regulation S are used herein as
defined therein):
(a)
the purchaser (i) is, and the person, if any, for whose account it is acquiring such Note is,
outside the United States and is not a U.S. person, (ii) is not an affiliate of the Issuer or a
person acting on behalf of such affiliate and (iii) is not a securities dealer or, if it is a securities
54
dealer, it did not acquire the Notes from the Issuer or an affiliate thereof in the initial
distribution and (iv) is acquiring the offered Notes in an offshore transaction meeting the
requirements of Regulation S;
(b)
the purchaser is aware that the Notes have not been and will not be registered under the
Securities Act and that the Notes are being distributed and offered outside the United States in
reliance on Regulation S;
(c)
the purchaser acknowledges that the Notes may be offered, sold or otherwise transferred only
(a) in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S or (b)
in a transaction exempt from registration under the Securities Act; in each case in accordance
with any applicable securities laws of any states of the United States;
(d)
the purchaser agrees that it will give to each person to whom it transfers notes notice of any
restrictions on transfer of such Notes;
(e)
it is not (and for so long as it holds any Note or any interest therein will not be), and is not
acting on behalf of (and for so long as it holds any Note or any interest therein will not be
acting on behalf of) (1) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that
is subject to Title I of ERISA, (2) a “plan” (as defined in Section 4975(e)(1) of the Code) to
which Section 4975 of the Code applies, (3) an entity whose underlying assets include the
assets of such an “employee benefit plan” or “plan”, or (4) a foreign, governmental or church
plan that is subject to any non-U.S, federal, state or local law that is similar to the applicable
provisions of ERISA or the Code with respect to the treatment of plan assets or prohibited
transactions; and
(f)
the purchaser acknowledges that the relevant Issuer, the dealer(s), their affiliates and others
will rely upon the truth and accuracy of the foregoing representations and agreements.
Public Offer Selling Restrictions under The Prospectus Directive
In relation to each Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on
which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant
Implementation Date”) an offer of Notes which are the subject of the offering contemplated by this
Base Prospectus as completed by the Final Terms in relation thereto may not be made to the public in
that Relevant Member State except that, with effect from and including the Relevant Implementation
Date, an offer of such Notes may be made to the public in that Relevant Member State:
(a)
if the Final Terms in relation to the Notes specify that an offer of those Notes may be made
other than pursuant to Article 3(2) of the Prospectus Directive in that Relevant Member State
(a “Non-exempt Offer”), following the date of publication of a prospectus in relation to such
Notes which has been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, provided that any such prospectus has subsequently
been completed by the Final Terms contemplating such Non-exempt Offer, in accordance with
the Prospectus Directive, in the period beginning and ending on the dates specified in such
prospectus or Final Terms, as applicable and the Issuer has consented in writing to its use for
the purpose of that Non-exempt Offer; or
(b)
at any time to any legal entity which is defined as a qualified investor in the Prospectus
Directive; or
(c)
at any time to fewer than 100, or if the Relevant Member State has implemented the relevant
provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than
qualified investors as defined in the Prospectus Directive) subject to obtaining the prior
consent of the relevant Issuer for any such offer; or
(d)
at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,
55
provided that no such offer of Notes referred to in (b) to (d) (inclusive) above shall require the relevant
Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer to the public” in relation to any Notes in
any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to
purchase or subscribe to the Notes, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression “Prospectus
Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented by the Relevant Member State), and includes any relevant
implementing measure in each Relevant Member State and the expression “2010 PD Amending
Directive” means Directive 2010/73/EU.
This Base Prospectus has been prepared on the basis that, except to the extent (ii) below may apply,
any offer of Notes in any Relevant Member State will be made pursuant to an exemption under the
Prospectus Directive from the requirement to publish a prospectus for offers of Notes. Accordingly,
any person making or intending to make an offer in that Relevant Member State of Notes which are the
subject of a placement contemplated in this Base Prospectus as completed by Final Terms in relation to
the offer of those Notes may only do so (i) in circumstances in which no obligation arises for the
relevant Issuer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement
a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer,
or (ii) if a prospectus for such offer has been approved by the competent authority in that Relevant
Member State or, where appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State and (in either case) published, all in accordance
with the Prospectus Directive, provided that any such prospectus has subsequently been completed by
Final Terms which specify that offers may be made other than pursuant to Article 3(2) of the
Prospectus Directive in that Relevant Member State and such offer is made on or prior to the date
specified for such purpose in such prospectus or Final Terms, as applicable, and the Issuer has
consented in writing to its use for the purpose of such offer. Except to the extent (ii) above may apply,
none of the Issuer nor the Guarantor has authorised, nor do they authorise, the making of any offer of
Notes in circumstances in which an obligation arises for the relevant Issuer to publish or supplement a
prospectus for such offer. For the purposes of this provision, the expression “Prospectus Directive”
means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to
the extent implemented in the Relevant Member State), and includes any relevant implementing
measure in the Relevant Member State and the expression “2010 PD Amending Directive” means
Directive 2010/73/EU.
Selling Restrictions Addressing Additional United Kingdom Securities Laws
Any offeror of Notes will be required to represent and agree that:
(a)
in relation to any Notes which have a maturity of less than one year, (i) it is a person whose
ordinary activities involve it in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (ii) it has not offered or sold and will
not offer or sell any Notes other than to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or as agent) for the
purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or
dispose of investments (as principal or agent) for the purposes of their businesses where the
issue of the Notes would otherwise constitute a contravention of section 19 of the Financial
Services and Markets Act 2000 (“FSMA”) by the relevant Issuer;
(b)
it has only communicated or caused to be communicated and will only communicate or cause
to be communicated an invitation or inducement to engage in investment activity (within the
meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any
Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer or the
Guarantor or, in the case of GSI, would not if it was not an authorised person, apply to GSI;
and
56
(c)
it has complied and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to any Notes in, from or otherwise involving the United
Kingdom.
Irish Selling Restrictions
In addition to the circumstances referred to in the section entitled “Public Offer Selling Restrictions
Under the Prospectus Directive”, any offeror of the Notes will be required to represent, warrant and
agree that it has not offered, sold, placed or underwritten and will not offer, sell, place or underwrite
the Notes, or do anything in Ireland in respect of the Notes, otherwise than in conformity with the
provisions of:
(a)
the Prospectus Regulations and any rules issued by the Central Bank under Section 51 of the
Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland (as
amended) (the “2005 Act”);
(b)
the Irish Companies Acts 1963 to 2009;
(c)
the European Communities (Markets in Financial Instruments) Regulations 2007 (as
amended) of Ireland and it will conduct itself in accordance with any rules or codes of conduct
and any conditions or requirements, or any other enactment, imposed or approved by the
Central Bank; and
(d)
the Market Abuse (Directive 2003/6/EC) Regulations 2005 and any rules issued by the Central
Bank under Section 34 of the Investment Funds, Companies and Miscellaneous Provisions Act
2005 of Ireland.
57
GENERAL INFORMATION
1.
The establishment and annual update of the Programme has been authorised pursuant to a
written resolution of (a) the Executive Committee of the Board of Directors of GSBE
passed on 10 February 2009; and (b) the Executive Committee of the Board of Directors
of GSI passed on 28 September 1998. The entering into and performance of the Guaranty
by the Guarantor has been authorised pursuant to a resolution of the Board of Directors of
GS Group dated 16 September 2005.
2.
None of the Issuers, or the Guarantor, or any of GSI or the Guarantor’s respective
subsidiaries, save, in respect of the Guarantor, as disclosed in “Legal Proceedings” on
pages 34 and 195-207 of the 2011 Form 10-K, are or have been involved in any
governmental, legal or arbitration proceedings (including any such proceedings which are
pending or threatened of which the Issuers or the Guarantor are aware) during the 12
months before the date of this Base Prospectus which may have, or have had in the recent
past, significant effects on the Issuers’ or the Guarantor’s financial position or
profitability. The Guarantor believes, based on currently available information, that the
results of such proceedings, in the aggregate, will not have a material adverse effect on
the consolidated financial position of the group, but might be material to its operating
results for any particular period, depending, in part, upon the operating results for such
period.
3.
There has been no material adverse change in the prospects of GSBE, GSI or any of
GSI’s subsidiaries since 31 December 2011, except as it may otherwise be indicated in
this Base Prospectus. There has been no material adverse change in the prospects of the
Guarantor or any of the Guarantor subsidiaries since 31 December 2011, except as it may
otherwise be indicated in this Base Prospectus.
4.
There has been no significant change in the financial or trading position of the Guarantor
or any of the Guarantor’s subsidiaries, since 31 December 2011, except as it may
otherwise be indicated in this Base Prospectus. There has been no significant change in
the financial or trading position of GSBE since 31 December 2011, except as it may
otherwise be indicated in this Base Prospectus. There has been no significant change in
the financial or trading position of GSI or any of GSI’s subsidiaries since 31 December
2011, except as it may otherwise be indicated in this Base Prospectus.
5.
For so long as any Notes shall be outstanding or may be issued under the Programme,
physical copies of the following documents may be obtained free of charge upon request
during normal business hours from the specified office of each of the Issuers:
(a)
the Memorandum and Articles of Association of each of the Issuers;
(b)
the restated Certificate of Incorporation of the Guarantor;
(c)
the Indenture;
(d)
the Guaranty dated 11 March 2011;
(e)
the audited accounts of the Guarantor for the two years ended 31 December 2011
and 31 December 2010;
(f)
the 2012 Proxy Statement and 17 April Form 8-K;
(g)
the audited financial statements of GSBE for the 52-week period ended 31
December 2010 and the 52-week period ended 31 December 2011;
(h)
the audited financial statements of GSI for the audited financial statements of GSI
for the 52-week period ended 31 December 2010 and the 52-week period ended
31 December 2011;
58
(i)
the Final Terms for each Series of Notes that are listed on the Official List of the
Irish Stock Exchange or any other stock exchange;
(j)
a copy of the Base Prospectus;
(k)
a copy of any supplement to the Base Prospectus and Final Terms; and
(l)
all reports, letters and other documents, balance sheets, valuations and statements
by any expert any part of which is extracted or referred to in this Base Prospectus.
6.
This Base Prospectus will also be made available to the public by publication in
electronic form on the website of the Central Bank www.centralbank.ie or by request
from The Goldman Sachs Group, Inc., Investor Relations, 200 West Street, New York,
New York 10282, telephone +1 (212) 902 0300.
7.
Any website addresses contained in this Base Prospectus do not form part of the Base
Prospectus.
8.
The estimated total expenses related to the admission to trading on the Irish Stock
Exchange will be approximately Euro 2,000.
9.
Each Final Terms in relation to each Series of Notes will specify whether the Notes have
been accepted for clearance through Euroclear and Clearstream, Luxembourg. The
appropriate common code and International Securities Identification Number in relation
to the Notes of each such Series and any other clearing system as shall have accepted the
relevant Securities for clearance will be specified in the Final Terms relating thereto.
10.
Records of Notes in certificated or book-entry form will be maintained by Euroclear Bank
SA/NV of 1 Boulevard du Roi Albert II, B- 1210 Brussels, Belgium and Clearstream
Banking SA of 42 Avenue J.F. Kennedy, L-1855 Luxembourg.
11.
Pursuant to the Indenture, a first priority security interest in all of the Issuers’ right, title
and interest in collateral securing the relevant Issuer’s obligations under the Notes will be
granted to The Bank of New York Mellon, acting through its London Branch, as Trustee,
on behalf of the Noteholders. The Bank of New York Mellon is a New York banking
corporation and its corporate trust office in London, England is located at One Canada
Square, London E14 5AL.
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REGISTERED OFFICES OF THE ISSUER
Goldman Sachs Bank (Europe) Plc
Hardwicke House
Upper Hatch Street
Dublin 2
Ireland
Goldman Sachs International
Peterborough Court
133 Fleet Street
London
EC4A 2BB
United Kingdom
PRINCIPAL OFFICE OF THE GUARANTOR
The Goldman Sachs Group, Inc.
200 West Street
New York, NY 10282
USA
TRUSTEE, REGISTRAR AND PAYING AGENT
The Bank of New York Mellon (acting through its London Branch)
One Canada Square
London E14 5AL
United Kingdom
LEGAL ADVISER TO THE ISSUERS
as to English and U.S law
Cleary Gottlieb Steen & Hamilton LLP
City Place House
55 Basinghall Street
London
EC2V 5EH
United Kingdom
as to Irish Law
Matheson Ormsby Prentice
70 Sir John Rogerson’s Quay
Dublin 2
Ireland
AUDITORS
INDEPENDENT AUDITORS OF GSBE
PricewaterhouseCoopers LLP
1 Spencer Dock
North Wall Quay
Dublin 1
Ireland
INDEPENDENT AUDITORS OF GSI
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
United Kingdom
INDEPENDENT ACCOUNTANTS OF THE GUARANTOR
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
USA
60