GOLDMAN SACHS INTERNATIONAL
AVVISO n.5336 | 23 Marzo 2017 | MOT - EuroMOT |
Mittente del comunicato : BORSA ITALIANA
Societa' oggetto dell'Avviso
: GOLDMAN SACHS INTERNATIONAL
Testo del comunicato
Oggetto : 'EuroMOT' - Inizio negoziazioni 'GOLDMAN SACHS INTERNATIONAL'
Si veda allegato.
Disposizioni della Borsa
Società emittente: GOLDMAN SACHS INTERNATIONAL
Titolo: "Issue of MXN 800,000,000 Three Year Fixed Rate Notes, due March 17, 2020" (Codice ISIN XS1505106192)
Società di Rating | Long Term | Data Report |
Moody's | A1 | 09/12/2015 |
Standard & Poor's | A+ | 16/12/2016 |
Fitch Ratings | A | 09/12/2015 |
Rating Emittente:
GOLDMAN SACHS INTERNATIONAL
Oggetto: INIZIO DELLE NEGOZIAZIONI IN BORSA
Data inizio negoziazioni: 24/03/2017
Mercato di negoziazione: Borsa - Mercato telematico delle obbligazioni (MOT),
segmento EuroMOT, 'classe euro-obbligazioni, ABS, titoli di emittenti esteri e altri titoli di debito'
Clearing: n.a.
Sistemi di regolamento: Euroclear e Clearstream
Calendario di regolamento: Il calendario della valuta MXN tenuto altresì conto dei
giorni di chiusura dei sistemi di liquidazione interessati
Termini di liquidazione: Il secondo giorno successivo alla data di stipulazione dei
contratti di compravendita
EMS: 440.000
CARATTERISTICHE SALIENTI DEI TITOLI OGGETTO DI QUOTAZIONE
"Issue of MXN 800,000,000 Three Year Fixed Rate Notes, due March 17, 2020"
Modalità di negoziazione: corso secco
N. obbligazioni in circolazione: 32.000
Valore nominale unitario: 25.000 MXN Valore nominale complessivo
delle obbligazioni in circolazione: 800.000.000 MXN
Interessi: le obbligazioni fruttano interessi annui lordi, pagabili in via posticipata in conformità a quanto specificato nel Prospetto del prestito
Modalità di calcolo dei ratei: 30/360 Godimento: 17/03/2017
Scadenza: 17/03/2020 (rimborso alla pari in un'unica soluzione alla scadenza)
Tagli: unico da nominali 25000 MXN
Codice ISIN: XS1505106192
Codice Instrument Id: 811467
Descrizione: GS INTL TF 6,25% MZ20 MXN Importo minimo di negoziazione: 25.000 MXN
DISPOSIZIONI DELLA BORSA ITALIANA
Dal giorno 24/03/2017 gli strumenti finanziari "Issue of MXN 800,000,000 Three Year Fixed Rate Notes, due March 17, 2020" verranno iscritti nel Listino Ufficiale, comparto obbligazionario (MOT).
Allegato:
- Prospetto di quotazione degli strumenti finanziari.
GOLDMAN SACHS INTERNATIONAL
(Incorporated with unlimited liability in England)
Series K Programme for the issuance of Warrants, Notes and Certificates
Issue of MXN 800,000,000* Three-Year Fixed Rate Notes, due March 17, 2020 (the "Securities" or the "Notes")
(ISIN: XS1505106192)
Prospectus
This document constitutes a prospectus (this "Prospectus") for the purposes of Article 5.3 of Directive 2003/71/EC as amended, including by Directive 2010/73/EU (the "Prospectus Directive") relating to the above-referenced Securities issued by Goldman Sachs International (the "Issuer" or "GSI"). This Prospectus should be read together with any documents incorporated by reference within it.
Programme
The Securities are being issued under the Series K Programme for the issuance of Warrants, Notes and Certificates (the "Programme") of the Issuer.
Status of the Securities
The Securities are unsecured and unsubordinated general obligations of the Issuer and not of any affiliate of the Issuer. The Securities are not bank deposits and are not insured or guaranteed by the UK Financial Services Compensation Scheme or any other government or governmental or private agency or deposit protection scheme in any jurisdiction. The payment obligations of the Issuer in respect of the Securities are not guaranteed by any entity.
*Issue Size
On the Issue Date (being March 17, 2017), an aggregate nominal amount of MXN 800,000,000 of Securities will be issued to and made available for sale by GSI (in its capacity as Dealer), and as soon as practicable thereafter, listed and admitted to trading on both the Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market of the Luxembourg Stock Exchange for purchase by investors. However, GSI reserves the right to cancel some or all of the Securities that it holds at any time prior to the Maturity Date (being March 17, 2020), such right to be exercised in accordance with applicable laws, the terms and conditions of the Securities and the applicable rules of Borsa Italiana S.p.A. and the Luxembourg Stock Exchange including as to notification. In particular, at any time following listing and admission to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market of the Luxembourg Stock Exchange, GSI may cancel some or all of any Securities which have not been purchased by investors by such time. Accordingly, the aggregate nominal amount of Securities outstanding at any time may be significantly less than MXN 800,000,000, and this could have a negative impact on an investor's ability to sell the Securities in the secondary market. Notification of any such cancellation of Securities will be made on the website of Borsa Italiana S.p.A. (xxx.xxxxxxxxxxxxx.xx) and in any case according to the rules of Borsa Italiana S.p.A. and on the website of the Luxembourg Stock Exchange (xxx.xxxxxx.xx).
Information incorporated by reference
This Prospectus incorporates by reference certain information from the base prospectus in relation to the Programme dated November 16, 2016 (the "Base Prospectus"). See the section entitled "Documents Incorporated by Reference" below. You should read this Prospectus together with such information from the Base Prospectus.
Statements in relation to prospects and financial or trading position
In this Prospectus, where GSI makes statements that "there has been no material adverse change in the prospects" and "no significant change in the financial or trading position" of GSI, references in these statements to the "prospects" and "financial or trading position" of GSI are specifically to the Issuer's ability to meet its full payment obligations under the Securities in a timely manner. Such statements are made, for example, in Element
B.12 of the "Summary" and in paragraph 3 of the section entitled "General Information" of this Prospectus. Material information about GSI's financial condition and prospects is included in each of GSI's annual and interim reports, which are incorporated by reference into this Prospectus.
The date of this Prospectus is March 17, 2017.
TABLE OF CONTENTS
Page
IMPORTANT NOTICES 4
SUMMARY 7
RISK FACTORS 15
DOCUMENTS INCORPORATED BY REFERENCE 23
CONTRACTUAL TERMS 25
OTHER INFORMATION 31
EXAMPLES 33
ANNEX – AMENDMENTS TO THE GENERAL TERMS AND CONDITIONS OF THE NOTES 34
GENERAL INFORMATION 35
INDEX OF DEFINED TERMS 41
IMPORTANT NOTICES
Approval and passporting under the EU Prospectus Directive
Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the "CSSF"), which is the Luxembourg competent authority for the purpose of the Prospectus Directive for approval of this Prospectus as a prospectus issued in compliance with the Prospectus Directive and relevant implementing measures in Luxembourg for the purpose of giving information with regard to the Securities. This Prospectus constitutes a prospectus for the purposes of Article 5.3 of the Prospectus Directive relating to the Securities, and should be read together with any documents incorporated by reference within it.
An application has been made for the Securities to be listed on the Official List and admitted to trading on the Luxembourg Stock Exchange, a regulated market for the purposes of Directive 2004/39/EC on Markets in Financial Instruments, with effect from as practicable after the Issue Date. No assurances can be given that such application for listing and admission to trading will be granted. Application will also be made for the Securities to be listed on Borsa Italiana S.p.A. and admitted to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market), a regulated market for the purposes of Directive 2004/39/EC on Markets in Financial Instruments, organised and managed by Borsa Italiana S.p.A, with effect from as practicable after the Issue Date. No assurances can be given that such application for listing and admission to trading will be granted.
This Prospectus will be published on the websites of the Luxembourg Stock Exchange (xxx.xxxxxx.xx) and the Issuer (xxx.xxxxxxx-xxxxx.xx). On the approval of this Prospectus as a prospectus for the purpose of Article 5.3 of the Prospectus Directive by the CSSF, notification of such approval has been made to the Italian National Stock Exchange and Companies Commission (Commissione Nazionale per le Società e la Borsa) ("CONSOB") in its capacity as the competent authority of the Republic of Italy.
CSSF disclaimer
Pursuant to Article 7(7) of the Luxembourg Law on Prospectuses for Securities dated July 10, 2005 (as amended), by approving this Prospectus, the CSSF gives no undertakings as to the economic and financial characteristics of the Securities or the quality or solvency of the Issuer.
Credit ratings
The credit ratings of GSI1 referred to in this Prospectus have been issued by Fitch, Inc. ("Fitch"), Moody's
1 The information for this rating has been extracted from information made available by each rating agency referred to below. The Issuer confirms that such information has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information published by such ratings agencies, no facts have been omitted which would render the reproduced information inaccurate or misleading.
As at the date of this Prospectus the ratings for GSI were:
Short-term debt:
Fitch, Inc. rating was F1: An 'F1' rating indicates the highest short-term credit quality and the strongest intrinsic capacity for timely payment of financial commitments; may have an added '+' to denote any exceptionally strong credit feature.
Moody's rating was P-1: 'P-1' Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.
S&P rating was A-1: A short-term obligation rated 'A-1' is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.
Long-term debt:
Fitch, Inc. rating was A: An 'A' rating indicates high credit quality and denotes expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
Investors Service, Inc. ("Moody's") and Standard & Poor's Ratings Services, a division of The McGraw-Xxxx Companies, Inc. ("S&P"), none of which entities is established in the European Union or registered under Regulation (EC) No. 1060/2009, as amended, including by Regulation (EU) No. 513/2011 (the "CRA Regulation"), and as further amended. In general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not either (1) issued or validly endorsed by a credit rating agency established in the European Union and registered with the European Securities and Markets Authority ("ESMA") under the CRA Regulation or (2) issued by a credit rating agency established outside the European Union which is certified under the CRA Regulation.
The EU affiliates of Fitch, Moody's and S&P are registered under the CRA Regulation. The ESMA has approved the endorsement by such EU affiliates of credit ratings issued by Fitch, Moody's and S&P. Accordingly, credit ratings issued by Fitch, Moody's and S&P may be used for regulatory purposes in the EU.
Credit ratings may be adjusted over time, and there is no assurance that these credit ratings will be effective after the date of this Prospectus. A credit rating is not a recommendation to buy, sell or hold the Securities.
The list of credit rating agencies registered under the CRA Regulation (as updated from time to time) is published on the website of the ESMA (xxx.xxxx.xxxxxx.xx/xxxx/xxxx-xxxxxxxxxx-xxx-xxxxxxxxx-XXXx).
Important U.S. Notices
The Securities have not been, nor will be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. Except as provided below, Securities may not be offered, sold or delivered within the United States or to U.S. persons (as defined in Regulation S under the Securities Act ("Regulation S")). The Securities have not been approved or disapproved by the Securities and Exchange Commission or any state securities commission in the United States nor has the Securities and Exchange Commission or any state securities commission passed upon the accuracy or the adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States.
Post-issuance Information
The Issuer does not intend to provide any post-issuance information, except if required by any applicable laws and regulations, and has not authorised the making or provision of any representation or information regarding the Issuer or the Securities other than as contained or incorporated by reference in this Prospectus, in any other document prepared in connection with the Programme or as expressly approved for such purpose by the Issuer. Any such representation or information should not be relied upon as having been authorised by the Issuer. The delivery of this Prospectus shall not, in any circumstances, create any implication that there has been no adverse change in the financial situation of the Issuer since the date hereof or, as the case may be, the date upon which this Prospectus has been most recently supplemented.
Moody's rating was A1: Obligations rated 'A' are considered upper-medium grade and are subject to low credit risk. Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from 'Aa' through 'Caa'. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
S&P rating was A+: An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
Restrictions and distribution and use of this Prospectus
The distribution of this Prospectus and the offering, sale and delivery of the Securities in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer to inform themselves about and to observe any such restrictions. This Prospectus may not be used for 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 Securities or the distribution of this Prospectus in any jurisdiction where any such action is required.
Prospects and financial or trading position
In the Summary section and elsewhere in this Prospectus, references to the "prospects" and "financial or trading position" of the Issuer, are specifically to the ability of the Issuer to meet its full payment obligations under the Securities in a timely manner. In addition, all such statements should be read in conjunction with and are qualified by the information contained in the documents incorporated by reference in this Prospectus.
SUMMARY
Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A – E (A.1 – E.7).
This summary contains all the Elements required to be included in a summary for this type of security and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.
Even though an Element may be required to be inserted in the summary because of the type of security and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of "not applicable".
SECTION A – INTRODUCTION AND WARNINGS | ||
A.1 | Introduction and warnings | This summary should be read as an introduction to this Prospectus. Any decision to invest in the Securities should be based on consideration of this Prospectus as a whole by the investor. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with the other parts of this Prospectus, key information in order to aid investors when considering whether to invest in such Securities. |
A.2 | Consents | Not applicable; no consent is given for the use of this Prospectus for subsequent resales of the Securities. |
SECTION B – ISSUER | ||
B.1 | Legal and commercial name of the Issuer | Goldman Sachs International ("GSI" or the "Issuer"). |
B.2 | Domicile, legal form, legislation and country of incorporation of the Issuer | GSI is a private unlimited liability company incorporated in England and Wales. GSI mainly operates under English law. The registered office of GSI is Xxxxxxxxxxxx Xxxxx, 000 Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx. |
B.4b | Known trends with respect to the Issuer | GSI's prospects will be affected, potentially adversely, by developments in global, regional and national economies, including in the United Kingdom, movements and activity levels, in financial, commodities, currency and other markets, interest rate movements, political and military developments throughout the world, client activity levels and legal and regulatory developments in the United Kingdom and other countries where the Issuer does business. |
B.5 | The Issuer's group | Goldman Sachs Group UK Limited, a company incorporated under English law, has a 100 per cent. shareholding in GSI. Goldman Sachs (UK) L.L.C. is established under the laws of the State of Delaware and has a 97.208 per cent. interest in Goldman Sachs Group UK Limited. Goldman Sachs Ireland Group Limited is established under the laws of Ireland and has a 2.792 per cent. interest in Goldman Sachs Group UK Limited. Goldman Sachs Ireland LLC is established under the laws of the State of Delaware and has a 100 per cent. shareholding in Goldman Sachs Ireland Group Limited. Goldman Sachs Ireland Group Holdings LLC is established under the laws of the State of Delaware and has a 75 per cent. interest in Goldman Sachs Ireland LLC. Goldman Sachs Global Holdings L.L.C. is established under the laws of the State of Delaware |
and has a 25 per cent. interest in Goldman Sachs Ireland LLC. The Goldman, Sachs & Co. L.L.C. is established under the laws of the State of Delaware and has a one per cent. interest in Goldman Sachs Global Holdings L.L.C. The Goldman Sachs Group, Inc. is established in Delaware and has a 100 per cent. shareholding in Goldman Sachs Ireland Group Holdings LLC, The Goldman, Sachs & Co. L.L.C. and Goldman Sachs (UK) L.L.C. and a 99 per cent. interest in Goldman Sachs Global Holdings L.L.C. Holding Company Structure of GSI Note: The percentages given are for direct holdings of ordinary shares or equivalent. Minority shareholdings are held by other entities which are themselves owned, directly or indirectly, by The Goldman Sachs Group, Inc. | ||
B.9 | Profit forecast or estimate | Not applicable; GSI has not made any profit forecasts or estimates. |
B.10 | Audit report qualifications | Not applicable; there are no qualifications in the audit report of GSI on its historical financial information. |
B.12 | Selected historical key financial information of the Issuer | The following table shows selected key historical financial information in relation to GSI: As at and for the year ended (in USD millions) December 31, 2016 December 31, 2015 Operating Profit 2,280 2,939 Profit on ordinary 1,943 2,661 activities before taxation Profit for the 1,456 2,308 financial year As of (in USD millions) December 31, 2016 December 31, 2015 Fixed Assets 140 12 Current Assets 934,129 850,219 |
Total 27,533 26,353 Shareholder's funds | ||
No material adverse change | There has been no material adverse change in the prospects of GSI since December 31, 2016. | |
Significant changes | Not applicable; there has been no significant change in the financial or trading position particular to GSI subsequent to December 31, 2016. | |
B.13 | Recent events material to the evaluation of the Issuer's solvency | Not applicable; there have been no recent events particular to GSI which are to a material extent relevant to the evaluation of GSI's solvency. |
B.14 | Issuer's position in its corporate group | Please refer to Element B.5 above. GSI is part of a group of companies of which The Goldman Sachs Group, Inc. is the holding company (the "Goldman Sachs Group") and transacts with, and depends on, entities within such group accordingly. |
B.15 | Principal activities | The principal activities of GSI consist of securities underwriting and distribution, trading of corporate debt and equity services, non-U.S. sovereign debt and mortgage securities, execution of swaps and derivative instruments, mergers and acquisitions, financial advisory services for restructurings/private placements/lease and project financings, real estate brokerage and finance, merchant banking, stock brokerage and research. |
B.16 | Ownership and control of the Issuer | Goldman Sachs Group UK Limited, a company incorporated under English law, has a 100 per cent. shareholding in GSI. See also Element B.5. |
B.17 | Rating of the Issuer or the Securities | The long term debt of GSI is rated 'A+' by S&P, 'A' by Fitch and 'A1' by Moody's. The Securities have not been rated. |
SECTION C – SECURITIES | ||
C.1 | Type and class of Securities | Fixed Rate Notes (the "Securities"). ISIN: XS1505106192; Common Code: 150510619; Valoren: 35341963. |
C.2 | Currency | The currency of the Securities will be Mexican Peso ("MXN""). |
C.5 | Restrictions on the free transferability | The Securities and (if applicable) securities to be delivered upon exercise or settlement of the Securities may not be offered, sold or delivered within the United States or to U.S. persons as defined in Regulation S under the Securities Act ("Regulation S"), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities law. Further, the Securities may not be acquired by, on behalf of, or with the assets of any plans subject to ERISA or Section 4975 of the U.S. Internal Revenue Code of 1986, as amended, other than certain insurance company general accounts. Subject to the above, the Securities will be freely transferable. |
C.8 | Rights attached to the securities including ranking and any limitation to those rights | Rights: The Securities give the right to each holder of Securities (a "Holder") to receive a potential return on the Securities (see Element C.9 below), together with certain ancillary rights such as the right to receive notice of certain determinations and events and to vote on future amendments. The terms and conditions are governed under English law. Ranking: The Securities are direct, unsubordinated and unsecured obligations of the Issuer and rank equally with all other direct, unsubordinated and unsecured obligations of the Issuer. |
Limitations to rights: • The terms and conditions of the Securities contain provisions for calling meetings of Holders to consider matters affecting their interests generally and these provisions permit defined majorities to bind all Holders, including Holders who did not attend and vote at the relevant meeting and Holders who voted in a manner contrary to the majority. Further, in certain circumstances, the Issuer may amend the terms and conditions of the Securities, without the Holders' consent. • The terms and conditions of the Securities permit the Issuer and the Calculation Agent (as the case may be), on the occurrence of certain events and in certain circumstances, without the Holders' consent, to make adjustments to the terms and conditions of the Securities, to redeem the Securities prior to maturity (where applicable), to postpone scheduled payments under the Securities, to change the currency in which the Securities are denominated, to substitute the Issuer with another permitted entity subject to certain conditions, and to take certain other actions with regard to the Securities. | ||
C.9 | Rights attached to the securities including interest provisions, yield and representative of the holders | Please refer to Element C.8 above. The return on the Securities will derive from: • The payment on the relevant payment date(s) of an amount on account of Interest; • The potential payment of a Non-scheduled Early Repayment Amount upon an unscheduled early redemption of the Securities (as described below); or • If the Securities are not previously redeemed, or purchased and cancelled, the payment of the Final Redemption Amount on the maturity date of the Securities. Interest The Securities bear interest from March 17, 2017 ("Interest Commencement Date") at the Rate of Interest. The interest amount payable on each Interest Payment Date in respect of each Security shall be calculated by multiplying the relevant Rate of Interest by the Calculation Amount, and further multiplying the product by the relevant day count fraction applicable to the interest period ending on (but excluding) the date on which such Interest Payment Date is scheduled to fall, and rounding the resultant figure in accordance with the terms and conditions. If an Interest Payment Date is not a payment business day, the interest amount for that Interest Payment Date will be paid on the next succeeding payment business day but the interest period for the determination of the interest amount shall remain unadjusted. The "Rate of Interest" for the interest periods ending on (but excluding) the date on which each Interest Payment Date is scheduled to fall shall be 6.25 per cent. (6.25%) per annum. Defined terms used above: • Calculation Amount: MXN 25,000. • Interest Payment Dates: the 17th day of March in each calendar year from, and including, March 17, 2018 to, and including, March 17, 2019, and the Maturity Date (as defined below). |
Indication of Yield: The yield is 6.25 per cent. Non-scheduled Early Repayment Amount Unscheduled early redemption: The Securities may be redeemed prior to the scheduled maturity (i) at the Issuer's option if the Issuer determines a change in applicable law has the effect that performance by the Issuer or its affiliates under the Securities or hedging transactions relating to the Securities has become (or there is a substantial likelihood in the immediate future that it will become) unlawful or impracticable (in whole or in part), or (ii) upon notice by a Holder declaring such Securities to be immediately repayable due to the occurrence of an event of default which is continuing. In such case, the Non-scheduled Early Repayment Amount payable on such unscheduled early redemption shall be, for each Security, the Specified Denomination of MXN 25,000. Redemption • The Maturity Date for the Securities shall be March 17, 2020, provided that if such day is not a payment business day, the final redemption amount will be paid on the next succeeding payment business day. • Unless previously redeemed or purchased and cancelled, each Security will be redeemed by the Issuer on the maturity date by payment of a Final Redemption Amount of MXN 25,000 per Calculation Amount of Securities. Representative of holders of Securities: Not applicable; the Issuer has not appointed any person to be a representative of the holders of Securities. | ||
C.10 | Derivative component in the interest payment | Please refer to Element C.9 above. Not applicable; there is no derivative component in the interest payments made in respect of the Securities. |
C.11 | Admission to trading on a regulated market | Application has been made to admit the Securities to trading on the regulated market of the Luxembourg Stock Exchange with effect from as soon as practicable following the Issue Date. No assurances can be given that such application for admission to trading will be granted. Application will be made to admit the Securities to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market) with effect from as soon as practicable following the Issue Date. No assurances can be given that such application for admission to trading will be granted. |
SECTION D – RISKS | ||
D.2 | Key risks that are specific to the Issuer | The payment of any amount due on the Securities is subject to our credit risk. The Securities are our unsecured obligations. The Securities are not bank deposits and are not insured or guaranteed by the UK Financial Services Compensation Scheme or any other government or governmental or private agency, or deposit protection scheme in any jurisdiction. The value of and return on your securities will be subject to our credit risk and to changes in the market's view of our creditworthiness. References in Element B.12 above to the "prospects" and "financial or trading position" of the Issuer, are specifically to the Issuer's ability to meet its full payment obligations under the Securities in a timely manner. Material information about the Issuer's financial condition and prospects is included in GSI's annual and/or interim reports. You should be aware, however, that each of the key risks highlighted below could have a material adverse effect on the Issuer's businesses, operations, financial and trading position and prospects, |
which, in turn, could have a material adverse effect on the return investors receive on the Securities. The Issuer is subject to a number of key risks: • GSI's businesses have been and may continue to be adversely affected by conditions in the global financial markets and economic conditions generally. • GSI's businesses and those of its clients are subject to extensive and pervasive regulation around the world. • GSI's businesses have been and may be adversely affected by declining asset values. This is particularly true for those businesses in which it has net "long" positions, receives fees based on the value of assets managed, or receives or posts collateral. • GSI's businesses have been and may be adversely affected by disruptions in the credit markets, including reduced access to credit and higher costs of obtaining credit. • GSI's market-making activities have been and may be affected by changes in the levels of market volatility. • GSI's investment banking, client execution and investment management businesses have been adversely affected and may continue to be adversely affected by market uncertainty or lack of confidence among investors and CEOs due to general declines in economic activity and other unfavourable economic, geopolitical or market conditions. • GSI's investment management business may be affected by the poor investment performance of its investment products. • GSI may incur losses as a result of ineffective risk management processes and strategies. • GSI's liquidity, profitability and businesses may be adversely affected by an inability to access the debt capital markets or to sell assets or by a reduction in its credit ratings or by an increase in its credit spreads. • A failure to appropriately identify and address potential conflicts of interest could adversely affect GSI's businesses. • A failure in GSI's operational systems or infrastructure, or those of third parties, as well as human error, could impair GSI's' liquidity, disrupt GSI's businesses, result in the disclosure of confidential information, damage GSI's reputation and cause losses. • A failure to protect GSI's computer systems, networks and information, and GSI's clients' information, against cyber attacks and similar threats could impair GSI's ability to conduct GSI's businesses, result in the disclosure, theft or destruction of confidential information, damage GSI's reputation and cause losses. • GSI's businesses, profitability and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, third parties who owe GSI money, securities or other assets or whose securities or obligations GSI holds. • Concentration of risk increases the potential for significant losses in GSI's market-making, underwriting, investing and lending activities. • The financial services industry is both highly competitive and |
interrelated. • GSI faces enhanced risks as new business initiatives lead it to transact with a broader array of clients and counterparties and exposes it to new asset classes and new markets. • Derivative transactions and delayed settlements may expose GSI to unexpected risk and potential losses. • GSI's businesses may be adversely affected if GSI is unable to hire and retain qualified employees. • GSI may be adversely affected by increased governmental and regulatory scrutiny or negative publicity. • Substantial legal liability or significant regulatory action against GSI could have material adverse financial effects or cause significant reputational harm to GSI, which in turn could seriously harm GSI's business prospects. • The growth of electronic trading and the introduction of new trading technology may adversely affect GSI's business and may increase competition. • GSI's commodities activities, particularly its power generation interests and physical commodities activities, subject GSI to extensive regulation potential catastrophic events and environmental, reputational and other risks that may expose it to significant liabilities and costs. • In conducting its businesses around the world, GSI is subject to political, economic, legal, operational and other risks that are inherent in operating in many countries. • GSI may incur losses as a result of unforeseen or catastrophic events, including the emergence of a pandemic, terrorist attacks, extreme weather events or other natural disasters. | ||
D.3 | Key risks that are specific to the Securities: | • You may lose some or all of your investment in the Securities where: ○ We (as Issuer) fail or are otherwise unable to meet our payment obligations; |
○ You do not hold your Securities to maturity and the secondary sale price you receive is less than the original purchase price; or | ||
○ Your Securities are redeemed early due to an unexpected event and the amount you receive is less than the original purchase price. | ||
• The estimated value of your Securities (as determined by reference to pricing models used by us) at the time the terms and conditions of your Securities are set on the trade date, will be less than the original issue price of your Securities. | ||
• Your Securities may not have an active trading market, and you may be unable to dispose of them. | ||
• We give no assurance that application for listing and admission to trading will be granted (or, if granted, will be granted by the issue date) or that an active trading market in the Securities will develop. We may discontinue any such listing at any time. | ||
• The initial issue size of MXN 800,000,000 could be reduced following issuance, and this could have a negative effect on your ability to sell the Securities in the secondary market. |
• The Issuer of your Securities may be substituted with another company. • We may amend the terms and conditions of your Securities in certain circumstances without your consent. | ||
SECTION E – THE OFFER | ||
E.2b | Reasons for the offer and use of proceeds | The net proceeds of the issue of the Securities will be used in the general business of the Issuer. |
E.3 | Terms and conditions of the offer | No public offer of the Securities is being made. The Issue Price is 100 per cent. (100%) of the Aggregate Nominal Amount. |
E.4 | Interests material to the issue/offer | So far as the Issuer is aware, no person involved in the issue of the Securities has an interest material to the issue, including conflicting interests. |
E.7 | Estimated expenses charged to the investor by the issuer or the offeror | Not applicable. There are no estimated expenses charged to the investor by the Issuer or the offeror. |
RISK FACTORS
An investment in your Securities is subject to the risks described below. You should carefully review (i) the applicable risk factors in the section entitled "Risk Factors" from the Base Prospectus incorporated by reference in this Prospectus (see the section entitled "Documents Incorporated by Reference" below) and (ii) the additional risk factors set out below, as well as the terms and conditions of the Securities described in this Prospectus. You should carefully consider whether the Securities are suited to your particular circumstances, including to consult your own professional advisers as necessary. We do not give to you as a prospective purchaser of Securities any assurance or guarantee as to the merits, performance or suitability of such Securities, and you should be aware that we act as an arm's-length contractual counterparty and not as an advisor or fiduciary.
In these Risk Factors, "we" and "our" mean Goldman Sachs.
RISK WARNING OF POTENTIAL LOSS OF SOME OR ALL OF YOUR INVESTMENT
You may lose some or all of your entire investment in the Securities where:
•
The Issuer fails or is otherwise unable to meet its payment obligations: The Securities are our unsecured obligations. They are not bank deposits and are not insured or guaranteed by the UK Financial Services Compensation Scheme or any other government or governmental or private agency or deposit protection scheme in any jurisdiction. Therefore, if the Issuer fails or is otherwise unable to meet its payment obligations under the Securities, you will lose some or all of your investment.
•
The secondary sale price is less than the original purchase price: The market price of your Securities prior to maturity may be significantly lower than the purchase price you pay for them. Consequently, if you sell your Securities before the stated scheduled redemption date, you may receive far less than your original invested amount.
These circumstances are more fully described below.
A. FACTORS THAT MAY AFFECT OUR ABILITY TO FULFIL OUR OBLIGATIONS UNDER THE SECURITIES
The payment of any amount due on the Securities is subject to our credit risk. The Securities are our unsecured obligations.
The Securities are not bank deposits and are not insured or guaranteed by the UK Financial Services Compensation Scheme or any other government or governmental or private agency or deposit protection scheme in any jurisdiction. Investors are dependent on our ability to pay all amounts due on the Securities, and therefore investors are subject to our credit risk and to changes in the market's view of our creditworthiness.
GSI is a member of a group of companies of which The Goldman Sachs Group, Inc. is the holding company (the "Goldman Sachs Group" or "Goldman Sachs"). However, the Securities are not insured or guaranteed by The Goldman Sachs Group, Inc. ("GSG"), or any affiliate of GSG or any other entity. As a holder of Securities, you will not have any recourse against The Goldman Sachs Group, Inc. or any other company in the Goldman Sachs Group other than GSI, and shall not have recourse against any other person, with respect to the performance of the Securities.
You should also read "Risk Factors – 2. Risks relating to GSI" (pages 49 to 63) in the Base Prospectus incorporated by reference herein.
Risks relating to the potential exercise by a UK resolution authority of its resolution powers in
relation to GSI
The EU Bank Recovery and Resolution Directive ("BRRD") entered into force on July 2, 2014. EU Member states were required to adopt and publish the laws, regulations and administrative provisions necessary to comply with the BRRD by December 31, 2014 and to apply those with effect from January 1, 2015, except in relation to the bail-in provisions, which were to apply from January 1, 2016 at the latest. Its stated aim is to provide national "resolution authorities" with powers and tools to address banking crises pre-emptively in order to safeguard financial stability and minimise taxpayers' exposure to losses.
The majority of the requirements of the BRRD have been implemented in the UK through the UK Xxxxxxx Xxx 0000, as amended and related statutory instruments (together, the "UK Banking Act"). The UK Banking Act provides for a "resolution regime" granting substantial powers to the Bank of England (or, in certain circumstances, HM Treasury), to implement resolution measures (in consultation with other UK authorities) with respect to a UK financial institution (for example, such as GSI) where the UK resolution authority considers that the relevant institution is failing or is likely to fail, there is no reasonable prospect of other measures preventing the failure of the institution and resolution action is necessary in the public interest.
The resolution powers available to the UK resolution authority include powers to:
• write down the amount owing, including to zero, or convert the relevant securities into other securities, including ordinary shares of the relevant institution (or a subsidiary) – the so-called "bail-in" tool;
• transfer all or part of the business of the relevant institution to a "bridge bank";
• transfer impaired or problem assets to an asset management vehicle; and
• sell the relevant institution to a commercial purchaser.
In addition, the UK resolution authority is empowered to modify contractual arrangements, suspend enforcement or termination rights that might otherwise be triggered and disapply or modify laws in the UK (with possible retrospective effect) to enable the recovery and resolution powers under the UK Banking Act to be used effectively.
You should assume that, in a resolution situation, financial public support will only be available to GSI (or any member of Goldman Sachs Group) as a last resort after the relevant UK resolution authorities have assessed and used, to the maximum extent practicable, the resolution tools, including the bail-in tool.
You should be aware that the exercise of any such resolution power or even the suggestion of any such potential exercise in respect of GSI (or any member of the Goldman Sachs Group) could have a material adverse effect on the rights of holders of Securities, and could lead to a loss of some or all of the investment. The resolution regime is designed to be triggered prior to insolvency of the relevant institution, and holders of securities issued by such institution may not be able to anticipate the exercise of any resolution power (including exercise of the "bail-in" tool) by the UK resolution authority. Further, holders of securities issued by an institution which has been taken into a resolution regime will have very limited rights to challenge the exercise of powers by the UK resolution authority, even where such powers have resulted in the write down of the securities or conversion of the securities to equity.
B. FACTORS WHICH ARE MATERIAL FOR THE PURPOSES OF ASSESSING THE MARKET
RISKS IN RELATION TO THE SECURITIES
1. Risks associated with the value and liquidity of your Securities
1.1 The estimated value of your Securities (as determined by reference to pricing models used by us) at the time the terms and conditions of your Securities are set on the trade date, will be less than the original issue price of your Securities
The original issue price for your Securities will exceed the estimated value of your Securities as from the trade date, as determined by reference to our pricing models and taking into account our credit spreads. The difference between the estimated value of your Securities as of the time the terms and conditions of your Securities were set on the trade date and the original issue price is a result of many factors, including among others on issuance, the expenses incurred in creating, documenting and marketing the Securities and our own internal funding costs (being an amount based on what we would pay to holders of a non-structured security with a similar maturity). The difference may be greater when the Securities are initially traded on any secondary markets and may gradually decline in value during the term of the Securities.
In estimating the value of your Securities as of the time the terms and conditions of your Securities were set on the trade date, our pricing models consider certain variables, including principally our credit spreads, interest rates (forecasted, current and historical rates), volatility, price-sensitivity analysis and the time to maturity of the Securities. These pricing models are proprietary and rely in part on certain assumptions about future events, which may prove to be incorrect. As a result, the actual value you would receive if you sold your Securities in the secondary market, if any, to others may differ, perhaps materially, from the estimated value of your Securities determined by reference to our models due to, among other things, any differences in pricing models or assumptions used by others.
1.2 The value, quoted price and yield of your Securities (if any) at any time will reflect many factors and cannot be predicted
The value, quoted price and yield of your Securities (if any) at any time will reflect many factors and cannot be predicted. The following factors, amongst others, many of which are beyond our control, may influence the market value of your Securities:
• interest rates and yield rates in the market;
• the time remaining until your Securities mature; and
• our creditworthiness, whether actual or perceived, and including actual or anticipated upgrades or downgrades in our credit ratings or changes in other credit measures.
If we make a market in the Securities, the price quoted by us would reflect any changes in market conditions and other relevant factors, including any deterioration in our creditworthiness or perceived creditworthiness. These changes may adversely affect the value of your Securities, including the price you may receive for your Securities in any market making transaction. To the extent that we make a market in the Securities, the quoted price will reflect the estimated value determined by reference to our pricing models at that time, plus or minus its customary bid and ask spread for similar sized trades of structured securities and subject to the declining excess amount described in risk factor 1.1 (The estimated value of your Securities (as determined by reference to pricing models used by us) at the time the terms and conditions of your Securities are set on the trade date, will be less than the original issue price of your Securities) above.
Further, if you sell or buy your Securities on the secondary market, you will likely be charged a
commission for secondary market transactions, or, in the case of a sale of the Securities the price will likely reflect a dealer discount. This commission or discount will further reduce the proceeds you would receive for your Securities in a secondary market sale.
If you sell your Securities prior to maturity, you may receive less than the face amount or initial purchase price of your Securities.
There is no assurance that we or any other party will be willing to purchase your Securities at any price and, in this regard, we are not obligated to make a market in the Securities. See risk factor 1.3 ("Your Securities may not have an active trading market") below.
In addition, please note that the yield of the Securities will also depend on their purchase and sale price on the secondary market. Such prices may differ significantly from the original issue price of your Securities and from the redemption price at maturity.
1.3 Your Securities may not have an active trading market
Unless we expressly tell you otherwise, or to the extent that the rules of any stock exchange on which the Securities are listed and admitted to trading require us to provide liquidity in respect of the Securities, there may be little or no secondary market for your Securities and you may be unable to sell them.
If we do make a market for the Securities, we may cease to do so at any time without notice to you and we are not obligated to provide any quotation of bid or offer price(s) of the Securities which is favourable to you.
Application (i) has been made by the Issuer (or on its behalf) for the Securities to be listed on the Official List and admitted to trading on the regulated market of the Luxembourg Stock Exchange; and (ii) will be made by the Issuer (or on its behalf) for the Securities to be listed on Borsa Italiana S.p.A. and admitted to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market), a regulated market organised and managed by Borsa Italiana S.p.A., however, we give no assurance that such applications will be accepted, that any particular Securities will be so admitted, or that an active trading market in the Securities will develop. We may discontinue any such listing at any time.
Even if a secondary market for your Securities develops, it may not provide significant liquidity and transaction costs in any secondary market could be high. As a result, the difference between bid and asked prices for your Securities in any secondary market could be substantial. See also risk factor 1.2 (The value, quoted price and yield of your Securities (if any) at any time will reflect many factors and cannot be predicted) above. There may be less liquidity in the secondary market for the Securities also if they are exclusively offered to retail investors without any offer to institutional investors.
On the Issue Date (being March 17, 2017), MXN 800,000,000 of Securities will be issued to and made available for sale by GSI (in its capacity as Dealer), and as soon as practicable thereafter, listed and admitted to trading on both the Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market of the Luxembourg Stock Exchange for purchase by investors. However, GSI (in its capacity as Dealer) reserves its right to cancel some or all of the Securities that it holds at any time prior to the Maturity Date (being March 17, 2020), such right to be exercised in accordance with applicable laws, the terms and conditions of the Securities and the applicable rules of Borsa Italiana S.p.A. and the Luxembourg Stock Exchange including as to notification. In particular, at any time following listing and admission to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market of the Luxembourg Stock Exchange, GSI (in its capacity as Dealer) may cancel some or all of any Securities which have not been purchased by investors by such time. Accordingly, the total amount of Securities outstanding at any time may be significantly less than MXN 800,000,000, and this could have a negative impact on an investor's ability to sell the Securities in the secondary market. Notification of
any such cancellation of Securities will be made on the website of Borsa Italiana S.p.A. (xxx.xxxxxxxxxxxxx.xx) and in any case according to the rules of Borsa Italiana S.p.A. and on the website of the Luxembourg Stock Exchange (xxx.xxxxxx.xx).
You should therefore not assume that the Securities can be sold at a specific time or at a specific price during their life, and you should assume that you may need to hold them until they mature.
1.4 Your Securities may lose value if interest rates increase
Particularly in relation to Fixed Rate Notes that are not linked to an underlying asset and have a term of ten years or more, in most cases an increase in interest rates during the term of the Securities will cause their value to decrease and if you sell the Securities prior to maturity you will receive less than the face amount of the Securities.
2. Risks associated with certain terms of the Securities, including adjustment, substitution and amendments
2.1 Your Securities may be redeemed prior to maturity due to a change in law event, and you may lose some or all of your investment
Where, due to a change in law event, our performance under the Securities or hedging transactions relating to the Securities has become (or there is a substantial likelihood in the immediate future that it will become) illegal or impractical, we may, in our discretion, redeem the Securities.
Following any such early redemption of the Securities, you may not be able to reinvest the proceeds from such redemption at a comparable return and/or with a comparable interest rate for a similar level of risk. You should consider such reinvestment risk in light of other available investments when you purchase the Securities.
2.2 The Issuer of your Securities may be substituted with another company
The Issuer may be substituted as principal obligor under such Securities by any company from the Goldman Sachs Group of companies. Whilst the new issuer will provide an indemnity in your favour in relation to any additional tax or duties that become payable solely as a result of such substitution, you will not have the right to consent to such substitution.
2.3 We may amend the terms and conditions of your Securities in certain circumstances without your consent; amendments to the Securities will bind all holders thereof
The terms and conditions of the Securities may be amended by us without your consent as a holder of the Securities in any of the following circumstances:
• to correct a manifest or proven error or omission;
• where the amendment is of a formal, minor or technical nature; or
• where such amendment will not materially and adversely affect the interests of holders.
In certain other circumstances, the consent of a defined majority of holders is required to make amendments. The terms and conditions of the Securities contain provisions for holders of Securities to call and attend meetings to vote upon such matters or to pass a written resolution in the absence of such a meeting. Resolutions passed at such a meeting, or passed in writing, can bind all holders of Securities, including investors that did not attend or vote, or who do not consent to the amendments.
3. Risks associated with foreign exchange rates
3.1 You may be exposed to foreign exchange risk on your Securities
Foreign exchange fluctuations between your home currency and the currency in which payments under the Securities is denominated may affect you if you intend to convert gains or losses from the sale of Securities into your home currency.
Foreign exchange rates are, and have been, highly volatile and determined by supply and demand for currencies in the international foreign exchange markets; such fluctuations in rates are subject to economic factors, including, among others, inflation rates in the countries concerned, interest rate differences between the respective countries, economic forecasts, international political factors, currency convertibility and safety of making financial investments in the currency concerned, speculation and measures taken by governments and central banks.
Foreign currency exchange rates can either float or be fixed by sovereign governments. From time to time, governments use a variety of techniques, such as intervention by a country's central bank or imposition of regulatory controls or taxes, to affect the exchange rate of their currencies. Governments may also issue a new currency to replace an existing currency or alter the exchange rate or exchange characteristics by devaluation or revaluation of a currency. Thus, a particular concern in purchasing Securities with foreign exchange risks as described above is that their yields or payouts could be significantly and unpredictably affected by governmental actions. Even in the absence of governmental action directly affecting currency exchange rates, political or economic developments in the country of the relevant currency or elsewhere could lead to significant and sudden changes in the exchange rate of that currency and others. These changes could negatively (or positively) affect the value of and return on the Securities as participants in the global currency markets move to buy or sell the relevant currency in reaction to these developments.
Governments have imposed from time to time and may in the future impose exchange controls or other conditions, including taxes, with respect to the exchange or transfer of a currency that could affect exchange rates as well as the availability of the currency for a Security at its maturity or on any other payment date. In addition, your ability to move currency freely out of the country in which payment in the currency is received or to convert the currency at a freely determined market rate could be limited by governmental actions.
4. Risks associated with discretionary powers of the Issuer and the Calculation Agent including in relation to our hedging arrangements
As described elsewhere in these risk factors, the occurrence of certain events – relating to the Issuer, our hedging arrangements, taxation, the relevant currency or other matters – may give rise to discretionary powers on our part (as Issuer or as Calculation Agent) under the terms and conditions of the Securities.
In relation to our hedging arrangements, we (including through one or more affiliates of the Issuer) may enter into one or more arrangements to cover our exposure to the relevant cash amounts to be paid or assets to be delivered under the Securities as these fall due. We describe some of the potential types of arrangements in risk factor 6.1 (Our hedging, trading, issuance and underwriting activities may create conflicts of interest between you and us) below. The particular hedging arrangements (if any) undertaken by us, and their cost, will likely be a significant determinant of the price and the economic terms and conditions of your Securities. Accordingly, if an event occurs which negatively impacts our hedging arrangements, we may have discretionary powers under the terms and conditions of your Securities as described in the paragraph immediately above to account for such impact on our heading arrangements. The exercise by us of such discretionary powers may have a negative impact on the value of and return
on your Securities.
5. Risks associated with taxation
Tax laws may change and this may have a negative impact on your Securities
Tax law and practice is subject to change, possibly with retrospective effect and this could adversely affect the value of your Securities to you and/or their market value generally. Any such change may (i) cause the tax treatment of the Securities to change from what you understood the position to be at the time of purchase; (ii) render the statements in this Prospectus concerning relevant tax law and practice in relation to the Securities inaccurate or inapplicable in some or all respects to certain Securities or have the effect that this Prospectus does not include material tax considerations in relation to certain Securities; or (iii) give us the right to redeem the Securities early, if such change has the effect that our performance under the Securities or hedging transaction relating to the Securities is unlawful or impracticable (see risk factor 2.1 (Your Securities may be redeemed prior to maturity due to a change in law event, and you may lose some or all of your investment)). You should consult your own tax advisers about the tax implications of holding any Security and of any transaction involving any Security.
6. Risks associated with conflicts of interest between Goldman Sachs Group and purchasers of Securities
The various roles and trading activities of Goldman Sachs could create conflicts of interest between you and us.
6.1 Our hedging, trading, issuance and underwriting activities may create conflicts of interest between you and us
In anticipation of the sale of the Securities, we and/or our affiliates may (but are not obligated to) enter into hedging transactions involving purchase of indices designed to track the performance of the relevant markets or components of such markets or other transactions on or before the trade date. In addition, from time to time after we issue the Securities, we and/or our affiliates expect to enter into additional hedging transactions and to unwind those we have entered into, in connection with the Securities and perhaps in connection with other Securities we issue, some of which may have returns linked to commodities or foreign currencies or other assets. Consequently, with regard to your Securities, from time to time, we may acquire or dispose of the specified currency of the Securities in foreign exchange transactions involving other currencies.
We and/or our affiliates may acquire a long or short position in securities similar to your Securities from time to time and may, in our or their sole discretion, hold or resell those securities.
In the future, we and/or our affiliates expect to close out hedge positions relating to the Securities and perhaps relating to other Securities with returns linked to foreign currencies. We expect these steps to involve sales of instruments linked to the foreign currencies on or shortly before the trade date. These steps also may involve sales and/or purchases of listed or over-the-counter options, futures or other instruments linked to the foreign currencies, constituent indices or indices designed to track the performance of the exchange or other markets or other components of such markets, as applicable.
6.2 As Calculation Agent, we will have the authority to make determinations that could affect the market value and return on your Securities
The Calculation Agent is GSI. The Calculation Agent has the authority (i) to determine whether certain specified events and/or matters so specified in the conditions relating to the Securities have occurred, and
(ii) to determine the consequence of such event, including potentially, revised calculations, adjustments, postponements or early redemption of the Securities. See risk factor 4 (Risks associated with discretionary powers of the Issuer and the Calculation Agent including in relation to our hedging arrangements) above. Any such determination made by the Calculation Agent (in the absence of manifest or proven error) shall be binding on the Issuer and all purchasers of the Securities. Any such determinations may have an adverse impact on the value of and return on the Securities.
7. Risks associated with potential 'bail-in' of Securities
See "Risks relating to the potential exercise by a UK resolution authority of its resolution powers in relation to GSI" above.
DOCUMENTS INCORPORATED BY REFERENCE
This Prospectus should be read and construed in conjunction with the documents incorporated by reference into this Prospectus. The information contained in the following documents (other than any documents which are incorporated by reference into such following documents) is hereby incorporated by reference into this Prospectus and deemed to form a part of this Prospectus:
(i) the base prospectus dated November 16, 2016 relating to issues of non-equity securities under the Programme by Goldman Sachs International and Goldman Sachs & Co. Wertpapier GmbH (the " Base Prospectus");
(ii) the Annual Report for the fiscal year ended December 31, 2016 of GSI (the "GSI's 2016 Annual Report"), containing, in Part II, the Directors' Report and Audited Financial Statements of GSI for the period ended December 31, 2016 (the "GSI's 2016 Financial Statements");
(iii) the Annual Report for the fiscal year ended December 31, 2015 of GSI (the "GSI's 2015 Annual Report"), containing, in Part II, the Directors' Report and Audited Financial Statements of GSI for the period ended December 31, 2015 (the "GSI's 2015 Financial Statements"); and
(iv) the Current Report on Form 8-K dated November 21, 2016 of The Goldman Sachs Group, Inc. (the "GSG's November 21, 2016 Form 8-K"), as filed with the U.S. Securities and Exchange Commission on November 21, 2016.
The table below sets out the relevant page references for the information incorporated into this Prospectus by reference. The information incorporated by reference that is not included in the cross-reference list is considered as additional information and is not required by the relevant schedules of Commission Regulation (EC) No. 809/2004 (as amended). Information not incorporated by reference are not relevant for the investor or are covered in other parts of this Prospectus.
The Luxembourg Stock Exchange will publish such documents on its website at xxx.xxxxxx.xx.
Information incorporated by reference Page reference
From the Base Prospectus
Risk Factors
2. Risks relating to GSI Pages 49-63
Commonly Asked Questions about the Programme Pages 106-117
General Terms and Conditions of the Notes Pages 171-218
Coupon Payout Conditions Pages 219-230
Forms of the Notes Pages 575-556
Book-Entry Clearing Systems Pages 577-579
Use of Proceeds Page 580
Goldman Sachs International Pages 581-583
General Information xx Xxxxxxx Sachs International Page 581
Capitalisation Pages 581-582
Corporate Governance Page 582
Management of GSI Page 582
GSI Board Audit Committee Pages 582-583
The proposed financial transactions tax ("FTT") Pages 587 United Kingdom Tax Considerations Pages 587-590
Italian Tax Considerations Pages 609-616
Selling Restrictions Pages 632-652
Offers and Sales and Distribution Arrangements Page 653 Index of Defined Terms Pages 664-673
From GSI's 2016 Annual Report
Strategic Report Pages 2-48
Directors' Report Pages 49-50
Balance Sheet Page 54
Profit and Loss Account Page 53
Statements of Cash Flows Page 56
Notes to the Financial Statements Pages 57-91
Independent Auditors' Report Pages 51-52
From GSI's 2015 Annual Report
Strategic Report Pages 2-48
Directors' Report Pages 49-50
Balance Sheet Page 54
Profit and Loss Account Page 53
Statements of Cash Flows Page 56
Notes to the Financial Statements Pages 57-94
Independent Auditors' Report Pages 51-52
From GSG's November 21, 2016 Form 8-K*
Item 5.02: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Page 2
Signature Page 3
* The page numbers referenced above in relation to the GSG's November 21, 2016 Form 8-K relate to the order in which the pages appear in the PDF version of such document.
Additional information relating to "Alternative Performance Measures" (as defined in the Guidelines published by the European Securities and Markets Authority) contained in GSI's 2015 Annual Report is set out in the section "General Information" on page 40 of this Prospectus.
GSI will provide without charge to each person to whom this Prospectus is delivered, upon his or her written or oral request, a copy of the documents referred to above which has been incorporated by reference into this Prospectus, excluding exhibits to the documents unless they are specifically incorporated by reference into the documents. Investors can request the documents from Investor Relations, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, XXX, telephone x0 (000) 000-0000. This Prospectus has been filed with the Commission de Surveillance du Secteur Financier, and will be published on the website of the Luxembourg Stock Exchange (xxx.xxxxxx.xx).
CONTRACTUAL TERMS
ISIN: XS1505106192
Common Code: 150510619
Valoren: 35341963 PIPG Tranche Number: 76628
The terms and conditions ("Conditions") of the Securities shall comprise (i) the General Terms and Conditions of the Notes (the "Original General Note Conditions") as amended by (ii) the Annex below (and subsequent to such amendments, the "General Note Conditions") as completed and/or amended by (iii) the terms of the Coupon Payout Conditions specified to be applicable by these Contractual Terms, as further completed and/or amended by (iv) these Contractual Terms. In the event of any inconsistency between the General Note Conditions as completed and/or amended by the Coupon Payout Conditions and these Contractual Terms, these Contractual Terms shall prevail.
All references in the General Note Conditions and the applicable Coupon Payout Conditions to "Final Terms" shall be deemed to be references to these Contractual Terms.
The Original General Note Conditions and the Coupon Payout Conditions are incorporated by reference herein: see the section entitled "Documents Incorporated by Reference" above.
Terms used herein shall be deemed to be defined as such for the purposes of the General Note Conditions set forth in the Base Prospectus.
1. Tranche Number: One.
2. Specified Currency or Currencies: Mexican Peso ("MXN"").
3. Aggregate Nominal Amount:
(i) Series: MXN 800,000,000.
(ii) Tranche: MXN 800,000,000.
On the Issue Date (being March 17, 2017), an aggregate nominal amount of MXN 800,000,000 of Securities will be issued to and made available for sale by Goldman Sachs International (in its capacity as Dealer) ("GSI"), and as soon as practicable thereafter, listed and admitted to trading on both the Borsa Italiana S.p.A.'s MOT (Electronic bond market) and the regulated market of the Luxembourg Stock Exchange for purchase by investors. However, GSI reserves its right to cancel some or all of the Securities that it holds at any time prior to the Maturity Date (being March 17, 2020), such right to be exercised in accordance with applicable laws, the terms and conditions of the Securities and the applicable rules of Borsa Italiana S.p.A. and the Luxembourg Stock Exchange including as to notification. In particular, at any time following listing and admission to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market)
and the regulated market of the Luxembourg Stock Exchange, GSI may cancel some or all of any Securities which have not been purchased by investors by such time. Accordingly, the aggregate nominal amount of Securities outstanding at any time may be significantly less than MXN 800,000,000, and this could have a negative impact on an investor's ability to sell the Securities in the secondary market. Notification of any such cancellation of Securities will be made on the website of Borsa Italiana S.p.A. (xxx.xxxxxxxxxxxxx.xx) and in any case according to the rules of Borsa Italiana
S.p.A. and on the website of the Luxembourg Stock Exchange (xxx.xxxxxx.xx).
4. Issue Price: 100 per cent. (100%) of the Aggregate Nominal Amount.
5. Specified Denomination: MXN 25,000.
6. Calculation Amount: MXN 25,000.
7. Issue Date: March 17, 2017.
8. Maturity Date: Scheduled Maturity Date is March 17, 2020. The Maturity Date shall not be subject to any adjustment.
For the avoidance of doubt, General Note Condition 11(i) (Payments on Business Days) shall apply to the Maturity Date.
(i) Strike Date: Not Applicable.
(ii) Relevant Determination Date (General Note Condition 2(a)):
Not Applicable.
(iii) Scheduled Determination Date: Not Applicable.
(iv) First Maturity Date Specific Adjustment:
Not Applicable.
(v) Second Maturity Date Specific Adjustment:
Not Applicable.
(vi) Business Day Adjustment: Not Applicable.
9. Underlying Asset(s): Not Applicable.
VALUATION PROVISIONS
10. Valuation Date(s): Not Applicable.
11. Entry Level Observation Dates: Not Applicable.
12. Initial Valuation Date: Not Applicable.
13. Averaging: Not Applicable.
14. Asset Initial Price: Not Applicable.
15. Adjusted Asset Final Reference Date: Not Applicable.
16. Adjusted Asset Initial Reference Date: Not Applicable.
17. FX (Final) Valuation Date: Not Applicable.
18. FX (Initial) Valuation Date: Not Applicable.
19. Final FX Valuation Date: Not Applicable.
20. Initial FX Valuation Date: Not Applicable.
COUPON PAYOUT CONDITIONS
21. Coupon Payout Conditions: Applicable.
22. Interest Basis: In respect of each Interest Payment Date, 6.25 per cent. (6.25%) Fixed Rate.
23. Interest Commencement Date: Issue Date.
24. Fixed Rate Note Conditions (General Note Condition 7):
Applicable.
(i) Rate(s) of Interest: 6.25 per cent. (6.25%) per cent. per annum payable annually in arrear.
(ii) Interest Payment Date(s): Each of:
(i) March 17, 2018 and March 17, 2019, and each such date shall not be subject to any adjustment in accordance with a Business Day Convention; and
(ii) the Maturity Date.
For the avoidance of doubt, General Note Condition 11(i) (Payments on Business Days) shall apply to the Interest Payment Dates.
The Interest Periods shall be "Unadjusted".
(iii) Fixed Coupon Amount(s): Not Applicable.
(iv) Broken Amount(s): Not Applicable.
(v) Day Count Fraction: 30/360.
(vi) Step Up Fixed Rate Note Conditions (General Note Condition 7(e)):
Not Applicable.
25. BRL FX Conditions (Coupon Payout Not Applicable.
Condition 1.1(c)):
26. FX Security Conditions (Coupon Payout Condition 1.1(d)):
Not Applicable.
27. Floating Rate Note Conditions (General Note Condition 8):
Not Applicable.
28. Change of Interest Basis (General Note Condition 9):
Not Applicable.
29. Conditional Coupon (Coupon Payout Condition 1.3):
Not Applicable.
30. Range Accrual Coupon (Coupon Payout Condition 1.4):
Not Applicable.
AUTOCALL PAYOUT CONDITIONS
31. Automatic Early Redemption (General Note Condition 10(i):
Not Applicable.
32. Autocall Payout Conditions: Not Applicable.
REDEMPTION PROVISIONS
33. Redemption/Payment Basis: Redemption at par.
34. Redemption at the option of the Issuer (General Note Condition 10(b)):
Not Applicable.
35. Redemption at the option of Noteholders (General Note Condition 10(c)):
Not Applicable.
36. Zero Coupon Note Conditions: Not Applicable.
37. Final Redemption Amount of each Note (General Note Condition 10(a)):
MXN 25,000 per Calculation Amount.
FINAL REDEMPTION AMOUNT PAYOUT CONDITIONS
38. Single Limb Payout (Payout Condition 1.1):
Not Applicable.
39. Multiple Limb Payout (Payout Condition 1.2):
Not Applicable.
40. Downside Physical Settlement (Payout Condition 1.2(c)(ii):
Not Applicable.
41. Barrier Event Conditions (Payout Condition 2):
Not Applicable.
42. Trigger Event Conditions (Payout Condition 3):
Not Applicable.
43. Currency Conversion: Not Applicable.
44. Physical Settlement (General Note Condition 12(a)):
Not Applicable.
45. Non-scheduled Early Repayment Amount: Par.
SHARE LINKED NOTE / INDEX LINKED NOTE / COMMODITY LINKED NOTE / FX LINKED NOTE / INFLATION LINKED NOTE
46. Type of Notes: The Notes are Fixed Rate Notes – the Fixed Rate Note Conditions are applicable.
47. Share Linked Notes: Not Applicable.
48. Index Linked Notes: Not Applicable.
49. Commodity Linked Notes (Single Commodity or Commodity Basket):
Not Applicable.
50. Commodity Linked Notes (Commodity Index or Commodity Index Basket):
Not Applicable.
51. FX Linked Notes: Not Applicable.
52. Inflation Linked Notes: Not Applicable.
53. EIS Notes: Not Applicable.
54. Multi-Asset Basket Linked Notes: Not Applicable.
GENERAL PROVISIONS APPLICABLE TO THE NOTES
55. FX Disruption Event/CNY FX Disruption Event/Currency Conversion Disruption Event (General Note Condition 13):
Not Applicable.
56. Rounding (General Note Condition 22):
(i) Non-Default Rounding − calculation values and percentages:
Not Applicable.
(ii) Non-Default Rounding − amounts due and payable:
Not Applicable.
(iii) Other Rounding Convention: Not Applicable.
57. Additional Business Centre(s): TARGET and the State of New York.
− Non-Default Business Day: Not Applicable.
58. Form of Notes: Registered Notes.
Global Registered Note registered in the name of a nominee for a common depositary for Euroclear and Clearstream, Luxembourg exchangeable for Individual
Note Certificates in the limited circumstances described in the Global Registered Note.
59. Additional Financial Centre(s) relating to Payment Business Days:
TARGET and the State of New York.
− Non-Default Payment Business Day: Not Applicable.
60. Principal Financial Centre: As specified in General Note Condition 2(a).
− Non-Default Principal Financial Centre: Not Applicable.
61. Instalment Notes (General Note Condition 10(p)):
Not Applicable.
62. Minimum Trading Number (General Note Condition 5(f)):
The minimum trading lot indicated by Borsa Italiana
S.p.A. in the first trading day notice.
63. Permitted Trading Multiple (General Note Condition 5(f)):
An integral multiple of the minimum trading lot indicated in paragraph 60 in accordance with Article 4.3.2, paragraph 9 of the Rules of the Markets organised and managed by Borsa Italiana S.p.A.
64. Record Date (General Note Condition 11): Not Applicable.
65. Calculation Agent (General Note Condition 18):
Goldman Sachs International.
DISTRIBUTION
66. Method of distribution: Non-syndicated.
(i) If syndicated, names and addresses of Managers/placers and underwriting commitments:
Not Applicable.
(ii) Date of Subscription Agreement: Not Applicable.
(iii) If non-syndicated, name and address of Dealer:
Goldman Sachs International, Xxxxxxxxxxxx Xxxxx, 000 Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx.
67. Non-exempt Offer: Not Applicable.
Signed on behalf of Goldman Sachs International:
By: .................................................
Duly authorised
54366916(Ver7)/Ashurst(WFUNG)/EK
OTHER INFORMATION
1. LISTING AND ADMISSION TO TRADING (i) Application has been made by the Issuer (or on
its behalf) for the Notes to be listed on the Official List and admitted to trading on the regulated market of the Luxembourg Stock Exchange with effect from as soon as practicable after the Issue Date. No assurances can be given that such application for listing and admission to trading will be granted; and
(ii) Application will be made by the Issuer (or on its behalf) for the Notes to be listed on Borsa Italiana S.p.A. and admitted to trading on Borsa Italiana S.p.A.'s MOT (Electronic bond market), a regulated market organised and managed by Borsa Italiana S.p.A, with effect from as soon as practicable after the Issue Date. No assurances can be given that such application for listing and admission to trading will be granted.
The Issuer has no duty to maintain the listing (if any) of the Notes on the relevant stock exchange(s) over their entire lifetime. The Notes may be suspended from trading and/or de-listed at any time in accordance with applicable rules and regulations of the relevant stock exchange(s).
2. ESTIMATED TOTAL EXPENSES RELATED TO THE ADMISSION TO TRADING
Not Applicable.
3. LIQUIDITY ENHANCEMENT AGREEMENTS
Not Applicable.
4. RATINGS Not Applicable.
5. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE/OFFER
Save as discussed in risk factor 6, "Risks associated with conflicts of interest between Goldman Sachs Group and purchasers of Securities" on pages 21 to 22 of this Prospectus, so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the issue.
6. REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES
Not Applicable.
YIELD
Indication of yield: The yield is 6.25 per cent. per annum. The yield of the Securities will also depend on their purchase and sale price on the secondary market (if any).
7. PERFORMANCE AND VOLATILITY OF THE UNDERLYING ASSET
Not Applicable.
8. OPERATIONAL INFORMATION
Any Clearing System(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking, société anonyme and the relevant identification number(s):
Not Applicable.
For the avoidance of doubt, and to the extent applicable in the event of listing on Borsa Italiana S.p.A., Italian investors may participate via an account with, or have an account with a participant of, Monte Titoli S.p.A. Monte Titoli S.p.A. will, in turn, have an account ("bridge") with Euroclear or Clearstream, Luxembourg
Delivery: Delivery against payment.
Names and addresses of additional Paying Agent(s) (if any):
Not Applicable.
Operational contact(s) for Fiscal Agent: xx-xx-xxxxxxxxxx@xx.xxx.
Intended to be held in a manner which would allow Eurosystem eligibility:
No.
EXAMPLES
THE EXAMPLES PRESENTED BELOW ARE FOR ILLUSTRATIVE PURPOSES ONLY.
For the purposes of each Example:
(i) the Issue Price is 100 per cent. (100%) of the Aggregate Nominal Amount, the Aggregate Nominal Amount is MXN 800,000,000 and the Calculation Amount is MXN 25,000;
(ii) in respect of any Interest Amount payable pursuant to General Note Condition 7 (Fixed Rate Note Conditions), the Interest Payment Dates are the 17th day of March in each calendar year from, and including, March 17, 2018 to, and including, March 17, 2019, and the Maturity Date; and
(iii) the day count fraction is deemed to be one.
FINAL REDEMPTION
The Notes will be redeemed on the Maturity Date and the Final Redemption Amount payable in respect of each Calculation Amount of the Notes will be MXN 25,000.
FIXED COUPON
An Interest Amount of MXN 1,562.50 will be payable on the Interest Payment Dates scheduled to fall on each Interest Payment Date.
ANNEX
AMENDMENTS TO THE GENERAL TERMS AND CONDITIONS OF THE NOTES
The General Terms and Conditions of the Notes are amended as described below for the purposes of this Prospectus only.
1. General Note Condition 17 (Change in law)
General Note Condition 17 (Change in law) shall be deleted in its entirety and replaced with the following:
"Upon a Change in Law Event, the Issuer shall have the right to redeem the Notes on such day as shall be notified to the Holders in accordance with General Note Condition 20 (Notices) and will, if and to the extent permitted by applicable law, pay to the Holder in respect of each Note the Non-scheduled Early Repayment Amount (which may be determined taking into account the change of applicable law) on such day. A "Change in Law Event" shall be deemed to have occurred upon the Issuer becoming aware that, due to (a) the adoption of, or any change in, any applicable law, rule, regulation, judgment, order, sanction, or directive of any governmental, administrative, legislative or judicial authority or power ("applicable law"), or (b) the promulgation of, or any change in, the formal or informal interpretation of any applicable law by a court, tribunal or regulatory authority with competent jurisdiction, which has the effect (as determined by the Issuer in its discretion, acting in good faith and in a commercially reasonable manner, according to generally accepted practices or methodologies) that:
(a) its performance under the Notes or its performance or that of any of its affiliates under any related Hedge Positions (whether with respect to the Underlying Asset(s) or any constituent thereof); or
(b) the performance of any of its affiliates under the Notes had such affiliate been an issuer of the Notes or under any related Hedge Positions (whether with respect to the Underlying Asset(s) or any constituent thereof) had such affiliate been a party to any such hedging arrangement,
has or will become unlawful or impractical in whole or in part or there is a substantial likelihood of the same in the immediate future."
2. General Note Condition 18 (Agents)
The last paragraph of General Note Condition 18 (Agents) shall be deleted in its entirety and replaced with the following:
"The Calculation Agent shall not act as an agent for the Holders but shall be the agent of the Issuer and all its calculations, determinations and adjustments hereunder shall be made in good faith and in a commercially reasonable manner, according to generally accepted practices or methodologies, and (save in the case of manifest or proven error) shall be final and binding on the Issuer and the Holders. All calculation functions required of the Calculation Agent under these General Note Conditions may be delegated to any such person as the Calculation Agent, in its discretion, acting in good faith and in a commercially reasonable manner, according to generally accepted practices or methodologies, may decide."
GENERAL INFORMATION
1. Authorisations
The Programme has been authorised pursuant to a written resolution of the Executive Committee of the Board of Directors of GSI passed on September 28, 1998.
2. Financial Statements
The statutory financial statements of GSI for the periods ended December 31, 2016 and December 31, 2015 have been audited without qualification by PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors, 7 More Xxxxxx Xxxxxxxxx, Xxxxxx, XX0 0XX in accordance with the laws of England. PricewaterhouseCoopers LLP is a registered member of the Institute of Chartered Accountants in England and Wales.
3. No significant change and no material adverse change
There has been no significant change in the financial or trading position of GSI since December 31, 2016.
There has been no material adverse change in the prospects of GSI since December 31, 2016.
In this Prospectus, references to the "prospects" and "financial or trading position" of GSI are specifically to the ability of GSI to meet its full payment obligations under the Securities in a timely manner. In addition, all such statements should be read in conjunction with and are qualified by the information contained in the documents incorporated by reference into this Prospectus.
4. Litigation
Save as disclosed in "Legal Proceedings" of Note 22 to GSI's 2016 Financial Statements (page 76) of GSI's 2016 Annual Report, there have been no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which GSI is aware) during the 12 months before the date of this Prospectus which may have, or have had in the recent past, significant effects on GSI's financial position or profitability.
5. Availability of Documents
For so long as any Securities shall be outstanding, copies of the following documents may be obtained free of charge upon request during normal business hours from the specified office of the Issuer and the office of the Luxembourg Paying Agent and each of the Paying Agents:
(a) the constitutional documents of GSI;
(b) the programme agency agreement in relation to the Securities dated May 29, 2015;
(c) the deed of covenant made by the Issuer dated May 29, 2015;
(d) a copy of this Prospectus and any document incorporated by reference herein; and
(e) 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 Prospectus.
6. Responsibility statement
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the
knowledge of GSI (which has taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. Where information contained in this Prospectus has been sourced from a third party, this information has been accurately reproduced and, so far as GSI is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.
7. Content of websites does not form part of this Prospectus
No content of any website, cited or referred to in this Prospectus, shall be deemed to form part of, or be incorporated by reference into this Prospectus.
8. De-listing
Although no assurance is made as to the liquidity of the Securities as a result of their listing on the Official List of the Luxembourg Stock Exchange or Borsa Italiana S.p.A., as the case may be, delisting the Securities from the Luxembourg Stock Exchange or Borsa Italiana S.p.A., as the case may be, may have a material adverse effect on a purchaser's ability to resell its Securities in the secondary market.
9. Yield
The yield for the Securities is calculated as at the Issue Price on the Issue Date. It is not an indication of future yield, which will depend on the price at which the Securities were acquired.
10. Non-equity securities
The Securities will not constitute "equity securities" for the purposes of Article 2(1)(b) of the Prospectus Directive and Article 2(1)(v) of the Luxembourg Law dated July 10, 2005 as amended on July 3, 2012 on prospectuses for securities (the "Luxembourg Prospectus Law").
11. Objects and Purposes of the Issuer
The objects and purposes of the Issuer are provided for in paragraph 3 of the Memorandum of Association of GSI.
12. Selected Financial Information
The selected financial information set out below has been extracted from GSI's 2016 Financial Statements, which have been audited by PricewaterhouseCoopers LLP and on which PricewaterhouseCoopers LLP issued an unqualified audit report.
GSI's 2016 Financial Statements have been prepared in accordance with FRS 101. GSI's 2016 Financial Statements are incorporated by reference into this Prospectus. The financial information presented below should be read in conjunction with the financial statements included in such document, the notes thereto and report thereon.
The following table shows selected key historical financial information in relation to GSI:
As at and for the year ended | ||
(in USD millions) | December 31, 2016 | December 31, 2015 |
Operating Profit | 2,280 | 2,939 |
Profit on ordinary activities before taxation | 1,943 | 2,661 |
Profit for the financial year | 1,456 | 2,308 |
As at | ||
(in USD millions) | December 31, 2016 | December 31, 2015 |
Fixed Assets | 140 | 12 |
Current Assets | 934,129 | 850,219 |
Total Shareholder's funds: | 27,533 | 26,353 |
13. Luxembourg Tax Considerations
The following overview is of a general nature and is included herein solely for information purposes. It is a general description of certain Luxembourg tax considerations relating to the purchasing, holding and disposing of Securities.
This description is based on the laws, regulations and applicable tax treaties as in effect in Luxembourg on the date hereof, all of which are subject to change, possibly with retroactive effect. It is not intended to be, nor should it be construed to be, legal or tax advice.
The following overview does not purport to be a comprehensive description of all tax considerations that may be relevant to a particular prospective holder with regard to a decision to purchase, own or dispose of Securities.
Prospective holders are advised to consult their own tax advisers as to the tax consequences, under the tax laws of the country of which they are resident and under the laws of the all relevant jurisdictions, to which they may be subject.
The residence concept used under the respective headings below applies for Luxembourg income tax assessment purposes only. Any reference in the present section to a tax, duty, xxxx, impost or other charge or withholding of a similar nature refers to Luxembourg tax law and/or concepts only.
Withholding tax
Non-Luxembourg tax resident holders
Under the Luxembourg general tax laws currently in force, there is no withholding tax to be withheld by the debtor of Securities on payments of principal, premium or arm's length interest (including accrued but unpaid interest) to non-Luxembourg tax resident holders. Nor is any Luxembourg withholding tax payable upon redemption or repurchase of Securities held by non-Luxembourg tax resident holders to the extent said Securities do not (i) give entitlement to a share of the profits generated by the issuing company and (ii) the issuing company is not thinly capitalised.
Luxembourg tax resident holders
Under Luxembourg general tax laws currently in force and subject to the law of December 23, 2005, as amended (hereinafter the "Law"), there is no withholding tax to be withheld by the debtor of Securities on payments of principal, premium or arm's length interest (including accrued but unpaid interest) to Luxembourg tax resident holders. Nor is any Luxembourg withholding tax payable upon redemption or repurchase of Securities held by Luxembourg tax resident holders to the extent said Securities do not (i) give entitlement to a share of the profits generated by the issuing company and (ii) the issuing company is not thinly capitalised.
Under the Law, payments of interest or similar income made or ascribed by a paying agent established in Luxembourg to or for the immediate benefit of an individual beneficial owner who is tax resident of Luxembourg will be subject to a withholding tax of 20 per cent.
Luxembourg resident individuals can opt to self declare and pay a 20 per cent. xxxx on interest payments made or ascribed by paying agents located in a Member State of the European Union other than Luxembourg or a Member State of the European Economic Area.
In case the individual beneficial owner is an individual acting in the course of the management of his/her private wealth, said withholding tax will be in full discharge of income tax. Responsibility for the withholding tax will be assumed by the Luxembourg Paying Agent. Payments of interest under Securities
coming within the scope of the Law would be subject to withholding tax at a rate of 20 per cent.
Registration tax
Neither the issuance nor the transfer of Securities will give rise to any Luxembourg stamp duty, issuance tax, registration tax, transfer tax or similar taxes or duties. Notwithstanding, documents relating to the Securities, other than the Securities themselves, presented in a notarial deed or in the course of litigation may require registration. In this case, and based on the nature of such documents, registration duties may apply.
Automatic exchange of information
Under the law of December 18, 2015 implementing the Directive on Administrative Cooperation ("DAC2") and the OECD Common Reporting Standard (the "CRS") (the "Law"), since January 1, 2016, the Luxembourg financial institutions are required to provide to the fiscal authorities of other EU Member States and jurisdictions participating to the CRS details of payments of interest, dividends and similar type of income, gross proceeds from the sale of financial assets and other income, and account balances held on reportable accounts, as defined in the DAC2 and the CRS, of account holders residents of, or established in, an EU Member State and certain dependent and associated territories of EU Member States or in a jurisdiction which has introduced the CRS in its domestic law.
Payment of interest and other income derived from the Securities will fall into the scope of the Law and are therefore subject to reporting obligations.
Prospective investors should consult their own tax advisor with respect to the application of the DAC2 and the CRS to such investor in light of such investor's individual circumstances.
General Information
14. Alternative Performance Measures
The table below presents the Alternative Performance Measures (as defined in the Guidelines published by the ESMA) ("APMs" and each an "APM") in respect of GSI's 2015 Annual Report that is prepared in accordance with U.K. Generally Accepted Accounting Practices ("U.K. GAAP").
APM | Page number | Definition, components and basis of calculation of the APM | Reconciliation of the APM | Use of the APM | Comparative APM |
Effective tax rate | 7 | The effective tax rate is the tax expense divided by the accounting profit. | GSI's effective tax rate for the full year of 2015 was 13.3%. | This APM is meaningful as it is used as a comparison to the U.K. tax rate applicable to GSI. | GSI's effective tax rate for the full year of 2014 was 21.9%. |
Components/basis of calculation: "Tax on profit on ordinary activities" divided by "Profit on ordinary activities before taxation". | Reconciliation: $353M/$2,661M. Both numbers are presented on page 53 of GSI's 2015 Annual Report. | Reconciliation: $452M/$2,060M. Both numbers are presented on page 53 of GSI's 2015 Annual Report. | |||
This APM and its components relate to the performance of the past reporting period. | |||||
Effective tax rate excluding one-time benefit on the revaluation of GSI's deferred tax asset as a result of the Finance (No. 2) Xxx 0000 being enacted | 7 | The effective tax rate excluding one-time benefit is the tax expense excluding the one-time effect of increased U.K. corporate tax rates divided by the accounting profit. Components/basis of calculation: Sum of "Tax on profit on ordinary activities" less "Effect of increased U.K. corporate tax rates" divided by "Profit on ordinary activities before taxation". This APM and its components relate to the performance of the past reporting period. | GSI's effective tax rate for the full year 2015 excluding the one-time benefit was 19.1%. Reconciliation: ($353M- $(155M))/$2,661M. "Tax on profit on ordinary activities" is disclosed on page 53 of GSI's 2015 Annual Report. "Effect of increased U.K. corporate tax rates" is disclosed on page 72 of GSI's 2015 Annual Report. "Profit on ordinary activities before taxation" is disclosed on page 53 of GSI's 2015 Annual Report. | This APM is meaningful as it is used as a comparison to the U.K. tax rate applicable to GSI. | There was no equivalent one-time benefit in 2014, i.e. the effect of increased U.K. corporate tax rates is Nil. Hence the comparable APM is GSI's effective tax rate for the full year of 2014 of 21.9%. |
- 40 -
Index of Defined Terms
INDEX OF DEFINED TERMS
Page Page
APM 40
APMs 40
applicable law 34
Base Prospectus 2, 23
BRRD 16
Change in Law Event 34
Conditions 25
CONSOB 4
CRA Regulation 5
CSSF 4
ESMA 5
Fitch 4
General Note Conditions 25
Goldman Sachs Group 9
GSI 1, 7, 25
GSI's 2015 Annual Report 23
GSI's 2015 Financial Statements 23
GSI's 2016 Annual Report 23
GSI's 2016 Financial Statements 23
Holder 9
Interest Commencement Date 10
Issuer 1, 7
Luxembourg Prospectus Law 36
Moody's 5
MXN 9, 25
Notes 1
Original General Note Conditions 25
Programme 1
Prospectus 1
Prospectus Directive 1
Rate of Interest 10
Regulation S 5, 9
S&P 5
Securities 1, 9
Securities Act 5
U.K. GAAP 40
UK Banking Act 16
Registered Office of GSI
Goldman Sachs International
Xxxxxxxxxxxx Xxxxx 000 Xxxxx Xxxxxx Xxxxxx XX0X 0XX Xxxxxxx
Principal Programme Agent and Registrar (Notes) Citigroup Global Markets Xxxxxxxxxxx XX
Xxxxxxxxx 00 00000 Xxxxxxxxx xx Xxxx
Xxxxxxx Xxxxxxxx of Germany
Transfer Agents
Banque Internationale à Luxembourg, société anonyme
00 xxxxx x'Xxxx
X-0000 Xxxxxxxxxx Xxxxx Duché de Luxembourg
Citibank, N.A., London Branch
Citigroup Centre Canada Square Canary Wharf London E14 5LB England
Fiscal Agent and Paying Agent
Citibank, N.A., London Branch
Citigroup Centre Canada Square Canary Wharf London E14 5LB England
Calculation Agent Goldman Sachs International
Xxxxxxxxxxxx Xxxxx 000 Xxxxx Xxxxxx Xxxxxx XX0X 0XX Xxxxxxx
Auditors to GSI PricewaterhouseCoopers LLP
0 Xxxxxxxxxx Xxxxx Xxxxxx XX0X 0XX Xxxxxxx
Legal Advisers to the Issuer
as to English law Xxxxxxx LLP Xxxxxxxxx Xxxxx 0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
as to Italian securities law Studio Legale Associato in associazione con
Xxxxxxx & Xxxxxxx LLP Xxx Xxxxxxx Xxxxxx 0 00000 Xxxxx
Xxxxx