Goldman Sachs has struck a 3.65 percent preferred out of its charter, and the restated charter filed the same day carries one paying 6.500 percent
Stock photo
Two rates sit in the same eleven-line filing, and the distance between them is the story.
Goldman Sachs told the Securities and Exchange Commission on Tuesday afternoon that it had filed a Certificate of Elimination in Delaware, striking out of its charter everything relating to its 3.65% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series U. All outstanding shares of that series were redeemed the day before. In the same filing, the company reported that a restated charter had gone in reflecting two things at once: the elimination of Series U, and the terms of a new 6.500% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series AA.
The gap is 2.85 percentage points.
The chain, in the company's own filings
None of this has to be inferred, which is unusual for a refinancing. On 20 July, Goldman announced the launch of a proposed public offering of depositary shares, each representing a one twenty-fifth interest in a share of the new Series AA, and said that if the offering priced and closed it intended to use a portion of the net proceeds to redeem all of the outstanding Series U. That filing was careful that pricing had not happened and that there was no assurance any redemption would follow.
It followed. The Series AA certificate of designations went in on 23 July at a liquidation preference of $25,000 a share. The Series U was redeemed on 10 August. The elimination was signed by the global treasurer, Carey Halio, on 11 August.
The eliminated series had been designated in Delaware on 26 July 2021, under board resolutions dating from October 2011. It lasted five years and a fortnight.
What the new series authorises
The restated charter sets the authorised number of Series AA shares at 100,000. At the $25,000 liquidation preference each carries, that is a ceiling of $2.5bn rather than a figure issued, and no issued share count appears in any of the filings read here. The first dividend period runs to but excluding the payment date of 10 February 2027.
One term travels with any new preferred and travelled with this one. Should Goldman fail to pay dividends on the Series AA, its ability to declare or pay dividends on its common stock, or to repurchase it, becomes restricted.
