Goldman Sachs Announces Series AA Preferred Stock Offering and Potential Redemption of Series U Shares

Details on the Proposed Series AA Preferred Stock Offering

Goldman Sachs plans to offer depositary shares, each representing a 1/25th interest in a share of its new Fixed-Rate Reset Non-Cumulative Preferred Stock, Series AA. This announcement was made through a preliminary prospectus supplement filed with the Securities and Exchange Commission on July 20, 2026. The offering underscores the firm’s active participation in capital markets to optimize its preferred equity portfolio and capital structure.

The depositary share structure enables investors to gain fractional ownership in the preferred shares, with the 1/25th ratio creating smaller, more accessible trading units. The preliminary prospectus supplement outlines detailed terms, including dividend rates and redemption features, which will be finalized upon pricing.

Use of Proceeds and Series U Preferred Stock Redemption Strategy

If the Series AA offering prices and closes, Goldman Sachs intends to use part of the net proceeds to redeem all outstanding shares of its Series U Preferred Stock, which carries a 3.65% fixed dividend and a $25,000 liquidation preference per share. This redemption would allow the company to retire the existing preferred issue and replace it with new preferred equity potentially featuring different economic terms.

The timing of any redemption depends entirely on the successful completion of the Series AA offering. Goldman Sachs emphasized that this disclosure does not constitute a redemption notice. Should the company decide to proceed with redeeming Series U shares, it will issue a formal press release and provide appropriate redemption notices to shareholders.

Market Conditions and Contingency Factors

The pricing and closing of the Series AA offering, as well as the potential redemption of Series U Preferred Stock, are subject to prevailing market conditions and other factors. Goldman Sachs explicitly stated there is no assurance the offering will price or close, nor that management will pursue the Series U redemption. These contingencies reflect the firm’s disciplined approach to capital market transactions.

The preliminary prospectus supplement filed on July 20, 2026, contains comprehensive details on offering terms, conditions, and associated risks. Prospective investors should review these materials carefully to understand dividend payment schedules, optional redemption features, and other critical provisions governing the Series AA preferred shares.

Goldman Sachs’ Preferred Stock Portfolio and Capital Management Approach

The Goldman Sachs Group holds multiple series of preferred stock and preferred-linked securities traded on various exchanges under different symbols. Its registered preferred securities include depositary shares representing interests in Series A, Series C, and Series D Floating Rate Non-Cumulative Preferred Stock, along with Fixed-to-Floating and other structured preferred securities. This diversified portfolio enables the firm to manage its capital structure effectively across varying interest rate environments and investor preferences.

The Series AA offering and possible Series U redemption align with Goldman Sachs’ broader capital management strategy. Introducing new preferred equity with fixed-rate reset features allows the company to respond to market demand and potentially retire older preferred stock. This reflects the firm’s active oversight and optimization of its preferred equity stack, a common practice among large financial institutions.

Regulatory Filings and Disclosure Compliance

Goldman Sachs filed a preliminary prospectus supplement with the SEC on July 20, 2026, detailing initial terms for the Series AA depositary shares offering. The company clarified that this disclosure does not constitute an offer to sell these shares, consistent with regulatory standards for preliminary offering documents.

Final terms, including dividend rates and redemption options, have yet to be determined and will be disclosed in a final prospectus supplement upon pricing. Investors should consult both the preliminary and final prospectus supplements for full disclosure of all terms and conditions.

Mechanics and Timing of Series U Preferred Stock Redemption

The Series U Preferred Stock carries a 3.65% fixed dividend and a $25,000 liquidation preference per share. If Goldman Sachs opts to redeem these shares, it will provide shareholders with formal notice in accordance with securities laws and preferred stock terms. Any redemption will be announced via press release followed by official redemption notices to holders.

Redemption will only proceed if the Series AA offering successfully prices and closes, ensuring the firm has sufficient proceeds to fund the redemption. This sequential process enables coordinated management of preferred equity issuance and retirement, demonstrating Goldman Sachs’ disciplined capital management.

Forward-Looking Statements and Risk Factors

Goldman Sachs included cautionary language regarding forward-looking statements related to the offering and use of proceeds, as defined under the Private Securities Litigation Reform Act of 1995. The company warned that actual outcomes may differ materially and that the offering and redemption are subject to various risks and uncertainties.

Investors are advised to review the "Risk Factors" section in Part I, Item 1A of Goldman Sachs’ Annual Report on Form 10-K for the year ended December 31, 2025, which discusses risks affecting the company’s future results and financial condition. These risks cover market, operational, regulatory, and other factors relevant to a large financial institution.

Industry Context for Preferred Equity Issuance

Preferred equity offerings are a routine part of capital management for major financial institutions. Preferred securities help meet regulatory capital requirements, manage funding costs, and optimize overall capital structure. Goldman Sachs’ Series AA offering and potential Series U redemption exemplify standard industry practices for maintaining efficient capital frameworks.

Preferred stock’s fixed dividends and redemption features appeal to specific investor groups. By issuing depositary shares representing fractional interests, Goldman Sachs enhances accessibility and liquidity for a wider investor base, a common approach among large issuers managing preferred stock portfolios.

Investor Guidance and Next Steps

Investors interested in the Series AA offering should follow Goldman Sachs’ investor relations updates for information on pricing and closing. After pricing, a final prospectus supplement will provide definitive terms, dividend rates, redemption features, and other material details. The immediate impact on share price following this announcement remains unclear.

If Goldman Sachs proceeds with redeeming Series U Preferred Stock, holders will receive formal redemption notices detailing the redemption date, price, and instructions. The company stresses no redemption decision has been finalized and shareholders should await official communications before taking action based on this preliminary disclosure.