It has long been thought that Goldman Sachs Group Inc. (NYSE: GS) was going to escape this credit crisis mostly unscathed and that the firm would never have capital issues. The good news is that both of those may still remain true. The bad news is that the (now) bank holding company has just filed a shelf registration statement with the SEC to allow it to raise funds for itself and its units.
Warren Buffett recently made a key investment in the company, butshares have continued to slide since then. The bulge bracket brokerfiled for unspecified amount of securities sales to allow it to sellany combination of Debt Securities, Warrants, Purchase Contracts,Units, Preferred Stock, Depositary Shares. It lists the units asbeing The Goldman Sachs Group, Inc. and some of its "Capital Units".
Keep in mind that this does not say how much the firm plans to raise.In fact, it may not sell any securities to the public. The firm liststhe use of proceeds as "to provide additional funds for operations andfor other general corporate purposes."
The recent ratings agency comments did bring up issues, but there isalso the belief that Goldman Sachs is going to begin buying up depositbase assets as banks and depository institutions in the U.S. have topay for their sins of this decade.
Jon C. Ogg
October 10, 2008