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Goldman prices $20.74 million notes tied to dollar vs. euro that pay par plus currency return
By Sheri Kasprzak
New York, Oct. 10 – On Friday, Goldman Sachs Group Inc. announced the pricing of $20.74 million of 0% notes linked to the performance of the U.S. dollar relative to the euro.
These notes are due Dec. 14, 2015 and pay par plus the currency return. The notes do not offer principal protection, which means that investors can receive less than par at maturity if the currency return is negative.
Another offering pays 4.14x
Earlier in the week, Goldman Sachs detailed its plans to sell 0% leveraged currency-linked notes linked to the dollar relative to the euro. Notes linked to both the euro and European indexes have recently grown in popularity given some volatility in the European Union.
The International Monetary Fund issued a statement earlier this week that its global economic growth forecast is 3.3% for 2014, down from 3.4% in July, with 3.8% growth expected in 2015.
Germany has particularly been an area of concern with growth forecasts for that country downgraded. German factory orders in August were down sharply, sparking fears of a potential recession for the country. Additionally, the country sold 10-year notes at a yield below 1% for the first time in history. France and Italy, according to the IMF report, will also be experiencing slower growth.
Looking to the specifics of Goldman Sachs’ other notes, investors will receive 4.14 times the gain in the dollar, assuming the currency appreciates relative to the euro. There is a cap of $1,414 per $1,000 principal amount. Investors are fully exposed to losses.
The notes are due Oct. 20, 2017.
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