Menu Our services in the selected location:
  • No services available for your region.
Select Location:
Remember my selection
Your browser is out of date.

Investment Ideas 2022: Explore three key themes dominating markets where investors might uncover potential opportunities. Read More

   

CREDIT TERMS: THE RISING IMPORTANCE OF THE FINE PRINT

December 15, 2022  |  11 Minute Read


Stephanie Rader

Global Head of Private Credit Client Solutions and Product Strategy

Stephanie Rader


Key Takeaways

  • As rates rise, the underwriting and documentation of credit investments becomes more important, particularly for leveraged loans and private credit due to the floating-rate nature of the products.

 

  • Heightened syndication risk has led more borrowers to pursue private credit, which carries more stringent terms and documentation but also more certainty of execution because capital is generally drawn from dedicated funds.

 

  • Amidst ongoing market volatility, investors need to be cognizant of how credit exposure in their portfolio is structured, and how hedges are being implemented to reduce FX and rate risk. Lenders and borrowers collaborated well during the pandemic, but few private lenders have been tested through an extended downturn.

Debt financing in recent decades has grown cheaper and easier to procure, with fewer strings attached as lenders competed for financings. Now, the market is beginning to turn. Rates are rising, underwriting is tightening, and terms are shifting. Credit assets are often assessed at a headline level, only considering basic characteristics like the coupon, rating, and duration, but the underlying terms and structures are key to understanding how these assets might behave in a downturn. It’s important for credit investors to not only understand the terms of deals being done today, but also the terms of their existing portfolio and which ones may become more important when rates rise and growth slows.

 

Over the last decade, terms for leveraged loans have increasingly resembled high yield, but the borrowers tend to have lower ratings and the debt is floating rate, which has implications in today’s market. The vast majority of leveraged loans today are classified as covenant-lite—but that doesn’t mean borrowers are without protections or recourse. Private credit, for its part, is growing and in many ways filling a gap left as the leveraged loan market evolves; larger private credit fund sizes and new loan structures are enabling lending that was not feasible in the past. An added wrinkle is that the more structured credit investments utilized in private markets have a variety of embedded terms and features that complicate analysis, providing the potential for additional upside and—more importantly in the current environment—downside risk reduction.

 

 

Credit Term Terminology

Origination and Structuring

When new loans are formed, originators set the initial terms and include standard features like voting rights and mandatory prepayment conditions. Lenders tend to require that proceeds from loans serve an express purpose, often related to a specific acquisition or capital expenditure. Separately, mandatory prepayment helps to ensure lenders are repaid in the event of asset sales and corporate events. Terms are necessarily more standardized for syndicated deals involving multiple lenders.

 

The bilateral nature of private lending allows for close alignment between borrowers and lenders. The documentation for private loans often stipulates that the borrower must provide monthly financial statements, whereas public market lenders are beholden to quarterly reporting cycles, which can be further delayed by audits. This allows both sides in private credit relationships to be proactive before potential issues arise. While the terms are more stringent, private lenders often work closely with borrowers to establish bespoke conditions and arrangements that not only provide an ex-ante playbook for distressed situations but can also help to course-correct before more severe action is needed.

 

The most fundamental protection for corporate lenders is collateral, which can include inventory, receivables, hard assets, and capital stock of operating units. While the concept of collateral is straightforward, there should be clear documentation about how collateral is protected (e.g., a negative pledge that prohibits assets as being pledged as collateral to different lenders).

 

Inadequate documentation and ambiguous language have led to disputes over collateral between borrowers and lenders in the leveraged loan and private credit spaces. These issues often surface when a borrower attempts to move assets outside of the legal entity with the obligation to the lender. In recent years, several private equity-backed companies have attempted—with varying degrees of success—to move business units, real estate, and other assets including intellectual property. The most infamous examples involved companies transferring intellectual property to an unrestricted subsidiary, in what is now often referred to as a “trap door.”

 

Prudent lenders have always addressed these issues, but market terms have broadly adjusted to address the risk of the “trap door” and similar efforts to shift collateral to enable further borrowing. Today, borrowers generally have few allowances for removing assets from the entity being lent against, but investors need to be aware of risk and ensure proper protections are in place. As with other terms, private creditors are generally better able to document collateral at the onset and track it over the course of the loan given the bilateral relationship and tighter reporting standards.

 

 

Syndication

The heightened pricing uncertainty of syndication in today’s market is one reason why private lenders have grown more popular. For deal financing, which is a primary purpose of leveraged loans and private lending, there is typically a gap of several months between when the deal agreement is in place and the transaction actually closes. In public issuances, flex provisions allow lenders to change the spread or size of the tranches during syndication to reflect market pricing. This has become increasingly important in the current market environment, as rising rates have made it more difficult to syndicate loans that were underwritten in more favorable borrowing environments. The average bid for new issues is around 95 cents on the dollar, pushing the yield for newly issued B-rated paper to more than 11%.1

 

The freezing of the banking and syndicated loan markets through 2022 has made the certainty offered by private creditors increasingly attractive. Rather than syndicating loans, these lenders generally draw capital commitments from closed-end funds, assuming the risk of holding the paper. This structure also tends to lead to fewer lenders in each transaction, helping to streamline the process. Even before the current market disruptions, borrowers had been increasingly opting for the flexibility of private lending, with the shift towards private credit underway for some time. While difficult to quantify in its entirety, the private credit market can be examined through several proxies including business development companies, where the share of private lending versus syndicated loans has shifted from 50/50 in 2016 to about 75/25 in recent years.2

 

 

Covenants

For loans that are already in place, covenants help to ensure the borrower maintains a sufficient operational trajectory to service the debt. Affirmative covenants are common and fairly standardized, requiring the borrower to take basic actions associated with the loan (e.g., pay interest). Even loans categorized as “cov-lite” will carry these terms. Negative covenants are more bespoke and tailored to the specific company’s situation, detailing restrictions on corporate activity (e.g., mergers & acquisitions, dividends, asset sales). Most covenants center on financial metrics, including balance sheet strength, cash flow coverage, and capital expenditure levels.

 

Negative covenants take two basic forms: maintenance and incurrence. As the name suggests, maintenance covenants require that a borrower “maintain” the ability to pass certain tests of financial performance on a periodic basis. While lenders technically have the right to accelerate a loan when a maintenance covenant is breached, the more common option (and typically more fruitful route for both parties) is to negotiate additional fees, a wider spread, more collateral, or similar concessions. Some loan agreements include provisions for “equity cures,” which allow the borrower to address a covenant breach by making an equity contribution. Incurrence covenants tend to cover similar aspects as maintenance covenants but only are tested if the borrower takes specified corporate actions, such as paying a dividend, issuing debt, or executing a transaction.

 

 

Cov-Lite Doesn’t Mean Cov-Less

Over the last decade, the term “cov-lite” has become virtually synonymous with leveraged loans, commanding more than 90% of the market. The common assumption is that this shift reflects a widespread disregard for incorporating basic protections into underwriting. The reality, however, is that cov-lite simply means that the loan has incurrence covenants—historically associated with investment-grade paper—rather than the maintenance covenants that the leveraged loan market initially coalesced around. To that end, the near ubiquity of cov-lite loans is more a reflection of the institutionalization of the market than a complete disregard for underwriting standards. In fact, LCD—the preeminent provider of leveraged loans data—ceased reporting on many aggregate maintenance covenant statistics due to the market’s widespread adoption of incurrence covenants (i.e., cov-lite).3 4

 

Even with the prevalence of cov-lite loans today, covenant relief in the leverage loan market was needed en masse during the pandemic. Almost all this relief pertained to pro rata loans, which includes revolvers and amortizing debt that are required to have covenants, as opposed to tranches sold to institutional investors. During the initial months of the pandemic, leveraged lenders worked with borrowers to allow them to draw on revolvers despite many failing to meet their incurrence covenants due to operational disruptions caused by lockdowns.

 

In private credit, senior direct lending and unitranche deals at the top end of the market have gravitated in a similar cov-lite direction as leveraged loans. Most private loans to middle-market borrowers, however, still carry maintenance covenants, typically including one that is financial in nature. Many borrowers were at risk of triggering those financial maintenance covenants, leading lenders to provide liquidity relief via changes in amortization schedules, switching to payment-in-kind (PIK) rather than cash interest, and even direct capital infusions. These deals often carried liquidity covenants, while offering leeway on leverage and fixed-charge covenants that might otherwise have been tripped.5 While these measures proved effective, how the market will respond during a prolonged economic downturn has yet to be seen since private credit was relatively nascent during the global financial crisis. In many cases, private lenders tend to view themselves as partners of equity owners and would prefer to find amicable resolutions in distress situations rather than pursuing workouts.

 

 

Despite the Prevalence of Cov-Lite Loans, Many Borrowers Sought Covenant Relief During the Pandemic

 

Source: Leveraged Commentary & Data (LCD). As of October 31, 2022.

 

 

Another common remedy for borrowers in recent years, whether for reasons of stress or convenience, was to amend-and-extend their existing loans. Under these transactions, the maturity on existing liabilities is extended further into the future with the option for lenders to convert to longer-dated paper with a wider spread. The amendment portion of the transaction, which requires a majority vote of the borrower group, stipulates the amount of the extension and the new spread as well as any revised terms. Amend-and-extend activity for leveraged loans hit record levels in recent years amidst attractive financing conditions, pushing out the maturity wall for leverage loans; at year-end 2020, more than $350 billion of leveraged loans were set to mature in 2023 and 2024, compared to about $120 billion today.6

 

 

More Downside Risk Reduction

Hedging has not been a central topic recently due to the relatively benign rate environment, but risk reduction has come to the forefront given the inflationary backdrop and aggressive policy response. Due to the floating-rate nature of leverage loans and private market debt, many lenders require borrowers to have a certain amount of interest rate hedging in place. While some borrowers are already hedging their rates exposures, lenders may increasingly ask borrowers to implement interest rate hedges to ensure debt servicing is maintained. This often takes the form of interest rate caps, which act as an insurance policy against rising reference rates like SOFR. The need for hedging has increased in recent years as more financial sponsors are opting to exclusively use floating-rate structures to finance deals. While some borrowers will have termed out that exposure when markets were favorable, an analysis of the high-yield market suggests that many borrowers still have significant floating-rate liabilities.7 Prepayment is also typically easier for floating-rate instruments, presenting a risk to lenders, but in today’s market many have been able to better negotiate call protections.

 

Foreign exchange (FX) hedging, while not as frequently featured in loan agreements, is becoming an increasingly salient topic for both borrowers and lenders too. For many private market strategies, currency hedging is relatively less important due to the long investment horizons and focus on capital appreciation; but yield-oriented strategies, such as private credit, are more exposed to fluctuations in FX markets due to the more consistent cash flow.

 

 

Considering the Upside Potential

Credit investors are inherently focused on downside risk reduction, particularly in tumultuous and volatile markets, with little additional upside potential beyond recouping the par value of the bond. In today’s tight lending market, borrowers may need to include additional upside opportunity through warrants or other incentives to entice lenders. Certain strategies, such as mezzanine, have always included warrants and equity features as standard operating practice, but the terms for more general direct lending strategies shift over time with market conditions. To that end, so-called “structured equity” investments, which include components of both debt and equity, have gained traction recently as a viable middle ground for companies in need of capital but unwilling to take on pure debt and reluctant to raise equity at depressed valuations.

 

 

Adapting to Market Realities

Many credit investors have yet to experience a full market cycle, and for those who have, markets look fundamentally different today than they have in the past. The leveraged loan market has risen in prominence and shifted to look more like high yield. Private credit has also gained traction, with an increasing spectrum of sub-strategies and underwriting features and provisions. As evolution in the space continues, investors need to understand the underlying positions of their credit portfolio. Particularly in private markets, where the terms can vary greatly from deal to deal, broad strategy labels may not accurately reflect the holdings within. As covered in a prior Perspectives article, the interest coverage ratio is a simple metric that can be used to judge a company’s ability to repay debt. Aggregate stats suggest general health in the market, but coverage ratios are significantly different across sectors and between companies—underscoring the need to understand idiosyncratic holdings.

 

For new debt issuances, lenders have already seen their negotiating positions improve in credit agreement structuring. Lower-quality companies are seeing the most significant tightening, but terms are also shifting for high-quality borrowers. Going forward, the shift to cov-lite debt—with incurrence rather than maintenances covenants—is unlikely to reverse in the leveraged loan market. Instead, we expect to see increased nuance in the structuring of incurrence covenants and more stringent restrictions on how borrowed cash can be used. Private creditors are likely to be able to command the most stringent terms, as the borrower base tends to be riskier; however, higher-quality companies are increasingly showing a willingness to engage with private credit and forge a closer relationship with a lender.

 

 

 

 

Related Insights

Start the Conversation

Committed to providing you with the insights you need to build your practice.

 

1 LCD. As of November 2022.

2 LCD. As of November 2022

3 LCD, Leveraged Commentary & Data (LCD): Leveraged Loan Primer. As of 2022 

4 LCD, High Yield Bond Primer. As of 2022. 

5 S&P Global, Private Debt: A Lesser-Known Corner Of Finance Finds The Spotlight. As of October 12, 2021 

6 LCD, Amend-and-extend activity remains focused on pro rata loans. As of September 22, 2022 

7 Goldman Sachs Global Investment Research, High Yield Credit Notes. As of July 8, 2022

Glossary

Middle-market borrowers generally include businesses with revenues of $25 million to $250 million.

Revolver refers to a borrower—either an individual or a company—who carries a balance from month to month, via a revolving credit line.

SOFR is secured overnight financing rate.

Tranches are pieces of a pooled collection of securities, usually debt instruments, that are split up by risk or other characteristics in order to be marketable to different investors.

Risk Considerations

Investments in fixed income securities are subject to the risks associated with debt securities generally, including credit, liquidity, interest rate, call and extension risk.

Investing in high-yield securities can be complex and involves a variety of risks and benefits. Non-investment grade fixed income securities and unrated securities of comparable credit quality (commonly known as “junk bonds”) are considered speculative and are subject to the increased risk of an issuer’s inability to meet principal and interest payment obligations. These securities may be subject to greater price volatility due to such factors as specific issuer developments, interest rate sensitivity, negative perceptions of the junk bond markets generally and less liquidity.

BDCs are subject to less regulation than other types of pooled investment vehicles such as registered investment companies. BDC's may pay significant fees, including incentive fees that are based upon performance (including realized and gains), and such fees may offset all or a significant portion of profits. BDCs will be subject to limitations on the types of investments it can make. Investors will be exposed to significant market, credit and liquidity risks. BDCs may make loans with a high degree of credit risk and engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. BDCs will be subject to regulatory restraints which will impact its ability to raise additional equity and debt capital. Accordingly, to the extent a BDC requires additional capital, it may experience regulatory hurdles to raising such capital. BDCs may invest in instruments that may be highly illiquid and extremely difficult to value. BDCs may involve complex tax and legal structures and accordingly are only suitable for sophisticated investors.

Hedge funds and other private investment funds (collectively, “Alternative Investments”) are subject to less regulation than other types of pooled investment vehicles such as mutual funds. Alternative Investments may impose significant fees, including incentive fees that are based upon a percentage of the realized and unrealized gains and an individual’s net returns may differ significantly from actual returns. Such fees may offset all or a significant portion of such Alternative Investment’s trading profits. Alternative Investments are not required to provide periodic pricing or valuation information. Investors may have limited rights with respect to their investments, including limited voting rights and participation in the management of such Alternative Investments.

Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. Similarly, interests in an Alternative Investment are highly illiquid and generally are not transferable without the consent of the sponsor, and applicable securities and tax laws will limit transfers.

Conflicts of Interest 
There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. These activities and interests include potential multiple advisory, transactional and other interests in securities and instruments that may be purchased or sold by the Alternative Investment. These are considerations of which investors should be aware and additional information relating to these conflicts is set forth in the offering materials for the Alternative Investment.

The above are not an exhaustive list of potential risks. There may be additional risks that should be considered before any investment decision.

General Disclosures

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.

Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

The views expressed herein are as of December 13, 2022 and subject to change in the future. Individual portfolio management teams for Goldman Sachs Asset Management may have views and opinions and/or make investment decisions that, in certain instances, may not always be consistent with the views and opinions expressed herein.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security, they should not be construed as investment advice.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

The website links provided are for your convenience only and are not an endorsement or recommendation by Goldman Sachs Asset Management of any of these websites or the products or services offered. Goldman Sachs Asset Management is not responsible for the accuracy and validity of the content of these websites.

United Kingdom: In the United Kingdom, this material is a financial promotion and has been approved by Goldman Sachs Asset Management International, which is authorized and regulated in the United Kingdom by the Financial Conduct Authority.

European Economic Area (EEA):This material is a financial promotion disseminated by Goldman Sachs Bank Europe SE, including through its authorised branches ("GSBE"). GSBE is a credit institution incorporated in Germany and, within the Single Supervisory Mechanism established between those Member States of the European Union whose official currency is the Euro, subject to direct prudential supervision by the European Central Bank and in other respects supervised by German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufischt, BaFin) and Deutsche Bundesbank.

Switzerland: For Qualified Investor use only – Not for distribution to general public. This is marketing material. This document is provided to you by Goldman Sachs Bank AG, Zürich. Any future contractual relationships will be entered into with affiliates of Goldman Sachs Bank AG, which are domiciled outside of Switzerland. We would like to remind you that foreign (Non-Swiss) legal and regulatory systems may not provide the same level of protection in relation to client confidentiality and data protection as offered to you by Swiss law.

Asia excluding Japan: Please note that neither Goldman Sachs Asset Management (Hong Kong) Limited (“GSAMHK”) or Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H ) (“GSAMS”) nor any other entities involved in the Goldman Sachs Asset Management business that provide this material and information maintain any licenses, authorizations or registrations in Asia (other than Japan), except that it conducts businesses (subject to applicable local regulations) in and from the following jurisdictions: Hong Kong, Singapore, Malaysia, India and China. This material has been issued for use in or from Hong Kong by Goldman Sachs Asset Management (Hong Kong) Limited, in or from Singapore by Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H) and in or from Malaysia by Goldman Sachs (Malaysia) Sdn Berhad (880767W).

Australia: This material is distributed by Goldman Sachs Asset Management Australia Pty Ltd ABN 41 006 099 681, AFSL 228948 (‘GSAMA’) and is intended for viewing only by wholesale clients for the purposes of section 761G of the Corporations Act 2001 (Cth). This document may not be distributed to retail clients in Australia (as that term is defined in the Corporations Act 2001 (Cth)) or to the general public. This document may not be reproduced or distributed to any person without the prior consent of GSAMA. To the extent that this document contains any statement which may be considered to be financial product advice in Australia under the Corporations Act 2001 (Cth), that advice is intended to be given to the intended recipient of this document only, being a wholesale client for the purposes of the Corporations Act 2001 (Cth). Any advice provided in this document is provided by either of the following entities. They are exempt from the requirement to hold an Australian financial services licence under the Corporations Act of Australia and therefore do not hold any Australian Financial Services Licences, and are regulated under their respective laws applicable to their jurisdictions, which differ from Australian laws. Any financial services given to any person by these entities by distributing this document in Australia are provided to such persons pursuant to the respective ASIC Class Orders and ASIC Instrument mentioned below.

  • Goldman Sachs Asset Management, LP (GSAMLP), Goldman Sachs & Co. LLC (GSCo), pursuant ASIC Class Order 03/1100; regulated by the US Securities and Exchange Commission under US laws.
  • Goldman Sachs Asset Management International (GSAMI), Goldman Sachs International (GSI), pursuant to ASIC Class Order 03/1099; regulated by the Financial Conduct Authority; GSI is also authorized by the Prudential Regulation Authority, and both entities are under UK laws.
  • Goldman Sachs Asset Management (Singapore) Pte. Ltd. (GSAMS), pursuant to ASIC Class Order 03/1102; regulated by the Monetary Authority of Singapore under Singaporean laws
  • Goldman Sachs Asset Management (Hong Kong) Limited (GSAMHK), pursuant to ASIC Class Order 03/1103 and Goldman Sachs (Asia) LLC (GSALLC), pursuant to ASIC Instrument 04/0250; regulated by the Securities and Futures Commission of Hong Kong under Hong Kong laws

 

No offer to acquire any interest in a fund or a financial product is being made to you in this document. If the interests or financial products do become available in the future, the offer may be arranged by GSAMA in accordance with section 911A(2)(b) of the Corporations Act. GSAMA holds Australian Financial Services Licence No. 228948. Any offer will only be made in circumstances where disclosure is not required under Part 6D.2 of the Corporations Act or a product disclosure statement is not required to be given under Part 7.9 of the Corporations Act (as relevant).

Canada: This presentation has been communicated in Canada by GSAM LP, which is registered as a portfolio manager under securities legislation in all provinces of Canada and as a commodity trading manager under the commodity futures legislation of Ontario and as a derivatives adviser under the derivatives legislation of Quebec. GSAM LP is not registered to provide investment advisory or portfolio management services in respect of exchange-traded futures or options contracts in Manitoba and is not offering to provide such investment advisory or portfolio management services in Manitoba by delivery of this material.

Japan: This material has been issued or approved in Japan for the use of professional investors defined in Article 2 paragraph (31) of the Financial Instruments and Exchange Law by Goldman Sachs Asset Management Co., Ltd.

South Africa: Goldman Sachs Asset Management International is authorised by the Financial Services Board of South Africa as a financial services provider.

Malaysia: This material is issued in or from Malaysia by Goldman Sachs (Malaysia) Sdn Bhd (880767W)

Hong Kong: This material has been issued or approved for use in or from Hong Kong by Goldman Sachs Asset Management (Hong Kong) Limited.

Singapore: This material has been issued or approved for use in or from Singapore by Goldman Sachs Asset Management (Singapore) Pte. Ltd. (Company Number: 201329851H).

Bahrain: This material has not been reviewed by the Central Bank of Bahrain (CBB) and the CBB takes no responsibility for the accuracy of the statements or the information contained herein, or for the performance of the securities or related investment, nor shall the CBB have any liability to any person for damage or loss resulting from reliance on any statement or information contained herein. This material will not be issued, passed to, or made available to the public generally.

Kuwait: This material has not been approved for distribution in the State of Kuwait by the Ministry of Commerce and Industry or the Central Bank of Kuwait or any other relevant Kuwaiti government agency. The distribution of this material is, therefore, restricted in accordance with law no. 31 of 1990 and law no. 7 of 2010, as amended. No private or public offering of securities is being made in the State of Kuwait, and no agreement relating to the sale of any securities will be concluded in the State of Kuwait. No marketing, solicitation or inducement activities are being used to offer or market securities in the State of Kuwait.

Oman: The Capital Market Authority of the Sultanate of Oman (the "CMA") is not liable for the correctness or adequacy of information provided in this document or for identifying whether or not the services contemplated within this document are appropriate investment for a potential investor. The CMA shall also not be liable for any damage or loss resulting from reliance placed on the document.

Qatar This document has not been, and will not be, registered with or reviewed or approved by the Qatar Financial Markets Authority, the Qatar Financial Centre Regulatory Authority or Qatar Central Bank and may not be publicly distributed. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

Saudi Arabia: The Capital Market Authority does not make any representation as to the accuracy or completeness of this document, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. If you do not understand the contents of this document you should consult an authorised financial adviser.

The CMA does not make any representation as to the accuracy or completeness of these materials, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of these materials. If you do not understand the contents of these materials, you should consult an authorised financial adviser.

United Arab Emirates: This document has not been approved by, or filed with the Central Bank of the United Arab Emirates or the Securities and Commodities Authority. If you do not understand the contents of this document, you should consult with a financial advisor.

Israel: This document has not been, and will not be, registered with or reviewed or approved by the Israel Securities Authority (ISA”). It is not for general circulation in Israel and may not be reproduced or used for any other purpose. Goldman Sachs Asset Management International is not licensed to provide investment advisory or management services in Israel.

Jordan: The document has not been presented to, or approved by, the Jordanian Securities Commission or the Board for Regulating Transactions in Foreign Exchanges.

Colombia: Esta presentación no tiene el propósito o el efecto de iniciar, directa o indirectamente, la adquisición de un producto a prestación de un servicio por parte de Goldman Sachs Asset Management a residentes colombianos. Los productos y/o servicios de Goldman Sachs Asset Management no podrán ser ofrecidos ni promocionados en Colombia o a residentes Colombianos a menos que dicha oferta y promoción se lleve a cabo en cumplimiento del Decreto 2555 de 2010 y las otras reglas y regulaciones aplicables en materia de promoción de productos y/o servicios financieros y /o del mercado de valores en Colombia o a residentes colombianos. Al recibir esta presentación, y en caso que se decida contactar a Goldman Sachs Asset Management, cada destinatario residente en Colombia reconoce y acepta que ha contactado a Goldman Sachs Asset Management por su propia iniciativa y no como resultado de cualquier promoción o publicidad por parte de Goldman Sachs Asset Management o cualquiera de sus agentes o representantes. Los residentes colombianos reconocen que (1) la recepción de esta presentación no constituye una solicitud de los productos y/o servicios de Goldman Sachs Asset Management, y (2) que no están recibiendo ninguna oferta o promoción directa o indirecta de productos y/o servicios financieros y/o del mercado de valores por parte de Goldman Sachs Asset Management.

Esta presentación es estrictamente privada y confidencial, y no podrá ser reproducida o utilizada para cualquier propósito diferente a la evaluación de una inversión potencial en los productos de Goldman Sachs Asset Management o la contratación de sus servicios por parte del destinatario de esta presentación, no podrá ser proporcionada a una persona diferente del destinatario de esta presentación.

Date of First Use: December 15, 2022 299523-OTU-1707673

Please enter your email address to continue reading.

Confirm Your Access


An email has been sent to you to verify ownership of your email address.

Please verify the link in the email by clicking the confirmation button. Once completed, you will gain instant access to our insights.

If you did not receive the email from us please check your spam folder or try again.