Goldman Sachs issues euro corporate bond with variable coupons

Goldman Sachs has issued a ten-year euro-denominated corporate bond structured as a fixed-to-reverse floater. Originally issued on June 27, 2023, the bond is set to mature in 2033 and lacks callability.

The security features a unique coupon structure where the first two years paid a fixed rate of 6.50%. From the third year onward, the coupons become variable, tied to the 3-month Euribor with a floor of 1.50% and a cap of 6.00%. This inverse relationship means yields increase when market rates fall and decrease when rates rise.

Currently trading at 91.51 cents, the bond is priced at an 8.5% discount to its par value. While the issuer maintains strong credit ratings—ranging from A2 by Moody’s to BBB+ by S&P—the instrument is characterized by low liquidity on the secondary market, with a float of approximately 80 million euros. Due to these factors, the bond is considered suitable primarily for experienced investors seeking diversification.