Fitch Ratings has affirmed the 'AA-/F1+' long- and short-term Issuer Default Ratings (IDRs) of Goldman Sachs Group, Inc. (Goldman), along with all outstanding debt ratings. The rating affirmations follow a review of the investment banking industry. Total unsecured long-term debt of $182 billion was outstanding as of May 30, 2008. The Rating Outlook is Stable. A complete list of ratings is detailed at the end of this press release.
Goldman prudently manages its balance sheet, and continues to exhibit strong liquidity management throughout the currently stressed environment. Goldman has been profitable, maintains its lead positions in global advisory, equity underwriting, and prime brokerage.
Goldman effectively limited its exposure to subprime mortgages and related derivative instruments. In doing so, it has avoided the most severe valuation losses incurred by many other participants in the securitized mortgage arena. Mark-to-market valuations taken in recent quarters on other high risk exposures - e.g., commercial real estate, leverage finance and financial guarantees - have been modest. Notwithstanding the liquidity and credit pressures prevalent in global markets, Goldman's performance in first-half 2008 (1H'08) was solid, and excelled among peers.
It is Fitch's view that credit markets will remain challenged in the near term, with earnings among investment banks expected to remain highly variable. Recent contributions from both the Investment Banking and FICC demonstrate Goldman's agility to navigate the current environment, and in some instances, take advantage of dynamic market conditions profitably.
The diversity and scale of the franchise enables Goldman to commit significant resources to principal investments without negative ratings implications. These investments can produce unpredictable gains and losses. The exposures created by these principal trading and proprietary investment activities will be considered in the context of overall franchise significance, earnings contributions, incremental risk and capital consumption.
The present ratings will accommodate continued positive performance. Fitch may take negative rating actions if there is increased risk-taking that is not supported by sufficient capital growth, exceptional trading losses, impaired liquidity, rising leverage and/or tangible equity erosion.
Fitch has affirmed the following ratings with a Stable Outlook:
Goldman Sachs Group, Inc.
--Long-term IDR 'AA-';
--Long-term senior debt 'AA-';
--Subordinated 'A+';
--Preferred equity 'A+';
--Short-term IDR 'F1+';
--Short-term debt 'F1+';
--Individual 'B';
--Support '5';
--Support Floor 'NF'.
Goldman Sachs Capital I, II, III
--Trust preferred 'A+'.
Goldman Sachs Paris Inc. et Cie.
--Long-term IDR 'AA-';
--Short-term IDR 'F1+'.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contacts:
Leslie Bright, +1-212-908-0622 (New York)
Eileen
Fahey, +1-312-368-5468 (Chicago)
Kenneth Reed, +1-212-908-0540
(Media Relations, New York)
