Furthermore, if you sell your notes, you will likely be charged a commission for secondary market transactions, or the
price will likely reflect a dealer discount. This commission or discount will further reduce the proceeds you would receive for your notes in a secondary market sale.
There is no assurance that GS&Co. or any other party will be willing to purchase your notes at any price and, in this regard, GS&Co. is not obligated to make a
market in the notes. See Additional Risk Factors Specific to the Underlier-Linked Notes Your Notes May Not Have an Active Trading Market on page
S-31
of the accompanying product
supplement no. 1,738.
The Notes Are Subject to the Credit Risk of the Issuer and the Guarantor
Although the return on the notes will be based on the performance of the underlier, the payment of any amount due on the notes is subject to the credit risk of GS
Finance Corp., as issuer of the notes, and the credit risk of The Goldman Sachs Group, Inc. as guarantor of the notes. The notes are our unsecured obligations. Investors are dependent on our ability to pay all amounts due on the notes, and therefore
investors are subject to our credit risk and to changes in the markets view of our creditworthiness. Similarly, investors are dependent on the ability of The Goldman Sachs Group, Inc., as guarantor of the notes, to pay all amounts due on the
notes, and therefore are also subject to its credit risk and to changes in the markets view of its creditworthiness. See Description of the Notes We May Offer Information About Our Medium-Term Notes, Series E
Program How the Notes Rank Against Other Debt on page
S-4
of the accompanying prospectus supplement and Description of Debt Securities We May Offer Guarantee by
The Goldman Sachs Group, Inc. on page 42 of the accompanying prospectus.
The Amount Payable on Your Notes Is Not Linked to the Level of the
Underlier at Any Time Other Than the Determination Date
The final underlier level will be based on the closing level of the underlier on the determination date
(subject to adjustment as described elsewhere in this pricing supplement). Therefore, if the closing level of the underlier dropped precipitously on the determination date, the cash settlement amount for your notes may be significantly less than it
would have been had the cash settlement amount been linked to the closing level of the underlier prior to such drop in the level of the underlier. Although the actual level of the underlier on the stated maturity date or at other times during the
life of your notes may be higher than the final underlier level, you will not benefit from the closing level of the underlier at any time other than on the determination date.
You May Lose a Substantial Portion of Your Investment in the Notes
You can lose a substantial portion of your investment in the notes. The cash payment on your notes on the stated maturity date will be based on the performance of the
S&P 500
®
Index as measured from the initial underlier level to the closing level on the determination date. If the final underlier level is
less than
the buffer level, you will have
a loss for each $1,000 of the face amount of your notes equal to the
product
of (i) the
sum
of the underlier return
plus
the buffer amount
times
(ii) $1,000. Thus, you may lose a substantial portion of your
investment in the notes, which would include any premium to face amount you paid when you purchased the notes.
Also, the market price of your notes prior to the
stated maturity date may be significantly lower than the purchase price you pay for your notes. Consequently, if you sell your notes before the stated maturity date, you may receive far less than the amount of your investment in the notes.
Your Notes Do Not Bear Interest
You will not receive any
interest payments on your notes. As a result, even if the cash settlement amount payable for your notes on the stated maturity date exceeds the face amount of your notes, the overall return you earn on your notes may be less than you would have
earned by investing in a
non-indexed
debt security of comparable maturity that bears interest at a prevailing market rate.
The Potential for the Value of Your Notes to Increase Will Be Limited
Your ability to participate in any change in the value of the underlier over the life of your notes will be limited because of the cap level. The maximum settlement
amount will limit the cash settlement amount you may receive for each of your notes at maturity, no matter how much the level of the underlier may rise beyond the cap level over the life of your notes. Accordingly, the amount payable for each of
your notes may be significantly less than it would have been had you invested directly in the underlier.
You Have No Shareholder Rights or Rights
to Receive Any Underlier Stock
Investing in your notes will not make you a holder of any of the underlier stocks. Neither you nor any other holder or owner of
your notes will have any rights with respect to the underlier stocks, including any voting rights, any right to receive dividends or other distributions, any rights to make a claim against the underlier stocks or any other rights of a holder of the
underlier stocks. Your notes will be paid in cash and you will have no right to receive delivery of any underlier stocks.
PS-13