Fitch Affirms Goldman Sachs' Ratings at 'A/F1'; Outlook Stable

  Fitch Affirms Goldman Sachs' Ratings at 'A/F1'; Outlook Stable

Business Wire

NEW YORK -- March 26, 2014

Fitch Ratings has affirmed The Goldman Sachs Group, Inc.'s (Goldman) Issuer
Default Rating (IDRs) at 'A/F1', support rating at '1', support rating floor
(SRF) at 'A' and viability rating (VR) at 'a'. The Rating Outlook is Stable. A
complete list of rating actions follows at the end of this release.

The rating actions on Goldman have been taken in conjunction with a periodic
review of the Global Trading and Universal Banks, which comprise 12 large and
globally active banking groups. Fitch's outlook for the sector is stable on
balance. Earnings pressure in securities businesses and continued conduct and
regulatory risks present in the GTUBs are offset by stronger balance sheets as
capitalization and liquidity remain sound. Fitch forecasts stronger GDP growth
in most economies, which should contribute to a more balanced operating
environment, but the operating environment is likely to remain challenging in
2014.

Today's rating actions assume that Goldman will perform adequately under the
CCAR stress test, though Fitch has no visibility into any potential
qualitative rejections for Goldman, or any of the other 29 banks subject to
regulatory stress testing. Although a qualitative rejection of a capital plan
request under CCAR would be viewed negatively, it is not expected to have any
rating implications for Goldman.

KEY RATING DRIVERS - IDRs, VR AND SENIOR DEBT

Goldman's IDRs, VR and senior debt continue to be supported by its leading
investment banking franchise, solid liquidity position, better-than-average
capital position, and strong risk management. The ratings are constrained by
Goldman's focus on capital market activities and relatively higher level of
wholesale funding.

Goldman has higher reliance on capital market operations than many global
trading and universal banks (GTUBs). Fitch recognizes that capital market
revenues are inherently volatile and susceptible to declines in difficult
market periods. Concerns over this inherent volatility are offset by
management's successful track record in managing through difficult periods.

Fitch believes that Goldman has a comparatively strong risk management
organization and systems to manage and monitor risk as demonstrated by its
ability to manage risk during period of market stress.

Goldman has consistently maintained liquidity at conservative levels, which is
viewed as appropriate given the company's reliance on wholesale funding.
Unencumbered highly liquid securities and cash was $184 billion (20% of total
assets) at year end 2013. Goldman's reliance on unsecured short-term funding
continues to be modest and the weighted average maturity of secured funding
remained constant during 2013.

Goldman's capital position continues to improve and remains comparatively
strong. Fitch Core Capital to risk-weighted assets remained higher than the
GTUB average. Goldman's Tier I common ratio under the Basel III advanced
approach was approximately 9.8% at year-end 2013 (in line with the average of
U.S. GTUBs).

Regulatory and legal issues appear manageable. Goldman and peers face new
capital markets regulations such as the Volcker Rule and implementation of
Basel III capital and liquidity standards. Goldman is projected to meet new
requirements well within allowable time frames.

RATING SENSITIVITIES - IDRs, VR AND SENIOR DEBT

Goldman's IDRs, VR and senior debt continue to be underpinned by its leading
investment banking franchise, solid operating profitability, strong risk
management, comfortable liquidity position and better-than-average capital
position. The ratings factor in Fitch core capital in line with current levels
and the management of capital comfortably above Basel III capital minimums.
The IDRs, VR and senior debt have limited upward potential, given Goldman's
business focus on the capital markets.

Downward pressure on the VR could result from a material loss, significant
increase in leverage or deterioration in liquidity levels. Similarly, any
unforeseen outsized or unusual fines, settlements or charges levied could also
have adverse rating implications. Goldman's Long-term IDR could be negatively
pressured if both its financial profile deteriorates (reflected in the VR) and
Fitch's view of support of U.S. G-SIFIs change.

KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATIING FLOOR

Goldman's Support Rating (SR) and Support Rating Floor (SRF) reflect Fitch's
expectation that there remains an extremely high probability of support from
the U.S. government ('AAA'/ Outlook Stable) if required. This expectation
reflects the U.S.'s extremely high ability to support its banks especially
given its strong financial flexibility, though propensity is becoming less
certain. Specific to Goldman, our view of support likelihood is based mostly
on its systemic importance in the U.S., its global interconnectedness given
its size and operations in global capital markets, and its position as a key
provider of financial services to the U.S. economy. Goldman's IDRs and senior
debt ratings do not benefit from support because Goldman's VR is equal to its
SRF.

However, in Fitch's view, there is a clear intention to reduce support for
G-SIFIs in the U.S., as demonstrated by the Dodd Frank Act (DFA) and progress
regulators have made on implementing the Orderly Liquidation Authority (OLA).
The FDIC has proposed its single point of entry (SPOE) strategy and further
initiatives are demonstrating the U.S. government's progress to eliminate
state support for U.S. banks going forward, which increases the likelihood of
senior debt losses if its banks fall afoul of solvency assessments.

KEY RATING SENSITIVITIES - SUPPORT RATING AND SRF

The SR and SRF are sensitive to progress made in finalizing the SPOE strategy
and any additional regulatory initiatives that may be imposed on the G-SIFIs,
including debt thresholds at the holding company. Fitch's assessment of
continuing support for U.S. G-SIFIs has to some extent relied upon the
feasibility of OLA implementation rather than its enactment into law (when DFA
passed). Hurdles that remain include the resolution of how cross-border
derivative acceleration/termination provisions are handled and that there is
sufficient contingent capital at the holding company to recapitalize without
requiring government assistance.

Fitch expects that the SPOE strategy and regulatory action to ensure
sufficient contingent capital will be finalized in the near term, but
regardless of its finalization Fitch believes that sufficient regulatory
progress continues to be made over the ratings time horizon. Therefore, Fitch
expects to revise Goldman's Support Rating to '5' and its SRF to 'No Floor'
within the next one to two years, likely to be some point in the late 2014 or
in 1H15.

A revision of the SRF to 'No Floor' would result in no change to Goldman's
Long-term IDR and debt ratings because Goldman's viability rating is equal to
the current SRF.

RATING DRIVERS AND SENSITIVITIES -SUBORDINATED DEBT AND OTHER HYBRID
SECURITIES

Subordinated debt and other hybrid capital issued by Goldman and by various
issuing vehicles are all notched down from Goldman's VR in accordance with
Fitch's assessment of each instrument's respective nonperformance and relative
Loss Severity risk profiles. Their ratings are primarily sensitive to any
change in Goldman's VR.

RATING DRIVERS AND SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS

Goldman's uninsured deposit ratings are rated one notch higher than the
company's IDR and senior unsecured debt because U.S. uninsured deposits
benefit from depositor preference. U.S. depositor preference gives deposit
liabilities superior recovery prospects in the event of default. However,
Goldman's uninsured deposits outside of the U.S. do not benefit from rating
uplift because they do not typically benefit from the U.S. depositor
preference unless the deposit is expressly payable at an office of the bank in
the United States. Since Fitch cannot determine which foreign branch deposits
may be dually payable, they do not get the rating uplift.

The ratings of long and short-term deposits issued by Goldman and its
subsidiaries are primarily sensitive to any change in Goldman's IDR.

RATING DRIVERS AND SENSITIVITIES - HOLDING COMPANY

Goldman's IDR is equalized with those of its operating companies and banks,
reflecting its role as the bank holding company, which is mandated in the U.S.
to act as a source of strength for its bank subsidiaries, as well as the use
of the holding company to fund subsidiary operations.

RATING DRIVERS AND SENSITIVITIES - SUBSIDIARY AND AFFILIATED COMPANIES

IDRs of major rated operating subsidiaries are equalized with Goldman's IDR
reflecting Fitch's view that these entities are core to Goldman's business
strategy and financial profile.

Goldman is a top global bank with four business segments: investment banking,
institutional client services, investment management, and investing and
lending. Goldman, in September 2008, converted to a bank holding company
regulated by the Federal Reserve Board. Goldman is designated as a G-SIFI by
the Financial Stability Board.

The following ratings were affirmed:

Goldman Sachs Group, Inc.

--Long-term IDR at 'A' with a Stable Outlook;

--Long-term senior debt at 'A';

--Viability Rating at 'a';

--Short-term IDR at 'F1';

--Commercial paper at 'F1';

--Support at '1';

--Support Floor at 'A';

--Market linked securities at 'Aemr';

--Subordinated debt to 'A-';

--Preferred equity at 'BB+';

--Senior unsecured Chilean Bond Issuance Programme at 'AAA(cl)'.

Goldman Sachs Bank, USA

--Long-term IDR at 'A' with a Stable Outlook;

--Long-term senior debt at 'A';

--Long-term deposits at 'A+';

--Short-term IDR at 'F1';

--Short-term debt at 'F1';

--Short-term deposits at 'F1';

--Support at '1'.

Goldman, Sachs & Co.

--Long-term IDR at 'A' with a Stable Outlook;

--Short-term IDR at 'F1';

--Long-term senior debt at 'A';

--Short-term debt at 'F1'.

Goldman Sachs International

--Long-term IDR at 'A' with a Stable Outlook;

--Short-term IDR at 'F1';

--Senior secured long-term notes at 'A';

--Senior secured short-term notes at 'F1';

--Short-term debt at 'F1'.

Goldman Sachs International Bank

--Long-term IDR at 'A' with a Stable Outlook;

--Short-term IDR at 'F1'

--Long-term deposits at 'A';

--Short-term deposits at 'F1'.

Goldman Sachs AG

--Long-term IDR at 'A' with a Stable Outlook;

--Short-term IDR at 'F1';

Goldman Sachs Bank (Europe) plc

--Senior secured guaranteed debt at 'A';

--Short-term secured guaranteed debt at 'F1';

--Short-term debt at 'F1'.

Goldman Sachs Paris Inc. et Cie.

--Long-term IDR at 'A' with a Stable Outlook;

--Short-term IDR at 'F1'.

Ultegra Finance Limited

--Long-term senior debt at 'A';

--Short-term debt at 'F1'.

Global Sukuk Company Limited

--Long-term senior unsecured at 'A';

--Short-term senior unsecured at 'F1'.

Goldman Sachs Financial Products I Limited

--Long-term senior unsecured at 'A'.

Goldman Sachs Capital I

--Trust preferred at 'BBB-'.

Goldman Sachs Capital II, III

--Preferred equity at 'BB+'.

Murray Street Investment Trust I

--Senior Guaranteed Trust Securities 'A'.

Vesey Street Investment Trust I

--Senior Guaranteed Trust Securities 'A'.

Fitch will hold a teleconference to discuss sovereign support for banks and
give an update on rating paths on Friday, March 28 at 15:00 GMT.

Callers must register in advance using the link below and are requested to
dial in early:

http://event.onlineseminarsolutions.com/r.htm?e=773507&s=1&k=E99B5BCE23C11883F75DA40C4B1FED21

Additional information is available at 'www.fitchratings.com'. The ratings
were unsolicited and have been provided by Fitch as a service to investors.

In addition to the source(s) of information identified in Fitch's Master
Criteria, these actions were additionally informed by information provided by
the companies.

Applicable Criteria and Related Research:

--Global Financial Institutions Rating Criteria (Jan. 31, 2014)

--Securities Firms Criteria (Jan. 31, 2014)

--Assessing and Rating Bank Subordinated and Hybrid Securities (Jan. 31, 2014)

--Rating FI Subsidiaries and Holding Companies (Aug. 10, 2012)

--The Evolving Dynamics of Support for Banks (Sept. 11, 2013)

--Bank Support: Likely Rating Paths' (Sept. 11, 2013)

--Sovereign Support for Banks: Update On Position Outlined In 3Q13 (Dec. 10,
2013)

--2014 Outlook: U.S. Banks (Nov. 21, 2013)

--2014 Outlook: U.S. Securities Firms (Nov. 21, 2013)

--Global Trading and Universal Banks - Periodic Review (Dec. 12, 2013)

--Fitch Fundamentals Index - U.S.; Index Trend Analysis 4Q13 (Jan. 15, 2014)

--U.S. Banking Quarterly Comment: 4Q13 (Earnings Continue to Tick Up, but
Challenges Remain) (Jan. 27, 2014)

--U.S. Banking Capital Market Update: 4Q13 (Weak FICC Results Limit Overall
Revenue Growth) (Jan. 28, 2014)

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Securities Firms Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732556

Bank Support: Likely Rating Paths

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715001

Sovereign Support For Banks: Update on Position Outlined in 3Q13

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726698

2014 Outlook: U.S. Banks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723989

2014 Outlook: U.S. Securities Firms (Capital and Liquidity Counterbalance
Challenging Market Conditions)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=722741

Global Trading and Universal Banks - Periodic Review

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726150

Fitch Fundamentals Index

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=729196

U.S. Banking Quarterly Comment: 4Q13 (Earnings Continue to Tick Up, but
Challenges Remain)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732295

U.S. Banking Capital Market Update: 4Q13 (Weak FICC Results Limit Overall
Revenue Growth)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732535

Assessing and Rating Bank Subordinated and Hybrid Securities Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732137

Rating FI Subsidiaries and Holding Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=679209

The Evolving Dynamics of Support for Banks

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715000

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=825148

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Contact:

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Senior Director
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or
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