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Unsecured Borrowings
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Unsecured Borrowings
Note 14.
Unsecured Borrowings
The table below presents information about unsecured borrowings.
 
    As of  
$ in millions
  
 
September
2020
 
 
     
 December
2019
  
 
Unsecured short-term borrowings
  
 
$  48,028
 
      $  48,287  
Unsecured long-term borrowings
  
 
213,936
 
      207,076  
Total
  
 
$261,964
 
      $255,363  
Unsecured Short-Term Borrowings
Unsecured short-term borrowings includes the portion of unsecured long-term borrowings maturing within one year of the financial statement date and unsecured long-term borrowings that are redeemable within one year of the financial statement date at the option of the holder.
The firm accounts for certain hybrid financial instruments at fair value under the fair value option. See Note 10 for further information about unsecured short-term borrowings that are accounted for at fair value. In addition, the firm designates certain derivatives as fair value hedges to convert a portion of its unsecured short-term borrowings not accounted for at fair value from fixed-rate obligations into floating-rate obligations. The carrying value of unsecured short-term borrowings that are not recorded at fair value generally approximates fair value due to the short-term nature of the obligations. As these unsecured short-term borrowings are not accounted for at fair value, they are not included in the firm’s fair value hierarchy in Notes 4 through 10. Had these borrowings been included in the firm’s fair value hierarchy, substantially all would have been classified in level 2 as of both September 2020 and December 2019.
The table below presents information about unsecured short-term borrowings.
 
    As of  
$ in millions
  
 
September
2020
 
 
    
 December
2019
  
 
Current portion of unsecured long-term borrowings
  
 
$26,833
 
     $30,636  
Hybrid financial instruments
  
 
18,065
 
     15,814  
Commercial paper
  
 
1,098
 
     –  
Other unsecured short-term borrowings
  
 
2,032
 
     1,837  
Total unsecured short-term borrowings
  
 
$48,028
 
     $48,287  
 
Weighted average interest rate
  
 
2.03%
 
     2.71%  
In the table above, the weighted average interest rates for these borrowings include the effect of hedging activities and exclude unsecured short-term borrowings accounted for at fair value under the fair value option. See Note 7 for further information about hedging activities.
Unsecured Long-Term Borrowings​​​​​​​
The table below presents information about unsecured long-term borrowings.
 
$ in millions
    
 U.S.
Dollar
  
 
     
Non-U.S.
Dollar
  
 
   
 
Total
 
As of September 2020
        
Fixed-rate obligations
  
 
$100,104
 
   
 
$40,078
 
   
 
$140,182
 
Floating-rate obligations
  
 
42,825
 
   
 
30,929
 
   
 
73,754
 
Total
  
 
$142,929
 
   
 
$71,007
 
   
 
$213,936
 
 
As of December 2019
        
Fixed-rate obligations
     $  92,846        $36,185        $129,031  
Floating-rate obligations
     47,850        30,195        78,045  
Total
     $140,696        $66,380        $207,076  
In the table above:
 
•  
Unsecured long-term borrowings consists principally of senior borrowings, which have maturities extending through 2067.
 
•  
Floating-rate obligations includes equity-linked, credit-linked and indexed instruments. Floating interest rates are generally based on LIBOR or Euro Interbank Offered Rate.
 
•  
U.S. dollar-denominated debt had interest rates ranging from 2.00% to 9.30% (with a weighted average rate of 4.18%) as of September 2020 and 2.00% to 10.04% (with a weighted average rate of 3.82%) as of December 2019. These rates exclude unsecured long-term borrowings accounted for at fair value under the fair value option.
 
•  
Non-U.S.
dollar-denominated debt had interest rates ranging from 0.13% to 13.00% (with a weighted average rate of 2.32%) as of September 2020 and 0.13% to 13.00% (with a weighted average rate of 2.33%) as of December 2019. These rates exclude unsecured long-term borrowings accounted for at fair value under the fair value option.
The table below presents unsecured long-term borrowings by maturity.
 
$ in millions
  
 
As of
September 2020
 
 
2021
  
 
$    9,062
 
2022
  
 
26,512
 
2023
  
 
29,746
 
2024
  
 
19,727
 
2025
  
 
26,433
 
2026 - thereafter
  
 
102,456
 
Total
  
 
$213,936
 
In the table above:
 
•  
Unsecured long-term borrowings maturing within one year of the financial statement date and unsecured long-term borrowings that are redeemable within one year of the financial statement date at the option of the holder are excluded as they are included in unsecured short-term borrowings.
 
•  
Unsecured long-term borrowings that are repayable prior to maturity at the option of the firm are reflected at their contractual maturity dates.
 
•  
Unsecured long-term borrowings that are redeemable prior to maturity at the option of the holder are reflected at the earliest dates such options become exercisable.
 
•  
Unsecured long-term borrowings included $13.55 billion of adjustments to the carrying value of certain unsecured long-term borrowings resulting from the application of hedge accounting by year of maturity as follows: $145 million in 2021, $(14) million in 2022, $252 million in 2023, $738 million in 2024, $979 million in 2025, and $11.45 billion in 2026 and thereafter.
The firm designates certain derivatives as fair value hedges to convert a portion of fixed-rate unsecured long-term borrowings not accounted for at fair value into floating-rate obligations. See Note 7 for further information about hedging activities.
The table below presents unsecured long-term borrowings, after giving effect to such hedging activities.
 
    As of  
$ in millions
  
 
September
2020
 
 
     
 December
2019
  
 
Fixed-rate obligations:
     
At fair value
  
 
$    1,429
 
      $       725  
At amortized cost
  
 
30,909
 
      47,577  
Floating-rate obligations:
     
At fair value
  
 
38,899
 
      42,936  
At amortized cost
  
 
142,699
 
      115,838  
Total
  
 
$213,936
 
      $207,076  
In the table above, the aggregate amounts of unsecured long-term borrowings had weighted average interest rates of 2.06% (3.61% related to fixed-rate obligations and 1.70% related to floating-rate obligations) as of September 2020 and 2.87% (3.77% related to fixed-rate obligations and 2.48% related to floating-rate obligations) as of December 2019. These rates exclude unsecured long-term borrowings accounted for at fair value under the fair value option.
As of both September 2020 and December 2019, the carrying value of unsecured long-term borrowings for which the firm did not elect the fair value option approximated fair value. As these borrowings are not accounted for at fair value, they are not included in the firm’s fair value hierarchy in Notes 4 through 10. Had these borrowings been included in the firm’s fair value hierarchy, substantially all would have been classified in level 2 as of both September 2020 and December 2019.
Subordinated Borrowings
Unsecured long-term borrowings includes subordinated debt and junior subordinated debt. Junior subordinated debt is junior in right of payment to other subordinated borrowings, which are junior to senior borrowings. Subordinated debt had maturities ranging from 2021 to 2045 as of both September 2020 and December 2019. Subordinated debt that matures within one year is included in unsecured short-term borrowings.
The table below presents information about subordinated borrowings.
 
$ in millions
    
 Par
Amount
  
 
     
 Carrying
Value
  
 
   
 
Rate
 
As of September 2020
        
Subordinated debt
  
 
$14,019
 
   
 
$18,987
 
   
 
1.83%
 
Junior subordinated debt
  
 
968
 
   
 
1,477
 
   
 
1.39%
 
Total
  
 
$14,987
 
   
 
$20,464
 
   
 
1.80%
 
 
As of December 2019
        
Subordinated debt
     $14,041        $16,980        3.46%  
Junior subordinated debt
     976        1,328        2.85%  
Total
     $15,017        $18,308        3.42%  
In the table above, the rate is the weighted average interest rate for these borrowings (excluding borrowings accounted for at fair value under the fair value option), including the effect of fair value hedges used to convert fixed-rate obligations into floating-rate obligations. See Note 7 for further information about hedging activities.
Junior Subordinated Debt
In 2004, Group Inc. issued $2.84 billion of junior subordinated debt to Goldman Sachs Capital I (Trust), a Delaware statutory trust. The Trust issued $2.75 billion of guaranteed preferred beneficial interests (Trust Preferred securities) to third parties and $85 million of common beneficial interests to Group Inc. As of September 2020, the outstanding par amount of junior subordinated debt held by the Trust was $968 million and the outstanding par amount of Trust Preferred securities and common beneficial interests issued by the Trust was $939 million and $29 million, respectively. As of December 2019, the outstanding par amount of junior subordinated debt held by the Trust was $976 million and the outstanding par amount of Trust Preferred securities and common beneficial interests issued by the Trust was $947 million and $29 million, respectively.
During the nine months ended September 2020, the firm purchased Trust Preferred securities with a par amount and a carrying value of $7.9 million and $11.0 million and delivered these securities, along with $0.2 million of common beneficial interests, to the Trust in a
non-cash
exchange for junior subordinated debt with a par amount and carrying value of $8.1 million and $12.5 million, respectively. Following the exchange, these Trust Preferred securities, common beneficial interests and junior subordinated debt were extinguished. The Trust is a wholly-owned finance subsidiary of the firm for regulatory and legal purposes but is not consolidated for accounting purposes.
The firm pays interest semi-annually on the junior subordinated debt at an annual rate of 6.345% and the debt matures on February 15, 2034. The coupon rate and the payment dates applicable to the beneficial interests are the same as the interest rate and payment dates for the junior subordinated debt. The firm has the right, from time to time, to defer payment of interest on the junior subordinated debt, and therefore cause payment on the Trust’s preferred beneficial interests to be deferred, in each case up to ten consecutive semi-annual periods. During any such deferral period, the firm will not be permitted to, among other things, pay dividends on or make certain repurchases of its common stock. The Trust is not permitted to pay any distributions on the common beneficial interests held by Group Inc. unless all dividends payable on the preferred beneficial interests have been paid in full.
The firm has covenanted in favor of the holders of Group Inc.’s 6.345% junior subordinated debt due February 15, 2034, that, subject to certain exceptions, the firm will not redeem or purchase the capital securities issued by Goldman Sachs Capital II and Goldman Sachs Capital III (APEX Trusts) or shares of Group Inc.’s Perpetual
Non-Cumulative
Preferred Stock, Series E (Series E Preferred Stock), Perpetual
Non-Cumulative
Preferred Stock, Series F (Series F Preferred Stock) or Perpetual
Non-Cumulative
Preferred Stock, Series O, if the redemption or purchase results in less than $253 million aggregate liquidation preference of that series outstanding, prior to specified dates in 2022 for a price that exceeds a maximum amount determined by reference to the net cash proceeds that the firm has received from the sale of qualifying securities.
The APEX Trusts hold Group Inc.’s Series E Preferred Stock and Series F Preferred Stock. These trusts are Delaware statutory trusts sponsored by the firm and wholly-owned finance subsidiaries of the firm for regulatory and legal purposes but are not consolidated for accounting purposes.