<PAGE> 1
Filed pursuant to Rule 424(b)(5)
Registration Statement No. 333-36178
Prospectus Supplement to Prospectus dated May 8, 2000.
$1,250,000,000
THE GOLDMAN SACHS GROUP, INC.
7.625% Notes due 2005
[GOLDMAN SACHS LOGO]
------------------------
The Goldman Sachs Group, Inc. will pay interest on the notes on February 17
and August 17 of each year. The first such payment will be made on February 17,
2001. If Goldman Sachs becomes obligated to pay additional amounts to non-U.S.
investors due to changes in U.S. withholding tax requirements, Goldman Sachs may
redeem the notes before their stated maturity at a price equal to 100% of the
principal amount redeemed plus accrued interest to the redemption date.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----
<S> <C> <C>
Initial public offering price............................... 99.982% $1,249,775,000
Underwriting discount....................................... 0.350% $ 4,375,000
Proceeds, before expenses, to Goldman Sachs................. 99.632% $1,245,400,000
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from July 17, 2000 and must
be paid by the purchaser if the notes are delivered after July 17, 2000.
------------------------
The underwriters expect to deliver the book-entry interests in the notes on
July 17, 2000 through the facilities of The Depository Trust Company, Euroclear
and Clearstream, Luxembourg against payment in immediately available funds.
Goldman Sachs may use this prospectus in the initial sale of the notes. In
addition, Goldman, Sachs & Co. or any other affiliate of Goldman Sachs may use
this prospectus in a market-making transaction in the notes after their initial
sale. UNLESS GOLDMAN SACHS OR ITS AGENT INFORMS THE PURCHASER OTHERWISE IN THE
CONFIRMATION OF SALE, THIS PROSPECTUS IS BEING USED IN A MARKET-MAKING
TRANSACTION.
GOLDMAN, SACHS & CO.
<TABLE>
<S> <C>
ABN AMRO INCORPORATED BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC. BANCO SANTANDER CENTRAL HISPANO
CHASE SECURITIES INC. CREDIT LYONNAIS SECURITIES
DEN DANSKE BANK DEUTSCHE BANC ALEX. BROWN
DG BANK HSBC MARKETS
DEUTSCHE GENOSSENSCHAFTSBANK AG
LOOP CAPITAL MARKETS, LLC MCDONALD INVESTMENTS INC.
ORMES CAPITAL MARKETS, INC. CHARLES SCHWAB & CO., INC.
UNIBANK WACHOVIA SECURITIES, INC.
</TABLE>
------------------------
Prospectus Supplement dated July 13, 2000.
<PAGE> 2
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED MAY 26, ENDED MAY 26,
2000 2000
<S> <C>
1.31x 1.36x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
"earnings" represent pre-tax earnings plus fixed charges and "fixed charges"
represent interest expense plus that portion of rent expense that, in our
opinion, approximates the interest factor included in rent expense.
See "Ratio of Earnings to Fixed Charges" in the accompanying prospectus for
the ratio of earnings to fixed charges for the years ended November 24, 1995
through November 26, 1999 and the three months ended February 26, 1999 and the
three months ended February 25, 2000.
S-2
<PAGE> 3
SPECIFIC TERMS OF THE NOTES
Please note that in this section entitled "Specific Terms of the Notes",
references to "The Goldman Sachs Group, Inc.", "we", "our" and "us" mean only
The Goldman Sachs Group, Inc. and do not include its consolidated subsidiaries.
Also, in this section, references to "holders" mean The Depository Trust Company
or its nominee and not indirect owners who own beneficial interests in notes
through participants in The Depository Trust Company. Please review the special
considerations that apply to indirect owners in the attached prospectus, under
"Legal Ownership and Book-Entry Issuance".
The notes will be a series of senior debt securities issued under our
senior debt indenture. This prospectus supplement summarizes specific financial
and other terms that will apply to the notes; terms that apply generally to all
of our debt securities are described in "Description of Debt Securities We May
Offer" in the attached prospectus. The terms described here supplement those
described in the attached prospectus and, if the terms described here are
inconsistent with those described there, the terms described here are
controlling.
FINANCIAL TERMS OF THE NOTES
The specific financial terms of the notes we are offering will be as
follows:
- TITLE OF THE NOTES: 7.625% Notes due 2005
- ISSUER OF THE NOTES: The Goldman Sachs Group, Inc.
- TOTAL PRINCIPAL AMOUNT BEING ISSUED: $1,250,000,000
- DUE DATE FOR PRINCIPAL: August 17, 2005
- INTEREST RATE: 7.625% annually
- DATE INTEREST STARTS ACCRUING: July 17, 2000
- DUE DATES FOR INTEREST: every February 17 and August 17
- FIRST DUE DATE FOR INTEREST: February 17, 2001
- REGULAR RECORD DATES FOR INTEREST: every February 1 and August 1
- ADDITIONAL AMOUNTS: We intend to pay principal and interest without deducting
U.S. withholding taxes. If we are required to deduct U.S. withholding taxes
from payments to non-U.S. investors, however, we will pay additional amounts
on those payments, but only to the extent described below under "-- Payment of
Additional Amounts".
- REDEMPTION: We will not have the option to redeem the notes before they
mature, unless we become obligated to pay additional amounts because of
changes in U.S. withholding tax requirements.
- REPAYMENT AT OPTION OF HOLDER: none
ADDITIONAL INFORMATION
ABOUT THE NOTES
BOOK-ENTRY NOTES
We will issue the notes only in book-entry form -- i.e., as global notes
registered in the name of The Depository Trust Company, New York, New York, or
its nominee. The sale of the notes will settle in immediately available funds
through DTC. You will not be permitted to withdraw the
S-3
<PAGE> 4
notes from The Depository Trust Company except in the limited situations
described in the attached prospectus under "Legal Ownership and Book-Entry
Issuance -- What is a Global Security? -- Holder's Option to Obtain a Non-Global
Security; Special Situations When a Global Security Will Be Terminated".
Investors may hold interests in a global note through organizations that
participate, directly or indirectly, in the DTC system. See "Legal Ownership and
Book-Entry Issuance" and "-- What Is a Global Security?" in the attached
prospectus for additional information about indirect ownership of interests in
the notes.
YOU CAN HOLD INTERESTS IN GLOBAL NOTES THROUGH CLEARSTREAM, LUXEMBOURG AND
EUROCLEAR, AS INDIRECT PARTICIPANTS IN DTC
As long as DTC is the depositary for the global notes, you may hold an
interest in a global note through any organization that participates, directly
or indirectly, in the DTC system. Those organizations include Clearstream,
Luxembourg and Euroclear. If you are a participant in either of those systems,
you may hold your interest directly in that system. If you are not a
participant, you may hold your interest indirectly through organizations that
are participants in that system. If you hold your interest indirectly, you
should note that DTC, Clearstream, Luxembourg and Euroclear will have no record
of you or your relationship with the direct participant in their systems.
Clearstream, Luxembourg and Euroclear are securities clearance systems in
Europe, and they participate indirectly in DTC. Clearstream, Luxembourg and
Euroclear will hold interests in the global notes on behalf of the participants
in their systems, through securities accounts they maintain in their own names
for their customers on their own books or on the books of their depositaries.
Those depositaries, in turn, are participants in DTC and hold those interests in
securities accounts they maintain in their own names on the books of DTC.
Citibank, N.A. acts as depositary for Clearstream, Luxembourg and The Chase
Manhattan Bank acts as depositary for Euroclear. Clearstream, Luxembourg and
Euroclear clear and settle securities transactions between their participants
through electronic, book-entry delivery of securities against payment.
DTC RULES WILL ALSO APPLY TO NOTES HELD THROUGH CLEARSTREAM, LUXEMBOURG AND
EUROCLEAR
If you hold an interest in a global note through Clearstream, Luxembourg or
Euroclear, that system will credit the payments we make on your note to the
account of your Clearstream, Luxembourg or Euroclear participant in accordance
with that system's rules and procedures. The participant's account will be
credited only to the extent that the system's depositary receives these payments
through the DTC system. Payments, notices and other communications or deliveries
relating to the notes, if made through Clearstream, Luxembourg or Euroclear,
must comply not only with the rules and procedures of those systems, but also
with the rules and procedures of DTC, except as described below.
If you hold an interest in a global note through Clearstream, Luxembourg or
Euroclear, you will not be entitled to exchange your interest for a certificate
representing a non-global note, unless and until the global note is terminated
at DTC, as described under "Legal Ownership and Book-Entry Issuance -- What Is a
Global Security? -- Holder's Option to Obtain a Non-Global Security; Special
Situations When a Global Security Will Be Terminated" in the attached
prospectus.
Trading in the notes between Clearstream, Luxembourg participants or
between Euroclear participants will by governed only by the rules and procedures
of that system. We understand that, at present, those systems' rules and
procedures applicable to trades in conventional eurobonds will apply to trades
in the notes, with settlement in immediately available funds.
S-4
<PAGE> 5
SPECIAL CONSIDERATIONS FOR CROSS-MARKET TRANSFERS
Cross-market transfers of the notes -- i.e., transfers between investors
who hold or will hold their interests through Clearstream, Luxembourg or
Euroclear, on the one hand, and investors who hold or will hold their interests
through DTC but not through Clearstream, Luxembourg or Euroclear, on the other
hand -- will be governed by DTC's rules and procedures in addition to those of
Clearstream, Luxembourg or Euroclear. If you hold your note through Clearstream,
Luxembourg or Euroclear and you wish to complete a cross-market transfer, you
will need to deliver transfer instructions and payment, if applicable, to
Clearstream, Luxembourg or Euroclear, through your participant, and that system
in turn will need to deliver them to DTC, through that system's depositary.
Because of time-zone differences between the United States and Europe, any
notes you purchase through Clearstream, Luxembourg or Euroclear in a
cross-market transfer will not be credited to your account at your Clearstream,
Luxembourg or Euroclear participant until the business day after the DTC
settlement date. For the same reason, if you sell the notes through Clearstream,
Luxembourg or Euroclear in a cross-market transfer, your cash proceeds will be
received by the depositary for that system on the DTC settlement date but will
not be credited to your participant's account until the business day following
the DTC settlement date. In this context, "business day" means a business day
for Clearstream, Luxembourg or Euroclear.
The description of the clearing and settlement systems in this section
reflects our understanding of the rules and procedures of DTC, Clearstream,
Luxembourg and Euroclear as currently in effect. Those systems could change
their rules and procedures at any time. We have no control over those systems
and we take no responsibility for their activities.
PAYMENT OF ADDITIONAL AMOUNTS
We intend to make all payments on the notes without deducting U.S.
withholding taxes. If we are required by law to do so on payments to non-U.S.
investors, however, we will pay additional amounts on those payments to the
extent described in this subsection.
We will pay additional amounts on a note only if the beneficial owner of
the note is a United States alien. The term "United States alien" means any
person who, for U.S. federal income tax purposes, is:
- a nonresident alien individual;
- a foreign corporation;
- a foreign partnership; or
- an estate or trust that is not subject to U.S. federal income tax on a net
income basis on income or gain from a note.
If the beneficial owner of a note is a United States alien, we will pay all
additional amounts that may be necessary so that every net payment of interest
or principal on that note will not be less than the amount provided for in that
note. By net payment we mean the amount we or our paying agent pays after
deducting or withholding an amount for or on account of any present or future
tax, assessment or other governmental charge imposed with respect to that
payment by a U.S. taxing authority.
Our obligation to pay additional amounts is subject to several important
exceptions, however. We will NOT pay additional amounts for or on account of any
of the following:
- any tax, assessment or other governmental charge imposed solely because at any
time there is or was a connection between the beneficial owner -- or between a
fiduciary, settlor, beneficiary or member of the beneficial owner, if the
beneficial owner is an estate, trust or partnership -- and the United States
(other than the mere receipt of a payment or the
S-5
<PAGE> 6
ownership or holding of a note), including because the beneficial owner -- or
the fiduciary, settlor, beneficiary or member -- at any time, for U.S. federal
income tax purposes:
-- is or was a citizen or resident or is or was treated as a resident of the
United States;
-- is or was present in the United States;
-- is or was engaged in a trade or business in the United States;
-- has or had a permanent establishment in the United States;
-- is or was a domestic or foreign personal holding company, a passive
foreign investment company or a controlled foreign corporation;
-- is or was a corporation that accumulates earnings to avoid U.S. federal
income tax; or
-- is or was a "ten percent shareholder" of The Goldman Sachs Group, Inc.;
- any tax, assessment or other governmental charge imposed solely because of a
change in applicable law or regulation, or in any official interpretation or
application of applicable law or regulation, that becomes effective after the
day on which the payment becomes due or is duly provided for, whichever occurs
later;
- any estate, inheritance, gift, sales, excise, transfer, wealth or personal
property tax, or any similar tax, assessment or other governmental charge;
- any tax, assessment or other governmental charge imposed solely because the
beneficial owner or any other person fails to comply with any certification,
identification or other reporting requirement concerning the nationality,
residence, identity or connection with the United States of the holder or any
beneficial owner of the note, if compliance is required by statute, by
regulation of the U.S. Treasury department or by an applicable income tax
treaty to which the United States is a party, as a precondition to exemption
from the tax, assessment or other governmental charge;
- any tax, assessment or other governmental charge that can be paid other than
by deduction or withholding from a payment on the notes;
- any tax, assessment or other governmental charge imposed solely because the
payment is to be made by a particular paying agent (which term may include us)
and would not be imposed if made by another paying agent; or
- any combination of the taxes, assessments or other governmental charges
described above.
In addition, we will not pay additional amounts with respect to any payment of
principal or interest to any United States alien who is a fiduciary or a
partnership, or who is not the sole beneficial owner of the payment, to the
extent that we would not have to pay additional amounts to any beneficiary or
settlor of the fiduciary or any member of the partnership, or to any beneficial
owner of the payment, if that person or entity were treated as the beneficial
owner of the note for this purpose.
When we refer to a "U.S. taxing authority", we mean the United States of
America or any state, other jurisdiction or taxing authority in the United
States. When we refer to the "United States" in the discussion of additional
amounts above and in the discussion of redemption for tax reasons below, we mean
the United States of America, including the states and the District of Columbia,
together with the territories, possessions and all other areas subject to the
jurisdiction of the United States of America.
When we refer to any payment of interest or principal on a note, this
includes any additional amount that may be payable as described above in respect
of that payment.
S-6
<PAGE> 7
WHEN WE CAN REDEEM THE NOTES
We will not be permitted to redeem the notes we are offering before their
stated maturity, except as described below. The notes will not be entitled to
the benefit of any sinking fund -- that is, we will not deposit money on a
regular basis into any separate custodial account to repay your note. In
addition, you will not be entitled to require us to buy your note from you
before its stated maturity.
We will be entitled, at our option, to redeem the outstanding notes in
whole and not in part if at any time we become obligated to pay additional
amounts on any notes on the next interest payment date, but only if our
obligation results from a change in the laws or regulations of any U.S. taxing
authority, or from a change in any official interpretation or application of
those laws or regulations, that becomes effective or is announced after the date
of this prospectus supplement. If we redeem the notes, we will do so at a
redemption price equal to 100% of the principal amount of the notes redeemed,
plus accrued interest to the redemption date.
If we become entitled to redeem the notes, we may do so at any time on a
redemption date of our choice. However, we must give the holders of the notes
notice of the redemption not less than 30 days or more than 60 days before the
redemption date and not more than 90 days before the next date on which we would
be obligated to pay additional amounts. In addition, our obligation to pay
additional amounts must remain in effect when we give the notice of redemption.
We will give the notice in the manner described under "Description of Debt
Securities We May Offer -- Notices" in the attached prospectus.
We or our affiliates may purchase notes from investors who are willing to
sell from time to time, either in the open market at prevailing prices or in
private transactions at negotiated prices. For example, we currently expect
Goldman, Sachs & Co. to make a market in the notes by purchasing and reselling
notes from time to time. Notes that we or our subsidiaries purchase may, at our
discretion, be held, resold or cancelled.
VALIDITY OF THE NOTES
The validity of the notes will be passed upon for The Goldman Sachs Group,
Inc. by one of its General Counsel, Robert J. Katz or Gregory K. Palm, and for
the underwriters by Sullivan & Cromwell, New York, New York. As of the date of
this prospectus supplement, each of Mr. Katz and Mr. Palm owns less than one
percent of the common stock, and participates in employee benefit plans, of The
Goldman Sachs Group, Inc. Sullivan & Cromwell has in the past represented and
continues to represent Goldman Sachs on a regular basis and in a variety of
matters, including offerings of our common stock and debt securities. Sullivan &
Cromwell also performed services for The Goldman Sachs Group, Inc. in connection
with the offering of the securities described in this prospectus supplement.
S-7
<PAGE> 8
UNDERWRITING
The Goldman Sachs Group, Inc. and the underwriters for this offering named
below have entered into a pricing agreement and an underwriting agreement with
respect to the notes. Subject to certain conditions, each underwriter has
severally agreed to purchase the principal amount of notes indicated in the
following table.
<TABLE>
<CAPTION>
Underwriters Principal Amount of Notes
------------ -------------------------
<S> <C>
Goldman, Sachs & Co. .................................... $1,000,000,000
ABN AMRO Incorporated ................................... 15,625,000
Banc of America Securities LLC........................... 15,625,000
Banc One Capital Markets, Inc. .......................... 15,625,000
Banco Santander Central Hispano, S.A. ................... 15,625,000
Chase Securities Inc. ................................... 15,625,000
Credit Lyonnais Securities............................... 15,625,000
Den Danske Bank Aktieselskab............................. 15,625,000
Deutsche Bank Securities Inc. ........................... 15,625,000
DG BANK
Deutsche Genossenschaftsbank AG........................ 15,625,000
HSBC Securities (USA) Inc. .............................. 15,625,000
Loop Capital Markets, LLC................................ 15,625,000
McDonald Investments Inc., A KeyCorp Company............. 15,625,000
Ormes Capital Markets, Inc. ............................. 15,625,000
Charles Schwab & Co., Inc. .............................. 15,625,000
Unibank A/S.............................................. 15,625,000
Wachovia Securities, Inc. ............................... 15,625,000
--------------
Total.......................................... $1,250,000,000
==============
</TABLE>
------------------------
Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any notes sold by the underwriters to securities dealers may be sold
at a discount from the initial public offering price of up to 0.200% of the
principal amount of the notes. Any such securities dealers may resell any notes
purchased from the underwriters to certain other brokers or dealers at a
discount from the initial public offering price of up to 0.125% of the principal
amount of the notes. If all the notes are not sold at the initial offering
price, the underwriters may change the offering price and the other selling
terms.
The underwriters intend to offer the notes for sale primarily in the United
States. Goldman, Sachs & Co., acting through its affiliates as its selling
agents, and the other underwriters may also offer the notes for sale outside the
United States.
The notes are a new issue of securities with no established trading market.
The Goldman Sachs Group, Inc. has been advised by Goldman, Sachs & Co. that
Goldman, Sachs & Co. intends to make a market in the notes. Other affiliates of
The Goldman Sachs Group, Inc. may also do so. Neither Goldman, Sachs & Co. nor
any other affiliate, however, is obligated to do so and any of them may
discontinue market-making at any time without notice. No assurance can be given
as to the liquidity or the trading market for the notes.
S-8
<PAGE> 9
Please note that the information about the original issue date, original
issue price and net proceeds to Goldman Sachs on the front cover page relates
only to the initial sale of the notes. If you have purchased a note in a
market-making transaction after the initial sale, information about the price
and date of sale to you will be provided in a separate confirmation of sale.
Goldman, Sachs & Co. has also informed The Goldman Sachs Group, Inc. that
it does not expect sales made by the underwriters in this offering to accounts
over which the underwriters exercise discretionary authority to exceed five
percent of the aggregate initial offering price of the notes. No such sales will
be made without the prior written approval of the customer to which such account
relates.
The Goldman Sachs Group, Inc. estimates that its share of the total
expenses of this offering, excluding underwriting discounts and commissions,
whether paid to Goldman, Sachs & Co. or any other underwriter, will be
approximately $500,000.
The Goldman Sachs Group, Inc. has agreed to indemnify the several
underwriters against certain liabilities, including liabilities under the
Securities Act of 1933.
Certain of the underwriters and their affiliates have in the past provided,
and may in the future from time to time provide, investment banking and general
financing and banking services to The Goldman Sachs Group, Inc. and its
affiliates, for which they have in the past received, and may in the future
receive, customary fees. The Goldman Sachs Group, Inc. and its affiliates have
in the past provided, and may in the future from time to time provide, similar
services to the underwriters and their affiliates on customary terms and for
customary fees.
This prospectus supplement will be used by the underwriters and other
dealers in connection with offers and sales of notes to persons located in the
United States. These offers and sales may involve notes initially sold by the
underwriters in this offering outside the United States.
S-9
<PAGE> 10
-------------------------------------------------------
-------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell or a solicitation of an offer to buy the securities it
describes, but only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus is current only as of its
date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Ratio of Earnings to Fixed Charges.... S-2
Specific Terms of the Notes........... S-3
Validity of the Notes................. S-7
Underwriting.......................... S-8
Prospectus
Available Information................. ii
Prospectus Summary.................... 1
Ratio of Earnings to Fixed Charges.... 4
Description of Debt Securities We May
Offer............................... 5
Description of Warrants We May
Offer............................... 27
Description of Purchase Contracts We
May Offer........................... 33
Description of Units We May Offer..... 38
Description of Preferred Stock We May
Offer............................... 43
Legal Ownership and Book-Entry
Issuance............................ 50
Considerations Relating to Securities
Issued in Bearer Form............... 56
Considerations Relating to Indexed
Securities.......................... 60
Considerations Relating to Securities
Denominated or Payable in or Linked
to a Non-U.S. Dollar Currency....... 62
United States Taxation................ 65
Plan of Distribution.................. 83
Employee Retirement Income Security
Act................................. 86
Validity of the Securities............ 86
Experts............................... 86
Cautionary Statement Pursuant to the
Private Securities Litigation Reform
Act of 1995......................... 87
</TABLE>
-------------------------------------------------------
-------------------------------------------------------
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-------------------------------------------------------
$1,250,000,000
THE GOLDMAN SACHS
GROUP, INC.
7.625% Notes due 2005
------------------
[GOLDMAN SACHS LOGO]
------------------
GOLDMAN, SACHS & CO.
ABN AMRO INCORPORATED
BANC OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
BANCO SANTANDER CENTRAL HISPANO
CHASE SECURITIES INC.
CREDIT LYONNAIS SECURITIES
DEN DANSKE BANK
DEUTSCHE BANC ALEX. BROWN
DG BANK
DEUTSCHE GENOSSENSCHAFTSBANK AG
HSBC MARKETS
LOOP CAPITAL MARKETS, LLC
MCDONALD INVESTMENTS INC.
ORMES CAPITAL MARKETS, INC.
CHARLES SCHWAB & CO., INC.
UNIBANK
WACHOVIA SECURITIES, INC.
-------------------------------------------------------
-------------------------------------------------------
