DBRS Confirms Ratings for Goldman Sachs Group at AA (low); Adds New Ratings, Discontinues Rating for Goldman Sachs Canada

DBRS has today confirmed its ratings for the Goldman Sachs Group, Inc. (Goldman or the Company) and related entities. This rating action includes the Company’s Issuer & Senior Debt rating of AA (low) and its Short-Term Instruments rating of R-1 (middle). The trend on all ratings remains Stable.

At the same time, DBRS has added new Trust-Preferred Securities ratings of “A” for Goldman Sachs Capital II and Goldman Sachs Capital III. Moreover, DBRS has discontinued its Short-Term Instruments rating for Goldman Sachs Canada. Since there are no outstanding obligations issued by Goldman Sachs Canada, no debt is affected by the discontinuation. The Short-Term Debt rating of R-1 (middle) for Goldman Sachs Canada Finance Co. has been confirmed, with a Stable trend.

Goldman’s ratings are underpinned by its strong franchise, with leading positions in investment banking, fixed income, currencies and commodities (FICC) and equities. The franchise is strengthened by the relatively stable earnings contribution of asset management and securities services. Goldman’s strong financial profile and its skillful risk management further support the ratings.

Goldman generated strong results in 2007 and solid results in Q1 2008 amid the continuing difficult market environment.

The Company faces a number of challenges. Goldman operates in volatile markets and the ongoing disruption in financial markets poses risks for its earnings and financial strength. In particular, the sustained pressure on liquidity in this market environment means that the Company has to maintain more liquidity, which may constrain its business activity and increase its funding costs. Sustaining strong earnings and abundant liquidity is important for Goldman as it relies primarily on wholesale funding. DBRS expects Goldman to continue coping successfully with these challenges.

Note:
All figures are in U.S. dollars unless otherwise noted.
(1) Rating based on the guarantee of The Goldman Sachs Group, Inc.