This pricing supplement, which is not complete and may be changed, relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying product supplement, prospectus supplement and prospectus are not an offer to sell these Notes in any country or jurisdiction where such an offer would not be permitted.
None of the Securities and Exchange Commission
(the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities
or determined if this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
Dual Directional Buffered Notes Linked to the S&P 500® Index
| Redemption Amount: |
At maturity, the Redemption
Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Underlying is greater than
or equal to the Starting Value:
 ,
subject to the Max Return.
b)
If the Ending Value of the Underlying is less than the
Starting Value but greater than or equal to the Threshold Value:
$1,000 +
c)
If the Ending Value of the Underlying is less than the
Threshold Value:
In this case, the Redemption
Amount will be less than the principal amount and you will lose some or a substantial portion of the principal amount. |
| Calculation Agent: |
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance. |
| Selling Agent: |
BofAS |
| CUSIP: |
09711A7B8 |
| Underlying Return: |
|
| Absolute Underlying Return: |
The absolute value of
the Underlying Return.
For example, if the Underlying
Return is -5%, the Absolute Underlying Return will equal 5%. |
| Events of Default and Acceleration: |
If an Event of Default, as defined in the senior indenture relating to the Notes and in the section entitled “Description of Debt Securities of BofA Finance LLC—Events of Default and Rights of Acceleration; Covenant Breaches” on page 54 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “—Redemption Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate. |
| *Subject to change. |
Any payments on the Notes depend on the credit
risk of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance of the Underlying. The economic terms of the Notes are
based on BAC’s internal funding rate, which is the rate it would pay to borrow funds through the issuance of market-linked notes,
and the economic terms of certain related hedging arrangements BAC’s affiliates enter into. BAC’s internal funding rate is
typically lower than the rate it would pay when it issues conventional fixed or floating rate debt securities. This difference in funding
rate, as well as the underwriting discount and the hedging related charges described below (see “Risk Factors” beginning on
page PS-6), will reduce the economic terms of the Notes to you and the initial estimated value of the Notes. Due to these factors, the
public offering price you pay to purchase the Notes will be greater than the initial estimated value of the Notes as of the pricing date.
The initial estimated value range
of the Notes as of the date of this pricing supplement is set forth on the cover page of this pricing supplement. The final pricing supplement
will set forth the initial estimated value of the Notes as of the pricing date. For more information about the initial estimated value
and the structuring of the Notes, see “Risk Factors” beginning on page PS-6 and “Structuring the Notes” on page
PS-14.
 |
DUAL DIRECTIONAL BUFFERED NOTES | PS-3 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Redemption Amount Determination
On the Maturity Date, you will receive
a cash payment per $1,000 in principal amount of Notes determined as follows:
All payments described above are
subject to the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor.
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-4 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Hypothetical Payout Profile and Examples of Payments
at Maturity
Dual Directional Buffered Notes Table
The following table is for purposes
of illustration only. It is based on hypothetical values and shows hypothetical
returns on the Notes. The table illustrates the calculation of the Redemption Amount and the return on the Notes based on a hypothetical
Starting Value of 100, a hypothetical Threshold Value of 90, the Upside Participation Rate of 100%, the Max Return of $1,100.00 and a
range of hypothetical Ending Values of the Underlying. The actual amount you receive and the resulting return will depend on the actual
Starting Value, Threshold Value and Ending Value and whether you hold the Notes to maturity. The following examples do not take into
account any tax consequences from investing in the Notes.
For recent actual levels of the Underlying,
see “The Underlying” section below. The Underlying is a price return index and as such the Ending Value will not include any
income generated by dividends paid on the stocks included in the Underlying, which you would otherwise be entitled to receive if you invested
in those stocks directly. In addition, all payments on the Notes are subject to Issuer and Guarantor credit risk.
| Ending Value |
Underlying Return |
Redemption Amount per Note |
Return on the Notes |
| 160.00 |
60.00% |
$1,100.00(4) |
10.00% |
| 150.00 |
50.00% |
$1,100.00 |
10.00% |
| 140.00 |
40.00% |
$1,100.00 |
10.00% |
| 130.00 |
30.00% |
$1,100.00 |
10.00% |
| 120.00 |
20.00% |
$1,100.00 |
10.00% |
| 110.00 |
10.00% |
$1,100.00 |
10.00% |
| 105.00 |
5.00% |
$1,050.00 |
5.00% |
| 100.00(1) |
0.00% |
$1,000.00 |
0.00% |
| 95.00 |
-5.00% |
$1,050.00 |
5.00% |
| 90.00(2) |
-10.00% |
$1,100.00(3) |
10.00% |
| 89.99 |
-10.01% |
$999.90 |
-0.01% |
| 70.00 |
-30.00% |
$800.00 |
-20.00% |
| 50.00 |
-50.00% |
$600.00 |
-40.00% |
| 25.00 |
-75.00% |
$350.00 |
-65.00% |
| 0.00 |
-100.00% |
$100.00 |
-90.00% |
| (1) | The hypothetical
Starting Value of 100 used in the table above has been chosen for
illustrative purposes only and does not represent a likely Starting Value for the Underlying. |
| (2) | This is the hypothetical Threshold Value
of the Underlying. |
| (3) | Any positive return based on the depreciation
of the Underlying cannot exceed the return provided by the hypothetical Threshold Value. |
| (4) | Any positive return based on the appreciation
of the Underlying cannot exceed the Max Return. |
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-5 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Risk Factors
Your investment in the Notes entails significant risks,
many of which differ from those of a conventional debt security. Your decision to purchase the Notes should be made only after carefully
considering the risks of an investment in the Notes, including those discussed below, with your advisors in light of your particular circumstances.
The Notes are not an appropriate investment for you if you are not knowledgeable about significant elements of the Notes or financial
matters in general. You should carefully review the more detailed explanation of risks relating to the Notes in the “Risk Factors”
sections beginning on page PS-5 of the accompanying product supplement, page S-6 of the accompanying prospectus supplement and page 7
of the accompanying prospectus, each as identified on page PS-18 below.
Structure-related
Risks
| • | Your investment may result
in a loss; there is no guaranteed return of principal. There is no fixed principal repayment amount on the Notes at maturity. If the
Ending Value of the Underlying is less than the Threshold Value, you will lose 1% of the principal amount for each 1% that the Ending
Value of the Underlying is less than the Threshold Value. In that case, you will lose some or a significant portion of your investment
in the Notes. |
| • | Any positive return on the
Notes will be limited. Any positive return on the Notes based on the appreciation of the Underlying will be limited to the Max Return.
Your return on the Notes may be less than the return that you could have realized if you invested directly in the Underlying, and you
will not receive the full benefit of any appreciation in the value of the Underlying beyond that maximum return. |
| • | The Notes do not bear interest.
Unlike a conventional debt security, no interest payments will be paid over the term of the Notes, regardless of the extent to which the
Ending Value of the Underlying exceeds the Starting Value or Threshold Value. |
| • | Your potential for a positive
return based on the depreciation of the Underlying is limited. The Absolute Underlying Return feature applies only if the Ending
Value of the Underlying is less than the Starting Value but greater than or equal to the Threshold Value. Because the Threshold Value
for the Underlying is 90% of the Starting Value, any positive return due to the depreciation of the Underlying is limited to 10%. Any
decline in the Ending Value of the Underlying from the Starting Value by more than 10% will result in a loss, rather than a positive return,
on the Notes. |
| • | The Redemption Amount will
not reflect the level of the Underlying other than on the Valuation Date. The level of the Underlying during the term of the Notes
other than on the Valuation Date will not affect payment on the Notes. Notwithstanding the foregoing, investors should generally be aware
of the performance of the Underlying while holding the Notes. The calculation agent will calculate the Redemption Amount by comparing
only the Starting Value or the Threshold Value, as applicable, to the Ending Value for the Underlying. No other levels of the Underlying
will be taken into account. As a result, you will receive less than the principal amount at maturity even if the level of the Underlying
has increased at certain times during the term of the Notes before the Underlying decreases to a level that is less than the Threshold
Value as of the Valuation Date. |
| • | Your return on the Notes may be less than
the yield on a conventional debt security of comparable maturity. Any return that you receive on the Notes may be less than the return
you would earn if you purchased a conventional debt security with the same Maturity Date. As a result, your investment in the Notes may
not reflect the full opportunity cost to you when you consider factors, such as inflation, that affect the time value of money. |
| • | Any payment on the Notes is subject to our credit risk
and the credit risk of the Guarantor, and any actual or perceived changes in our or the Guarantor’s creditworthiness are expected
to affect the value of the Notes. The Notes are our senior unsecured debt securities. Any payment on the Notes will be fully and unconditionally
guaranteed by the Guarantor. The Notes are not guaranteed by any entity other than the Guarantor. As a result, your receipt of the Redemption
Amount at maturity will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the Notes
on the Maturity Date, regardless of the Ending Value of the Underlying as compared to the Starting Value. No assurance can be given as
to what our financial condition or the financial condition of the Guarantor will be at any time after the pricing date of the Notes. If
we and the Guarantor become unable to meet our respective financial obligations as they become due, you may not receive the amount(s)
payable under the terms of the Notes. |
In addition, our credit ratings and the credit ratings
of the Guarantor are assessments by ratings agencies of our respective abilities to pay our obligations. Consequently, our or the Guarantor’s
perceived creditworthiness and actual or anticipated decreases in our or the Guarantor’s credit ratings or increases in the spread
between the yield on our respective securities and the yield on U.S. Treasury securities (the “credit spread”) prior to the
Maturity Date of your Notes may adversely affect the market value of the Notes. However, because your return on the Notes depends upon
factors in addition to our ability and the ability of the Guarantor to pay our respective obligations, such as the value of the Underlying,
an improvement in our or the Guarantor’s credit ratings will not reduce the other investment risks related to the Notes.
| • | We are a finance subsidiary and, as such, have no independent
assets, operations, or revenues. We are a finance subsidiary of the Guarantor, have no operations other than those related to the
issuance, administration and repayment of our debt securities that are guaranteed by the Guarantor, and are dependent upon the Guarantor
and/or its other subsidiaries to meet our obligations under the Notes in the ordinary course. Therefore, our ability to make payments
on the Notes may be limited. |
Valuation-
and Market-related Risks
| • | The public offering price
you pay for the Notes will exceed their initial estimated value. The range of initial estimated values of the Notes |
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-6 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
| | that is provided on the cover page of this preliminary pricing
supplement, and the initial estimated value as of the pricing date that will be provided in the final pricing supplement, are each estimates
only, determined as of a particular point in time by reference to our and our affiliates’ pricing models. These pricing models
consider certain assumptions and variables, including our credit spreads and those of the Guarantor, the Guarantor’s internal funding
rate, mid-market terms on hedging transactions, expectations on interest rates, dividends and volatility, price-sensitivity analysis,
and the expected term of the Notes. These pricing models rely in part on certain forecasts about future events, which may prove
to be incorrect. If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them
and lower than their initial estimated value. This is due to, among other things, changes in the level of the Underlying, changes in the
Guarantor’s internal funding rate, and the inclusion in the public offering price of the underwriting discount and the hedging related
charges, all as further described in "Structuring the Notes" below. These factors, together with various credit, market and
economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary
market and will affect the value of the Notes in complex and unpredictable ways. |
| • | The initial estimated value
does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates would be
willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any time after issuance
will vary based on many factors that cannot be predicted with accuracy, including the performance of the Underlying, our and
BAC’s creditworthiness and changes in market conditions. |
| • | We cannot assure you that
a trading market for your Notes will ever develop or be maintained. We will not list the Notes on any securities exchange. We cannot
predict how the Notes will trade in any secondary market or whether that market will be liquid or illiquid. |
Conflict-related
Risks
| • | Trading and hedging activities by us, the Guarantor and
any of our other affiliates, including BofAS, may create conflicts of interest with you and may affect your return on the Notes and their
market value. We, the Guarantor or one or more of our other affiliates, including BofAS, may buy or sell the securities held by or
included in the Underlying, or futures or options contracts or exchange traded instruments on the Underlying or those securities, or other
instruments whose value is derived from the Underlying or those securities. While we, the Guarantor or one or more of our other affiliates,
including BofAS, may from time to time own securities represented by the Underlying, except to the extent that BAC’s common stock
may be included in the Underlying, we, the Guarantor and our other affiliates, including BofAS, do not control any company included in
the Underlying, and have not verified any disclosure made by any other company. We, the Guarantor or one or more of our other affiliates,
including BofAS, may execute such purchases or sales for our own or their own accounts, for business reasons, or in connection with hedging
our obligations under the Notes. These transactions may present a conflict of interest between your interest in the Notes and the interests
we, the Guarantor and our other affiliates, including BofAS, may have in our or their proprietary accounts, in facilitating transactions,
including block trades, for our or their other customers, and in accounts under our or their management. These transactions may adversely
affect the value of the Underlying in a manner that could be adverse to your investment in the Notes. On or before the pricing date, any
purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on our or their behalf (including those for
the purpose of hedging some or all of our anticipated exposure in connection with the Notes), may affect the value of the Underlying.
Consequently, the value of the Underlying may change subsequent to the pricing date, which may adversely affect the market value of the
Notes.
We, the Guarantor or one or more of our other affiliates, including BofAS, also expect to engage in hedging activities that could affect
the value of the Underlying on the pricing date. In addition, these hedging activities, including the unwinding of a hedge, may decrease
the market value of your Notes prior to maturity, and may affect the amounts to be paid on the Notes. We, the Guarantor or one or more
of our other affiliates, including BofAS, may purchase or otherwise acquire a long or short position in the Notes and may hold or resell
the Notes. For example, BofAS may enter into these transactions in connection with any market making activities in which it engages. We
cannot assure you that these activities will not adversely affect the value of the Underlying, the market value of your Notes prior to
maturity or the amounts payable on the Notes. |
| • | There may be potential conflicts
of interest involving the calculation agent, which is an affiliate of ours. We have the right to appoint and remove the calculation
agent. One of our affiliates will be the calculation agent for the Notes and, as such, will make a variety of determinations relating
to the Notes, including the amounts that will be paid on the Notes. Under some circumstances, these duties could result in a conflict
of interest between its status as our affiliate and its responsibilities as calculation agent. |
Underlying-related
Risks
| • | The publisher of the Underlying
may adjust the Underlying in a way that affects its levels, and the publisher has no obligation to consider your interests. The
publisher of the Underlying can add, delete, or substitute the components included in the Underlying or make other methodological changes
that could change its level. Any of these actions could adversely affect the value of your Notes. |
Tax-related
Risks
| • | The U.S. federal income tax consequences of an investment
in the Notes are uncertain, and may be adverse to a holder of the Notes. No statutory, judicial, or administrative authority directly
addresses the characterization of the Notes or securities similar to the Notes for U.S. federal income tax purposes. As a result, significant
aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. Under the terms of the Notes, you will
have agreed with us to treat the Notes as single financial contracts, as described below under “U.S. Federal Income Tax Summary—General.”
If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative characterization for the Notes, the
timing and character of gain or loss with respect to the Notes may differ. No ruling will be requested from |
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-7 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
| | the IRS with respect to the Notes and no assurance can be given that the
IRS will agree with the statements made in the section entitled “U.S. Federal Income Tax Summary.” You are urged to consult
with your own tax advisor regarding all aspects of the U.S. federal income tax consequences of investing in the Notes. |
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-8 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
The Underlying
All disclosures contained in this pricing
supplement regarding the Underlying, including, without limitation, its make-up, method of calculation, and changes in its components,
have been derived from publicly available sources. The information reflects the policies of, and is subject to change by, S&P Dow
Jones Indices LLC (“SPDJI”), the sponsor of the SPX. We refer to SPDJI as the "Underlying Sponsor". The Underlying
Sponsor, which licenses the copyright and all other rights to the Underlying, has no obligation to continue to publish, and may discontinue
publication of, the Underlying. The consequences of the Underlying Sponsor discontinuing publication of the Underlying are discussed in
“Description of the Notes—Discontinuance of an Index” in the accompanying product supplement. None of us, the Guarantor,
the calculation agent, or BofAS accepts any responsibility for the calculation, maintenance or publication of the Underlying or any successor
index. None of us, the Guarantor, BofAS or any of our other affiliates makes any representation to you as to the future performance of
the Underlying. You should make your own investigation into the Underlying.
The S&P 500® Index
The SPX includes a representative
sample of 500 companies in leading industries of the U.S. economy. The SPX is intended to provide an indication of the pattern of common
stock price movement. The calculation of the level of the SPX is based on the relative value of the aggregate market value of the common
stocks of 500 companies as of a particular time compared to the aggregate average market value of the common stocks of 500 similar companies
during the base period of the years 1941 through 1943.
The SPX includes companies from eleven
main groups: Communication Services; Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Information
Technology; Real Estate; Materials; and Utilities. SPDJI, may from time to time, in its sole discretion, add companies to, or delete companies
from, the SPX to achieve the objectives stated above.
Company additions to the SPX must
have an unadjusted company market capitalization of $14.6 billion or more (an increase from the previous requirement of an unadjusted
company market capitalization of $13.1 billion or more).
SPDJI calculates the SPX by reference
to the prices of the constituent stocks of the SPX without taking account of the value of dividends paid on those stocks. As a result,
the return on the Notes will not reflect the return you would realize if you actually owned the SPX constituent stocks and received the
dividends paid on those stocks.
Computation of the SPX
While SPDJI currently employs the
following methodology to calculate the SPX, no assurance can be given that SPDJI will not modify or change this methodology in a manner
that may affect payments on the Notes.
Historically, the market value of
any component stock of the SPX was calculated as the product of the market price per share and the number of then outstanding shares of
such component stock. In March 2005, SPDJI began shifting the SPX halfway from a market capitalization weighted formula to a float-adjusted
formula, before moving the SPX to full float adjustment on September 16, 2005. SPDJI’s criteria for selecting stocks for the SPX
did not change with the shift to float adjustment. However, the adjustment affects each company’s weight in the SPX.
Under float adjustment, the share
counts used in calculating the SPX reflect only those shares that are available to investors, not all of a company’s outstanding
shares. Float adjustment excludes shares that are closely held by control groups, other publicly traded companies or government agencies.
In September 2012, all shareholdings
representing more than 5% of a stock’s outstanding shares, other than holdings by “block owners,” were removed from
the float for purposes of calculating the SPX. Generally, these “control holders” will include officers and directors, private
equity, venture capital and special equity firms, other publicly traded companies that hold shares for control, strategic partners, holders
of restricted shares, ESOPs, employee and family trusts, foundations associated with the company, holders of unlisted share classes of
stock, government entities at all levels (other than government retirement/pension funds) and any individual person who controls a 5%
or greater stake in a company as reported in regulatory filings. However, holdings by block owners, such as depositary banks, pension
funds, mutual funds and ETF providers, 401(k) plans of the company, government retirement/pension funds, investment funds of insurance
companies, asset managers and investment funds, independent foundations and savings and investment plans, will ordinarily be considered
part of the float.
Treasury stock, stock options, restricted
shares, equity participation units, warrants, preferred stock, convertible stock, and rights are not part of the float. Shares held in
a trust to allow investors in countries outside the country of domicile, such as depositary shares and Canadian exchangeable shares, are
normally part of the float unless those shares form a control block. If a company has multiple classes of stock outstanding, shares in
an unlisted or non-traded class are treated as a control block.
For each stock, an investable weight
factor (“IWF”) is calculated by dividing the available float shares by the total shares outstanding. Available float shares
are defined as the total shares outstanding less shares held by control holders. This calculation is subject to a 5% minimum threshold
for control blocks. For example, if a company’s officers and directors hold 3% of the company’s shares, and no other control
group holds 5% of the company’s shares, SPDJI would assign that company an IWF of 1.00, as no control group meets the 5% threshold.
However, if a company’s officers and directors hold 3% of the company’s shares and another control group holds 20% of the
company’s shares, SPDJI would assign an IWF of 0.77, reflecting the fact that 23% of the company’s outstanding shares are
considered to be held for control. As of July 31, 2017, companies with multiple share class lines are no longer eligible for inclusion
in the SPX. Constituents of the SPX prior to July 31, 2017 with multiple share class lines
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-9 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
will be grandfathered in and continue
to be included in the SPX. If a constituent company of the SPX reorganizes into a multiple share class line structure, that company will
remain in the SPX at the discretion of the S&P Index Committee in order to minimize turnover.
The SPX is calculated using a base-weighted
aggregate methodology. The level of the SPX reflects the total market value of all component stocks relative to the base period of the
years 1941 through 1943. An indexed number is used to represent the results of this calculation in order to make the level easier to work
with and track over time. The actual total market value of the component stocks during the base period of the years 1941 through 1943
has been set to an indexed level of 10. This is often indicated by the notation 1941- 43 = 10. In practice, the daily calculation of the
SPX is computed by dividing the total market value of the component stocks by the “index divisor.” By itself, the index divisor
is an arbitrary number. However, in the context of the calculation of the SPX, it serves as a link to the original base period level of
the SPX. The index divisor keeps the SPX comparable over time and is the manipulation point for all adjustments to the SPX, which is index
maintenance.
Index Maintenance
Index maintenance includes monitoring
and completing the adjustments for company additions and deletions, share changes, stock splits, stock dividends, and stock price adjustments
due to company restructuring or spinoffs. Some corporate actions, such as stock splits and stock dividends, require changes in the common
shares outstanding and the stock prices of the companies in the SPX, and do not require index divisor adjustments.
To prevent the level of the SPX from
changing due to corporate actions, corporate actions which affect the total market value of the SPX require an index divisor adjustment.
By adjusting the index divisor for the change in market value, the level of the SPX remains constant and does not reflect the corporate
actions of individual companies in the SPX. Index divisor adjustments are made after the close of trading and after the calculation of
the SPX closing level.
Changes in a company’s shares
outstanding of 5.00% or more due to mergers, acquisitions, public offerings, tender offers, Dutch auctions, or exchange offers are made
as soon as reasonably possible. Share changes due to mergers or acquisitions of publicly held companies that trade on a major exchange
are implemented when the transaction occurs, even if both of the companies are not in the same headline index, and regardless of the size
of the change. All other changes of 5.00% or more (due to, for example, company stock repurchases, private placements, redemptions, exercise
of options, warrants, conversion of preferred stock, notes, debt, equity participation units, at-the-market offerings, or other recapitalizations)
are made weekly and are announced on Fridays for implementation after the close of trading on the following Friday. Changes of less than
5.00% are accumulated and made quarterly on the third Friday of March, June, September, and December, and are usually announced two to
five days prior.
If a change in a company’s shares
outstanding of 5.00% or more causes a company’s IWF to change by five percentage points or more, the IWF is updated at the same
time as the share change. IWF changes resulting from partial tender offers are considered on a case-by-case basis.
Historical Performance of the SPX
The following graph sets forth the
daily historical performance of the SPX in the period from January 2, 2018 through June 26, 2023. We obtained this historical data from
Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. The horizontal
line in the graph represents the SPX’s hypothetical Threshold Value of 3,895.94 (rounded to two decimal places), which is 90% of
the SPX’s hypothetical Starting Value of 4,328.82, which was its closing level on June 26, 2023. The actual Starting Value and Threshold
Value will be determined on the pricing date.
This historical data on the SPX is not
necessarily indicative of the future performance of the SPX or what the value of the Notes may be. Any historical upward or downward trend
in the level of the SPX during any period set forth above is not an indication that the level of the SPX is more
|
|
DUAL DIRECTIONAL BUFFERED NOTES | PS-10 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
or less likely to increase or decrease at any time over the term of the
Notes.
Before investing in the Notes, you
should consult publicly available sources for the levels of the SPX.
License Agreement
S&P®
is a registered trademark of Standard & Poor’s Financial Services
LLC (“S&P”) and Dow Jones® is a registered trademark
of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed for use by S&P Dow Jones Indices
LLC. “Standard & Poor’s®,” “S&P 500®”
and “S&P®” are trademarks of S&P. These trademarks
have been sublicensed for certain purposes by our affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated. The SPX is a product
of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Notes are not sponsored, endorsed,
sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P
Dow Jones Indices”). S&P Dow Jones Indices make no representation or warranty, express or implied, to the holders of the Notes
or any member of the public regarding the advisability of investing in securities generally or in the Notes particularly or the ability
of the SPX to track general market performance. S&P Dow Jones Indices’ only relationship to Merrill Lynch, Pierce, Fenner &
Smith Incorporated with respect to the SPX is the licensing of the SPX and certain trademarks, service marks and/or trade names of S&P
Dow Jones Indices and/or its third-party licensors. The SPX is determined, composed and calculated by S&P Dow Jones Indices without
regard to us, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or the Notes. S&P Dow Jones Indices have no obligation to take
our needs, BAC’s needs or the needs of Merrill Lynch, Pierce, Fenner & Smith Incorporated or holders of the Notes into consideration
in determining, composing or calculating the SPX. S&P Dow Jones Indices are not responsible for and have not participated in the determination
of the prices and amount of the Notes or the timing of the issuance or sale of the Notes or in the determination or calculation of the
equation by which the Notes are to be converted into cash. S&P Dow Jones Indices have no obligation or liability in connection with
the administration, marketing or trading of the Notes. There is no assurance that investment products based on the SPX will accurately
track index performance or provide positive investment returns. S&P Dow Jones Indices LLC and its subsidiaries are not investment
advisors. Inclusion of a security or futures contract within an index is not a recommendation by S&P Dow Jones Indices to buy, sell,
or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc.
and its affiliates may independently issue and/or sponsor financial products unrelated to the Notes currently being issued by us, but
which may be similar to and competitive with the Notes. In addition, CME Group Inc. and its affiliates may trade financial products which
are linked to the performance of the SPX. It is possible that this trading activity will affect the value of the Notes.
S&P DOW JONES INDICES
DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE SPX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION,
INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES
INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE
NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE
OR AS TO RESULTS TO BE OBTAINED BY US, BAC, BOFAS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, HOLDERS OF THE NOTES, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE SPX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES
INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR
ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, OTHER THAN THE LICENSORS OF
S&P DOW JONES INDICES.
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DUAL DIRECTIONAL BUFFERED NOTES | PS-11 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Supplement to the Plan of Distribution; Role of BofAS
and Conflicts of Interest
BofAS, a broker-dealer affiliate
of ours, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling agent
in the distribution of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121. BofAS may
not make sales in this offering to any of its discretionary accounts without the prior written approval of the account holder.
We expect to deliver the Notes against
payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under Rule 15c6-1
of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days, unless the
parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the Notes occurs more than two business
days from the pricing date, purchasers who wish to trade the Notes more than two business days prior to the original issue date will be
required to specify alternative settlement arrangements to prevent a failed settlement.
Under our distribution agreement
with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on the cover of this pricing supplement,
less the indicated underwriting discount, if any. BofAS will sell the Notes to other broker-dealers that will participate in the offering
and that are not affiliated with us, at an agreed discount to the principal amount. Each of those broker-dealers may sell the Notes to
one or more additional broker-dealers. BofAS has informed us that these discounts may vary from dealer to dealer and that not all dealers
will purchase or repurchase the Notes at the same discount. Certain dealers who purchase the Notes for sale to certain fee-based advisory
accounts may forgo some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the
Notes in these fee-based advisory accounts may be as low as $978.00 per $1,000 in principal amount of Notes.
BofAS and any of our other broker-dealer
affiliates may use this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus for offers and
sales in secondary market transactions and market-making transactions in the Notes. However, they are not obligated to engage in such
secondary market transactions and/or market-making transactions. These broker-dealer affiliates may act as principal or agent in these
transactions, and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion, for
a short, undetermined initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market at a price
that may exceed the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on then-prevailing market
conditions and other considerations, including the performance of the Underlying and the remaining term of the Notes. However, none of
us, the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes at any price or at any time, and we cannot
assure you that any party will purchase your Notes at a price that equals or exceeds the initial estimated value of the Notes.
Any price that BofAS may pay to repurchase
the Notes will depend upon then prevailing market conditions, the creditworthiness of us and the Guarantor, and transaction costs. At
certain times, this price may be higher than or lower than the initial estimated value of the Notes.
European Economic Area and United Kingdom
None of this pricing supplement, the accompanying
product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus for the purposes of the Prospectus
Regulation (as defined below). This pricing supplement, the accompanying product supplement, the accompanying prospectus and the accompanying
prospectus supplement have been prepared on the basis that any offer of Notes in any Member State of the European Economic Area (the “EEA”)
or in the United Kingdom (each, a “Relevant State”) will only be made to a legal entity which is a qualified investor under
the Prospectus Regulation (“Qualified Investors”). Accordingly any person making or intending to make an offer in that Relevant
State of Notes which are the subject of the offering contemplated in this pricing supplement, the accompanying product supplement, the
accompanying prospectus and the accompanying prospectus supplement may only do so with respect to Qualified Investors. Neither BofA Finance
nor BAC has authorized, nor does it authorize, the making of any offer of Notes other than to Qualified Investors. The expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
PROHIBITION OF SALES TO EEA AND UNITED
KINGDOM RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA or in the United Kingdom. For these purposes: (a) a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended
(“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive) where
that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified
investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication in any form and
by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to
purchase or subscribe for the Notes. Consequently no key information document required by Regulation (EU) No 1286/2014, as amended (the
“PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA or
in the United Kingdom has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor
in the EEA or in the United Kingdom may be unlawful under the PRIIPs Regulation.
United Kingdom
The communication of this pricing supplement,
the accompanying product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or materials
relating to the issue of the Notes offered hereby is not being made, and such
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DUAL DIRECTIONAL BUFFERED NOTES | PS-12 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
documents and/or materials have not been
approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000,
as amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed
on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only
being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within
the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion)
Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Financial Promotion
Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together
being referred to as “relevant persons”). In the United Kingdom, the Notes offered hereby are only available to, and any investment
or investment activity to which this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement and
the accompanying prospectus relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant
person should not act or rely on this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement
or the accompanying prospectus or any of their contents.
Any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only be communicated
or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to BofA Finance, as issuer, or BAC, as
guarantor.
All applicable provisions of the FSMA must
be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the United Kingdom.
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DUAL DIRECTIONAL BUFFERED NOTES | PS-13 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Structuring the Notes
The Notes are
our debt securities, the return on which is linked to the performance of the Underlying. The related guarantee is BAC’s obligation.
As is the case for all of our and BAC’s respective debt securities, including our market-linked notes, the economic terms of the
Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because market-linked notes
result in increased operational, funding and liability management costs to us and BAC, BAC typically borrows the funds under these types
of notes at a rate, which we refer to in this pricing supplement as BAC’s internal funding rate, that is more favorable to BAC than
the rate that it might pay for a conventional fixed or floating rate debt security. This generally relatively lower internal funding rate,
which is reflected in the economic terms of the Notes, along with the fees and charges associated with market-linked notes, typically
results in the initial estimated value of the Notes on the pricing date being less than their public offering price.
In order to meet our payment obligations
on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call options,
put options or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are determined based
upon terms provided by BofAS and its affiliates, and take into account a number of factors, including our and BAC’s creditworthiness,
interest rate movements, the volatility of the Underlying, the tenor of the Notes and the hedging arrangements. The economic terms of
the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised
us that the hedging arrangements will include hedging related charges, reflecting the costs associated with, and our affiliates’
profit earned from, these hedging arrangements. Since hedging entails risk and may be influenced by unpredictable market forces, actual
profits or losses from these hedging transactions may be more or less than any expected amounts.
For further
information, see “Risk Factors” beginning on page PS-6 above and “Supplemental Use of Proceeds” on page PS-20
of the accompanying product supplement.
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DUAL DIRECTIONAL BUFFERED NOTES | PS-14 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
U.S. Federal Income Tax Summary
The following summary of the material U.S. federal
income and estate tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and is not exhaustive
of all possible tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”),
regulations promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations),
rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect
and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that
the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. This
summary does not include any description of the tax laws of any state or local governments, or of any foreign government, that may be
applicable to a particular holder.
Although the Notes are issued by us, they will
be treated as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references
to “we,” “our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S. Holders
and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will hold the Notes
as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment, and that are not
excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor concerning
the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax consequences arising
under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax
laws.
General
Although there is no statutory, judicial, or administrative
authority directly addressing the characterization of the Notes, in the opinion of our counsel, Sidley Austin LLP, and based on certain
factual representations received from us, the Notes should be treated as single financial contracts with respect to the Underlying and
under the terms of the Notes, we and every investor in the Notes agree, in the absence of an administrative determination or judicial
ruling to the contrary, to treat the Notes in accordance with such characterization. This discussion assumes that the Notes constitute
single financial contracts with respect to the Underlying for U.S. federal income tax purposes. If the Notes did not constitute single
financial contracts, the tax consequences described below would be materially different.
This characterization of the Notes is not binding
on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or
any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to their proper
characterization and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences
of an investment in the Notes are not certain, and no assurance can be given that the IRS or any court will agree with the characterization
and tax treatment described in this pricing supplement. Accordingly, you are urged to consult your tax advisor regarding all aspects of
the U.S. federal income tax consequences of an investment in the Notes, including possible alternative characterizations.
Unless otherwise stated, the following discussion
is based on the characterization described above. The discussion in this section assumes that there is a significant possibility of a
significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether the issuer
of a component stock included in the Underlying would be treated as a “passive foreign investment company” (“PFIC”),
within the meaning of Section 1297 of the Code, or a United States real property holding corporation, within the meaning of Section 897(c)
of the Code. If the issuer of one or more stocks included in the Underlying were so treated, certain adverse U.S. federal income tax consequences
could possibly apply to a holder of the Notes. You should refer to information filed with the SEC by the issuers of the component stocks
included in the Underlying and consult your tax advisor regarding the possible consequences to you, if any, if any issuer of a component
stock included in the Underlying is or becomes a PFIC or is or becomes a United States real property holding corporation.
U.S. Holders
Upon receipt of a cash payment at maturity or
upon a sale or exchange of the Notes prior to maturity, a U.S. Holder generally will recognize capital gain or loss equal to the difference
between the amount realized and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes will equal
the amount paid by that holder to acquire them. This capital gain or loss generally will be long-term capital gain or loss if the U.S.
Holder held the Notes for more than one year. The deductibility of capital losses is subject to limitations.
Alternative Tax Treatments. Due to the
absence of authorities that directly address the proper tax treatment of the Notes, prospective investors are
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DUAL DIRECTIONAL BUFFERED NOTES | PS-15 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
urged to consult their tax advisors regarding all possible alternative tax treatments
of an investment in the Notes. In particular, the IRS could seek to subject the Notes to the Treasury regulations governing contingent
payment debt instruments. If the IRS were successful in that regard, the timing and character of income on the Notes would be affected
significantly. Among other things, a U.S. Holder would be required to accrue original issue discount every year at a “comparable
yield” determined at the time of issuance. In addition, any gain realized by a U.S. Holder at maturity or upon a sale or exchange
of the Notes generally would be treated as ordinary income, and any loss realized at maturity or upon a sale or exchange of the Notes
generally would be treated as ordinary loss to the extent of the U.S. Holder’s prior accruals of original issue discount, and as
capital loss thereafter.
The IRS released Notice 2008-2 (the “Notice”),
which sought comments from the public on the taxation of financial instruments currently taxed as “prepaid forward contracts.”
This Notice addresses instruments such as the Notes. According to the Notice, the IRS and Treasury are considering whether a holder of
an instrument such as the Notes should be required to accrue ordinary income on a current basis, regardless of whether any payments are
made prior to maturity. It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any such future
guidance may affect the amount, timing and character of income, gain, or loss in respect of the Notes, possibly with retroactive effect.
The IRS and Treasury are also considering additional
issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether foreign holders
of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Code, concerning certain
“constructive ownership transactions,” generally applies or should generally apply to such instruments, and whether any of
these determinations depend on the nature of the underlying asset.
In addition, proposed Treasury regulations require
the accrual of income on a current basis for contingent payments made under certain notional principal contracts. The preamble to the
regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual of income on
those contracts, and requires current accrual of income for some contracts already in existence. While the proposed regulations do not
apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the
case of prepaid forward contracts. If the IRS or Treasury publishes future guidance requiring current economic accrual for contingent
payments on prepaid forward contracts, it is possible that you could be required to accrue income over the term of the Notes.
Because of the absence of authority regarding
the appropriate tax characterization of the Notes, it is also possible that the IRS could seek to characterize the Notes in a manner that
results in tax consequences that are different from those described above. For example, the IRS could possibly assert that any gain or
loss that a holder may recognize at maturity or upon the sale or exchange of the Notes should be treated as ordinary gain or loss.
Because the Underlying is an index that periodically
rebalances, it is possible that the Notes could be treated as a series of single financial contracts, each of which matures on the next
rebalancing date. If the Notes were properly characterized in such a manner, a U.S. Holder would be treated as disposing of the Notes
on each rebalancing date in return for new Notes that mature on the next rebalancing date, and a U.S. Holder would accordingly likely
recognize capital gain or loss on each rebalancing date equal to the difference between the holder’s tax basis in the Notes (which
would be adjusted to take into account any prior recognition of gain or loss) and the fair market value of the Notes on such date.
Non-U.S. Holders
Except as discussed below, a Non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes provided that the Non-U.S. Holder
complies with applicable certification requirements and that the payment is not effectively connected with the conduct by the Non-U.S.
Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale or exchange of the Notes or their settlement at
maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien individual and is present in the U.S.
for 183 days or more during the taxable year of the sale, exchange, or settlement and certain other conditions are satisfied.
If a Non-U.S. Holder of the Notes is engaged in
the conduct of a trade or business within the U.S. and if gain realized on the settlement at maturity, or upon sale or exchange of the
Notes, is effectively connected with the conduct of such trade or business (and, if certain tax treaties apply, is attributable to a permanent
establishment maintained by the Non-U.S. Holder in the U.S.), the Non-U.S. Holder, although exempt from U.S. federal withholding tax,
generally will be subject to U.S. federal income tax on such gain on a net income basis in the same manner as if it were a U.S. Holder.
Such Non-U.S. Holders should read the material under the heading “—U.S. Holders,” for a description of the U.S. federal
income tax consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation,
it may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion of
its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the U.S., subject
to certain adjustments.
A “dividend equivalent” payment is
treated as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding tax
if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-
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DUAL DIRECTIONAL BUFFERED NOTES | PS-16 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
linked instruments (“ELIs”) that are “specified ELIs”
may be treated as dividend equivalents if such specified ELIs reference an interest in an “underlying security,” which is
generally any interest in an entity taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest
could give rise to a U.S. source dividend. However, IRS guidance provides that withholding on dividend equivalent payments will not apply
to specified ELIs that are not delta-one instruments and that are issued before January 1, 2025. Based on our determination that the Notes
are not delta-one instruments, Non-U.S. Holders should not be subject to withholding on dividend equivalent payments, if any, under the
Notes. However, it is possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence
of certain events affecting the Underlying or the Notes, and following such occurrence the Notes could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlying or
the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context of the Notes
and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the applicable paying
agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.
As discussed above, alternative characterizations
of the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or clarification
of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax, tax will be withheld at the
applicable statutory rate. As discussed above, the IRS has indicated in the Notice that it is considering whether income in respect of
instruments such as the Notes should be subject to withholding tax. Prospective Non-U.S. Holders should consult their own tax advisors
regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current
law, while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those
individuals’ gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with respect
to which the individual has retained certain interests or powers), should note that, absent an applicable treaty benefit, a Note is likely
to be treated as U.S. situs property, subject to U.S. federal estate tax. These individuals and entities should consult their own tax
advisors regarding the U.S. federal estate tax consequences of investing in a Note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S. Federal
Income Tax Considerations — General — Backup Withholding and Information Reporting” in the accompanying prospectus for
a description of the applicability of the backup withholding and information reporting rules to payments made on the Notes.
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DUAL DIRECTIONAL BUFFERED NOTES | PS-17 |
Dual Directional Buffered Notes Linked to the S&P 500® Index
Where You Can Find More Information
The terms and risks of the Notes are contained
in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus, which can be accessed
at the following links:
This pricing supplement
and the accompanying product supplement, prospectus supplement and prospectus have been filed as part of a registration statement with
the SEC, which may, without cost, be accessed on the SEC website at www.sec.gov or obtained from BofAS by calling 1-800-294-1322. Before
you invest, you should read this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus for
information about us, BAC and this offering. Any prior or contemporaneous oral statements and any other written materials you may have
received are superseded by this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus. Certain
terms used but not defined in this pricing supplement have the meanings set forth in the accompanying product supplement or prospectus
supplement. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,”
“us,” “our,” or similar references are to BofA Finance, and not to BAC.
The Notes are our senior debt securities.
Any payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee are not insured by the
Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in right of payment with all of our other
unsecured and unsubordinated obligations, except obligations that are subject to any priorities or preferences by law. The related guarantee
will rank equally in right of payment with all of BAC’s other unsecured and unsubordinated obligations, except obligations that
are subject to any priorities or preferences by law, and senior to its subordinated obligations. Any payments due on the Notes, including
any repayment of the principal amount, will be subject to the credit risk of BofA Finance, as issuer, and BAC, as guarantor.
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DUAL DIRECTIONAL BUFFERED NOTES | PS-18 |
Bank of America (NYSE:BAC-Q)
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From Oct 2024 to Nov 2024
Bank of America (NYSE:BAC-Q)
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From Nov 2023 to Nov 2024
