This amended and restated pricing supplement amends and restates
in full the pricing supplement dated August 27, 2019 for CUSIP 09709TUX7 to amend the starting value for the the Dow Jones Industrial
AverageSM (the “INDU”)
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Pricing
Supplement
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|
|
(To Prospectus dated November
4, 2016,
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Filed
Pursuant to Rule 424(b)(2)
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Series A Prospectus Supplement
dated November 4, 2016 and
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Registration
Statement No. 333-213265
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|
Product Supplement EQUITY-1 dated
January 24, 2017)
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|
|
Dated
September 3, 2019
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|
$1,798,000
BofA Finance LLC
Leveraged Notes Linked to the Least Performing of the S&P
500® Index and the Dow Jones Industrial AverageSM, due August 30, 2024
Fully and Unconditionally Guaranteed by Bank of America Corporation
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|
·
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The CUSIP number for the notes is 09709TUX7.
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·
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The notes are senior unsecured obligations issued by BofA Finance
LLC (“BofA Finance”), a direct, wholly-owned subsidiary of Bank of America Corporation (“BAC” or the “Guarantor”),
which are fully and unconditionally guaranteed by the Guarantor. Any payment due on the notes, including any repayment of principal,
will be subject to the credit risk of BofA Finance, as issuer of the notes, and the credit risk of BAC, as guarantor of the notes.
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|
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·
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All payments on the notes occur at maturity. The notes do not guarantee
a full return of your principal at maturity, and you could lose up to 100% of the principal amount.
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|
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·
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The notes priced on August 27, 2019 (the “pricing date”).
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|
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·
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The notes will mature on August 30, 2024. The notes will not pay
interest.
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|
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·
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Payment on the notes will depend on the individual performance of
the S&P 500® Index (the “SPX”) and the Dow Jones Industrial AverageSM (the “INDU”)
(each, an “Underlying,” and collectively, the “Underlyings”).
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|
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·
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If the Ending Value of the Least Performing Underlying is greater
than its Starting Value, the notes provide a levered return. The Redemption Amount per note will be the principal amount plus a
return of 1.22% for each 1% that the Ending Value of the Least Performing Underlying (defined below) is greater than its Starting
Value. If the Ending Value of the Least Performing Underlying is equal to or less than its Starting Value but greater than or equal
to its Threshold Value, you will receive the principal amount. However, if the Ending Value of the Least Performing Underlying
is less than its Threshold Value, you will be subject to 1-1 downside exposure to any decrease in the level of the Least Performing
Underlying from its Starting Value. In that case, the Redemption Amount (defined below) will be less than 50% of the principal
amount and could be zero.
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|
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·
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The “Threshold Value” with respect to each Underlying
is 50% of its Starting Value.
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|
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·
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The “Least Performing Underlying” will be the Underlying
with the lowest Underlying Return (as defined below).
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·
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The notes will not be listed on any securities exchange.
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·
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The notes will be issued in denominations of $1,000 and whole multiples
of $1,000
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|
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·
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The initial estimated value of the notes is less than the public
offering price. The initial estimated value of the notes as of the pricing date is $953.00 per $1,000 in principal amount.
See “Summary” beginning on page PS-3 of this pricing supplement, “Risk Factors” beginning on page PS-7
of this pricing supplement and “Structuring the Notes” on page PS-22 of this pricing supplement for additional information.
The actual value of your notes at any time will reflect many factors and cannot be predicted with accuracy.
|
Potential purchasers of the notes should consider the
information in “Risk Factors” beginning on page PS-7 of this pricing supplement, page PS-5 of the accompanying product
supplement, page S-4 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus.
The notes and the related guarantee:
|
Are Not FDIC Insured
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Are Not Bank Guaranteed
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May Lose Value
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|
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Per Note
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Total
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Public Offering Price(1)
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$1,000.00
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$1,798,000.00
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Underwriting Discount(1)
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$32.50
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$ 58,435.00
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Proceeds (before expenses) to BofA Finance
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$967.50
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$1,739,565.00
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(1) 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 $967.50 per note.
|
The notes and the related guarantee
of the notes by the Guarantor are unsecured and are not savings accounts, deposits, or other obligations of a bank. The notes are
not guaranteed by Bank of America, N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any
other governmental agency and involve investment risks.
None of the Securities
and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or
disapproved of these notes or the guarantee, or passed upon the adequacy or accuracy of this pricing supplement, or the accompanying
product supplement, prospectus supplement or prospectus. Any representation to the contrary is a criminal offense.
We will deliver the notes in book-entry form only through The
Depository Trust Company on August 30, 2019 against payment in immediately available funds.
BofA Merrill Lynch
Selling Agent
SUMMARY
The Leveraged Notes Linked to the Least
Performing of the S&P 500® Index and the Dow Jones Industrial AverageSM, due August 30, 2024 (the
“notes”) are our senior debt securities. Any payment on the notes is 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 with all of our other senior unsecured debt, and the related guarantee will rank equally with all of BAC’s
other senior unsecured debt. Any payment 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. The notes will mature on August 30, 2024.
If the Ending Value of the Least Performing
Underlying is greater than its Starting Value, the notes provide you a levered return of 122.00%. In such case, the Redemption
Amount per note will be the principal amount plus a return of 1.22% for each 1% that the Ending Value of the Least Performing Underlying
is greater than its Starting Value. If the Ending Value of the Least Performing Underlying is equal to or less than its Starting
Value but greater than or equal to its Threshold Value, you will receive the principal amount. However, if the Ending Value of
the Least Performing Underlying is less than its Threshold Value, you will be subject to 1-1 downside exposure to any decrease
in the level of the Least Performing Underlying from its Starting Value. In that case, the Redemption Amount will be less than
50% of the principal amount and could be zero.
Any payment on the notes depends on the
credit risk of BofA Finance and BAC and on the performance of each of the Underlyings. 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 it enters 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, reduced 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 are paying to purchase the
notes is greater than the initial estimated value of the notes as of the pricing date.
On the cover page of this pricing supplement,
we have provided the initial estimated value for the notes. For more information about the initial estimated value and the structuring
of the notes, see “Risk Factors” beginning on page PS-7 and “Structuring the Notes” on page PS-22.
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Issuer:
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BofA Finance LLC (“BofA Finance”)
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Guarantor:
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Bank of America Corporation (“BAC”)
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Term:
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Approximately five years
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Pricing Date:
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August 27, 2019
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Issue Date:
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August 30, 2019
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Calculation Day:
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August 27, 2024, subject to postponement as set forth in the section
“Description of the Notes— Certain Terms of the Notes— Events Relating to Calculation Days” of the accompanying
product supplement. If the calculation day is not a business day, the calculation day will be postponed to the next business day.
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Maturity Date:
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August 30, 2024
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Underlyings:
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The S&P 500® Index (Bloomberg ticker: “SPX”) and the Dow Jones Industrial AverageSM (Bloomberg ticker: “INDU”).
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Upside Participation Rate:
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122.00%.
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Starting Value:
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SPX: 2,869.16
INDU: 25,777.90
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Threshold Value:
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SPX: 1,434.58, which is 50% of its Starting Value.
INDU: 12,888.95, which is 50% of its Starting Value (rounded
to two decimal places).
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Ending Value:
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With respect to each Underlying, its closing level on the calculation day, as determined by the calculation agent.
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Redemption Amount:
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At maturity, you will receive the Redemption Amount, denominated
in U.S. dollars, calculated as follows:
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Least Performing Underlying:
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The Underlying with the lowest Underlying Return.
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Underlying Return:
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With respect to each Underlying, (Ending Value – Starting
Value)
Starting Value
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Calculation Agent:
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BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
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Selling Agent:
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BofAS.
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You should read carefully this entire
pricing supplement and the accompanying product supplement, prospectus supplement, and prospectus to understand fully the terms
of the notes, as well as the tax and other considerations important to you in making a decision about whether to invest in the
notes. In particular, you should review carefully the section in this pricing supplement entitled “Risk Factors,” which
highlights a number of risks of an investment in the notes, to determine whether an investment in the notes is appropriate for
you. If information in this pricing supplement is inconsistent with the product supplement, prospectus supplement or prospectus,
this pricing supplement will supersede those documents. You are urged to consult with your own attorneys and business and tax advisors
before making a decision to purchase any of the notes.
The information in this “Summary”
section is qualified in its entirety by the more detailed explanation set forth elsewhere in this pricing supplement and the accompanying
product supplement, prospectus supplement and prospectus. You should rely only on the information contained in this pricing supplement
and the accompanying product supplement, prospectus supplement and prospectus. We have not authorized any other person to provide
you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. None
of us, the Guarantor or BofAS is making an offer to sell these notes in any jurisdiction where the offer or sale is not permitted.
You should assume that the information in this pricing supplement, the accompanying product supplement, prospectus supplement,
and prospectus is accurate only as of the date on their respective front covers.
Capitalized terms used but not defined
in this pricing supplement have the meanings set forth in the accompanying product supplement, prospectus supplement and prospectus.
Unless otherwise indicated or unless the context requires otherwise, all references in this pricing supplement to “we,”
“us,” “our,” or similar references are to BofA Finance, and not to BAC (or any other affiliate of BofA
Finance).
As a result of the completion of the
reorganization of Bank of America’s U.S. broker-dealer business, references to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“MLPF&S”) in the accompanying product supplement EQUITY-1, prospectus supplement and prospectus,
as such references relate to MLPF&S’s institutional services, should now be read as references to BofAS.
The accompanying documents referenced
above may be accessed at the following links:
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|
·
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Product supplement EQUITY-1 dated January 24, 2017:
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https://www.sec.gov/Archives/edgar/data/70858/000119312517016445/d331325d424b5.htm
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|
·
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Series A MTN prospectus supplement dated November
4, 2016 and prospectus dated November 4, 2016:
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https://www.sec.gov/Archives/edgar/data/70858/000119312516760144/d266649d424b3.htm
Hypothetical Payments on the Notes
The following table is for purposes of
illustration only. It is based on hypothetical values and shows hypothetical returns on the notes. It illustrates
the calculation of the Redemption Amount and total return based on a hypothetical Starting Value of 100 and a hypothetical Threshold
Value of 50 for the Least Performing Underlying, the Upside Participation Rate of 122.00%, and a range of hypothetical Ending Values
of the Least Performing Underlying. The actual amount you receive and the resulting total return will depend on the actual Starting
Value, Threshold Value, and Ending Value of the Least Performing Underlying, and whether you hold the notes to maturity. The
numbers appearing in the table below have been rounded for ease of analysis, and do not take into account any tax consequences
from investing in the notes.
For recent actual levels of the Underlyings,
see “The Underlyings” section below. Each Underlying is a price return index and as such its Ending Value will not
include any income generated by dividends paid on the securities included in that 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.
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Ending
Value of the
Least Performing
Underlying
|
Underlying
Return of
the Least Performing
Underlying
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Redemption
Amount
per Note(1)
|
Total
Return on the
Notes
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0.000
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-100.000%
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$0.00
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-100.000%
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10.000
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-90.000%
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$100.00
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-90.000%
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20.000
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-80.000%
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$200.00
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-80.000%
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30.000
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-70.000%
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$300.00
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-70.000%
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40.000
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-60.000%
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$400.00
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-60.000%
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49.999
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-50.001%
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$499.99
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-50.001%
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50.000(2)
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-50.000%
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$1,000.00
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0.000%
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60.000
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-40.000%
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$1,000.00
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0.000%
|
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70.000
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-30.000%
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$1,000.00
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0.000%
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80.000
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-20.000%
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$1,000.00
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0.000%
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90.000
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-10.000%
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$1,000.00
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0.000%
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100.000(3)
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0.000%
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$1,000.00
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0.000%
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110.000
|
10.000%
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$1,122.00
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12.200%
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120.000
|
20.000%
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$1,244.00
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24.400%
|
|
140.000
|
40.000%
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$1,488.00
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48.800%
|
|
160.000
|
60.000%
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$1,732.00
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73.200%
|
|
170.000
|
70.000%
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$1,854.00
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85.400%
|
|
180.000
|
80.000%
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$1,976.00
|
97.600%
|
|
190.000
|
90.000%
|
$2,098.00
|
109.800%
|
|
200.000
|
100.000%
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$2,220.00
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122.000%
|
|
|
1)
|
The Redemption Amount per note is based on the Upside
Participation Rate.
|
|
|
2)
|
This is the hypothetical Threshold Value
of the Least Performing Underlying.
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|
|
3)
|
The hypothetical Starting Value of 100 used
in the table above has been chosen for illustrative purposes only. The actual Starting Value for each Underlying is set forth on
page PS-3 above.
|
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.
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 either Underlying is less than its Threshold Value, you will lose 1% of the principal amount for each 1% that the Ending
Value of the Least Performing Underlying is less than its Starting Value. In that case, you will lose more than 50% and up to 100%
of your principal.
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 either Underlying exceeds its Threshold Value or Starting Value. Payments on the notes will be limited only to
the payment at maturity.
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, which could
be negative, 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 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 obligations under the notes on the maturity date, regardless of the Ending Value of either Underlying as compared
to its Threshold Value or Starting Value. No assurance can be given as to what our financial condition or the financial condition
of the Guarantor will be on the maturity date. If we and the Guarantor become unable to meet our respective financial obligations
as they become due, you may not receive the amounts 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 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 levels of the Underlyings, 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, will have limited assets and operations. We are a finance subsidiary of BAC and will have no assets, operations or revenues
other than those related to the issuance, administration and repayment of our debt securities that are guaranteed by the Guarantor.
As a finance subsidiary, to meet our obligations under the notes, we are dependent upon payment or contribution of funds and/or
repayment of outstanding loans from the Guarantor and/or its other subsidiaries. Therefore, our ability to make payments on the
notes may be limited. In addition, we will have no independent assets available for distributions to holders of the notes if they
make claims in respect of the notes in a bankruptcy, resolution or similar proceeding. Accordingly, any recoveries by such holders
may be limited to those available under the related guarantee by the Guarantor, and that guarantee will rank equally with all other
senior unsecured obligations of the Guarantor.
The public offering price you are
paying for the notes exceeds the initial estimated value. The initial estimated value that is provided on the cover page of
this pricing supplement is an estimate only, determined as of the pricing date 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.
The initial estimated value does not
represent a minimum or maximum price at which we, the Guarantor, 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 the pricing date will
vary based on many factors that cannot be predicted with accuracy, including our and the Guarantor’s creditworthiness and
changes in market conditions.
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 levels of the Underlyings, 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.
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.
The development of a trading market for
the notes will depend on the Guarantor’s financial performance and other factors, including changes in the levels of the
Underlyings. The number of potential buyers of your notes in any secondary market may be limited. We anticipate that BofAS will
act as a market-maker for the notes, but none of us, the Guarantor or BofAS is required to do so. There is no assurance that any
party will be willing to purchase your notes at any price in any secondary market. BofAS may discontinue its market-making activities
as to the notes at any time. To the extent that BofAS engages in any market-making activities, it may bid for or offer the notes.
Any price at which BofAS may bid for, offer, purchase, or sell any notes may differ from the values determined by pricing models
that it may use, whether as a result of dealer discounts, mark-ups, or other transaction costs. These bids, offers, or completed
transactions may affect the prices, if any, at which the notes might otherwise trade in the market.
In addition, if at any time BofAS were
to cease acting as a market-maker as to the notes, it is likely that there would be significantly less liquidity in the secondary
market. In such a case, the price at which the notes could be sold likely would be lower than if an active market existed.
The Redemption Amount will not reflect
changes in the levels of the Underlyings other than on the calculation day. Changes in the levels of the Underlyings during
the term of the notes other than on the calculation day will not be reflected in the calculation of the Redemption Amount. To calculate
the Redemption Amount, the calculation agent will compare only the Ending Value of each Underlying to its Starting Value or Threshold
Value, as applicable. No other levels of the Underlyings will be taken into account. As a result, even if the level of each Underlying
has increased at certain times during the term of the notes, you will receive a Redemption Amount that is less than the principal
amount if the Ending Value of either Underlying is less than its Threshold Value.
Because the notes are linked to the
lesser performing (and not the average performance) of the two Underlyings, you may lose some or all of your principal amount even
if the Ending Value of one Underlying is always greater than its Threshold Value. Your notes are linked to the lesser performing
of two Underlyings, and a change in the level of one Underlying may not correlate with changes in the level of the other Underlying.
The notes are not linked to a basket composed of the Underlyings, where the depreciation in the level of one Underlying could be
offset to some extent by the appreciation in the level of the other Underlying. In the case of the notes that we are offering,
the individual performance of each Underlying would not be combined, and the depreciation in the level of one Underlying would
not be offset by any appreciation in the level of the other Underlying. Even if the Ending Value of one Underlying is equal to
or above its Threshold Value, you will lose a portion of your principal if the Ending Value of the other Underlying is below its
Threshold Value.
Trading and hedging activities by us,
the Guarantor and any of our other affiliates may affect your return on the notes and their market value. We, the Guarantor
and our other affiliates, including BofAS, may buy or sell the securities held by or included in the Underlying, or futures or
options contracts on the Underlying or those securities, or other listed or over-the-counter derivative instruments linked to the
Underlying or those securities. We, the Guarantor and any 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 could 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
its behalf (including for the purpose of hedging anticipated exposures), may
have affected the value of the Underlying. Consequently, the
value of the Underlying may change subsequent to the pricing date, adversely affecting the market value of the notes.
We, the Guarantor or one or more of
our other affiliates, including BofAS, may also have engaged in hedging activities that could have affected the value of the Underlying
on the pricing date. In addition, these activities 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.
The publisher of an Underlying may
adjust that Underlying in a way that affects its levels, and the publisher has no obligation to consider your interests. The
publisher of an Underlying can add, delete, or substitute the components included in that Underlying or make other methodological
changes that could change its level. A new security included in an Underlying may perform significantly better or worse than the
replaced security, and the performance will impact the level of that Underlying. Additionally, the publisher of an Underlying may
alter, discontinue, or suspend calculation or dissemination of that Underlying. Any of these actions could adversely affect the
value of your notes. The publisher of either Underlying will have no obligation to consider your interests in calculating or revising
the applicable Underlying.
Our trading, hedging and other business
activities may create conflicts of interest with you. We, the Guarantor or one or more of our other affiliates, including BofAS,
may engage in trading activities related to the Underlyings or the securities represented by the Underlyings that are not for your
account or on your behalf. We, the Guarantor or one or more of our other affiliates, including BofAS, also may issue or underwrite
other financial instruments with returns based upon the Underlyings. While we, the Guarantor or one or more of our other affiliates,
including BofAS, may from time to time own securities represented by the Underlyings, except to the extent that BAC’s common
stock is included in the SPX, we, the Guarantor and our other affiliates, including BofAS, do not control any company included
in the Underlyings, and have not verified any disclosure made by any other company. These trading and other business activities
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 proprietary accounts, in facilitating transactions, including block trades, for our or their other
customers, and in accounts under our or their management. These trading and other business activities, if they influence the level
of the Underlyings or secondary trading in your notes, could be adverse to your interests as a beneficial owner of the notes.
We expect to enter into arrangements
or adjust or close out existing transactions to hedge our obligations under the notes. We, the Guarantor or our other affiliates,
including BofAS, also may enter into hedging transactions relating to other notes or instruments, some of which may have returns
calculated in a manner related to that of the notes offered hereby. We may enter into such hedging arrangements with one of our
affiliates. Our affiliates may enter into additional hedging transactions with other parties relating to the notes and the Underlyings.
This hedging activity is expected to result in a profit to those engaging in the hedging activity, which could be more or less
than initially expected, or the hedging activity could also result in a loss. We and our affiliates will price these hedging transactions
with the intent to realize a profit, regardless of whether the value of the notes increases or decreases. Any profit in connection
with such hedging activities will be in addition to any other compensation that we, the Guarantor and our other affiliates, including
BofAS, receive for the sale of the notes, which creates an additional incentive to sell the notes to you.
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. These conflicts could occur, for
instance, in connection with the calculation agent’s determination as to whether a Market Disruption Event (as defined in
the product supplement below) has occurred. The calculation agent will be required to carry out its duties in good faith and use
its reasonable judgment. However, because we expect that the Guarantor will control the calculation agent, potential conflicts
of interest could arise.
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 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 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.
* * *
Investors in the notes should review
the additional risk factors set forth beginning on page PS-5 of the product supplement prior to making an investment decision.
DESCRIPTION
OF THE NOTES
General
The notes will be part of a series of
medium-term notes entitled “Senior Medium-Term Notes, Series A” issued under the Senior Indenture, as amended and supplemented
from time to time, among us, the Guarantor and The Bank of New York Mellon Trust Company N.A., as trustee. The Senior Indenture
is more fully described in the prospectus supplement and prospectus. The following description of the notes supplements the description
of the general terms and provisions of the notes and debt securities set forth under the headings “Description of the Notes”
in the prospectus supplement and “Description of Debt Securities” in the prospectus. These documents should be read
in connection with this pricing supplement.
Our payment obligations on the notes
are fully and unconditionally guaranteed by the Guarantor. The notes will rank equally with all of our other senior unsecured debt
from time to time outstanding. The guarantee of the notes will rank equally with all other senior unsecured obligations of the
Guarantor. Any payment due on the notes, including any repayment of principal, is subject to our credit risk, as issuer, and the
credit risk of BAC, as guarantor.
The notes will be issued in denominations
of $1,000 and whole multiples of $1,000. You may transfer the notes only in whole multiples of $1,000.
Prior to maturity, the notes are not
repayable at our option or at your option.
If the scheduled maturity date is not
a business day, the payment will be postponed to the next business day, and no interest will be payable as a result of that postponement.
Redemption Amount
At maturity, subject to our credit risk
as issuer of the notes and the credit risk of the Guarantor as guarantor of the notes, you will receive the Redemption Amount per
note that you hold, denominated in U.S. dollars. The Redemption Amount will be calculated as follows:
|
|
·
|
If the Ending Value of the Least Performing Underlying
is greater than its Starting Value, the Redemption Amount per note will equal:
|
$1,000 + ($1,000 x Upside Participation Rate x Underlying
Return of the Least Performing Underlying)
|
|
·
|
If the Ending Value of the Least Performing Underlying
is equal to or less than its Starting Value but greater than or equal to its Threshold Value, the Redemption Amount per note will
equal:
|
$1,000
|
|
·
|
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value, the Redemption Amount per note will equal:
|
In this case, the Redemption Amount will be less than
50% of the principal amount of the notes and could be zero.
With respect to each Underlying,
its “Underlying Return” will equal:
Ending Value – Starting Value
Starting Value
The Threshold Value of each Underlying (which is 50%
of its Starting Value) is set forth on page PS-4 above.
The “Upside Participation Rate” is 122.00%.
Determining the Starting Value and the Ending Value of Each
Underlying
With respect to each Underlying, the
“Starting Value” is set forth on page PS-3 above.
With respect to each Underlying, the
“Ending Value” will be its closing level on the calculation day.
The calculation day is subject to postponement
as set forth in the product supplement, in the section “Description of the Notes— Certain Terms of the Notes—
Events Relating to Calculation Days.” If the calculation day is not a business day, the calculation day will be postponed
to the next business day.
Events of Default and Acceleration
If an Event of Default, as defined in
the Senior Indenture and in the section entitled “Events of Default and Rights of Acceleration” beginning on page 35
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,” calculated as though the date of acceleration were the maturity date of the notes and as though the calculation
day were the third trading day prior to the date of acceleration. In case of a default in the payment of the notes, the notes will
not bear a default interest rate.
THE UNDERLYINGS
All disclosures contained in this pricing
supplement regarding the Underlyings, including, without limitation, their makeup, method of calculation, and changes in their
components, have been derived from publicly available sources. The information reflects the policies of, and is subject to change
by each of S&P Dow Jones Indices LLC (“SPDJI”), the sponsor of the SPX, and Dow Jones Indexes, the marketing name
of CME Group Index Services LLC, the sponsor of the INDU. We refer to SPDJI and Dow Jones Indexes as the “Underlying Sponsors.”
The Underlying Sponsors, which license the copyright and all other rights to the Underlyings, have no obligation to continue to
publish, and may discontinue publication of, the Underlyings. The consequences of either Underlying Sponsor discontinuing publication
of the applicable 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 either 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 Underlyings. You should make your own investigation into the
Underlyings.
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. The Underlying Sponsor 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 S&P 500® Index
must have an unadjusted company market capitalization of $8.2 billion or more (an increase from the previous requirement of an
unadjusted company market capitalization of $6.1 billion or more).
The Underlying Sponsor 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. Additional information is available on the following websites: us.spindices.com/indices/equity/sp-500
and spdji.com/. We are not incorporating by reference the websites or any material they include in this pricing supplement.
Computation of the SPX
While the Underlying Sponsor currently
employs the following methodology to calculate the SPX, no assurance can be given that the Underlying Sponsor will not modify or
change this methodology in a manner that may affect the Redemption Amount.
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, the Underlying Sponsor 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. The Underlying Sponsor’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, the Underlying Sponsor 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, the Underlying Sponsor 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 were grandfathered in and continue to be included in the SPX. If a constituent company of the Index
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 and IWF due to its acquisition of another public company are made as soon as reasonably
possible. At the index sponsor’s discretion, de minimis merger and acquisition share changes are accumulated
and implemented with the quarterly share rebalancing.
All
other changes of less than 5% are accumulated and made quarterly on the third Friday of March, June, September, and December.
Changes
in a company’s total shares outstanding of 5% or more due to public offerings are made as soon as reasonably possible. Other
changes of 5% or more (for example, due to tender offers, Dutch auctions, voluntary exchange offers, company stock repurchases,
private placements, acquisitions of private companies or non-index companies that do not trade on a major exchange, redemptions,
exercise of options, warrants, conversion of preferred stock, notes, debt, equity participations, at-the-market stock offerings
or other recapitalizations) are made weekly, and are generally announced on Fridays for implementation after the close of trading
the following Friday (one week later). If a 5% or more share change 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.
The following graph sets forth
the daily historical performance of the SPX in the period from January 1, 2008 through the pricing date. This historical data on
the SPX is not necessarily indicative of its future performance 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 below is not an indication that the level of the SPX is more
or less likely to increase or decrease at any time over the term of the notes. The horizontal line in the graph represents the
Threshold Value of 1,434.58, which is 50% of its Starting Value of 2,869.16.
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, MLPF&S. The SPX is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for
use by MLPF&S.
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 MLPF&S
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, MLPF&S, or the notes. S&P Dow Jones Indices have no obligation to take our needs or the needs of MLPF&S 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 DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE OR AS TO RESULTS TO BE OBTAINED BY US, BAC, MLPF&S, 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 MLPF&S, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
The Dow Jones Industrial AverageSM
Unless
otherwise stated, all information on the INDU provided in this pricing supplement is derived from Dow Jones Indexes, the marketing
name and a licensed trademark of CME Group Index Services LLC. The INDU is a price-weighted index, which means an underlying stock’s
weight in the INDU is based on its price per share rather than the total market capitalization of the issuer. The INDU is designed
to provide an indication of the composite performance of 30 common stocks of corporations representing a broad cross-section of
U.S. industry. The corporations represented in the INDU tend to be market leaders in their respective industries and their stocks
are typically widely held by individuals and institutional investors.
The INDU is maintained by an Averages
Committee comprised of the Managing Editor of The Wall Street Journal (“WSJ”), the head of Dow Jones Indexes research
and the head of CME Group Inc. research. The Averages Committee was created in March 2010, when Dow Jones Indexes became part of
CME Group Index Services, LLC, a joint venture company owned 90% by CME Group Inc. and 10% by Dow Jones & Company. Generally,
composition changes occur only after mergers, corporate acquisitions or other dramatic shifts in a component's core business. When
such an event necessitates that one component be replaced, the entire INDU is reviewed. As a result, when changes are made they
typically involve more than one component. While there are no rules for component selection, a stock typically is added only if
it has an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors and accurately represents
the sector(s) covered by the average.
Changes in the composition of the INDU
are made entirely by the Averages Committee without consultation with the corporations represented in the INDU, any stock exchange,
any official agency or us. Unlike most other indices, which are reconstituted according to a fixed review schedule, constituents
of the INDU are reviewed on an as-needed basis. Changes to the common stocks included in the INDU tend to be made infrequently,
and the underlying stocks of the INDU may be changed at any time for any reason. The companies currently represented in the INDU
are incorporated in the United States and its territories and their stocks are listed on the New York Stock Exchange and NASDAQ.
The INDU initially consisted
of 12 common stocks and was first published in the WSJ in 1896. The INDU was increased to include 20 common stocks in
1916 and to 30 common stocks in 1928. The number of common stocks in the INDU has remained at 30 since 1928, and, in
an effort to maintain continuity, the constituent corporations represented in the INDU have been changed on a relatively
infrequent basis. The INDU includes companies from nine main groups: Basic Materials; Consumer Goods; Consumer Services; Financials;
Healthcare; Industrials; Oil & Gas; Technology; and Telecommunications.
Computation of the INDU
The level of the INDU is the sum of the
primary exchange prices of each of the 30 component stocks included in the INDU, divided by a divisor that is designed to provide
a meaningful continuity in the level of the INDU. Because the INDU is price-weighted, stock splits or changes in the component
stocks could result in distortions in the INDU level. In order to prevent these distortions related to extrinsic factors, the divisor
is periodically changed in accordance with a mathematical formula that reflects adjusted proportions within the INDU. The current
divisor of the INDU is published daily in the WSJ and other publications. In addition, other statistics based on the INDU may be
found in a variety of publicly available sources.
The following graph sets forth the
daily historical performance of the INDU in the period from January 1, 2008 through the pricing date. This historical data on the
INDU is not necessarily indicative of its future performance or what the value of the notes may be. Any historical upward or downward
trend in the level of the INDU during any period set forth below is not an indication that the level of the INDU is more or less
likely to increase or decrease at any time over the term of the notes. The horizontal line in the graph represents the Threshold
Value of 12,888.95 (rounded to two decimal places), which is 50% of its Starting Value of 25,777.90.
Before investing in the notes, you should consult publicly
available sources for the levels of the INDU.
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, MLPF&S. The INDU is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed
for use by MLPF&S.
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 INDU to track general market performance. S&P Dow Jones Indices’ only relationship to MLPF&S
with respect to the INDU is the licensing of the INDU and certain trademarks, service marks and/or trade names of S&P Dow Jones
Indices and/or its third party licensors. The INDU is determined, composed and calculated by S&P Dow Jones Indices without
regard to us, MLPF&S, or the notes. S&P Dow Jones Indices have no obligation to take our needs, BAC’s needs
or the needs of MLPF&S or holders of the notes into consideration in determining, composing or calculating the INDU.
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 INDU 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 INDU. 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 INDU OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING
BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATIONS (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, MLPF&S, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR
ENTITY FROM THE USE OF THE INDU 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 MLPF&S, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
SUPPLEMENTAL 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.
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. 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 $967.50 per note.
We will 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, 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.
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. The selling agent 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 Underlyings 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.
No Prospectus (as defined in Directive
2003/71/EC, as amended (the “Prospectus Directive”)) will be prepared in connection with these notes. Accordingly,
these notes may not be offered to the public in any member state of the European Economic Area (the “EEA”), and any
purchaser of these notes who subsequently sells any of these notes in any EEA member state must do so only in accordance with the
requirements of the Prospectus Directive, as implemented in that member state.
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. For these purposes, 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
the notes, and a “retail investor” means a person who is one (or more) of: (a) a retail client, as defined in point
(11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID II”); or (b) a customer, within the meaning of Insurance
Distribution Directive 2016/97/EU, as amended, where that customer would not qualify as a professional client as defined in point
(10) of Article 4(1) of MiFID II; or (c) not a qualified investor as defined in the Prospectus Directive. 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 has been prepared, and therefore, offering
or selling the notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
STRUCTURING THE NOTES
The notes are our debt securities, the
return on which is linked to the performance of the Underlyings. The related guarantees are BAC’s obligations. 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, resulted 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 Underlyings, 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-7 above and “Supplemental Use of Proceeds” on page PS-16 of product supplement
EQUITY-1.
VALIDITY OF THE NOTES
In the opinion of McGuireWoods LLP,
as counsel to BofA Finance and BAC, when the trustee has made an appropriate entry on Schedule 1 to the Master Registered Global
Note dated November 4, 2016 that represents the notes (the “Master Note”) identifying the notes offered hereby as supplemental
obligations thereunder in accordance with the instructions of BofA Finance, and the notes have been delivered against payment therefor
as contemplated in this pricing supplement and the related prospectus, prospectus supplement and product supplement, all in accordance
with the provisions of the indenture governing the notes and the related guarantee, such notes will be legal, valid and binding
obligations of BofA Finance, and the related guarantee will be the legal, valid and binding obligations of BAC, subject, in each
case, to the effects of applicable bankruptcy, insolvency (including laws relating to preferences, fraudulent transfers and equitable
subordination), reorganization, moratorium and other similar laws affecting creditors’ rights generally, and to general principles
of equity. This opinion is given as of the date of this pricing supplement and is limited to the laws of the State of New York
and the Delaware Limited Liability Company Act and the Delaware General Corporation Law (including the statutory provisions, all
applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing) as in effect on
the date hereof. In addition, this opinion is subject to customary assumptions about the trustee’s authorization, execution
and delivery of the indenture governing the notes and due authentication of the Master Note, the validity, binding nature and enforceability
of the indenture governing the notes and the related guarantee with respect to the trustee, the legal capacity of individuals,
the genuineness of signatures, the authenticity of all documents submitted to McGuireWoods LLP as originals, the conformity to
original documents of all documents submitted to McGuireWoods LLP as copies thereof, the authenticity of the originals of such
copies and certain factual matters, all as stated in the letter of McGuireWoods LLP dated August 23, 2016, which has been filed
as an exhibit to the Registration Statement of BofA Finance and BAC relating to the notes and the related guarantees initially
filed with the Securities and Exchange Commission on August 23, 2016.
Sidley Austin LLP, New York, New York,
is acting as counsel to BofAS and as special tax counsel to BofA Finance and BAC.
U.S. FEDERAL
INCOME TAX SUMMARY
The following summary of the material U.S.
federal income tax considerations of the acquisition, ownership, and disposition of the notes supplements, and to the extent inconsistent
supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under
“U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible
tax considerations. In addition, any reference to “Morrison & Foerster LLP” in the aforementioned tax discussions
in the accompanying prospectus and prospectus supplement should be read as a reference to “Sidley Austin LLP.” 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 Bank of America Corporation for U.S. federal income tax purposes. Accordingly throughout this
tax discussion, references to “we,” “our” or “us” are generally to Bank of America Corporation
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 Underlyings 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 Underlyings 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 any
issuer of a component stock included in an 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 an 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 Underlyings and consult your tax advisor regarding the possible consequences to you, if any,
if any issuer of a component stock included in an 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 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 each 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-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, 2021. 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 Underlyings 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 Underlyings
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 — Taxation of Debt Securities — 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.
Foreign Account Tax Compliance Act (“FATCA”)
The discussion in the accompanying prospectus
under “U.S. Federal Income Tax Considerations – Foreign Account Tax Compliance Act” is hereby modified to reflect
regulations proposed by Treasury indicating its intent to eliminate the requirements under FATCA of withholding on gross proceeds
from the sale, exchange, settlement at maturity or other disposition of relevant financial instruments. Treasury has indicated
that taxpayers may rely on these proposed regulations pending their finalization.
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