Filed Pursuant to Rule 424(b)(2)
Registration Statement Nos. 333-268718
and 333-268718-01
(To Prospectus dated December 30, 2022, Prospectus Supplement dated December 30, 2022 and
Product Supplement EQUITY CYN-2 dated  August 21, 2023)
300,000 Units
$10 principal amount per unit
CUSIP No. 09710V764
Pricing Date
Settlement Date
Maturity Date
January 30, 2025
February 6, 2025
February 6, 2030
BofA Finance LLC
Autocallable Strategic Accelerated Redemption Securities® Linked to the Nasdaq-100 Index®
Fully and Unconditionally Guaranteed by Bank of America Corporation
■   
Automatically callable if the closing level of the Index on any Call Observation Date, occurring approximately one, two, three, four and five years after the pricing date, is at or above the Starting Value. If the notes are called, on the relevant Call Payment Date you will receive the applicable Call Payment, and no further amounts will be payable on the notes
■   
In the event of an automatic call, the amount payable per unit will be:
■   
$10.81 if called on the first Call Observation Date
■   
$11.62 if called on the second Call Observation Date
■   
$12.43 if called on the third Call Observation Date
■   
$13.24 if called on the fourth Call Observation Date
■   
$14.05 if called on the final Call Observation Date
■   
If not called on one of the first four Call Observation Dates, a maturity of approximately five years
■   
If not called on any of the Call Observation Dates, 1-to-1 downside exposure to decreases in the Index from the Starting Value beyond a 15.00% decline, with up to 85.00% of the principal amount at risk
■   
All payments are subject to the credit risk of BofA Finance LLC, as issuer of the notes, and the credit risk of Bank of America Corporation, as guarantor of the notes
■   
No periodic interest payments
■   
Limited secondary market liquidity, with no exchange listing
The notes are being issued by BofA Finance LLC (“BofA Finance”) and are fully and unconditionally guaranteed by Bank of America Corporation (“BAC”). Investing in the notes involves a number of risks. There are important differences between the notes and a conventional debt security, including different investment risks and certain additional costs. See “Risk Factors” beginning on page TS-7 of this term sheet, “Additional Risk Factor” on page TS-8 of this term sheet, and “Risk Factors” beginning on page PS-10 of the accompanying product supplement, page S-6 of the accompanying Series A MTN prospectus supplement and page 7 of the accompanying prospectus.
The initial estimated value of the notes as of the pricing date is $9.713 per unit, which is less than the public offering price listed below. See “Summary” on the following page, “Risk Factors” beginning on page TS-7 of this term sheet and “Structuring the Notes” on page TS-14 of this term sheet for additional information. The actual value of your notes at any time will reflect many factors and cannot be predicted with accuracy.
_________________________
None of the Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities or determined if this Note Prospectus (as defined below) is truthful or complete. Any representation to the contrary is a criminal offense.
_________________________
Per Unit
Total
Public offering price
$ 10.00
        $3,000,000.00
Underwriting discount(1)
$ 0.15
$ 0.05
 
 
             $60,000.00
Proceeds, before expenses, to BofA Finance
$ 9.80
        $2,940,000.00
(1)   
The underwriting discount reflects a sales commission of $0.15 per note and a structuring fee of $0.05 per note.
The notes and the related guarantee:
Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
BofA Securities
January 30, 2025
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Summary
The Autocallable Strategic Accelerated Redemption Securities® Linked to the Nasdaq-100 Index®, due February 6, 2030 (the “notes”) are our senior unsecured debt securities. Payments on the notes are fully and unconditionally guaranteed by BAC. The notes and the related guarantee are not insured by the Federal Deposit Insurance Corporation or secured by collateral. The notes will rank equally in right of payment with all of BofA Finance’s other unsecured and unsubordinated obligations, except obligations that are subject to any priorities or preferences by law, and the related guarantee will rank equally in right of payment with all of BAC’s other unsecured and unsubordinated obligations, except obligations that are subject to any priorities or preferences by law, and senior to its subordinated obligations. Any payments due on the notes, including any repayment of principal, will be subject to the credit risk of BofA Finance, as issuer, and BAC, as guarantor. The notes will be automatically called if the Observation Value of the Market Measure, which is the Nasdaq-100 Index® (the “Index”), on any Call Observation Date is equal to or greater than the Call Value. If your notes are called, you will receive the applicable Call Payment on the related Call Payment Date, and no further amounts will be payable on the notes. If your notes are not called, at maturity, if the Ending Value is greater than or equal to the Threshold Value, you will receive the principal amount of your notes. If your notes are not called, at maturity, if the Ending Value is less than the Threshold Value, you will lose a portion, which could be significant, of the principal amount depending on the performance of the Index. Any payments on the notes will be calculated based on the $10 principal amount per unit and will depend on the performance of the Index, subject to our and BAC’s credit risk. See “Terms of the Notes” below.
The economic terms of the notes are based on BAC’s internal funding rate, which is the rate it would pay to borrow funds through the issuance of market-linked notes and the economic terms of certain related hedging arrangements. BAC’s 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 costs associated with hedging the notes, reduced the economic terms of the notes to you and the initial estimated value of the notes on the pricing date. 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.
On the cover page of this term sheet, we have provided the initial estimated value for the notes. This initial estimated value was determined based on our, BAC’s and our other affiliates’ pricing models, which take into consideration BAC’s internal funding rate and the market prices for the hedging arrangements related to the notes. For more information about the initial estimated value and the structuring of the notes, see “Structuring the Notes” on page TS-14.
Terms of the Notes
Payment Determination
Issuer:
BofA Finance LLC (“BofA Finance”)
Automatic Call Provision:
Redemption Amount Determination:
Notwithstanding anything to the contrary in the accompanying product supplement, the Redemption Amount will be determined as set forth in this term sheet.
If the notes are not called, you will receive the Redemption Amount per unit on the maturity date, determined as follows:
In this case you will receive a Redemption Amount that is less, and possibly significantly less, than the Principal Amount per unit.
Guarantor:
Bank of America Corporation (“BAC”)
Principal Amount:
$10.00 per unit
Term:
Approximately five years, if not called on one of the first four Call Observation Dates
Market Measure:
The Nasdaq-100 Index® (Bloomberg symbol: “NDX”), a price return index
Call Feature:
Autocallable Notes
Call Value:
21,508.12 (100% of the Starting Value)
Call Payments (per Unit):
$10.81 if called on the first Call Observation Date;
$11.62 if called on the second Call Observation Date; $12.43 if called on the third Call Observation Date; $13.24 if called on the fourth Call Observation Date; and $14.05 if called on the final Call Observation Date.
Call Premiums (per Unit):
$0.81, representing a Call Premium of 8.10% of the principal amount, if called on the first Call Observation Date;
$1.62, representing a Call Premium of
16.20% of the principal amount, if called on the second Call Observation Date;
$2.43, representing a Call Premium of 24.30% of the principal amount, if called on the third Call Observation Date;
$3.24, representing a Call Premium of 32.40% of the principal amount, if called on the fourth Call Observation Date; and
$4.05, representing a Call Premium of 40.50% of the principal amount, if called on the final Call Observation Date.
The Coupon Feature applicable to the notes is “Snowball Coupon Payments” and, for purposes of this term sheet, references in the accompanying product supplement to “Snowball Coupon Payment” shall be deemed to refer to “Call Premium”.
Threshold Value:
18,281.90 (85.00% of the Starting Value, rounded to two decimal places)
Starting Value:
21,508.12
Ending Value:
The Observation Value on the final Call Observation Date
Observation Value:
The closing level of the Market Measure on the relevant Call Observation Date.
Call Observation Dates:
February 6, 2026, February 1, 2027, January 31, 2028, January 30, 2029 and January 30, 2030 (the final Call Observation Date), which are approximately one, two, three, four and five years after the pricing date.
The scheduled Call Observation Dates are subject to postponement in the event of Market Disruption Events and non-
Autocallable Strategic Accelerated Redemption Securities®
TS-2
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Market Measure Business Days, as described beginning on page PS-35 of product supplement EQUITY CYN-2.
Final Calculation Day / Maturity Valuation Period:
January 30, 2030 (which is also the final Call Observation Date), which is the fifth scheduled Market Measure Business Day immediately preceding the maturity date, subject to postponement in the event of Market Disruption Events and non-Market Measure Business Days, as described beginning on page PS-37 of the accompanying product supplement.
Call Payment Dates:
Approximately the fifth business day following the applicable Call Observation Date, subject to postponement as described on page PS-35 of the accompanying product supplement; provided however, that the Call Payment Date related to the final Call Observation Date will be the maturity date.
Fees and Charges:
The underwriting discount of $0.20 per unit listed on the cover page.
Calculation Agent:
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
Autocallable Strategic Accelerated Redemption Securities®
TS-3
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
The terms and risks of the notes are contained in this term sheet and in the following:
■   
■   
Series A MTN prospectus supplement dated December 30, 2022 and prospectus dated December 30, 2022:
https://www.sec.gov/Archives/edgar/data/1682472/000119312522315195/d409418d424b3.htm
These documents (together, the “Note Prospectus”) have been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website at www.sec.gov or obtained from Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”) or BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus, including this term sheet, for information about us, BAC and this offering. Any prior or contemporaneous oral statements and any other written materials you may have received are superseded by the Note Prospectus. Certain terms used but not defined in this term sheet have the meanings set forth in the accompanying product supplement. Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar references are to BofA Finance, and not to BAC.
Investor Considerations
You may wish to consider an investment in the notes if:
The notes may not be an appropriate investment for you if:
■   
You anticipate that the Observation Value of the Index on at least one of the Call Observation Dates will be equal to or greater than the Call Value and, in that case, you accept an early exit from your investment.
■   
You accept that the return on the notes will be limited to the return represented by the applicable Call Premium even if the percentage change in the level of the Index is significantly greater than such return.
■   
You are willing to lose a portion, which could be significant, of the principal amount if the notes are not called.
■   
You are willing to forgo the interest payments that are paid on conventional interest-bearing debt securities.
■   
You are willing to forgo dividends or other benefits of owning the stocks included in the Index.
■   
You are willing to accept a limited or no market for sales for the notes prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our and BAC’s actual and perceived creditworthiness, BAC’s internal funding rate and fees and charges on the notes.
■   
You are willing to assume our credit risk, as issuer of the notes, and BAC’s credit risk, as guarantor of the notes, for all payments under the notes, including the Redemption Amount.
■   
You anticipate that the Observation Value of the Index will be less than the Call Value on each Call Observation Date.
■   
You wish to make an investment that cannot be automatically called prior to maturity.
■   
You seek an uncapped return on your investment.
■   
You seek 100% principal repayment or preservation of capital.
■   
You seek interest payments or other current income on your investment.
■   
You want to receive dividends or other distributions paid on the stocks included in the Index.
■   
You seek an investment for which there will be a liquid secondary market.
■   
You are unwilling or are unable to take market risk on the notes, to take our credit risk, as issuer of the notes, or to take BAC’s credit risk, as guarantor of the notes.
We urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
Autocallable Strategic Accelerated Redemption Securities®
TS-4
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Examples of Hypothetical Payments
The following examples and table are for purposes of illustration only. They are based on hypothetical values and show hypothetical returns on the notes. They illustrate the calculation of the Call Payment or the Redemption Amount, as applicable, based on the hypothetical terms set forth below. The actual amount you receive and the resulting return will depend on the actual Starting Value, Call Value, Threshold Value and Observation Values of the Index, whether the notes are automatically called and the term of your investment.  The following examples do not take into account any tax consequences from investing in the notes. These examples are based on the following hypothetical terms:
1)   
a Starting Value of 100.00 for the Index;
2)   
a Call Value of 100.00 for the Index;
3)   
a Threshold Value of 85.00 for the Index;
4)   
an expected term of the notes of approximately five years, if the notes are not called on one of the first four Call Observation Dates;
5)   
the Call Premium of 8.10% of the principal amount if the notes are called on the first Call Observation Date; 16.20% if called on the second Call Observation Date; 24.30% if called on the third Call Observation Date; 32.40% if called on the fourth Call Observation Date; and 40.50% if called on the final Call Observation Date (in each case, the midpoint of the applicable Call Premium range); and
6)   
the Call Observation Dates occurring approximately one, two, three, four and five years after the pricing date.
The hypothetical Starting Value of 100.00 for the Index used in these examples has been chosen for illustrative purposes only. The actual Starting Value of the Index is set forth on page TS-2 above. For recent actual levels of the Index, see “The Index” section below. The Index is a price return index and as such the levels of the Index will not include any income generated by dividends paid on the stocks included in the Index, 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.
Notes Are Called on a Call Observation Date
The notes will be called at $10.00 plus the applicable Call Premium if the Observation Value of the Index on one of the Call Observation Dates is equal to or greater than the Call Value. After the notes are called, they will no longer remain outstanding and there will not be any further payments on the notes.
Example 1 - The Observation Value of the Index on the first Call Observation Date is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $0.81 = $10.81 per unit.
Example 2 - The Observation Value of the Index on the first Call Observation Date is below the Call Value, but the Observation Value of the Index on the second Call Observation Date is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $1.62 = $11.62 per unit.
Example 3 - The Observation Values of the Index on the first and second Call Observation Dates are below the Call Value, but the Observation Value of the Index on the third Call Observation Date is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $2.43 = $12.43 per unit.
Example 4 - The Observation Values of the Index on the first, second, and third Call Observation Dates are below the Call Value, but the Observation Value of the Index on the fourth Call Observation Date is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $3.24 = $13.24 per unit.
Example 5 - The Observation Values of the Index on the first, second, third and fourth Call Observation Dates are below the Call Value, but the Observation Value of the Index on the fifth and final Call Observation Date is 110.00. Therefore, the notes will be called at $10.00 plus the Call Premium of $4.05 = $14.05 per unit.
Notes Are Not Called on Any Call Observation Date
Example 6 – The notes are not called on any Call Observation Date and the Ending Value is equal to or greater than the Threshold Value. The Redemption Amount will be equal to the principal amount. For example, if the Ending Value is 90.00, the Redemption Amount per unit will be $10.00.
Example 7 - The notes are not called on any Call Observation Date and the Ending Value is less than the Threshold Value. The Redemption Amount will be less, and possibly significantly less, than the principal amount. For example, if the Ending Value of the Index is 50.00, the Redemption Amount per unit will be:
Autocallable Strategic Accelerated Redemption Securities®
TS-5
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Summary of the Hypothetical Examples
Notes Are Called on a Call Observation Date
Notes Are Not Called on Any Call Observation Date
Example 1
Example 2
Example 3
Example 4
Example 5
Example 6
Example 7
Starting Value of the Index
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Call Value of the Index
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Threshold Value of the Index
85.00
85.00
85.00
85.00
85.00
85.00
85.00
Observation Value of the Index on the first Call Observation Date
110.00
80.00
80.00
80.00
80.00
78.00
80.00
Observation Value of the Index on the second Call Observation Date
N/A
110.00
80.00
80.00
80.00
78.00
80.00
Observation Value of the Index on the third Call Observation Date
N/A
N/A
110.00
80.00
80.00
78.00
80.00
Observation Value of the Index on the fourth Call Observation Date
N/A
N/A
N/A
110.00
80.00
78.00
80.00
Observation Value of the Index on the final Call Observation Date
N/A
N/A
N/A
N/A
110.00
90.00
50.00
Return of the Index
10.00%
10.00%
10.00%
10.00%
10.00%
-10.00%
-50.00%
Return of the Notes
8.10%
16.20%
24.30%
32.40%
40.50%
0.00%
-35.00%
Call Payment / Redemption Amount per Unit
$10.81
$11.62
$12.43
$13.24
$14.05
$10.00
$6.50
Autocallable Strategic Accelerated Redemption Securities®
TS-6
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Risk Factors
There are important differences between the notes and a conventional debt security. An investment in the notes involves significant risks, including those listed below. You should carefully review the more detailed explanation of risks relating to the notes in the “Risk Factors” sections beginning on page PS-10 of the accompanying product supplement, page S-6 of the Series A MTN prospectus supplement, and page 7 of the prospectus identified above. 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. We also urge you to consult your investment, legal, tax, accounting, and other advisors before you invest in the notes.
Structure-related Risks
■   
If the notes are not called, you may lose a portion, which could be significant, of the principal amount, depending on the performance of the Market Measure.
■   
Your investment return is limited to the return represented by the applicable Call Premium and may be less than a comparable investment directly in the stocks included in the Index.
■   
Payments on the notes will not reflect changes in the value of the Market Measure other than on the Call Observation Dates.
■   
If the notes are called, you will be subject to reinvestment risk, and you will lose the opportunity to receive any higher Call Premium that otherwise might have been payable on a later date.
■   
Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
■   
Payments on the notes are subject to our credit risk, and the credit risk of BAC, and any actual or perceived changes in our or BAC’s creditworthiness are expected to affect the value of the notes. If we and BAC become insolvent or are unable to pay our respective obligations, you may lose your entire investment.
■   
We are a finance subsidiary and, as such, have no independent assets, operations or revenues.
■   
BAC’s obligations under its guarantee of the notes will be structurally subordinated to liabilities of its subsidiaries.
■   
The notes issued by us will not have the benefit of any cross-default or cross-acceleration with other indebtedness of BofA Finance or BAC; events of bankruptcy or insolvency or resolution proceedings relating to BAC and covenant breach by BAC will not constitute an event of default with respect to the notes.
Valuation- and Market-related Risks
■   
The initial estimated value of the notes considers certain assumptions and variables and relies in part on certain forecasts about future events, which may prove to be incorrect. The initial estimated value of the notes 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 BAC, BAC’s internal funding rate on the pricing date, mid-market terms on hedging transactions, expectations on interest rates 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 public offering price you are paying for the notes exceeds the initial estimated value. 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 the initial estimated value. This is due to, among other things, changes in the level of the Index, changes in BAC’s internal funding rate, and the inclusion in the public offering price of the underwriting discount and costs associated with hedging the notes, all as further described in “Structuring the Notes” on page TS-14. These factors, together with various credit, market and economic factors over the term of the notes, are expected to reduce the price at which you may be able to sell the notes in any secondary market and will affect the value of the notes in complex and unpredictable ways.
■   
The initial estimated value does not represent a minimum or maximum price at which we, BAC, MLPF&S, BofAS or any of our other affiliates would be willing to purchase your notes in any secondary market (if any exists) at any time. The value of your notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Index, our and BAC’s creditworthiness and changes in market conditions.
■   
A trading market is not expected to develop for the notes. None of us, BAC, MLPF&S or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase your notes at any price in any secondary market.
Conflict-related Risks
■   
BAC and its affiliates’ hedging and trading activities (including trades in shares of companies included in the Index) and any hedging and trading activities BAC or its affiliates engage in that are not for your account or on your behalf, may affect the market value and return of the notes and may create conflicts of interest with 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.
Market Measure-related Risks
■   
The Index sponsor may adjust the Index in a way that affects its level, and has no obligation to consider your interests.
Autocallable Strategic Accelerated Redemption Securities®
TS-7
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
■   
You will have no rights of a holder of the securities represented by the Index, and you will not be entitled to receive securities or dividends or other distributions by the issuers of those securities.
■   
While BAC and our other affiliates may from time to time own securities of companies included in the Index, except to the extent that BAC’s common stock is included in the Index, we, BAC and our other affiliates do not control any company included in the Index, and have not verified any disclosure made by any other company.
Tax-related Risks
■   
The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See “Summary Tax Consequences” below and “U.S. Federal Income Tax Summary” beginning on page PS-51 of the accompanying product supplement.
Additional Risk Factor
The notes are subject to risks associated with foreign securities markets.
The Index includes certain foreign equity securities. You should be aware that investments in securities linked to the value of foreign equity securities involve particular risks. The foreign securities markets comprising the Index may have less liquidity and may be more volatile than U.S. or other securities markets and market developments may affect foreign markets differently from U.S. or other securities markets. Direct or indirect government intervention to stabilize these foreign securities markets, as well as cross-shareholdings in foreign companies, may affect trading prices and volumes in these markets. Also, there is generally less publicly available information about foreign companies than about those U.S. companies that are subject to the reporting requirements of the SEC, and foreign companies are subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.
Prices of securities in foreign countries are subject to political, economic, financial and social factors that apply in those geographical regions. These factors, which could negatively affect those securities markets, include the possibility of recent or future changes in a foreign government’s economic and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other laws or restrictions applicable to foreign companies or investments in foreign equity securities and the possibility of fluctuations in the rate of exchange between currencies, the possibility of outbreaks of hostility and political instability and the possibility of natural disaster or adverse public health developments in the region. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy in important respects such as growth of gross national product, rate of inflation, capital reinvestment, resources and self-sufficiency.
Autocallable Strategic Accelerated Redemption Securities®
TS-8
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
The Index
All disclosures contained in this term sheet regarding the Index, including, without limitation, its make-up, method of calculation, and changes in its components, have been derived from publicly available sources. The information reflects the policies of, and is subject to change by, Nasdaq, Inc. (the “Index sponsor”). The Index sponsor, which licenses the copyright and all other rights to the Index, has no obligation to continue to publish, and may discontinue publication of, the Index. The consequences of the Index sponsor discontinuing publication of the Index are discussed in the section of the accompanying product supplement beginning on page PS-40 entitled “Description of the Notes—Discontinuance of an Index.”  None of us, BAC, the calculation agent, MLPF&S or BofAS accepts any responsibility for the calculation, maintenance or publication of the Index or any successor index.
The Index is intended to measure the performance of the 100 largest domestic and international non-financial securities listed on The Nasdaq Stock Market ("NASDAQ") based on market capitalization. The Index reflects companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology. It does not contain securities of financial companies including investment companies.
The Index began trading on January 31, 1985 at a base value of 125.00. The Index is calculated and published by Nasdaq, Inc. In administering the Index, Nasdaq, Inc. will exercise reasonable discretion as it deems appropriate.
Underlying Stock Eligibility Criteria
Index eligibility is limited to specific security types only. The security types eligible for the Index include foreign or domestic common stocks, ordinary shares, ADRs and tracking stocks. Security types not included in the Index are closed-end funds, convertible debt securities, exchange traded funds, limited liability companies, limited partnership interests, preferred stocks, rights, shares or units of beneficial interest, warrants, units, and other derivative securities. The Index does not contain securities of investment companies. For purposes of the Index eligibility criteria, if the security is a depositary receipt representing a security of a non-U.S. issuer, then references to the “issuer” are references to the issuer of the underlying security.
Initial Eligibility Criteria
To be eligible for initial inclusion in the Index, a security must be listed on NASDAQ and meet the following criteria:
•   
the security’s U.S. listing must be exclusively on the Nasdaq Global Select Market or the Nasdaq Global Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing);
•   
the security must be of a non-financial company;
•   
the security may not be issued by an issuer currently in bankruptcy proceedings;
•   
the security must have a minimum three-month average daily trading volume of at least 200,000 shares;
•   
if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S.;
•   
the issuer of the security may not have entered into a definitive agreement or other arrangement which would likely result in the security no longer being eligible for inclusion in the Index;
•   
the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn; and
•   
the issuer of the security must have “seasoned” on NASDAQ, the New York Stock Exchange or NYSE Amex. Generally, a company is considered to be seasoned if it has been listed on a market for at least three full months (excluding the first month of initial listing).
Continued Eligibility Criteria
In addition, to be eligible for continued inclusion in the Index, the following criteria apply:
•   
the security’s U.S. listing must be exclusively on the Nasdaq Global Select Market or the Nasdaq Global Market;
•   
the security must be of a non-financial company;
•   
the security may not be issued by an issuer currently in bankruptcy proceedings;
•   
the security must have a minimum three-month average daily trading volume of at least 200,000 shares;
•   
if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S. (measured annually during the ranking review process);
•   
the security must have an adjusted market capitalization equal to or exceeding 0.10% of the aggregate adjusted market capitalization of the Index at each month-end. In the event a company does not meet this criterion for two consecutive month-ends, it will be removed from the Index effective after the close of trading on the third Friday of the following month; and
•   
the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn.
Autocallable Strategic Accelerated Redemption Securities®
TS-9
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Computation of the Index
The value of the Index equals the aggregate value of the Index share weights (the “Index Shares”) of each of the Index securities multiplied by each such security’s last sale price (last sale price refers to the last sale price on NASDAQ), and divided by the divisor of the Index. If trading in an Index security is halted while the market is open, the last traded price for that security is used for all Index computations until trading resumes. If trading is halted before the market is open, the previous day’s last sale price is used. The formula for determining the Index value is as follows:
The Index is ordinarily calculated without regard to cash dividends on Index securities. The Index is calculated during the trading day and is disseminated once per second from 09:30:01 to 17:16:00 ET. The closing level of the Index may change up until 17:15:00 ET due to corrections to the last sale price of the Index securities. The official closing value of the Index is ordinarily disseminated at 17:16:00 ET.
Index Maintenance
Changes to Index Constituents
Changes to the Index constituents may be made during the annual ranking review. In addition, if at any time during the year other than the annual review, it is determined that an Index security issuer no longer meets the criteria for continued inclusion in the Index, or is otherwise determined to have become ineligible for continued inclusion in the Index, it is replaced with the largest market capitalization issuer not currently in the Index that meets the applicable eligibility criteria for initial inclusion in the Index.
Ordinarily, a security will be removed from the Index at its last sale price. However, if at the time of its removal the Index security is halted from trading on its primary listing market and an official closing price cannot readily be determined, the Index security may, in Nasdaq, Inc.’s discretion, be removed at a price of $0.00000001 (“zero price”). This zero price will be applied to the Index security after the close of the market but prior to the time the official closing value of the Index is disseminated.
Divisor Adjustments
The divisor is adjusted to ensure that changes in the Index constituents either by corporate actions (that adjust either the price or shares of an Index security) or Index participation outside of trading hours do not affect the value of the Index. All divisor changes occur after the close of the applicable index security markets.
Quarterly Index Rebalancing
The Index will be rebalanced on a quarterly basis if it is determined that (1) the current weight of the single Index security with the largest market capitalization is greater than 24.0% of the Index or (2) the collective weight of those securities whose individual current weights are in excess of 4.5% exceeds 48.0% of the Index. In addition, a “special rebalancing” of the Index may be conducted at any time if Nasdaq, Inc. determines it necessary to maintain the integrity and continuity of the Index. If either one or both of the above weight distribution conditions are met upon quarterly review, or Nasdaq, Inc. determines that a special rebalancing is necessary, a weight rebalancing will be performed.
If the first weight distribution condition is met and the current weight of the single Index security with the largest market capitalization is greater than 24.0%, then the weights of all securities with current weights greater than 1.0% (“large securities”) will be scaled down proportionately toward 1.0% until the adjusted weight of the single largest Index security reaches 20.0%.
If the second weight distribution condition is met and the collective weight of those securities whose individual current weights are in excess of 4.5% (or adjusted weights in accordance with the previous step, if applicable) exceeds 48.0% of the Index, then the weights of all such large securities in that group will be scaled down proportionately toward 1.0% until their collective weight, so adjusted, is equal to 40.0%.
The aggregate weight reduction among the large securities resulting from either or both of the rebalancing steps above will then be redistributed to those securities with weightings of less than 1.0% (“small securities”) in the following manner. In the first iteration, the weight of the largest small security will be scaled upwards by a factor which sets it equal to the average Index weight of 1.0%. The weights of each of the smaller remaining small securities will be scaled up by the same factor reduced in relation to each security’s relative ranking among the small securities such that the smaller the Index security in the ranking, the less its weight will be scaled upward. This is intended to reduce the market impact of the weight rebalancing on the smallest component securities in the Index.
In the second iteration of the small security rebalancing, the weight of the second largest small security, already adjusted in the first iteration, will be scaled upwards by a factor which sets it equal to the average Index weight of 1.0%. The weights of each of the smaller remaining small securities will be scaled up by this same factor reduced in relation to each security’s relative ranking among the small securities such that, once again, the smaller the security in the ranking, the less its weight will be scaled upward. Additional iterations
Autocallable Strategic Accelerated Redemption Securities®
TS-10
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
will be performed until the accumulated increase in weight among the small securities equals the aggregate weight reduction among the large securities that resulted from the rebalancing in accordance with the two weight distribution conditions discussed above.
Finally, to complete the rebalancing process, once the final weighting percentages for each Index security have been set, the Index Shares will be determined anew based upon the last sale prices and aggregate capitalization of the Index at the close of trading on the last calendar day in February, May, August and November. Changes to the Index Shares will be made effective after the close of trading on the third Friday in March, June, September and December, and an adjustment to the divisor is made to ensure continuity of the Index. Ordinarily, new rebalanced Index Shares will be determined by applying the above procedures to the current Index Shares. However, Nasdaq, Inc. may, from time to time, determine rebalanced weights, if necessary, by applying the above procedure to the actual current market capitalization of the Index components. In such instances, Nasdaq, Inc. would announce the different basis for rebalancing prior to its implementation.
During the quarterly rebalancing, data is cutoff as of the previous month end and no changes are made to the Index from that cutoff until the quarterly index share change effective date, except in the case of changes due to corporate actions with an ex-date.
Adjustments for Corporate Actions
Changes in the price and/or Index Shares driven by corporate events such as stock dividends, splits, and certain spin-offs and rights issuances will be adjusted on the ex-date. If the change in total shares outstanding arising from other corporate actions is greater than or equal to 10.0%, the change will be made as soon as practicable. Otherwise, if the change in total shares outstanding is less than 10.0%, then all such changes are accumulated and made effective at one time on a quarterly basis after the close of trading on the third Friday in each of March, June, September, and December. The Index Shares are derived from the security’s total shares outstanding. The Index Shares are adjusted by the same percentage amount by which the total shares outstanding have changed.
The following graph shows the daily historical performance of the Index in the period from January 1, 2015 through January 30, 2025. We obtained this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. On the pricing date, the closing level of the Index was 21,508.12.
Historical Performance of the Index
This historical data on the Index is not necessarily indicative of the future performance of the Index or what the value of the notes may be. Any historical upward or downward trend in the level of the Index during any period set forth above is not an indication that the level of the Index is more or less likely to increase or decrease at any time over the term of the notes.
Before investing in the notes, you should consult publicly available sources for the levels of the Index.
License Agreement
The Notes are not sponsored, endorsed, sold or promoted by Nasdaq, Inc. or its affiliates (Nasdaq, Inc., with its affiliates, are referred to as the “Corporations”). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the Notes. The Corporations make no representation or warranty, express or implied, to the owners 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 Index to track general stock market performance. The Corporations’ only relationship to our affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Licensee”) is in the licensing of the NASDAQ®, OMX®, NASDAQ OMX®, and Index registered trademarks, and
Autocallable Strategic Accelerated Redemption Securities®
TS-11
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
certain trade names of the Corporations or their licensor and the use of the Index which is determined, composed and calculated by Nasdaq, Inc. without regard to Licensee or the Notes. Nasdaq, Inc. has no obligation to take the needs of the Licensee or the owners of the Notes into consideration in determining, composing or calculating the Index. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of the Notes to be issued or in the determination or calculation of the equation by which the Notes are to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Notes.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE Index OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE Index OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE Index OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Autocallable Strategic Accelerated Redemption Securities®
TS-12
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Supplement to the Plan of Distribution; Conflicts of Interest
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 term sheet, less the indicated underwriting discount.
MLPF&S will purchase the notes from BofAS for resale, and will receive a selling concession in connection with the sale of the notes in an amount up to the full amount of underwriting discount set forth on the cover of this term sheet.
We are paying a fee to LFT Securities, LLC for providing certain electronic platform services with respect to this offering, which reduced the economic terms of the notes to you. An affiliate of BofAS has an ownership interest in LFT Securities, LLC.
MLPF&S and BofAS, each a broker-dealer subsidiary of BAC, are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling agent in the case of BofAS, and as dealer, in the case of MLPF&S, in the distribution of the notes. Accordingly, offerings of the notes will conform to the requirements of Rule 5121 applicable to FINRA members. MLPF&S may not make sales in this offering to any of its discretionary accounts without the prior written approval of the account holder.
We will deliver the notes against payment therefor in New York, New York on a date that is greater than one business day 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 one business day, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes more than one business day prior to the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
The notes will not be listed on any securities exchange. In the original offering of the notes, the notes will be sold in minimum investment amounts of 10,000 units. If you place an order to purchase the notes, you are consenting to MLPF&S and/or one of its affiliates acting as a principal in effecting the transaction for your account.
MLPF&S and BofAS may repurchase and resell the notes, with repurchases and resales being made at prices related to then-prevailing market prices or at negotiated prices, and these will include MLPF&S’s and BofAS’s trading commissions and mark-ups or mark-downs. MLPF&S and BofAS may act as principal or agent in these market-making transactions; however, neither is obligated to engage in any such transactions. At their discretion, for a short, undetermined initial period after the issuance of the notes, MLPF&S and 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 MLPF&S or BofAS for the notes will be based on then-prevailing market conditions and other considerations, including the performance of the Index and the remaining term of the notes. However, neither we nor any of our affiliates is obligated to purchase your notes at any price, or at any time, and we cannot assure you that we or any of our affiliates will purchase your notes at a price that equals or exceeds the initial estimated value of the notes.
The value of the notes shown on your account statement will be based on BofAS’s estimate of the value of the notes if BofAS or another of our affiliates were to make a market in the notes, which it is not obligated to do. That estimate will be based upon the price that BofAS may pay for the notes in light of then-prevailing market conditions and other considerations, as mentioned above, and will include transaction costs. At certain times, this price may be higher than or lower than the initial estimated value of the notes.
Autocallable Strategic Accelerated Redemption Securities®
TS-13
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Structuring the Notes
The notes are our debt securities, the return on which is linked to the performance of the Index. 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 that is more favorable to BAC than the rate that it might pay for a conventional fixed or floating rate debt security. This rate, which we refer to in this term sheet as BAC’s internal funding rate, is typically lower than the rate BAC would pay when it issues conventional fixed or floating rate debt securities. 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.
At maturity, if not previously called, we are required to pay the Redemption Amount to holders of the notes, which will be calculated based on the performance of the Index and the $10 per unit principal amount. In order to meet these payment obligations, 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 by seeking bids from market participants, including MLPF&S, 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 Index, the tenor of the notes and the tenor of the hedging arrangements. The economic terms of the notes and their initial estimated value depend in part on the terms of these hedging arrangements. These hedging arrangements are expected to result in a profit to those engaging in the hedging activity, which could be more or less than initially expected, but could also result in a loss.
For further information, see “Risk Factors—Valuation and Market-related Risks” and “—Conflict-related Risks” beginning on page PS-16 and PS-19, respectively, and “Use of Proceeds” on page PS-29 of the accompanying product supplement.
Validity of the Notes
In the opinion of McGuireWoods LLP, as counsel to BofA Finance, as issuer, and BAC, as guarantor, when the trustee has made the appropriate entries or notations on Schedule 1 to the master global note 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 term sheet 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 the legal, valid and binding obligations of BofA Finance, and the related guarantee will be the legal, valid and binding obligation 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 term sheet and is limited to the Delaware General Corporation Law and the Delaware Limited Liability Company Act (including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting either of the foregoing) and the laws of the State of New York 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 opinion letter of McGuireWoods LLP dated December 8, 2022, which has been filed as an exhibit to the Registration Statement (File Nos. 333-268718 and 333-268718-01) of BAC and BofA Finance, filed with the SEC on December 8, 2022.
Autocallable Strategic Accelerated Redemption Securities®
TS-14
Autocallable Strategic Accelerated Redemption Securities®
Linked to the Nasdaq-100 Index®, due February 6, 2030
Summary Tax Consequences
You should consider the U.S. federal income tax consequences of an investment in the notes, including the following:
■   
There is no statutory, judicial, or administrative authority directly addressing the characterization of the notes.
■   
You agree with us (in the absence of an administrative determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as a callable single financial contract with respect to the Index.
■   
Under this characterization and tax treatment of the notes, a U.S. Holder (as defined in the prospectus) generally will recognize capital gain or loss upon maturity or upon a sale, exchange or redemption of the notes prior to maturity. This capital gain or loss generally will be long-term capital gain or loss if you held the notes for more than one year.
■   
No assurance can be given that the Internal Revenue Service (“IRS”) or any court will agree with this characterization and tax treatment.
■   
Under current IRS guidance, withholding on “dividend equivalent” payments (as discussed in the product supplement), if any, will not apply to notes that are issued as of the date of this term sheet unless such notes are “delta-one” instruments.
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. You should review carefully the discussion under the section entitled “U.S. Federal Income Tax Summary” beginning on page PS-51 of the accompanying product supplement.
Where You Can Find More Information
We and BAC have filed a registration statement (including a product supplement, a prospectus supplement, and a prospectus) with the SEC for the offering to which this term sheet relates. Before you invest, you should read the Note Prospectus, including this term sheet, and the other documents relating to this offering that we and BAC have filed with the SEC, for more complete information about us, BAC and this offering. You may get these documents without cost by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, we, any agent, or any dealer participating in this offering will arrange to send you these documents if you so request by calling MLPF&S or BofAS toll-free at 1-800-294-1322.
Autocallable Strategic Accelerated Redemption Securities®
TS-15
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