This pricing supplement, which is not complete and may be changed,
relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying prospectus
supplement and prospectus are not an offer to sell these notes in any country or jurisdiction where such an offer would not be
permitted.
* We or one of our affiliates
may pay varying selling concessions of up to 3.50% in connection with the distribution of the notes to other registered broker-dealers.
RISK FACTORS
Your investment in the notes entails
significant risks, many of which differ from those of a conventional 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.
The notes are subject to our early
redemption.
We may redeem all, but not less than all, of the notes on any interest payment date on or after September 27, 2020
(other than the maturity date). If you intend to purchase the notes, you must be willing to have your notes redeemed as early as
that date. We are generally more likely to elect to redeem the notes during periods when the remaining interest to be accrued on
the notes is to accrue at a rate that is greater than that which we would pay on our other interest bearing debt securities having
a maturity comparable to the remaining term of the notes. No further payments will be made on the notes after they have been redeemed.
If we redeem the notes prior to the
maturity date, you may not be able to reinvest your proceeds from the redemption in an investment with a return that is as high
as the return on the notes would have been if they had not been redeemed, or that has a similar level of risk.
Step-up notes present different investment
considerations than fixed-rate notes.
The rate of interest paid by us on the notes will increase upward from the initial stated
rate of interest on the notes. The notes are callable by us, in whole but not in part, prior to maturity and, therefore, contain
the redemption risk described above. If we do not call the notes, the interest rate will step up as described on the cover of this
pricing supplement. Unless general interest rates rise significantly, you should not expect to earn the highest scheduled interest
rate set forth on the cover of this pricing supplement because the notes are likely to be called prior to maturity if interest
rates remain the same or fall during their term. When determining whether to invest in a step-up fixed rate note, you should not
focus on the highest stated interest rate, which usually is the final step-up rate of interest. You should instead consider, among
other things, the overall annual percentage rate of interest to maturity or the various potential redemption dates as compared
to other investment alternatives.
An investment in the notes may be
more risky than an investment in notes with a shorter term
. The notes have a term of 15 years, subject to our right to call
the notes as set forth in this pricing supplement. By purchasing notes with a relatively longer term, you are more exposed to fluctuations
in interest rates than if you purchased a note with a shorter term. In particular, you may be negatively affected if interest rates
begin to rise, because the likelihood that we will redeem your notes will decrease and the interest rate on the notes may be less
than the amount of interest you could earn on other investments with a similar level of risk available at that time. In addition,
if you tried to sell your notes at such time, their value in any secondary market transaction would also be adversely affected.
Payments on the notes are subject
to our credit risk, and actual or perceived changes in our creditworthiness are expected to affect the value of the notes.
The notes are our senior unsecured debt securities. As a result, your receipt of all payments of interest and principal on the
notes is dependent upon our ability to repay our obligations on the applicable payment date. No assurance can be given as to what
our financial condition will be at any time during the term of the notes or on the maturity date. If we become unable to meet our
financial obligations as they become due, you may not receive the amounts payable under the terms of the notes.
Our credit ratings are an assessment
by ratings agencies of our ability to pay our obligations. Consequently, our perceived creditworthiness and actual or anticipated
decreases in our credit ratings or increases in our credit spreads prior to the maturity date of the notes may adversely affect
the market value of the notes. However, because your return on the notes
depends upon factors in addition to our ability to pay
our obligations, such as the difference between the interest rates accruing on the notes and current
market interest rates, an improvement in our credit ratings will not reduce the other investment risks related to the notes.
We have included in the terms of the notes
the costs of developing, hedging, and distributing them, and the price, if any, at which you may sell the notes in any secondary
market transaction will likely be lower than the public offering price due to, among other things, the inclusion of these costs.
In determining the economic terms of the notes, and consequently the potential return on the notes to you, a number of factors
are taken into account. Among these factors are certain costs associated with developing, hedging, and offering the notes.
Assuming there is no change in market conditions
or any other relevant factors, the price, if any, at which the selling agent or another purchaser might be willing to purchase
the notes in a secondary market transaction is expected to be lower than the price that you paid for them. This is due to, among
other things, the inclusion of these costs, and the costs of unwinding any relating hedging.
The quoted price of any of our affiliates
for the notes could be higher or lower than the price that you paid for them.
We cannot assure you that a trading
market for the 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 our financial performance and other factors. The number of potential buyers of the notes in any secondary
market may be limited. We anticipate that our affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”),
will act as a market-maker for the notes, but neither MLPF&S nor any of our other affiliates is required to do so. MLPF&S
may discontinue its market-making activities as to the notes at any time. To the extent that MLPF&S engages in any market-making
activities, it may bid for or offer the notes. Any price at which MLPF&S 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 MLPF&S
were to cease acting as a market-maker for the notes, it is likely that there would be significantly less liquidity in the secondary
market and there may be no secondary market at all for the notes. In such a case, the price at which the notes could be sold likely
would be lower than if an active market existed and you should be prepared to hold the notes until maturity.
Many economic and other factors
will impact the market value of the notes
. The market for, and the market value of, the notes may be affected by a number of
factors that may either offset or magnify each other, including:
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the time remaining to maturity of the notes;
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the aggregate amount outstanding of the notes;
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our right to redeem the notes on the dates set forth above;
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the level, direction, and volatility of market interest rates generally (in particular, increases in U.S. interest rates, which
may cause the market value of the notes to decrease);
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general economic conditions of the capital markets in the United States;
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geopolitical conditions and other financial, political, regulatory, and judicial events that affect the capital markets generally;
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our financial condition and creditworthiness; and
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any market-making activities with respect to the notes.
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Our trading and hedging activities may
create conflicts of interest with you.
We or one or more of our affiliates, including MLPF&S, may engage in trading activities
related to the notes that are not for your account or on your behalf. We expect to enter into arrangements to hedge the market
risks associated with our obligation to pay the amounts due under the notes. We may seek competitive terms in entering into the
hedging arrangements for the notes, but are not required to do so, and we may enter into such hedging arrangements with one of
our subsidiaries or affiliates. 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, but which could also result in a loss for the hedging counterparty. These
trading and hedging activities may present a conflict of interest between your interest in the notes and the interests we and our
affiliates may have in our proprietary accounts, in facilitating transactions for our other customers, and in accounts under our
management.
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 is based upon the advice of
Morrison & Foerster LLP, our tax counsel. The following discussion is not exhaustive of all possible tax considerations. This
summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated under the
Code by the U.S. Treasury Department (including proposed and temporary regulations), rulings, current administrative interpretations
and official pronouncements of the Internal Revenue Service (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.
The following discussion supplements,
is subject to the same qualifications and limitations as, and should be read in conjunction with the discussion in the prospectus
supplement under the caption “U.S. Federal Income Tax Considerations,” and in the prospectus under the caption “U.S.
Federal Income Tax Considerations.” To the extent inconsistent, the following discussion supersedes the discussion in the
prospectus supplement and the prospectus.
This discussion only applies to U.S.
holders (as defined in the accompanying prospectus) that are not excluded from the discussion of U.S. federal income taxation in
the accompanying prospectus. In particular, this summary is directed solely to U.S. holders that 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 as property
held for investment. This summary assumes that the issue price of the notes, as determined for U.S. federal income tax purposes,
equals the principal amount thereof.
The notes will be treated as debt instruments
for U.S. federal income tax purposes. The notes provide for an initial fixed rate of interest that increases in subsequent periods.
In addition, the notes provide us with the right to redeem the notes on September 27, 2020 and on each subsequent interest payment
date at a redemption price equal to 100% of the principal amount of the notes, plus any accrued and unpaid interest. Solely for
purposes of computing the yield and maturity of a debt instrument, applicable Treasury regulations generally deem an issuer to
exercise a call option in a manner that minimizes the yield on the debt instrument. This assumption is made solely for U.S. federal
income tax purposes of determining whether the notes are issued with original issue discount (“OID”) and is not an
indication of our intention to call or not to call the notes at any time. The yield on the notes would be minimized if we call
the notes on September 27, 2024. Accordingly, solely for purposes of determining the yield and maturity of the notes we are deemed
to exercise our right to redeem the notes on such date and the notes should be treated as maturing on that date. Therefore, the
notes should not be treated as having been issued with OID. If we do not call the notes on such date, solely for purposes of determining
the yield and maturity of the notes, the notes should be deemed to be retired and reissued for an amount equal to their adjusted
issue price on that date. This deemed retirement and reissuance should not result in any taxable gain or loss to you. Solely for
purposes of determining yield and maturity, the deemed reissued notes should be subject to the rules discussed above. By application
of those rules, the deemed reissued notes should be treated as fixed rate debt instruments not bearing OID. The same analysis would
apply to each subsequent interest rate step up date.
You should consult the discussion under
“U.S. Federal Income Tax Considerations—Taxation of Debt Securities—Consequences to U.S. Holders” as it
relates to fixed rate debt instruments not bearing OID in the accompanying prospectus for a description of the consequences to
you of the ownership and disposition of the notes.
Upon the sale, exchange, retirement,
or other disposition of a note, a U.S. holder will recognize gain or loss equal to the difference between the amount realized
upon the sale,
exchange, retirement, or other disposition (less an amount
equal to any accrued interest not previously included in income if the note is disposed of between interest payment dates, which
will be included in income as interest income for U.S. federal income tax purposes) and the U.S. holder’s adjusted tax
basis in the note. A U.S. holder’s adjusted tax basis in a note generally will be the cost of the note to such U.S.
holder, increased by any OID, market discount, de minimis OID, or de minimis market discount previously included in income with
respect to the note, and decreased by the amount of any premium previously amortized to reduce interest on the note and the amount
of any payment (other than a payment of qualified stated interest) received in respect of the note.
Except as discussed in the prospectus
with respect to market discount, gain or loss realized on the sale, exchange, retirement, or other disposition of a note generally
will be capital gain or loss and will be long-term capital gain or loss if the note has been held for more than one year. The ability
of U.S. holders to deduct capital losses is subject to limitations under the Code.
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.
SUPPLEMENTAL
PLAN OF DISTRIBUTION—Conflicts of interest
Our broker-dealer subsidiary, MLPF&S,
will act as our selling agent in connection with the offering of the notes. The selling agent is a party to the Distribution Agreement
described in the “Supplemental Plan of Distribution (Conflicts of Interest)” beginning on page S-23 of the accompanying
prospectus supplement.
The selling agent will receive the
compensation set forth on the cover page of this pricing supplement as to the notes sold through its efforts. The selling agent
is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Accordingly, the offering of the notes
will conform to the requirements of FINRA Rule 5121.
The selling agent is not acting as
your fiduciary or advisor
solely as a result of the offering of the notes
,
and you should not rely upon any communication from the selling agent in connection with the notes as investment advice or a recommendation
to purchase the notes. You should make your own investment decision regarding the notes after consulting with your legal, tax,
and other advisors.
Under the terms of our distribution
agreement with MLPF&S, MLPF&S will purchase the notes from us on the issue date as principal at the purchase price indicated
on the cover of this pricing supplement, less the indicated underwriting discount.
MLPF&S may 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. MLPF&S 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.
MLPF&S and any of our other broker-dealer
affiliates may use this pricing supplement, and the accompanying 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. Our affiliates may act as principal or agent in these transactions, and any such
sales will be made at prices related to prevailing market prices at the time of the sale.
ERISA
CONSIDERATIONS
Each fiduciary of a pension, profit-sharing,
or other employee benefit plan subject to the Employee Retirement Income Security Act of 1974 (“ERISA”) (a “Plan”),
should consider the fiduciary standards of ERISA in the context of the Plan’s particular circumstances before authorizing
an investment in the notes. Accordingly, among other factors, the fiduciary should consider whether the investment would satisfy
the prudence and diversification requirements of ERISA and would be consistent with the documents and instruments governing the
Plan.
In addition, we and certain of our
subsidiaries and affiliates, may be each considered a party in interest within the meaning of ERISA, or a disqualified person (within
the meaning of the Code), with respect to many Plans, as well as many individual retirement accounts and Keogh plans (also “Plans”).
Prohibited transactions within the meaning of ERISA or the Code would likely arise, for example, if the notes are acquired by or
with the assets of a Plan with respect to which we or any of our affiliates is a party in interest, unless the notes are acquired
under an exemption from the prohibited transaction rules. A violation of these prohibited transaction rules could result in an
excise tax or other liabilities under ERISA and/or Section 4975 of the Code for such persons, unless exemptive relief is available
under an applicable statutory or administrative exemption.
Under ERISA and various prohibited
transaction class exemptions (“PTCEs”) issued by the U.S. Department of Labor, exemptive relief may be available for
direct or indirect prohibited transactions resulting from the purchase, holding, or disposition of the notes. Those exemptions
are PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE 95-60 (for certain transactions involving
insurance company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment funds), PTCE 90-1
(for certain transactions involving insurance company separate accounts), PTCE 84-14 (for certain transactions determined by independent
qualified asset managers), and the exemption under Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code for certain
arm’s-length transactions with a person that is a party in interest solely by reason of providing services to Plans or being
an affiliate of such a service provider (the “Service Provider Exemption”).
Because we may be considered a party
in interest with respect to many Plans, the notes may not be purchased, held, or disposed of by any Plan, any entity whose underlying
assets include plan assets by reason of any Plan’s investment in the entity (a “Plan Asset Entity”) or any person
investing plan assets of any Plan, unless such purchase, holding, or disposition is eligible for exemptive relief, including relief
available under PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or the Service Provider Exemption, or such purchase, holding, or disposition
is otherwise not prohibited. Any purchaser, including any fiduciary purchasing on behalf of a Plan, transferee or holder of the
notes will be deemed to have represented, in its corporate and its fiduciary capacity, by its purchase and holding of the notes
that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing such notes on behalf of or with plan assets of any
Plan or any plan subject to similar laws or (b) its purchase, holding, and disposition are eligible for exemptive relief or such
purchase, holding, and disposition are not prohibited by ERISA or Section 4975 of the Code or similar laws.
Further, any person acquiring or holding
the notes on behalf of any plan or with any plan assets shall be deemed to represent on behalf of itself and such plan that (x)
the plan is paying no more than, and is receiving no less than, adequate consideration within the meaning of Section 408(b)(17)
of ERISA in connection with the transaction or any redemption of the notes, (y) none of us, MLPF&S, or any other selling agent
directly or indirectly exercises any discretionary authority or control or renders investment advice or otherwise acts in a fiduciary
capacity with respect to the assets of the plan within the meaning of ERISA and (z) in making the foregoing representations and
warranties, such person has applied sound business principles in determining whether fair market value will be paid, and has made
such determination acting in good faith.
The fiduciary investment considerations
summarized above generally apply to employee benefit plans maintained by private-sector employers and to individual retirement
accounts and other arrangements subject to Section 4975 of the Code, but generally do not apply to governmental plans (as defined
in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA), and foreign plans (as described in Section
4(b)(4) of ERISA). However, these other plans may be subject to similar provisions under applicable federal, state, local, foreign,
or other regulations, rules, or laws (“similar laws”). The fiduciaries of plans subject to similar laws should also
consider the foregoing issues in general terms as well as any further issues arising under the applicable similar laws.
In addition, any purchaser, that is
a Plan or a Plan Asset Entity or that is acquiring the notes on behalf of a Plan or a Plan Asset Entity, including any fiduciary
purchasing on behalf of a Plan or Plan Asset entity, will be deemed to have represented, in its corporate and its fiduciary capacity,
by its purchase and holding of the notes that (a) none of us, MLPF&S, or any of our other affiliates is a “fiduciary”
(under Section 3(21) of ERISA, or under any final or proposed regulations thereunder, or with respect to a governmental, church,
or foreign plan under any similar laws) with respect to the acquisition, holding or disposition of the notes, or as a result of
any exercise by us or our affiliates of any rights in connection with the notes, (b) no advice provided by us or any of our affiliates
has formed a primary basis for any investment decision by or on behalf of such purchaser in connection with the notes and the transactions
contemplated with respect to the notes, and (c) such purchaser recognizes and agrees that any communication from us or any of our
affiliates to the purchaser with respect to the notes is not intended by us or any of our affiliates to be impartial investment
advice and is rendered in its capacity as a seller of such notes and not a fiduciary to such purchaser. Purchasers of the notes
have exclusive responsibility for ensuring that their purchase, holding, and disposition of the notes do not violate the prohibited
transaction rules of ERISA or the Code or any similar regulations applicable to governmental or church plans, as described above.
This discussion is a general summary
of some of the rules which apply to benefit plans and their related investment vehicles. This summary does not include all of the
investment considerations relevant to Plans and other benefit plan investors such as governmental, church, and foreign plans and
should not be construed as legal advice or a legal opinion. Due to the complexity of these rules and the penalties that may be
imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries or other persons
considering purchasing the notes on behalf of or with “plan assets” of any Plan or other benefit plan investor consult
with their legal counsel prior to directing any such purchase.