This amended and restated preliminary pricing supplement amends and restates in full the preliminary pricing supplement dated May 15, 2023 for CUSIP 09709T7C9.
This pricing supplement, which is not complete and may be changed, relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying product supplement, prospectus supplement and prospectus are not an offer to sell these Notes in any country or jurisdiction where such an offer would not be permitted.
None of the Securities and Exchange Commission
(the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities
or determined if this Note Prospectus (as defined on page PS-21) is truthful or complete. Any representation to the contrary is a criminal
offense.
Payment on the Notes depends
on the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance 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 BAC’s affiliates enter into. BAC’s internal funding
rate is typically lower than the rate it would pay when it issues conventional fixed or floating rate debt securities. This difference
in funding rate, as well as the underwriting discount and the hedging related charges described below (see “Risk Factors”
beginning on page PS-6), will reduce the economic terms of the Notes to you and the initial estimated value of the Notes. Due to these
factors, the public offering price you pay to purchase the Notes will be greater than the initial estimated value of the Notes as of the
pricing date.
The initial estimated value
range of the Notes as of the date of this pricing supplement is set forth on the cover page of this pricing supplement. The final pricing
supplement will set forth the initial estimated value of the Notes as of the pricing date. For more information about the initial estimated value and the structuring
of the Notes, see “Risk Factors” beginning on page PS-6 and “Structuring the Notes” on page PS-18.
On the Maturity Date, you will receive
a cash payment per $1,000 in principal amount of Notes determined as follows:
All payments described above are subject to Issuer and
Guarantor credit risk.
For recent actual values of the Underlyings,
see “The Underlyings” section below. All payments on the Notes are subject to Issuer and Guarantor credit risk.
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 values
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, the Guarantor or one or more of our
other affiliates, including BofAS, may also engage in hedging activities that could affect the values of the Underlyings on the pricing
date. In addition, these hedging activities, including the unwinding of a hedge, may decrease the market value of your Notes prior to
maturity, and may affect the amounts to be paid on the Notes. We, the Guarantor or one or more of our other affiliates, including BofAS,
may purchase or otherwise acquire a long or short position in the Notes and may hold or resell the Notes. For example, BofAS may enter
into these transactions in connection with any market making activities in which it engages. We cannot assure you that these activities
will not adversely affect the values of the Underlyings, the market value of your Notes prior to maturity or the amount payable on the
Notes.
weather conditions, act of governmental authority, labor
difficulty, etc.), may adversely affect the value of or trading in the Gold Spot Price, or the manner in which it is calculated, and therefore,
the value of the Notes.
Additional Risk Factors Relating to the SPX
| • | Our offering of the Notes does not constitute a recommendation
of the SPX. You should not take our offering of the Notes as an expression of our views about how the SPX will perform in the future
or as a recommendation to invest in the SPX, including through an investment in the Notes. As we are part of a global financial institution,
we, the Guarantor and our other affiliates may, and often do, have positions (both long and short) in the SPX that may conflict with an
investment in the Notes. You should undertake an independent determination of whether an investment in the Notes is suitable for you in
light of your specific investment objectives, risk tolerance and financial resources. |
| ● | Our affiliates may publish research, express opinions
or provide recommendations that are inconsistent with investing in the SPX and any such research, opinions or recommendations could adversely
affect the value of the SPX. In the ordinary course of business, our affiliates may have published research reports, expressed opinions
or provided recommendations on the SPX or the equity securities represented by the SPX, the applicable financial markets or other matters
that may influence the value of the SPX and the value of the Notes, and may do so in the future. These research reports, opinions or recommendations
may be communicated to our clients and clients of our affiliates and may be inconsistent with purchasing or holding the Notes. Any research
reports, opinions or recommendations expressed by our affiliates may not be consistent with each other and may be modified from time to
time without notice. Moreover, other professionals who deal in markets relating to the SPX may at any time have significantly different
views from those of our affiliates. For these reasons, you are encouraged to derive information concerning the SPX or the securities represented
thereby from multiple sources, and you should not rely on the views expressed by our affiliates. |
| ● | You will have no rights as a security holder, you will
have no rights to receive the securities included in the SPX, and you will not be entitled to dividends or other distributions by the
issuers of these securities. The Notes are our debt securities. They are not equity instruments, shares of stock, or securities of
any other issuer, other than the related guarantees, which are the securities of the Guarantor. Investing in the Notes will not make you
a holder of any of the securities included in the SPX. You will not have any voting rights, any rights to receive dividends or other distributions,
or any other rights with respect to those securities. The payment on the Notes will not reflect the value of dividends paid or distributions
made on the equity securities represented by the SPX or any other rights associated with those equity securities. As a result, the return
on your Notes may not reflect the return you would realize if you actually owned those securities and received the dividends paid or other
distributions made in connection with them. Additionally, the level of the SPX reflects only the prices of the securities included in
the SPX and does not take into consideration the value of dividends paid on those securities. Your Notes will be paid in cash and you
have no right to receive delivery of any of these securities. |
| ● | The publisher of the SPX may adjust the SPX in a way
that affects its levels and has no obligation to consider your interests. We, the Guarantor and our affiliates, including the Selling
Agents, have no affiliation with the publisher of the SPX (the “Index Publisher”). Consequently, we have no control
of the actions of the Index Publisher. The Index Publisher can add, delete, or substitute the components included in the SPX or make other
methodological changes that could change its level. A new security included in the SPX may perform significantly better or worse than
the replaced security, and the performance will impact the level of the SPX. Additionally, the Index Publisher may alter, discontinue,
or suspend calculation or dissemination of the SPX. Any of these actions could adversely affect the value of your Notes. The Index Publisher
will have no obligation to consider your interests in calculating or revising the SPX. |
| ● | The business activities of us, the Guarantor and any
of our other affiliates, including the Selling Agents, relating to the companies included in the SPX may create conflicts of interest
with you. We, the Guarantor and/or our other affiliates, including the Selling Agents, at the time of any offering of the Notes or
in the future, may engage in business with the companies included in the SPX, including making loans to or equity investments in, or providing
investment banking, asset management, or other services to, those companies, their affiliates and their competitors. |
In connection with these activities, we,
the Guarantor or our other affiliates, including the Selling Agents, may receive information about those companies that we or they will
not divulge to you or other third parties. One or more of our affiliates may have published, and in the future may publish, research reports
on one or more of these companies. This research is modified from time to time without notice and may express opinions or provide recommendations
that are inconsistent with purchasing or holding your Notes. Any of these activities may adversely affect the value of the SPX and, consequently,
the market value of your Notes. We, the Guarantor and our other affiliates, including the Selling Agents, do not make any representation
to any purchasers of the Notes regarding any matters whatsoever relating to the issuers of the securities represented by the SPX. Any
prospective purchaser of the Notes should undertake an independent investigation of the companies represented by the SPX to a level that,
in its judgment, is appropriate to make an informed decision regarding an investment in the Notes. The selection of the SPX does not reflect
any investment recommendations from us, the Guarantor or our other affiliates, including the Selling Agents.
| ● | We, the Guarantor and any of our other affiliates, including
the Selling Agents, do not control any company included in the SPX and have not verified any disclosure made by any of those companies.
We, the Guarantor or our other affiliates, including the Selling Agents, currently, or in the future, may engage in business with the
Index Publisher or companies represented by the SPX, and we, the Guarantor or our other affiliates, including the Selling Agents, may
from time to time own securities of companies represented by the SPX. However, none |
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DIGITAL RETURN NOTES | PS-9 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
of us, the Guarantor or any of our other affiliates, including the Selling
Agents, have the ability to control the actions of the Index Publisher or any of these companies or have undertaken any independent review
of, or made any due diligence inquiry with respect to, the Index Publisher or any of these companies, unless (and only to the extent that)
our securities or the securities of the Guarantor or our other affiliates are included in the SPX. We, the Guarantor and any of our other
affiliates, including the Selling Agents, are not responsible for the calculation of the SPX. You should make your own investigation into
the SPX.
None of the Index Publisher or its affiliates,
or any companies represented by the SPX, will be involved in any offering of the Notes or will have any obligation of any sort with respect
to the Notes. As a result, none of those companies will have any obligation to take your interests as holders of the Notes into consideration
for any reason, including taking any corporate actions that might adversely affect the value of the securities included in the SPX or
the value of the Notes.
| ● | We cannot assure you that publicly available information
provided about the SPX is accurate or complete. All disclosures relating to the SPX contained herein is derived from publicly available
documents and other publicly available information, without independent verification. None of us, the Guarantor, the Selling Agents or
our other affiliates has participated in, or will participate in, the preparation of those documents or make any due diligence inquiry
with respect to the SPX in connection with the offering of the Notes. We and the Guarantor do not make any representation that those publicly
available documents or any other publicly available information regarding the SPX is accurate or complete. We and the Guarantor are not
responsible for the public disclosure of information by or about the SPX. As a result we cannot give any assurance that all events which
could impact the SPX or the accuracy or completeness of those public documents or information have been publicly disclosed. Any subsequent
disclosure or future failure to disclose material events concerning the SPX could affect its value and therefore, the value of the Notes.
You must rely on your own evaluation of the merits of an investment linked to the SPX. |
| ● | The historical performance of the SPX should not be taken
as an indication of its performance during the term of the Notes. The SPX may perform better or worse than it has historically during
the term of the Notes. The historical performance of the SPX should not be taken as an indication of its future performance. |
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DIGITAL RETURN NOTES | PS-10 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
Additional Terms of the Notes
The following shall supersede and replace the section entitled Description
of the Notes— Market Disruption Events—Observation Values and Ending Values—Market Measure that is a Commodity or Futures
Contract” in the accompanying product supplement:
If, for either Underlying (i) the scheduled Valuation Date is determined
by the calculation agent not to be a Market Measure Business Day by reason of an extraordinary event, occurrence, declaration or otherwise,
or (ii) there is a Market Disruption Event on that day (any such day in either (i) or (ii) being a “non-calculation day”),
the Valuation Date will be the immediately succeeding Market Measure Business Day during which no Market Disruption Event occurs or is
continuing; provided that the Ending Value will not be determined on a date later than the first scheduled Market Measure Business Day
after the scheduled Valuation Date, and if that day is not a Market Measure Business Day, or if there is a Market Disruption Event on
that date, the calculation agent will determine the Ending Value (or, if not determinable, estimate) in a manner which the calculation
agent considers commercially reasonable under the circumstances on that first scheduled Market Measure Business Day.
For the avoidance of doubt, the occurrence of a Market Disruption Event
or non-Market Measure Business Day as to either Underlying as described above will not affect the determination of the Ending Value of
the other Underlying that is not so affected.
With respect to the SPX only, the following supersedes
and supplements any contrary information included in the accompanying product supplement, prospectus supplement and prospectus.
A “Market Measure Business Day” means
a day on which (1) the applicable exchange(s), or their successors, are open for trading and (2) the SPX or any successor index
is calculated and published.
Market Disruption Events
For the SPX, “Market Disruption Event” means one or
more of the following events, as determined by the calculation agent in its sole discretion:
|
(A) |
the suspension of or material limitation on trading, in each case, for more than two consecutive hours of trading, or during the one-half hour period preceding the close of trading, on the primary exchange where the securities included in the SPX trade, as determined by the calculation agent (without taking into account any extended or after-hours trading session), in 20% or more of the securities which then comprise the SPX or any Successor Index (as defined in “—Discontinuance of an Index”); or |
|
(B)
|
the suspension of or material limitation on trading, in each case, for more than two consecutive hours of trading, or during the one-half hour period preceding the close of trading, on the primary exchange that trades options contracts or futures contracts related to the SPX, as determined by the calculation agent (without taking into account any extended or after-hours trading session), in options contracts or futures contracts related to the SPX, or any Successor Index, whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise. |
For the purpose of determining whether a Market Disruption Event as to
the SPX has occurred:
|
(1) |
a limitation on the hours in a Market Measure Business Day and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange; |
|
(2) |
a decision to permanently discontinue trading in the relevant futures or options contracts related to the SPX, or any Successor Index, will not constitute a Market Disruption Event; |
|
(3) |
a suspension in trading in a futures or options contract on the SPX, or any Successor Index, by a major securities market by reason of (a) a price change violating limits set by that securities market, (b) an imbalance of orders relating to those contracts, or (c) a disparity in bid and ask quotes relating to those contracts will constitute a suspension of or material limitation on trading in futures or options contracts related to the SPX or any Successor Index; |
|
(4) |
a suspension of or material limitation on trading on the relevant exchange will not include any time when that exchange is closed for trading under ordinary circumstances; and |
|
(5) |
For the purpose of clause (A) above, any limitations on trading during significant market fluctuations under NYSE Rule 80B, or any applicable rule or regulation enacted or promulgated by the NYSE or any other self-regulatory organization or the SEC of similar scope as determined by the calculation agent, will be considered “material.” |
Adjustments to the SPX
After the pricing date, the Index Publisher of the SPX may make a material
change in the method of calculating the SPX or in another way that changes the SPX such that it does not, in the opinion of the calculation
agent, fairly represent the level of the SPX had those changes or modifications not been made. In this case, the calculation agent will,
at the close of business in New York, New York, on each date that the closing level is to be calculated under the terms of the Notes,
make adjustments to the SPX. Those adjustments will be made in good faith as necessary to arrive at a calculation of a level of the SPX
as if those changes or modifications had not been made, and calculate the closing level of the SPX, as so adjusted.
Discontinuance of the SPX
After the pricing date, the Index Publisher may discontinue publication
of the SPX. The Index Publisher or another entity may then publish a substitute index that the calculation agent determines, in its sole
discretion, to be comparable to the original Index (a “Successor Index”). If this occurs, the calculation agent will
substitute the Successor Index as calculated by the relevant Index Publisher or any other entity and calculate the level of the index
at any time required under the terms of the Notes. If the calculation agent selects a Successor Index, the calculation agent will give
written notice of the
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DIGITAL RETURN NOTES | PS-11 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
selection to the trustee, to us, to the Guarantor, and to the holders of the Notes.
If the Index Publisher discontinues publication of the SPX before the last
date on which the level of the SPX must be determined for purposes of the Notes, and the calculation agent does not select a Successor
Index, then on each relevant day that the level of the SPX must be determined, until the earlier to occur of:
|
• |
|
the determination of the final payment on the Notes; and |
|
• |
|
a determination by the calculation agent that a Successor Index is available, |
the calculation agent will compute a substitute level for the SPX
in accordance with the procedures last used to calculate the SPX before any discontinuance. The calculation agent will make available
to holders of the Notes information regarding those levels by means of Bloomberg L.P., Thomson Reuters, a website, or any other means
selected by the calculation agent in its reasonable discretion.
If a Successor Index is selected or the calculation agent calculates a
level as a substitute for the SPX, the Successor Index or level will be used as a substitute for all purposes, including for the purpose
of determining whether a Market Disruption Event exists.
Notwithstanding these alternative arrangements, any modification or discontinuance
of the publication of the SPX may adversely affect trading in the Notes.
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DIGITAL RETURN NOTES | PS-12 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
The Underlyings
All disclosures
contained in this pricing supplement regarding the Underlyings, including, without limitation, their make-up, 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, the LBMA with respect to the Gold Spot Price, and S&P Dow Jones Indices LLC (“SPDJI”) with respect to the
SPX. The consequences of the LBMA discontinuing publication of the Gold Spot Price are discussed in “Description of the Notes—Discontinuance
of a Market Measure” in the accompanying product supplement. The consequences of SPDJI discontinuing publication of the SPX are
discussed in “Additional Terms of the Notes” above. 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 underlying. 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 Gold Spot Price
In this pricing supplement, when we refer
to the Gold Spot Price, we mean the official U.S. dollar LBMA Gold Price PM (expressed in dollars per troy ounce) calculated and administered
by IBA and published by the LBMA (Bloomberg: “GOLDLNPM <cmdty>”) (or any official successor thereto).
Although the market for physical gold is
global, most over the counter market trades are cleared through London. In addition to coordinating market activities, the LBMA acts as
the principal point of contact between the market and its regulators. A primary function of the LBMA is its involvement in the promotion
of refining standards by maintenance of the “London Good Delivery Lists,” which are the lists of LBMA accredited melters and
assayers of gold. The LBMA also coordinates market clearing and vaulting, promotes good trading practices and develops standard documentation.
IBA, on behalf of LBMA, has assumed responsibility
for establishing the LBMA Gold Price as of March 20, 2015. In April 2017, IBA introduced central clearing to the gold auction. Central
clearing removes the need for firms to have large bilateral credit lines in place with each other in order to become a direct participant.
This opens up the auction to a broader cross section of the market and also facilitates greater volume in the auction.
IBA operates electronic auctions for spot,
unallocated Loco London gold (gold bullion that is physically held in London), providing a market-based platform for buyers and sellers
to trade. The auctions are run at 10:30am and 3:00pm London time. The final auction price is published to the market as LBMA Gold Price
AM and LBMA Gold Price PM.
The price formation for the gold auction
is in USD only. The final price is converted into the benchmark in other currencies including: Australian Dollars; British Pounds, Canadian
Dollars, Euros, Onshore and Offshore Yuan, Indian Rupees, Japanese Yen, Malaysian Ringgit, Russian Rubles, Singapore Dollars, South African
Rand, Swiss Francs, New Taiwan Dollars, Thai Baht and Turkish Lira. The benchmarks in other currencies are not tradeable directly through
the auction.
The methodology is reviewed by the Precious
Metals Oversight Committee as documented in its Terms of Reference. The frequency of reviews is set by the Oversight Committee through
its Calendar of Agenda Items.
The auctions run in rounds of 30 seconds.
At the start of each round, IBA publishes a price for that round. Participants then have 30 seconds to enter, change or cancel their orders
(how much gold they want to buy or sell at that price). At the end of each round order entry is frozen and the system checks to see if
the difference between buying and selling (the imbalance) is within the imbalance threshold (normally 10,000 oz. for gold).If the imbalance
is outside of the threshold at the end of a round, then the auction is not balanced, the price is adjusted and a new round starts. If
the imbalance is within the threshold then the auction is finished and the price is set. Any imbalance is shared equally between all direct
participants (even if they did not place orders or did not log in) and the net volume for each participant trades at the final price.
The final price is then published as the LBMA Gold Price in US Dollars and also converted into the benchmarks in other currencies using
foreign exchange rates from when the final round ended.
The prices during the auction are determined
by an algorithm that takes into account current market conditions and the activity in the auction. Each auction is actively supervised
by IBA staff.
If IBA discovers an error during an auction
round, the auction round could be stopped and restarted. If IBA makes an error in an auction which is discovered after an auction is finished,
the auction could not be rerun, but IBA could replace the published auction price with a No Publication. If a participant makes an error
which is discovered after an auction is finished, the auction could not be rerun. If fewer than three direct participants are present
for the auction and IBA therefore publishes a price without conducting an auction but IBA publishes an incorrect price, the incorrect
price could be amended if the error were discovered within 30 minutes after publication. If IBA publishes an incorrect non-USD price,
the incorrect non-USD price could be amended if the error were discovered within 30 minutes after publication.
Historical Performance of the Gold Spot Price
The following graph sets forth the
daily historical performance of the Gold Spot Price in the period from January 2, 2018 through May 9, 2023. We obtained this historical
data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P.
The horizontal line in the graph represents the Gold Spot Price’s hypothetical Threshold Value of $2,030.20, which is 100% of the
Gold Spot Price’s hypothetical Starting Value of $2,030.20, which was its closing price on May 9, 2023. The actual Starting Value
and Threshold Value will be determined on the pricing date.
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DIGITAL RETURN NOTES | PS-13 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
![](https://content.edgar-online.com/edgar_conv_img/2023/05/26/0001481057-23-003575_image_006.gif)
This historical data on the Gold
Spot Price is not necessarily indicative of the future performance of the Gold Spot Price or
what the value of the Notes may be. Any historical upward or downward trend in the Gold Spot Price during
any period set forth above is not an indication that the Gold Spot Price 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 Gold Spot Price.
|
DIGITAL RETURN NOTES | PS-14 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
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. S&P Dow Jones Indices LLC (“SPDJI”), the sponsor of the SPX, may from time to time,
in its sole discretion, add companies to, or delete companies from, the SPX to achieve the objectives stated above.
Company additions to the SPX must have an
unadjusted company market capitalization of $14.6 billion or more (an increase from the previous requirement of an unadjusted company
market capitalization of $13.1 billion or more).
SPDJI calculates the SPX by reference to the
prices of the constituent stocks of the SPX without taking account of the value of dividends paid on those stocks. As a result, the return
on the Notes will not reflect the return you would realize if you actually owned the SPX constituent stocks and received the dividends
paid on those stocks.
Computation of the SPX
While SPDJI currently employs the following
methodology to calculate the SPX, no assurance can be given that SPDJI will not modify or change this methodology in a manner that may
affect payments on the Notes.
Historically, the market value of any component
stock of the SPX was calculated as the product of the market price per share and the number of then outstanding shares of such component
stock. In March 2005, SPDJI began shifting the SPX halfway from a market capitalization weighted formula to a float-adjusted formula,
before moving the SPX to full float adjustment on September 16, 2005. SPDJI’s criteria for selecting stocks for the SPX did not
change with the shift to float adjustment. However, the adjustment affects each company’s weight in the SPX.
Under float adjustment, the share counts used
in calculating the SPX reflect only those shares that are available to investors, not all of a company’s outstanding shares. Float
adjustment excludes shares that are closely held by control groups, other publicly traded companies or government agencies.
In September 2012, all shareholdings representing
more than 5% of a stock’s outstanding shares, other than holdings by “block owners,” were removed from the float for
purposes of calculating the SPX. Generally, these “control holders” will include officers and directors, private equity, venture
capital and special equity firms, other publicly traded companies that hold shares for control, strategic partners, holders of restricted
shares, ESOPs, employee and family trusts, foundations associated with the company, holders of unlisted share classes of stock, government
entities at all levels (other than government retirement/pension funds) and any individual person who controls a 5% or greater stake in
a company as reported in regulatory filings. However, holdings by block owners, such as depositary banks, pension funds, mutual funds
and ETF providers, 401(k) plans of the company, government retirement/pension funds, investment funds of insurance companies, asset managers
and investment funds, independent foundations and savings and investment plans, will ordinarily be considered part of the float.
Treasury stock, stock options, restricted
shares, equity participation units, warrants, preferred stock, convertible stock, and rights are not part of the float. Shares held in
a trust to allow investors in countries outside the country of domicile, such as depositary shares and Canadian exchangeable shares, are
normally part of the float unless those shares form a control block. If a company has multiple classes of stock outstanding, shares in
an unlisted or non-traded class are treated as a control block.
For each stock, an investable weight factor
(“IWF”) is calculated by dividing the available float shares by the total shares outstanding. Available float shares are defined
as the total shares outstanding less shares held by control holders. This calculation is subject to a 5% minimum threshold for control
blocks. For example, if a company’s officers and directors hold 3% of the company’s shares, and no other control group holds
5% of the company’s shares, SPDJI would assign that company an IWF of 1.00, as no control group meets the 5% threshold. However,
if a company’s officers and directors hold 3% of the company’s shares and another control group holds 20% of the company’s
shares, SPDJI would assign an IWF of 0.77, reflecting the fact that 23% of the company’s outstanding shares are considered to be
held for control. As of July 31, 2017, companies with multiple share class lines are no longer eligible for inclusion in the SPX. Constituents
of the SPX prior to July 31, 2017 with multiple share class lines will be grandfathered in and continue to be included in the SPX. If
a constituent company of the SPX reorganizes into a multiple share class line structure, that company will remain in the SPX at the discretion
of the S&P Index Committee in order to minimize turnover.
The SPX is calculated using a base-weighted
aggregate methodology. The level of the SPX reflects the total market value of all component stocks relative to the base period of the
years 1941 through 1943. An indexed number is used to represent the results of this calculation in order to make the level easier to work
with and track over time. The actual total market value of the component stocks during the base period of the years 1941 through 1943
has been set to an indexed level of 10. This is often indicated by the notation 1941- 43 = 10. In practice, the daily calculation of the
SPX is computed by dividing the total market value of the component stocks by the “index divisor.” By itself, the index divisor
is an arbitrary number. However, in the context of the calculation of the SPX, it serves as a link to the original base period level of
the SPX. The index divisor keeps the SPX comparable over time and is the manipulation point for all adjustments to the SPX, which is index
maintenance.
Index Maintenance
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DIGITAL RETURN NOTES | PS-15 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
Index maintenance includes monitoring and
completing the adjustments for company additions and deletions, share changes, stock splits, stock dividends, and stock price adjustments
due to company restructuring or spinoffs. Some corporate actions, such as stock splits and stock dividends, require changes in the common
shares outstanding and the stock prices of the companies in the SPX, and do not require index divisor adjustments.
To prevent the level of the SPX from changing
due to corporate actions, corporate actions which affect the total market value of the SPX require an index divisor adjustment. By adjusting
the index divisor for the change in market value, the level of the SPX remains constant and does not reflect the corporate actions of
individual companies in the SPX. Index divisor adjustments are made after the close of trading and after the calculation of the SPX closing
level.
Changes in a company’s shares outstanding
of 5.00% or more due to mergers, acquisitions, public offerings, tender offers, Dutch auctions, or exchange offers are made as soon as
reasonably possible. Share changes due to mergers or acquisitions of publicly held companies that trade on a major exchange are implemented
when the transaction occurs, even if both of the companies are not in the same headline index, and regardless of the size of the change.
All other changes of 5.00% or more (due to, for example, company stock repurchases, private placements, redemptions, exercise of options,
warrants, conversion of preferred stock, notes, debt, equity participation units, at-the-market offerings, or other recapitalizations)
are made weekly and are announced on Fridays for implementation after the close of trading on the following Friday. Changes of less than
5.00% are accumulated and made quarterly on the third Friday of March, June, September, and December, and are usually announced two to
five days prior.
If a change in a company’s shares outstanding
of 5.00% or more causes a company’s IWF to change by five percentage points or more, the IWF is updated at the same time as the
share change. IWF changes resulting from partial tender offers are considered on a case by case basis.
Historical Performance of the SPX
The following graph sets forth the daily historical
performance of the SPX in the period from January 2, 2018 through May 9, 2023. We obtained this historical data from Bloomberg L.P. We
have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. The horizontal line in the
graph represents the SPX’s hypothetical Threshold Value of 4,119.17, which is 100% of the SPX’s hypothetical Starting Value
of 4,119.17, which was its closing level on May 9, 2023. The actual Starting Value and Threshold Value will be determined on the pricing
date.
![](https://content.edgar-online.com/edgar_conv_img/2023/05/26/0001481057-23-003575_image_007.gif)
This historical data on the SPX is not necessarily
indicative of the future performance of the SPX or what the value of the Notes may be. Any historical upward or downward trend in the
closing level of the SPX during any period set forth above is not an indication that the closing level of the SPX 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 closing levels of the SPX.
License Agreement
S&P®
is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed for use by
S&P Dow Jones Indices LLC. “Standard & Poor’s®,”
“S&P 500®” and “S&P®”
are trademarks of S&P. These trademarks have been sublicensed for certain purposes by our affiliate, Merrill Lynch, Pierce, Fenner
& Smith Incorporated. The SPX is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Notes are not sponsored, endorsed, sold
or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P Dow
Jones Indices”). S&P Dow Jones Indices make no representation or warranty, express or implied, to the holders of the Notes or
any member of the public regarding the advisability of investing in securities generally or in the Notes particularly or the ability of
the SPX to track general market performance. S&P Dow Jones Indices’ only relationship to Merrill Lynch, Pierce, Fenner &
Smith Incorporated with respect to the SPX is the licensing of the SPX and certain trademarks, service marks and/or trade names of S&P
Dow Jones Indices and/or its third party licensors. The
|
DIGITAL RETURN NOTES | PS-16 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
SPX is determined, composed and calculated by
S&P Dow Jones Indices without regard to us, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or the Notes. S&P Dow Jones
Indices have no obligation to take our needs, BAC’s needs or the needs of Merrill Lynch, Pierce, Fenner & Smith Incorporated
or holders of the Notes into consideration in determining, composing or calculating the SPX. S&P Dow Jones Indices are not responsible
for and have not participated in the determination of the prices and amount of the Notes or the timing of the issuance or sale of the
Notes or in the determination or calculation of the equation by which the Notes are to be converted into cash. S&P Dow Jones Indices
have no obligation or liability in connection with the administration, marketing or trading of the Notes. There is no assurance that investment
products based on the SPX will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC
and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation
by S&P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding
the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to the Notes currently
being issued by us, but which may be similar to and competitive with the Notes. In addition, CME Group Inc. and its affiliates may trade
financial products which are linked to the performance of the SPX. It is possible that this trading activity will affect the value of
the Notes.
S&P DOW JONES INDICES DO NOT GUARANTEE
THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE SPX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT
NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS
TO BE OBTAINED BY US, BAC, BOFAS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR
ENTITY FROM THE USE OF THE SPX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER
SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT
LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN
S&P DOW JONES INDICES AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
.
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DIGITAL RETURN NOTES | PS-17 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
Supplement to the Plan of Distribution; Role of BofAS
and Conflicts of Interest
BofAS, a broker-dealer affiliate of ours,
is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling agent in the distribution
of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121. BofAS may not make sales in
this offering to any of its discretionary accounts without the prior written approval of the account holder.
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 $990.00 per $1,000 in principal amount of Notes.
BofAS and any of our other broker-dealer
affiliates may use this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus for offers and
sales in secondary market transactions and market-making transactions in the Notes. However, they are not obligated to engage in such
secondary market transactions and/or market-making transactions. These broker-dealer affiliates may act as principal or agent in these
transactions, and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion, for a short,
undetermined initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market at a price that
may exceed the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on then-prevailing market
conditions and other considerations, including the performance of the 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.
Sales Outside of the United States
The Notes have not been approved for public
sale in any jurisdiction outside of the United States. There has been no registration or filing as to the Notes with any regulatory, securities,
banking, or local authority outside of the United States and no action has been taken by BofA Finance, BAC, BofAS or any other affiliate
of BAC, to offer the Notes in any jurisdiction other than the United States. As such, these Notes are made available to investors outside
of the United States only in jurisdictions where it is lawful to make such offer or sale and only under circumstances that will result
in compliance with applicable laws and regulations, including private placement requirements.
Further, no offer or sale of the Notes
is being made to residents of:
·
Australia
·
Barbados
·
Belgium
·
Crimea
·
Cuba
·
Curacao
·
Gibraltar
·
Indonesia
·
Italy
·
Iran
·
Kazakhstan
·
Malaysia
·
New Zealand
·
North Korea
·
Norway
·
Russia
·
Syria
You are urged to carefully review the selling
restrictions that may be applicable to your jurisdiction beginning on page S-56 of the accompanying prospectus supplement.
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DIGITAL RETURN NOTES | PS-18 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
European Economic Area and United Kingdom
None of this pricing supplement, the accompanying
product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus for the purposes of the Prospectus
Regulation (as defined below). This pricing supplement, the accompanying product supplement, the accompanying prospectus and the accompanying
prospectus supplement have been prepared on the basis that any offer of Notes in any Member State of the European Economic Area (the “EEA”)
or in the United Kingdom (each, a “Relevant State”) will only be made to a legal entity which is a qualified investor under
the Prospectus Regulation (“Qualified Investors”). Accordingly any person making or intending to make an offer in that Relevant
State of Notes which are the subject of the offering contemplated in this pricing supplement, the accompanying product supplement, the
accompanying prospectus and the accompanying prospectus supplement may only do so with respect to Qualified Investors. Neither BofA Finance
nor BAC has authorized, nor does it authorize, the making of any offer of Notes other than to Qualified Investors. The expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
PROHIBITION OF SALES TO EEA AND UNITED
KINGDOM RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA or in the United Kingdom. For these purposes: (a) a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended
(“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive) where
that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified
investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication in any form and
by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to
purchase or subscribe for the Notes. Consequently no key information document required by Regulation (EU) No 1286/2014, as amended (the
“PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA or
in the United Kingdom has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor
in the EEA or in the United Kingdom may be unlawful under the PRIIPs Regulation.
United Kingdom
The communication of this pricing supplement,
the accompanying product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or materials
relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been approved, by an
authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as amended (the
“FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general
public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those
persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of
investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,
as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order,
or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together
being referred to as “relevant persons”). In the United Kingdom, the Notes offered hereby are only available to, and any investment
or investment activity to which this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement and
the accompanying prospectus relates will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant
person should not act or rely on this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement
or the accompanying prospectus or any of their contents.
Any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only be communicated
or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to BofA Finance, as issuer, or BAC, as
guarantor.
All applicable provisions of the FSMA must
be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the United Kingdom.
|
DIGITAL RETURN NOTES | PS-19 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
Structuring the Notes
The Notes are our
debt securities, the return on which is linked to the performance of the Underlyings. The related guarantee is BAC’s obligation.
As is the case for all of our and BAC’s respective debt securities, including our market-linked notes, the economic terms of the
Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because market-linked notes
result in increased operational, funding and liability management costs to us and BAC, BAC typically borrows the funds under these types
of notes at a rate, which we refer to in this pricing supplement as BAC’s internal funding rate, that is more favorable to BAC than
the rate that it might pay for a conventional fixed or floating rate debt security. This generally relatively lower internal funding rate,
which is reflected in the economic terms of the Notes, along with the fees and charges associated with market-linked notes, typically
results in the initial estimated value of the Notes on the pricing date being less than their public offering price.
In order to meet our payment obligations
on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call options,
put options or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are determined based
upon terms provided by BofAS and its affiliates, and take into account a number of factors, including our and BAC’s creditworthiness,
interest rate movements, the volatility of the 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-6 above and “Supplemental Use of Proceeds” on page PS-20 of the accompanying
product supplement.
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DIGITAL RETURN NOTES | PS-20 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
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 discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and is not exhaustive of all
possible tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations
promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations), rulings,
current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect and
all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that the
IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. This summary
does not include any description of the tax laws of any state or local governments, or of any foreign government, that may be applicable
to a particular holder.
Although the Notes are issued by us, they will
be treated as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references
to “we,” “our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S. Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes
upon original issuance and will hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means
property held for investment, and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations”
in the accompanying prospectus. This discussion does not address the tax consequences applicable to holders subject to Section 451(b)
of the Code. This summary assumes that the issue price of the Notes, as determined for U.S. federal income tax purposes, equals the principal
amount thereof.
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
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, certain aspects of the U.S. federal income tax consequences of an investment
in the Notes are not certain. We intend to treat the Notes as “contingent payment debt instruments” for U.S. federal income
tax purposes, subject to taxation under the “noncontingent bond method.” The balance of this discussion assumes that this
characterization is proper and will be respected.
U.S. Holders
If the Notes are properly characterized as contingent
payment debt instruments for U.S. federal income tax purposes, such Notes generally will be subject to Treasury regulations governing
contingent payment debt instruments. Under those regulations, and as further described under “U.S. Federal Income Tax Considerations—General—Consequences
to U.S. Holders—Debt Securities Subject to Contingences” in the accompanying prospectus, a U.S. Holder will be required to
report original issue discount (“OID”) or interest income based on a “comparable yield” and a “projected
payment schedule,” established by us for determining interest accruals and adjustments with respect to the Notes. A U.S. Holder
of the Notes generally will be required to include in income OID in excess of actual cash payments received for certain taxable years.
The following table is based upon a hypothetical
projected payment schedule (including a hypothetical Redemption Amount) and a hypothetical comparable yield equal to 5.50% per annum (compounded
semi-annually). The hypothetical comparable yield is our current estimate of the comparable yield based upon market conditions as of the
date of this preliminary pricing supplement. It has been determined by us for purposes of illustrating the application of the Code and
the Treasury regulations to the Notes as if the Notes had been issued on June 16, 2023 and were scheduled to mature on June 20, 2024.
This tax accrual table is based upon a hypothetical projected payment schedule per $1,000.00 principal amount of the Notes, which would
consist of a single payment of $1,055.7562 at maturity. The following table is for tax purposes only, and we make no representations or
predictions as to what the actual Redemption Amount will be. The actual “projected payment schedule” will be completed on
the pricing date, and included in the final pricing supplement.
Accrual Period |
Interest Deemed to Accrue During Accrual Period
(per $1,000 principal amount of the Notes) |
Total Interest Deemed to Have Accrued from Original Issue Date (per $1,000 principal amount of the Notes) |
June 16, 2023 through December 31, 2023 |
$32.2093 |
$32.2093 |
January 1, 2024 through June 20, 2024 |
$23.5469 |
$55.7562 |
Hypothetical Projected Redemption Amount = $1,055.7562
per Note.
Upon a sale, exchange, retirement, or other
disposition of the Notes, a U.S. Holder generally will recognize taxable gain or loss equal to the difference between the amount realized
and that holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes generally will equal the cost of the Notes,
increased by the amount of OID previously accrued by the holder for the Notes. A U.S. Holder generally will treat any gain as interest
income, and will treat any loss as ordinary loss to the extent of the previous interest inclusions in respect of the Notes, and the balance
as long-term
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DIGITAL RETURN NOTES | PS-21 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
or short-term capital loss depending upon the U.S. Holder’s holding period
for the Note. The deductibility of capital losses by a U.S. Holder is subject to limitations.
Non-U.S. Holders
Please see the discussion under “U.S.
Federal Income Tax Considerations—General—Consequences to Non-U.S. Holders” in the accompanying prospectus for the material
U.S. federal income tax consequences that will apply to Non-U.S. Holders of the Notes, except that the following disclosure supplements
the discussion in the prospectus.
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, 2025. Based on our determination that the Notes are not delta-one instruments, Non-U.S. Holders should not be subject
to withholding on dividend equivalent payments, if any, under the Notes. However, it is possible that the Notes could be treated as deemed
reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the 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.
Backup Withholding and Information Reporting
Please see the discussion under “U.S.
Federal Income Tax Considerations — General — Backup Withholding and Information Reporting” in the accompanying prospectus
for a description of the applicability of the backup withholding and information reporting rules to payments made on the Notes.
|
DIGITAL RETURN NOTES | PS-22 |
Digital Return Notes Linked to the Gold Spot Price and the S&P 500® Index
Where You Can Find More Information
The terms and risks of the Notes are contained
in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus, which can be accessed
at the following links:
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 BofAS by calling 1-800-294-1322. Before you invest,
you should read the Note Prospectus, including this pricing supplement, 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 pricing supplement have the meanings set forth in the accompanying product supplement or prospectus supplement.
Unless otherwise indicated or unless the context requires otherwise, all references in this document to “we,”
“us,” “our,” or similar references are to BofA Finance, and
not to BAC.
The Notes are our senior
debt securities. Any payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee
are not insured by the Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in right
of payment with all of our other unsecured and unsubordinated obligations, except obligations that are subject to any priorities or preferences
by law. The related guarantee will rank equally in right of payment with all of BAC’s other unsecured and unsubordinated obligations,
except obligations that are subject to any priorities or preferences by law, and senior to its subordinated obligations. Any payments
due on the Notes, including any repayment of the principal amount, will be subject to the credit risk of BofA Finance, as Issuer, and
BAC, as Guarantor.
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DIGITAL RETURN NOTES | PS-23 |