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.
Linked to the Least Performing
of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
|
•
|
Approximate
3 year term if not called prior to maturity.
|
|
•
|
Payments
on the Notes will depend on the individual performance of the VanEck Vectors®
Gold Miners ETF and the iShares® Silver Trust (each an “Underlying”).
|
|
•
|
Contingent
coupon rate of 9.00% per annum (0.75% per month) payable monthly if the Observation Value of each Underlying on the applicable
Observation Date is greater than or equal to 80% of its Starting Value.
|
|
•
|
Beginning
in March 2022, automatically callable monthly for an amount equal to the principal amount plus the relevant contingent coupon if
the Observation Value of each Underlying is greater than or equal to its 100% of its Starting Value on any Observation Date
(other than the final Observation Date).
|
|
•
|
Assuming
the Notes are not called prior to maturity, if any Underlying declines by more than 20% from its Starting Value, at maturity
your investment will be subject to a 1:1 downside beyond the 20% decline, with up to 80% of the principal at risk; otherwise, at
maturity investors will receive the principal amount. At maturity the investor will also receive the final contingent coupon if
the Observation Value of each Underlying on the final Observation Date is greater than or equal to 80% of its Starting Value.
|
|
•
|
All
payments on the Notes are subject to the credit risk of BofA Finance LLC (“BofA
Finance”) and Bank of America Corporation (“BAC” or the “Guarantor”).
|
|
•
|
The
Notes are expected to price on March 26, 2021, expected to issue on March 31, 2021 and expected to mature on April 1, 2024.
|
|
•
|
The
Notes will not be listed on any securities exchange.
|
The initial estimated value
of the Notes as of the pricing date is expected to be between $900.00 and $950.00 per $1,000 in principal amount of Notes, which
is less than the public offering price listed below. The actual value of your Notes at any time will reflect many factors and
cannot be predicted with accuracy. See “Risk Factors” beginning on page PS-9 of this pricing supplement and “Structuring
the Notes” on page PS-20 of this pricing supplement for additional information.
Potential purchasers of
the Notes should consider the information in “Risk Factors” beginning on page PS-9 of this pricing supplement, page
PS-5 of the accompanying product supplement, page S-5 of the accompanying prospectus supplement, and page 7 of the accompanying
prospectus. 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-25) is truthful or complete. Any representation to the contrary is a criminal offense.
|
Public offering price(1)
|
Underwriting discount(1)
|
Proceeds, before expenses, to BofA Finance
|
Per Note
|
$1,000.00
|
$30.00
|
$970.00
|
Total
|
|
|
|
|
(1)
|
Certain
dealers who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions,
fees or commissions. The public offering price for investors purchasing the Notes in these fee-based advisory accounts may be as
low as $970.00 per $1,000 in principal amount of Notes.
|
The Notes and the related
guarantee:
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Selling
Agent
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Terms of the Notes
The Contingent Income Buffered Auto-Callable
Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust (the “Notes”)
provide a monthly Contingent Coupon Payment of $7.50 on the applicable Contingent Payment Date if, on any monthly Observation Date,
the Observation Value of each Underlying is greater than or equal to its Coupon Barrier. Beginning in March 2022, if the
Observation Value of each Underlying is greater than or equal to its Call Value on any Observation Date (other than the
final Observation Date), the Notes will be automatically called, in whole but not in part, at 100% of the principal amount, together
with the relevant Contingent Coupon Payment. No further amounts will be payable following an Automatic Call. If the Notes are not
automatically called prior to maturity and the Least Performing Underlying declines by more than 20% from its Starting Value, there
is full exposure to declines in the Least Performing Underlying beyond a 20% decline, and you will lose some or a significant portion
of your investment in the Notes. Otherwise, at maturity you will receive the principal amount. At maturity you will also receive
the final Contingent Coupon Payment if the Observation Value of each Underlying on the final Observation Date is greater
than or equal to its Coupon Barrier. The Notes are not traditional debt securities and it is possible that the Notes will not pay
any Contingent Coupon Payments, and you may lose some or a significant portion of your principal amount at maturity. Any payments
on the Notes will be calculated based on $1,000 in principal amount of Notes and will depend on the performance of the Underlyings,
subject to our and BAC’s credit risk.
Issuer:
|
BofA Finance
|
Guarantor:
|
BAC
|
Denominations:
|
The Notes will be issued in minimum denominations of $1,000 and whole multiples of $1,000 in excess thereof.
|
Term:
|
Approximately 3 years, unless previously automatically called.
|
Underlyings:
|
The VanEck Vectors® Gold Miners ETF (Bloomberg symbol: “GDX”) and the iShares® Silver Trust (Bloomberg symbol: “SLV”).
|
Pricing Date*:
|
March 26, 2021
|
Issue Date*:
|
March 31, 2021
|
Valuation Date*:
|
March 26, 2024, subject to postponement as described under “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates” in the accompanying product supplement.
|
Maturity Date*:
|
April 1, 2024
|
Starting Value:
|
With respect to each Underlying, its Closing Market Price on the pricing date.
|
Observation Value:
|
With respect to each Underlying, its Closing Market Price on the applicable Observation Date multiplied by its Price Multiplier, as determined by the calculation agent.
|
Ending Value:
|
With respect to each Underlying, its Observation Value on the Valuation Date, as determined by the calculation agent.
|
Call Value:
|
With respect to each Underlying, 100% of its Starting Value.
|
Price Multiplier
|
With respect to each Underlying, 1, subject to adjustment for certain events as described in “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs” beginning on page PS-27 of the accompanying product supplement.
|
Coupon Barrier:
|
With respect to each Underlying, 80% of its Starting Value.
|
Threshold Value:
|
With respect to each Underlying, 80% of its Starting Value.
|
Contingent Coupon Payment:
|
If, on any monthly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier, we will pay a Contingent Coupon Payment of $7.50 per $1,000 in principal amount of Notes (equal to a rate of 0.75% per month or 9.00% per annum) on the applicable Contingent Payment Date (including the Maturity Date).
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-2
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Automatic Call:
|
Beginning in March 2022, all (but not less than all) of the Notes will be automatically called if the Observation Value of each Underlying is greater than or equal to its Call Value on any Observation Date (other than the final Observation Date). If the Notes are automatically called, the Early Redemption Amount will be paid on the applicable Contingent Payment Date. No further amounts will be payable following an Automatic Call.
|
Early Redemption Amount:
|
For each $1,000 in principal amount of Notes, $1,000 plus the applicable Contingent Coupon Payment.
|
Redemption Amount:
|
If the Notes have
not been automatically called prior to maturity, the Redemption Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Least Performing Underlying
is greater than or equal to its Threshold Value:
$1,000; or
b)
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value:
In this case, the
Redemption Amount will be less than the principal amount and you could lose up to 80% of your principal amount.
The Redemption
Amount will also include the final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater
than or equal to its Coupon Barrier.
|
Observation Dates*:
|
As set forth beginning on page PS-4.
|
Contingent Payment Dates*:
|
As set forth beginning on page PS-4.
|
Calculation Agent:
|
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
|
Selling Agent:
|
BofAS
|
CUSIP:
|
09709UDT2
|
Underlying Return:
|
With respect to
each Underlying,
|
Least Performing Underlying:
|
The Underlying with the lowest Underlying Return.
|
Events of Default and Acceleration:
|
If an Event of Default, as defined in the senior indenture relating to the Notes and in the section entitled “Description of Debt Securities—Events of Default and Rights of Acceleration” beginning on page 22 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “Redemption Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. We will also determine whether the final Contingent Coupon Payment is payable based upon the prices of the Underlyings on the deemed Valuation Date; any such final Contingent Coupon Payment will be prorated by the calculation agent to reflect the length of the final contingent payment period. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
*Subject to change
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-3
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Observation Dates and Contingent Payment Dates
Observation Dates*
|
|
Contingent Payment Dates
|
April 26, 2021
|
|
April 29, 2021
|
May 26, 2021
|
|
June 1, 2021
|
June 28, 2021
|
|
July 1, 2021
|
July 26, 2021
|
|
July 29, 2021
|
August 26, 2021
|
|
August 31, 2021
|
September 27, 2021
|
|
September 30, 2021
|
October 26, 2021
|
|
October 29, 2021
|
November 26, 2021
|
|
December 1, 2021
|
December 27, 2021
|
|
December 30, 2021
|
January 26, 2022
|
|
January 31, 2022
|
February 28, 2022
|
|
March 3, 2022
|
March 28, 2022
|
|
March 31, 2022
|
April 26, 2022
|
|
April 29, 2022
|
May 26, 2022
|
|
June 1, 2022
|
June 27, 2022
|
|
June 30, 2022
|
July 26, 2022
|
|
July 29, 2022
|
August 26, 2022
|
|
August 31, 2022
|
September 26, 2022
|
|
September 29, 2022
|
October 26, 2022
|
|
October 31, 2022
|
November 28, 2022
|
|
December 1, 2022
|
December 27, 2022
|
|
December 30, 2022
|
January 26, 2023
|
|
January 31, 2023
|
February 27, 2023
|
|
March 2, 2023
|
March 27, 2023
|
|
March 30, 2023
|
April 26, 2023
|
|
May 1, 2023
|
May 26, 2023
|
|
June 1, 2023
|
June 26, 2023
|
|
June 29, 2023
|
July 26, 2023
|
|
July 31, 2023
|
August 28, 2023
|
|
August 31, 2023
|
September 26, 2023
|
|
September 29, 2023
|
October 26, 2023
|
|
October 31, 2023
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-4
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Observation Dates*
|
|
Contingent Payment Dates
|
November 27, 2023
|
|
November 30, 2023
|
December 26, 2023
|
|
December 29, 2023
|
January 26, 2024
|
|
January 31, 2024
|
February 26, 2024
|
|
February 29, 2024
|
March 26, 2024 (the “Valuation Date”)
|
|
April 1, 2024 (the “Maturity Date”)
|
* The Observation Dates are subject to postponement as
set forth in “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates”
beginning on page PS-22 of the accompanying product supplement.
Any payments on the Notes depend on the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance of
the 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-9), 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-9 and “Structuring
the Notes” on page PS-20.
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-5
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Contingent Coupon Payment and Redemption
Amount Determination
On each
Contingent Payment Date, you may receive a Contingent Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming
the Notes have not been automatically called, 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.
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-6
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Total Contingent Coupon Payment Examples
The
table below illustrates the hypothetical total Contingent Coupon Payments per $1,000 in principal amount of Notes over the term
of the Notes, based on the Contingent Coupon Payment of $7.50, depending on how many Contingent Coupon Payments are payable prior
to an Automatic Call or maturity. Depending on the performance of the Underlyings, you may not receive any Contingent Coupon Payments
during the term of the Notes.
Number of Contingent Coupon Payments
|
Total Contingent Coupon Payments
|
0
|
$0.00
|
6
|
45.00
|
12
|
$90.00
|
24
|
$180.00
|
36
|
$270.00
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-7
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Hypothetical Payout Profile and Examples
of Payments at Maturity
Contingent Income Buffered
Auto-Callable Yield Notes Table
The following table is
for purposes of illustration only. It assumes the Notes have not been automatically called
prior to maturity and is based on hypothetical values and shows hypothetical returns on the Notes. The table
illustrates the calculation of the Redemption Amount and the return on the Notes based on a hypothetical Starting Value of 100
for the Least Performing Underlying, a hypothetical Coupon Barrier of 80 for the Least Performing Underlying, a hypothetical Threshold
Value of 80 for the Least Performing Underlying, the Contingent Coupon Payment of $7.50 per $1,000 in principal amount of Notes
and a range of hypothetical Ending Values of the Least Performing Underlying. The actual amount you receive and the resulting
return will depend on the actual Starting Values, Coupon Barriers, Threshold Values, Observation Values and Ending Values of the
Underlyings, whether the Notes are automatically called prior to maturity, and whether you hold the Notes to maturity. The
following examples do not take into account any tax consequences from investing in the Notes.
For recent actual prices of
the Underlyings, see “The Underlyings” section below. The Ending Value of each Underlying will not include any income
generated by dividends paid on an Underlying or on the stocks or assets represented by that Underlying, which you would otherwise
be entitled to receive if you invested in those securities or assets directly. In addition, all payments on the Notes are subject
to Issuer and Guarantor credit risk.
Ending Value of the
Least Performing Underlying
|
Underlying Return of the
Least Performing Underlying
|
Redemption Amount per Note
(including any final Contingent Coupon Payment)
|
Return
on the Notes(1)
|
160.00
|
60.00%
|
$1,007.50(2)
|
0.75%
|
150.00
|
50.00%
|
$1,007.50
|
0.75%
|
140.00
|
40.00%
|
$1,007.50
|
0.75%
|
130.00
|
30.00%
|
$1,007.50
|
0.75%
|
120.00
|
20.00%
|
$1,007.50
|
0.75%
|
110.00
|
10.00%
|
$1,007.50
|
0.75%
|
105.00
|
5.00%
|
$1,007.50
|
0.75%
|
102.00
|
2.00%
|
$1,007.50
|
0.75%
|
100.00(3)
|
0.00%
|
$1,007.50
|
0.75%
|
90.00
|
-10.00%
|
$1,007.50
|
0.75%
|
80.00(4)
|
-20.00%
|
$1,007.50
|
0.75%
|
79.99
|
-20.01%
|
$999.90
|
-0.01%
|
70.00
|
-30.00%
|
$900.00
|
-10.00%
|
60.00
|
-40.00%
|
$800.00
|
-20.00%
|
40.00
|
-60.00%
|
$600.00
|
-40.00%
|
0.00
|
-100.00%
|
$200.00
|
-80.00%
|
|
(1)
|
The “Return on the
Notes” is calculated based on the Redemption Amount and potential final Contingent Coupon Payment, not including any Contingent
Coupon Payments paid prior to maturity.
|
|
(2)
|
This amount represents
the sum of the principal amount and the final Contingent Coupon Payment.
|
|
(3)
|
The hypothetical
Starting Value of 100 used in the table above has been chosen for
illustrative purposes only and does not represent a likely Starting Value for any Underlying.
|
|
(4)
|
This is the hypothetical Coupon Barrier and
Threshold Value of the Least Performing Underlying.
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-8
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Risk Factors
Your investment in the Notes entails significant
risks, many of which differ from those of a conventional debt security. Your decision to purchase the Notes should be made only
after carefully considering the risks of an investment in the Notes, including those discussed below, with your advisors in light
of your particular circumstances. The Notes are not an appropriate investment for you if you are not knowledgeable about significant
elements of the Notes or financial matters in general. You should carefully review the more detailed explanation of risks relating
to the Notes in the “Risk Factors” sections beginning on page PS-5 of the accompanying product supplement, page S-5
of the accompanying prospectus supplement and page 7 of the accompanying prospectus, each as identified on page PS-25 below.
Structure-related Risks
|
•
|
Your investment may
result in a loss; there is no guaranteed return of principal. There is no fixed principal repayment amount on the Notes at
maturity. If the Notes are not automatically called prior to maturity and the Ending Value of any Underlying is less than
its Threshold Value at maturity, you will lose 1% of the principal amount for each 1% that the Ending Value of the Least Performing
Underlying is less than its Threshold Value. In that case, you will lose some or a significant portion of your investment in the
Notes.
|
|
•
|
Your return on the
Notes is limited to the return represented by the Contingent Coupon Payments, if any, over the term of the Notes. Your return
on the Notes is limited to the Contingent Coupon Payments paid over the term of the Notes, regardless of the extent to which the
Observation Value or Ending Value of any Underlying exceeds its Coupon Barrier or Starting Value, as applicable. Similarly, the
amount payable at maturity or upon an Automatic Call will never exceed the sum of the principal amount and the applicable Contingent
Coupon Payment, regardless of the extent to which the Observation Value of any Underlying exceeds its Starting Value. In contrast,
a direct investment in one or more of the Underlyings or in the securities or assets included in one or more of the Underlyings
would allow you to receive the benefit of any appreciation in their values. Thus, any return on the Notes will not reflect the
return you would realize if you actually owned those securities or assets and received the dividends paid or distributions made
on them.
|
|
•
|
The Notes are subject
to a potential Automatic Call, which would limit your ability to receive the Contingent Coupon Payments over the full term of the
Notes. The Notes are subject to a potential Automatic Call. Beginning in March 2022, the Notes will be automatically called
if, on any Observation Date (other than the final Observation Date), the Observation Value of each Underlying is greater than or
equal to its Call Value. If the Notes are automatically called, you will be entitled to receive the principal amount and the Contingent
Coupon Payment with respect to the applicable Observation Date. In this case, you will lose the opportunity to continue to receive
Contingent Coupon Payments after the date of the Automatic Call. If the Notes are called prior to the Maturity Date, you may be
unable to invest in other securities with a similar level of risk that could provide a return that is similar to the Notes.
|
|
•
|
You may not receive
any Contingent Coupon Payments. The Notes do not provide for any regular fixed coupon payments. Investors in the Notes will
not necessarily receive any Contingent Coupon Payments on the Notes. If the Observation Value of any Underlying is less
than its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment applicable to that Observation
Date. If the Observation Value of any Underlying is less than its Coupon Barrier on all the Observation Dates during the
term of the Notes, you will not receive any Contingent Coupon Payments during the term of the Notes, and will not receive a positive
return on the Notes.
|
|
•
|
The Contingent Coupon
Payment, Early Redemption Amount or Redemption Amount, as applicable, will not reflect the prices of the Underlyings other than
on the Observation Dates. The prices of the Underlyings during the term of the Notes other than on the Observation Dates will
not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware of the performance of the
Underlyings while holding the Notes. The calculation agent will determine whether each Contingent Coupon Payment is payable and
will calculate the Early Redemption Amount or the Redemption Amount, as applicable, by comparing only the Call Value, the Coupon
Barrier or the Threshold Value, as applicable, to the Observation Value or the Ending Value for each Underlying. No other prices
of the Underlyings will be taken into account. As a result, if the Notes are not automatically called prior to maturity, and the
Ending Value of the Least Performing Underlying is less than its Threshold Value, you will receive less than the principal amount
at maturity even if the price of each Underlying was always above its Threshold Value prior to the Valuation Date.
|
|
•
|
Because the Notes
are linked to the least performing (and not the average performance) of the Underlyings, you may not receive any return on the
Notes and may lose some or a significant portion of your principal amount even if the Observation Value or Ending Value of one
Underlying is always greater than or equal to its Coupon Barrier or Threshold Value, as applicable. Your Notes are linked to
the least performing of the Underlyings, and a change in the price of one Underlying may not correlate with changes in the price
of the other Underlying(s). The Notes are not linked to a basket composed of the Underlyings, where the depreciation in the price
of one Underlying could be offset to some extent by the appreciation in the price of the other Underlying(s). In the case of the
Notes, the individual performance of each Underlying would not be combined, and the depreciation in the price of one Underlying
would not be offset by any appreciation in the price of the other Underlying(s). Even if the Observation Value of an Underlying
is at or above its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment with respect to that
Observation Date if the Observation Value of another Underlying is below its Coupon Barrier on that day. In addition, even if the
Ending Value of an Underlying is at or above its Threshold Value, you will lose a portion of your principal if the Ending Value
of the Least Performing Underlying is below its Threshold Value.
|
|
CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-9
|
Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
|
•
|
Your return on the Notes may be less
than the yield on a conventional debt security of comparable maturity. Any return that you receive on the Notes may be less
than the return you would earn if you purchased a conventional debt security with the same Maturity Date. As a result, your investment
in the Notes may not reflect the full opportunity cost to you when you consider factors, such as inflation, that affect the time
value of money. In addition, if interest rates increase during the term of the Notes, the Contingent Coupon Payment (if any) may
be less than the yield on a conventional debt security of comparable maturity.
|
|
•
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Any payment on the
Notes is subject to the credit risk of BofA Finance and the Guarantor, and actual or perceived changes in BofA Finance or the Guarantor’s
creditworthiness are expected to affect the value of the Notes. The Notes are our senior unsecured debt securities. Any payment
on the Notes will be fully and unconditionally guaranteed by the Guarantor. The Notes are not guaranteed by any entity other than
the Guarantor. As a result, your receipt of the Early Redemption Amount or the Redemption Amount at maturity, as applicable, will
be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the Notes on the applicable
Contingent Payment Date or the Maturity Date, regardless of the Ending Value of the Least Performing Underlying as compared to
its Starting Value.
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In addition, our credit
ratings and the credit ratings of the Guarantor are assessments by ratings agencies of our respective abilities to pay our obligations.
Consequently, our or the Guarantor’s perceived creditworthiness and actual or anticipated decreases in our or the Guarantor’s
credit ratings or increases in the spread between the yield on our respective securities and the yield on U.S. Treasury securities
(the “credit spread”) prior to the Maturity Date of your Notes may adversely affect the market value of the Notes.
However, because your return on the Notes depends upon factors in addition to our ability and the ability of the Guarantor to pay
our respective obligations, such as the 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.
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We are a finance
subsidiary and, as such, have no independent assets, operations or revenues. We are a finance subsidiary of BAC, have no operations
other than those related to the issuance, administration and repayment of our debt securities that are guaranteed by the Guarantor,
and are dependent upon the Guarantor and/or its other subsidiaries to meet our obligations under the Notes in the ordinary course.
Therefore our ability to make payments on the Notes may be limited.
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Valuation-and Market-related Risks
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The public offering
price you pay for the Notes will exceed their initial estimated value. The range of initial estimated values of the Notes that
is provided on the cover page of this preliminary pricing supplement, and the initial estimated value as of the pricing date that
will be provided in the final pricing supplement, are each estimates only, determined as of a particular point in time by reference
to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including
our credit spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market terms on hedging transactions,
expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected term of the Notes.
These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect. If you attempt to
sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower than their initial
estimated value. This is due to, among other things, changes in the prices of the Underlyings, changes in the Guarantor’s
internal funding rate, and the inclusion in the public offering price of the underwriting discount and the hedging related charges,
all as further described in "Structuring the Notes" below. These factors, together with various credit, market and economic
factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary
market and will affect the value of the Notes in complex and unpredictable ways.
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The initial estimated
value does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates
would be willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any
time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Underlyings,
our and BAC’s creditworthiness and changes in market conditions.
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We cannot assure
you that a trading market for your Notes will ever develop or be maintained. We will not list the Notes on any securities exchange.
We cannot predict how the Notes will trade in any secondary market or whether that market will be liquid or illiquid.
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Conflict-related Risks
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Trading and hedging
activities by us, the Guarantor and any of our other affiliates, including BofAS, may create conflicts of interest with you and
may affect your return on the Notes and their market value. We, the Guarantor or one or more of our other affiliates, including
BofAS, may buy or sell shares of the Underlyings or the securities or assets held by or included in the Underlyings, or futures
or options contracts on the Underlyings or those securities or assets, or other listed or over-the-counter derivative instruments
linked to the Underlyings or those securities or assets. While we, the Guarantor or one or more of our other affiliates, including
BofAS, may from time to time own the Underlyings or the securities or assets represented by the Underlyings, except to the extent
that BAC’s common stock may be included in the Underlyings, we, the Guarantor and our other affiliates, including BofAS,
do not control any company included in the Underlyings, and have not verified any disclosure made by any other company. We, the
Guarantor or one or more of our other affiliates, including BofAS, may execute such purchases or sales for our own or their own
accounts, for business reasons, or in connection with hedging our obligations under the Notes. These transactions may present a
conflict of interest between your interest in the Notes and the interests we, the Guarantor and our other affiliates, including
BofAS, may have in our or their proprietary accounts, in facilitating transactions,
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-10
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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including block trades, for our or their other customers,
and in accounts under our or their management. These transactions may adversely affect the value of the Underlyings in a manner
that could be adverse to your investment in the Notes. On or before the pricing date, any purchases or sales by us, the Guarantor
or our other affiliates, including BofAS or others on its behalf (including for the purpose of hedging some or all of our anticipated
exposure in connection with the Notes), may affect the value of the Underlyings. Consequently, the value of the Underlyings may
change subsequent to the pricing date, which may adversely affect the market value of the Notes.
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We, the Guarantor or one or
more of our other affiliates, including BofAS, also expect to engage in hedging activities that could affect the value of the 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 value of the Underlyings, the market value of your Notes
prior to maturity or the amounts payable on the Notes.
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There may be potential
conflicts of interest involving the calculation agent, which is an affiliate of ours. We have the right to appoint and remove
the calculation agent. One of our affiliates will be the calculation agent for the Notes and, as such, will make a variety of determinations
relating to the Notes, including the amounts that will be paid on the Notes. Under some circumstances, these duties could result
in a conflict of interest between its status as our affiliate and its responsibilities as calculation agent.
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Underlying-related Risks
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A limited number of securities may affect the
level of the underlying index of the GDX, and the underlying index of the GDX is not necessarily representative of the gold and
silver mining industry. As of January 31, 2021, the top three securities included in the underlying index of the GDX constituted
29.57% of the total weight of the underlying index of the GDX and the top seven securities included in the underlying index of
the GDX constituted 48.57% of the total weight of the underlying index of the GDX. Because the GDX attempts to track the performance
of its underlying index, any reduction in the market price of those top seven securities is likely to have a substantial adverse
impact on the level of the underlying index of the GDX, and therefore the price of the GDX and the value of the notes.
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While the securities included in the
underlying index of the GDX are common stocks, American Depositary Receipts (“ADRs”) or global depositary receipts
(“GDRs”) of companies generally considered to be involved in various segments of the gold and silver mining industry,
the securities included in the underlying index of the GDX may not follow the price movements of the entire gold and silver mining
industry generally. If the securities included in the underlying index of the GDX (and, accordingly, the securities held by the
GDX) decline in value, the GDX will decline in value even if security prices in the gold and silver mining industry generally increase
in value.
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There is no direct correlation between the value
of the Notes or the price of the GDX and the SLV, on the one hand, and gold and silver prices, on the other hand. Although
the price of gold or silver is one factor that may influence the performance of the GDX and the SLV, the Notes are not linked to
the gold or silver spot prices or to gold or silver futures. There is no direct linkage between the price of the GDX and the SLV
and the prices of gold and silver. While gold and silver prices may be one factor that could affect the prices of the securities
included in the underlying index of the GDX and, consequently, the price of the GDX, or the assets included in the SLV, the amounts
payable on the Notes are not directly linked to the movement of gold and silver prices and may be affected by factors unrelated
to those movements. Investing in the Notes is not the same as investing in gold or silver, and you should not invest in the Notes
if you wish to invest in a product that is linked directly to the price of gold or silver.
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The performance of the GDX and the SLV may be
influenced by gold and silver prices. To the extent the price of gold or silver has a limited effect, if any, on the performance
of the GDX and the SLV, gold prices and silver prices are subject to volatile price movements over short periods of time, represent
trading in commodities markets, which are substantially different from equities markets, and are affected by numerous factors.
These include economic factors, including the structure of and confidence in the global monetary system, expectations of the future
rate of inflation, the relative strength of, and confidence in, the U.S. dollar (the currency in which the prices of gold and silver
are generally quoted), interest rates and gold and silver borrowing and lending rates, and global or regional economic, financial,
political, regulatory, judicial, or other events.
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Gold prices and silver prices may
also be affected by industry factors such as industrial and jewelry demand, lending, sales and purchases of gold and silver by
the official sector, including central banks and other governmental agencies and multilateral institutions which hold gold and
silver, levels of gold and silver production and production costs, and short-term changes in supply and demand because of trading
activities in the gold and silver markets. It is not possible to predict the aggregate effects of all or any combination of these
factors. Any negative developments with respect to these factors may have an adverse effect on gold and silver prices and, as a
result, on the prices of the GDX and the SLV and, therefore, the return on the Notes.
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The Notes are subject
to foreign currency exchange rate risk. The GDX holds securities traded outside of the United States. Its share price
will fluctuate based upon its net asset value, which will in turn depend in part upon changes in the value of the currencies in
which the securities held by the GDX are traded. Accordingly, investors in the Notes will be exposed to currency exchange rate
risk with respect to each of the currencies in which the securities held by the GDX are traded. An investor’s net exposure
will depend on the extent to which
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-11
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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these currencies strengthen or weaken against the U.S. dollar.
If the dollar strengthens against these currencies, the net asset value of the GDX will be adversely affected and the price of
the GDX may decrease.
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There are risks associated
with commodities trading on the London Bullion Market Association. The investment objective of the SLV is to reflect generally
the price of silver before the payment of its expenses and liabilities. The price of silver is determined by the London Bullion
Market Association (the “LBMA”) or an independent service provider appointed by the LBMA. The LBMA is a self-regulatory
association of bullion market participants. Although all market-making members of the LBMA are supervised by the Bank of England
and are required to satisfy a capital adequacy test, the LBMA itself is not a regulated entity. If the LBMA should cease operations,
or if bullion trading should become subject to a value added tax or other tax or any other form of regulation currently not in
place, the role of the LBMA silver price as a global benchmark for the value of silver may be adversely affected. The LBMA is a
principals’ market that operates in a manner more closely analogous to an over-the-counter physical commodity market than
a regulated futures market, and certain features of U.S. futures contracts are not present in the context of LBMA trading. For
example, there are no daily price limits on the LBMA that would otherwise restrict fluctuations in the prices of LBMA contracts.
In a declining market, it is possible that prices would continue to decline without limitation within a trading day or over a period
of trading days. The LBMA may alter, discontinue or suspend calculation or dissemination of the LBMA silver price, which could
adversely affect the value of the Notes. The LBMA, or an independent service provider appointed by the LBMA, will have no obligation
to consider your interests in calculating or revising the LBMA silver price. All of these factors could adversely affect the price
the SLV and, therefore, the return on the Notes.
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The anti-dilution
adjustments will be limited. The calculation agent may adjust the applicable Price Multipliers of the Underlyings and other
terms of the Notes to reflect certain corporate actions by the Underlyings, as described in the section “Description of the
Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs” in the accompanying product supplement. The calculation
agent will not be required to make an adjustment for every event that may affect the Underlyings and will have broad discretion
to determine whether and to what extent an adjustment is required.
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The sponsor or investment
advisor of an Underlying may adjust that Underlying in a way that affects its prices, and the sponsor or investment advisor has
no obligation to consider your interests. The sponsor or investment advisor of an Underlying can add, delete, or substitute
the components included in that Underlying or make other methodological changes that could change its price. Any of these actions
could adversely affect the value of your Notes.
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The performance of
the GDX may not correlate with the performance of the NYSE Arca Gold Miners Index as well as the net asset value per share of the
GDX, especially during periods of market volatility. The performance of the GDX and that of the underlying index of the GDX
generally will vary due to, for example, transaction costs, management fees, certain corporate actions, and timing variances. Moreover,
it is also possible that the performance of the GDX may not fully replicate or may, in certain circumstances, diverge significantly
from the performance of the underlying index of the GDX. This could be due to, for example, the GDX not holding all or substantially
all of the underlying assets included in the underlying index of the GDX and/or holding assets that are not included in the underlying
index, the temporary unavailability of certain securities in the secondary market, the performance of any derivative instruments
held by the GDX, differences in trading hours between the GDX (or the underlying assets held by the GDX) and its underlying index,
or other circumstances. This variation in performance is called the “tracking error,” and, at times, the tracking error
may be significant. In addition, because the shares of the GDX are traded on a securities exchange and are subject to market supply
and investor demand, the market price of one share of the GDX may differ from its net asset value per share; shares of the GDX
may trade at, above, or below its net asset value per share. During periods of market volatility, securities held by the GDX may
be unavailable in the secondary market, market participants may be unable to calculate accurately the net asset value per share
of the GDX and the liquidity of the GDX may be adversely affected. Market volatility may also disrupt the ability of market participants
to trade shares of the GDX. Further, market volatility may adversely affect, sometimes materially, the prices at which market participants
are willing to buy and sell shares of the GDX. As a result, under these circumstances, the market value of shares of the GDX may
vary substantially from the net asset value per share of the GDX.
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Tax-related Risks
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The U.S. federal income tax consequences of an
investment in the Notes are uncertain, and may be adverse to a holder of the Notes. No statutory, judicial, or administrative
authority directly addresses the characterization of the Notes or securities similar to the Notes for U.S. federal income tax purposes.
As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. Under
the terms of the Notes, you will have agreed with us to treat the Notes as contingent income-bearing single financial contracts,
as described below under “U.S. Federal Income Tax Summary—General.” If the Internal Revenue Service (the “IRS”)
were successful in asserting an alternative characterization for the Notes, the timing and character of income, gain or loss with
respect to the Notes may differ. No ruling will be requested from the IRS with respect to the Notes and no assurance can be given
that the IRS will agree with the statements made in the section entitled “U.S. Federal Income Tax Summary.” You
are urged to consult with your own tax advisor regarding all aspects of the U.S. federal income tax consequences of investing in
the Notes.
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-12
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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, each of Van Eck Associates Corporation (“VanEck”), the advisor to the GDX, and iShares® Delaware
Trust Sponsor LLC (“iShares Delaware”), the advisor to the SLV. We refer to VanEck and iShares Delaware as the “Investment
Advisors.” The Investment Advisors, which license the copyright and all other rights to the Underlyings, have no obligation
to continue to publish, and may discontinue publication of, the Underlyings. The consequences of an Investment Advisor discontinuing
publication of the applicable Underlying are discussed in “Description of the Notes—Anti-Dilution and Discontinuance
Adjustments Relating to ETFs—Discontinuance of or Material Change to an ETF” in the accompanying product supplement.
None of us, the Guarantor, the calculation agent, or BofAS accepts any responsibility for the calculation, maintenance or publication
of any 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 VanEck Vectors® Gold
Miners ETF
We have derived the following information
from publicly available documents published by VanEck Vectors ETF Trust (the “Trust”).
Information provided to or filed
with the SEC relating to GDX under the Securities Exchange Act of 1934 can be located by reference to its Central Index
Key, or CIK, 1137360 through the SEC’s website at http://www.sec.gov. Additional information about the GDX may
be obtained from other sources including, but not limited to, press releases, newspaper articles and other publicly disseminated
documents. We have not made any independent investigation as to the accuracy or completeness of such information.
The
GDX is an investment portfolio maintained, managed and advised by the Trust. The GDX is an exchange traded fund that trades on
NYSE Arca under the ticker symbol “GDX.” The GDX seeks to provide investment results that correspond generally to the
price and yield performance, before fees and expenses, of the NYSE Arca Gold Miners Index (the “Underlying Index”).
The GDX utilizes a “passive” or “indexing” investment approach in attempting to track the performance of
the Underlying Index. The GDX will invest in all of the securities which comprise the Underlying Index. The GDX will normally invest
at least 80% of its total assets in common stocks that comprise the Underlying Index. As of December 24, 2020, the expense ratio
was 0.52%.
The Underlying Index
The Underlying Index is a modified
market capitalization weighted index comprised of securities issued by publicly traded companies involved primarily in the mining
of gold or silver. The Underlying Index was developed by the NYSE Amex and is calculated, maintained and published by NYSE Arca.
Eligibility Criteria for Underlying Index Components
The Underlying Index includes common
stocks, ADRs or GDRs of selected companies that are involved in mining for gold and silver and that are listed for trading and
electronically quoted on a major stock market that is accessible by foreign investors. Generally, this includes exchanges in most
developed markets and major emerging markets, and includes companies that are cross-listed, i.e., both U.S. and Canadian listings.
NYSE Arca will use its discretion to avoid exchanges and markets that are considered “frontier” in nature or have major
restrictions to foreign ownership. The Underlying Index includes companies that derive at least 50% of their revenues from gold
mining and related activities (40% for companies that are already included in the Underlying Index). Also, the Underlying Index
will maintain an exposure to companies with a significant revenue exposure to silver mining in addition to gold mining, which will
not exceed 20% of the Underlying Index weight at each rebalance.
Only companies with a market capitalization
of greater than $750 million that have an average daily trading volume of at least 50,000 shares and an average daily value traded
of at least $1 million over the past three months are eligible for inclusion in the Underlying Index. A buffer is enforced for
companies already in the Underlying Index. For companies already included in the Underlying Index, the market capitalization requirement
at each rebalance is $450 million, the average daily volume requirement is at least 30,000 shares over the past three months and
the average daily value traded requirement is at least $600,000 over the past three months.
NYSE Arca has the discretion to not
include all companies that meet the minimum criteria for inclusion.
Calculation of the Underlying Index
The Underlying Index is calculated
by NYSE Arca on a net total return basis. The calculation is based on the current modified market capitalization divided by a divisor.
The divisor was determined on the initial capitalization base of the Underlying Index and the base level and may be adjusted as
a result of corporate actions and composition changes, as described below. The level of the Underlying Index was set at 500.00
on December 20, 2002, which is the index base date. The Underlying Index is calculated using the following formula:
Where:
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-13
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
t = day of calculation;
N = number of constituent
equities in the Underlying Index;
Qi,t = number of
shares of equity i on day t;
Mi,t = multiplier
of equity i;
Ci,t = price of
equity i on day t; and
DIV = current index
divisor on day t.
Underlying Index Maintenance
The Underlying Index is reviewed quarterly
to ensure that at least 90% of the Underlying Index weight is accounted for by index components that continue to meet the initial
eligibility requirements. NYSE Arca may at any time and from time to time change the number of securities comprising the group
by adding or deleting one or more securities, or replacing one or more securities contained in the group with one or more substitute
securities of its choice, if in NYSE Arca’s discretion such addition, deletion or substitution is necessary or appropriate
to maintain the quality and/or character of the Underlying Index. Components will be removed from the Underlying Index during the
quarterly review if either (1) the market capitalization falls below $450 million or (2) the traded average daily shares for the
previous three months is less than 30,000 shares and the average daily traded value for the previous three months is less than
$600,000.
At the time of
the quarterly rebalance, the component security weights (also referred to as the multiplier or share quantities of each component
security) will be modified to conform to the following asset diversification requirements:
1.
the weight of any single component security may
not account for more than 20% of the total value of the Underlying Index;
2.
the component securities are split into two subgroups-large
and small, which are ranked by market capitalization weight in the Underlying Index. Large securities are defined as having a starting
index weight greater than or equal to 5%. Small securities are defined as having a starting index weight below 5%; and
3.
the final aggregate weight of those component
securities which individually represent more than 4.5% of the total value of the Underlying Index may not account for more than
45% of the total index value.
The weights of the components securities
(taking into account expected component changes and share adjustments) are modified in accordance with the Underlying Index’s
diversification rules.
Diversification Rule 1: If any component
stock exceeds 20% of the total value of the Underlying Index, then all stocks greater than 20% of the Underlying Index are reduced
to represent 20% of the value of the Underlying Index. The aggregate amount by which all component stocks are reduced is redistributed
proportionately across the remaining stocks that represent less than 20% of the index value. After this redistribution, if any
other stock then exceeds 20%, the stock is set to 20% of the index value and the redistribution is repeated.
Diversification Rule 2: The components
are sorted into two groups, large are components with a starting index weight of 5% or greater and small are components with a
weight of under 5% (after any adjustments for Diversification Rule 1). The large group will represent in the aggregate 45% and
the small group will represent 55% in the aggregate of the final index weight. This will be adjusted through the following process:
The weight of each of the large stocks will be scaled down proportionately (with a floor of 5%) so that the aggregate weight of
the large components will be reduced to represent 45% of the Underlying Index. If any large component stock falls below a weight
equal to the product of 5% and the proportion by which the stocks were scaled down following this distribution, then the weight
of the stock is set equal to 5% and the components with weights greater than 5% will be reduced proportionately. The weight of
each of the small components will be scaled up proportionately from the redistribution of the large components. If any small component
stock exceeds a weight equal to the product of 4.5% and the proportion by which the stocks were scaled down following this distribution,
then the weight of the stock is set equal to 4.5%. The redistribution of weight to the remaining stocks is repeated until the entire
amount has been redistributed.
Changes to the Underlying Index composition
and/or the component security weights in the Underlying Index are determined and announced prior to taking effect. These changes
typically become effective after the close of trading on the third Friday of each calendar quarter month in connection with the
quarterly index rebalance. The share quantities of each component security in the index portfolio remains fixed between quarterly
reviews except in the event of certain types of corporate actions such as stock splits, reverse stock splits, stock dividends,
or similar events. The share quantities used in the Underlying Index calculation are not typically adjusted for shares issued or
repurchased between quarterly reviews. However, in the event of a merger between two components, the share quantities of the surviving
entity may be adjusted to account for any stock issued in the acquisition. NYSE Arca may substitute securities or change the number
of securities included in the Underlying Index, based on changing conditions in the industry or in the event of certain types of
corporate actions, including mergers, acquisitions, spin-offs, and reorganizations. In the event of component or share quantity
changes to the index portfolio, the payment of dividends other than ordinary cash dividends, spin-offs, rights offerings, re-capitalization,
or other corporate actions affecting a component security of the Underlying Index, the index divisor may be adjusted to ensure
that there are no changes to the index level as a result of nonmarket forces.
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-14
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Historical Performance of the GDX
The following graph sets
forth the daily historical performance of the GDX in the period from January 1, 2008 through February 22, 2021. 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 GDX’s hypothetical Coupon Barrier and Threshold Value
of $27.37 (rounded to two decimal places), which is 80% of the GDX’s hypothetical Starting Value of $34.21, which was its
closing price on February 22, 2021. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing
date.
This historical data on the GDX
is not necessarily indicative of the future performance of the GDX or what the value of the Notes may be. Any historical upward
or downward trend in the price of the GDX during any period set forth above is not an indication that the price of the GDX 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 prices and trading pattern of the GDX.
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-15
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
The iShares® Silver
Trust
The
SLV trades under the ticker symbol “SLV” on NYSE Arca, Inc. The Bank of New York Mellon is the trustee of the SLV,
and JPMorgan Chase Bank, N.A., London branch is the custodian of the SLV.
The
SLV seeks to reflect generally the price of silver before the payment of its expenses and liabilities. The assets of the SLV consist
primarily of silver held by the custodian on behalf of the SLV. The SLV issues shares in exchange for deposits of silver and distributes
silver in connection with the redemption of shares. The shares of the SLV are intended to constitute a simple and cost-effective
means of making an investment similar to an investment in silver.
The
shares of the SLV represent units of fractional undivided beneficial interest in and ownership of the SLV. The SLV is a passive
investment vehicle and the trustee of the SLV does not actively manage the silver held by the SLV. The trustee of the SLV sells
silver held by the SLV to pay the SLV’s expenses on an as-needed basis irrespective of then-current silver prices. Currently,
the SLV’s only ordinary recurring expense is expected to be iShares Delaware’s fee, which is accrued daily at an annualized
rate equal to 0.50% of the net asset value of the SLV and is payable monthly in arrears. The trustee of the SLV will, when directed
by iShares Delaware, and, in the absence of such direction, may, in its discretion, sell silver in such quantity and at such times
as may be necessary to permit payment of iShares Delaware’s fee and of SLV expenses or liabilities not assumed by iShares
Delaware.
Information
provided to or filed with the SEC by the SLV pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act
of 1934, as amended, can be located by reference to SEC file numbers 333-239613 and 001-32863, respectively, through the SEC’s
website at http://www.sec.gov. According to the SLV’s prospectus, the SLV is not a mutual fund or any other type of investment
company within the meaning of the Investment Company Act of 1940, as amended and is not subject to regulation thereunder. The SLV
is not a commodity pool within the meaning of the Commodity Exchange Act, as amended and is not subject to regulation thereunder,
and iShares Delaware is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator or a
commodity trading advisor.
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Historical Performance of the SLV
The following graph sets forth
the daily historical performance of the SLV in the period from January 1, 2008 through February 22, 2021. 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 SLV’s hypothetical Coupon Barrier and Threshold Value of $21.02 (rounded
to two decimal places), which is 80% of the SLV’s hypothetical Starting Value of $26.27, which was its closing price on February
22, 2021. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical data on the SLV
is not necessarily indicative of the future performance of the SLV or what the value of the Notes may be. Any historical upward
or downward trend in the price of the SLV during any period set forth above is not an indication that the price of the SLV 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 prices and trading pattern of the SLV.
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-17
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
Supplement to the Plan of Distribution; Role
of BofAS and Conflicts of Interest
BofAS, a broker-dealer affiliate
of ours, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling
agent in the distribution of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121.
BofAS may not make sales in this offering to any of its discretionary accounts without the prior written approval of the account
holder.
We expect to deliver the Notes
against payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under
Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the Notes occurs
more than two business days from the pricing date, purchasers who wish to trade the Notes more than two business days prior to
the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
Under our distribution agreement
with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on the cover of this pricing
supplement, less the indicated underwriting discount. 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 $970.00 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. The selling agent may act as principal or agent
in these transactions, and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion,
for a short, undetermined initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market
at a price that may exceed the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on
then-prevailing market conditions and other considerations, including the performance of the Underlyings and the remaining term
of the Notes. However, none of us, the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes at any
price or at any time, and we cannot assure you that any party will purchase your Notes at a price that equals or exceeds the initial
estimated value of the Notes.
Any price that BofAS
may pay to repurchase the Notes will depend upon then prevailing market conditions, the creditworthiness of us and the Guarantor,
and transaction costs. At certain times, this price may be higher than or lower than the initial estimated value of the Notes.
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 have authorized, nor do
they 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.
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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 the
Issuer or the Guarantor.
All applicable provisions of the
FSMA must be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the
United Kingdom.
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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-9 above and “Supplemental Use of Proceeds” on page
PS-19 of the accompanying product supplement.
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
U.S. Federal Income Tax Summary
The following summary of the material U.S.
federal income tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under
“U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible
tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations
promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations),
rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently
in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance
can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences
described below. This summary does not include any description of the tax laws of any state or local governments, or of any foreign
government, that may be applicable to a particular holder.
Although the Notes are issued by us, they
will be treated as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion,
references to “we,” “our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S.
Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will
hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment,
and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor
concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax
consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes
in U.S. federal or other tax laws.
General
Although there is no statutory, judicial,
or administrative authority directly addressing the characterization of the Notes, we intend to treat the Notes for all tax purposes
as contingent income-bearing single financial contracts with respect to the Underlyings and under the terms of the Notes, we and
every investor in the Notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat
the Notes in accordance with such characterization. In the opinion of our counsel, Sidley Austin LLP, it is reasonable to treat
the Notes as contingent income-bearing single financial contracts with respect to the Underlyings. However, Sidley Austin LLP has
advised us that it is unable to conclude that it is more likely than not that this treatment will be upheld. This discussion assumes
that the Notes constitute contingent income-bearing single financial contracts with respect to the Underlyings for U.S. federal
income tax purposes. If the Notes did not constitute contingent income-bearing single financial contracts, the tax consequences
described below would be materially different.
This characterization of the Notes is
not binding on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization
of the Notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with
respect to their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the
U.S. federal income tax consequences of an investment in the Notes are not certain, and no assurance can be given that the IRS
or any court will agree with the characterization and tax treatment described in this pricing supplement. Accordingly, you are
urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the Notes,
including possible alternative characterizations.
Unless otherwise stated, the following
discussion is based on the characterization described above. The discussion in this section assumes that there is a significant
possibility of a significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether
the issuer of either Underlying would be treated as a “passive foreign investment company” (“PFIC”), within
the meaning of Section 1297 of the Code, or a United States real property holding corporation, within the meaning of Section 897(c)
of the Code. If the issuer of either Underlying were so treated, certain adverse U.S. federal income tax consequences could possibly
apply to a holder of the Notes. You should refer to information filed with the SEC by the issuers of the Underlyings and consult
your tax advisor regarding the possible consequences to you, if any, if the issuer of either Underlying is or becomes a PFIC or
is or becomes a United States real property holding corporation.
U.S. Holders
Although the U.S. federal income tax treatment
of any Contingent Coupon Payment on the Notes is uncertain, we intend to take the position, and the following discussion assumes,
that any Contingent Coupon Payment constitutes taxable ordinary income to a U.S. Holder at the time received or accrued in accordance
with the U.S. Holder’s regular method of accounting. By purchasing the Notes you agree, in the absence of an administrative
determination or judicial ruling to the contrary, to treat any Contingent Coupon Payment as described in the preceding sentence.
Upon receipt of a cash payment at maturity
or upon a sale, exchange, or redemption of the Notes prior to maturity, a U.S. Holder generally will recognize capital gain or
loss equal to the difference between the amount realized (other than amounts representing any Contingent Coupon Payment, which
would be taxed as described above) and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes
will equal the
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
amount paid by that holder to acquire them. Subject to the discussion below
concerning the possible application of the “constructive ownership” rules of Section 1260 of the Code, this capital
gain or loss generally will be long-term capital gain or loss if the U.S. Holder held the Notes for more than one year. The deductibility
of capital losses is subject to limitations.
Possible Application of Section 1260
of the Code. Since the Underlyings are the type of financial asset described under Section 1260 of the Code (including, among
others, any equity interest in pass-through entities such as exchange traded funds, regulated investment companies, real estate
investment trusts, partnerships, and passive foreign investment companies, each a “Section 1260 Financial Asset”),
while the matter is not entirely clear, there may exist a risk that an investment in the Notes will be treated, in whole or in
part, as a “constructive ownership transaction” to which Section 1260 of the Code applies. If Section 1260 of the Code
applies, all or a portion of any long-term capital gain recognized by a U.S. Holder in respect of the Notes will be recharacterized
as ordinary income (the “Excess Gain”). In addition, an interest charge will also apply to any deemed underpayment
of tax in respect of any Excess Gain to the extent such gain would have resulted in gross income inclusion for the U.S. Holder
in taxable years prior to the taxable year of the sale, exchange, redemption, or settlement (assuming such income accrued at a
constant rate equal to the applicable federal rate as of the date of sale, exchange, redemption, or settlement).
If an investment in the Notes is treated
as a constructive ownership transaction, it is not clear to what extent any long-term capital gain of a U.S. Holder in respect
of the Notes will be recharacterized as ordinary income. It is possible, for example, that the amount of the Excess Gain (if any)
that would be recharacterized as ordinary income in respect of the Notes will equal the excess of (i) any long-term capital gain
recognized by the U.S. Holder in respect of the Notes and attributable to Section 1260 Financial Assets, over (ii) the “net
underlying long-term capital gain” (as defined in Section 1260 of the Code) such U.S. Holder would have had if such U.S.
Holder had acquired an amount of the corresponding Section 1260 Financial Assets at fair market value on the original issue date
for an amount equal to the portion of the issue price of the Notes attributable to the corresponding Section 1260 Financial Assets
and sold such amount of Section 1260 Financial Assets at maturity or upon sale, exchange, or redemption of the Notes at fair market
value. Unless otherwise established by clear and convincing evidence, the net underlying long-term capital gain is treated as zero
and therefore it is possible that all long-term capital gain recognized by a U.S. Holder in respect of the Notes will be recharacterized
as ordinary income if Section 1260 of the Code applies to an investment in the Notes. U.S. Holders should consult their tax advisors
regarding the potential application of Section 1260 of the Code to an investment in the Notes.
As described below, the IRS, as indicated
in Notice 2008-2 (the “Notice”), is considering whether Section 1260 of the Code generally applies or should apply
to the Notes, including in situations where the Underlyings are not the type of financial asset described under Section 1260 of
the Code.
Alternative Tax Treatments. Due
to the absence of authorities that directly address the proper tax treatment of the Notes, prospective investors are urged to consult
their tax advisors regarding all possible alternative tax treatments of an investment in the Notes. In particular, the IRS could
seek to subject the Notes to the Treasury regulations governing contingent payment debt instruments. If the IRS were successful
in that regard, the timing and character of income on the Notes would be affected significantly. Among other things, a U.S. Holder
would be required to accrue original issue discount every year at a “comparable yield” determined at the time of issuance.
In addition, any gain realized by a U.S. Holder at maturity or upon a sale, exchange, or redemption of the Notes generally would
be treated as ordinary income, and any loss realized at maturity or upon a sale, exchange, or redemption of the Notes generally
would be treated as ordinary loss to the extent of the U.S. Holder’s prior accruals of original issue discount, and as capital
loss thereafter.
In addition, it is possible that the Notes
could be treated as a unit consisting of a deposit and a put option written by the Note holder, in which case the timing and character
of income on the Notes would be affected significantly.
The Notice sought comments from the public
on the taxation of financial instruments currently taxed as “prepaid forward contracts.” This Notice addresses instruments
such as the Notes. According to the Notice, the IRS and Treasury are considering whether a holder of an instrument such as the
Notes should be required to accrue ordinary income on a current basis, regardless of whether any payments are made prior to maturity.
It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any such future guidance may
affect the amount, timing and character of income, gain, or loss in respect of the Notes, possibly with retroactive effect.
The IRS and Treasury are also considering
additional issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether
foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of
the Code, concerning certain “constructive ownership transactions,” generally applies or should generally apply to
such instruments, and whether any of these determinations depend on the nature of the underlying asset.
In addition, proposed Treasury regulations
require the accrual of income on a current basis for contingent payments made under certain notional principal contracts. The preamble
to the regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual
of income on those contracts, and requires current accrual of income for some contracts already in existence. While the proposed
regulations do not apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar
timing issues exist in the case of prepaid forward contracts. If the IRS or Treasury publishes future guidance
requiring current economic accrual for contingent payments on prepaid forward contracts, it is possible that you could be required
to accrue income over the term of the Notes.
It is also possible that the IRS could
assert that your Notes should be treated as partially giving rise to “collectibles” gain or loss if you have held your
Notes for more than one year, although we do not think such a treatment would be appropriate in this case because a sale, exchange,
or redemption
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
of the Notes is not a sale, exchange, or redemption of a collectible but is rather a sale, exchange, or redemption
of a derivative contract that reflects the value, in part, of a collectible. “Collectibles” gain is currently subject
to tax at marginal rates of up to 28%.
Because of the absence of authority regarding
the appropriate tax characterization of the Notes, it is also possible that the IRS could seek to characterize the Notes in a manner
that results in tax consequences that are different from those described above. For example, the IRS could possibly assert that
any gain or loss that a holder may recognize at maturity or upon the sale, exchange, or redemption of the Notes should be treated
as ordinary gain or loss.
Non-U.S. Holders
Because the U.S. federal income tax treatment
of the Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal income tax at a 30% rate (or
at a lower rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon Payment made unless such payments
are effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. (in which case, to avoid withholding,
the Non-U.S. Holder will be required to provide a Form W-8ECI). We will not pay any additional amounts in respect of such withholding.
To claim benefits under an income tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to
its eligibility under the appropriate treaty’s limitations on benefits article, if applicable. In addition, special rules
may apply to claims for treaty benefits made by Non-U.S. Holders that are entities rather than individuals. The availability of
a lower rate of withholding under an applicable income tax treaty will depend on whether such rate applies to the characterization
of the payments under U.S. federal income tax laws. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Except as discussed below, a Non-U.S. Holder
generally will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes (not including,
for the avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject to the rules discussed in
the previous paragraph) upon the sale, exchange or redemption of the Notes or their settlement at maturity, provided that the Non-U.S.
Holder complies with applicable certification requirements and that the payment is not effectively connected with the conduct by
the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange, or redemption of
the Notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien
individual and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange, redemption, or settlement
and certain other conditions are satisfied.
If a Non-U.S. Holder of the Notes is engaged
in the conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized on the settlement
at maturity, or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of such trade or business
(and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.),
the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S. federal income tax on
such Contingent Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders
should read the material under the heading “—U.S. Holders,” for a description of the U.S. federal income tax
consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation, it
may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion
of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the
U.S., subject to certain adjustments.
A “dividend equivalent” payment
is treated as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding
tax if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked
instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified
ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation
for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However,
IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one
instruments and that are issued before January 1, 2023. Based on our determination that the Notes are not delta-one instruments,
Non-U.S. Holders should not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is
possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain
events affecting the Underlyings or the Notes, and following such occurrence the Notes could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlyings
or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context
of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the
applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect
to amounts so withheld.
As discussed above, alternative characterizations
of the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or
clarification of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax in addition
to the withholding tax described above, tax will be withheld at the applicable statutory rate. Prospective Non-U.S. Holders should
consult their own tax advisors regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current
law, while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible
in those individuals’ gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual
and with respect to which the individual has retained certain interests or powers), should note that, absent an applicable treaty
benefit, a Note is likely to
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-23
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
be treated as U.S. situs property, subject to U.S. federal estate tax.
These individuals and entities should consult their own tax advisors regarding the U.S. federal estate tax consequences of investing
in a Note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S.
Federal Income Tax Considerations — Taxation of Debt Securities — Backup Withholding and Information Reporting”
in the accompanying prospectus for a description of the applicability of the backup withholding and information reporting rules
to payments made on the Notes.
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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-24
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Contingent Income Buffered Auto-Callable Yield Notes Linked to the Least Performing of the VanEck Vectors® Gold Miners ETF and the iShares® Silver Trust
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, and the related guarantee will rank
equally in right of payment with all of BAC’s other unsecured and unsubordinated obligations, in each case, except obligations
that are subject to any priorities or preferences by law. 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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CONTINGENT INCOME BUFFERED AUTO-CALLABLE YIELD NOTES | PS-25
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