Linked to the S&P 500® Futures Excess Return
Index
| ● | Approximate 3.25 year term
if not called prior to maturity. |
| ● | The Notes will be automatically called at an amount equal
to the Call Amount if, on the Observation Date, the Observation Value of the S&P 500® Futures Excess Return Index (the
“Underlying”) is equal to or greater than 100% of the Starting Value. The Observation Date and Call Amount are indicated on
page PS-4. |
| ● | Assuming the Notes are not called prior to maturity, if
the Ending Value of the Underlying is greater than the Redemption Barrier (which is equal to 100% of the Starting Value), at maturity,
you will receive 1.15-to-1 upside exposure to increases
in the value of the Underlying. |
| ● | However, if the Notes are not called prior to maturity and the
Ending Value of the Underlying is less than 55% of the Starting Value, you will be subject to 1:1 downside exposure to declines in the
value of the Underlying, with up to 100% of the principal at risk; otherwise,
if the Ending Value of the Underlying is equal to or less than the Redemption Barrier but greater
than or equal to 55% of the Starting Value, at maturity, investors will receive the principal amount.
|
| ● | Any payment on the Notes is subject to the credit risk
of BofA Finance LLC (“BofA Finance”) and Bank of America Corporation (“BAC” or the “Guarantor”). |
| ● | No periodic interest payments. |
| ● | The Notes priced on January 26, 2024,
will issue on January 31, 2024 and will mature on April 29, 2027.
|
| ● | The Notes will not be listed on any securities exchange. |
The initial estimated value of the Notes as of the
pricing date is $953.40 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-7 of this pricing supplement and “Structuring the Notes” on page PS-18 of this pricing supplement for additional
information.
Potential purchasers of the Notes should consider
the information in “Risk Factors” beginning on page PS-7 of this pricing supplement, page PS-5 of the accompanying product
supplement, page S-6 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 pricing supplement and the accompanying product supplement, prospectus supplement and prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
|
Public offering price(1) |
Underwriting discount(1)(2) |
Proceeds, before expenses, to BofA Finance(2) |
Per Note |
$1,000.00 |
$30.00 |
$970.00 |
Total |
$1,198,000.00 |
$35,940.00 |
$1,162,060.00 |
(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. |
(2) |
The underwriting discount per $1,000 in principal amount of Notes may be as high as $30.00, resulting in proceeds, before expenses, to BofA Finance of as low as $970.00 per $1,000 in principal amount of Notes. The total underwriting discount and proceeds, before expenses, to BofA Finance specified above reflect the aggregate of the underwriting discounts per $1,000.00 in principal amount of Notes. |
The Notes and the related guarantee:
Are Not FDIC Insured |
Are Not Bank Guaranteed |
May Lose Value |
|
Selling Agent |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Terms of the Notes
The Auto-Callable Enhanced Return Notes Linked to the
S&P 500® Futures Excess Return Index (the “Notes”) will be automatically called at an amount equal to the
Call Amount if the Observation Value of the Underlying on the Observation Date is greater than or equal to the Call
Value. No further amounts will be payable following an Automatic Call.
If your Notes are
not automatically called prior to maturity and the Ending Value of the Underlying is greater than the Redemption Barrier, at maturity,
the Notes provide you 1.15-to-1 upside exposure to increases in the value of the Underlying. However, if the Notes are not automatically
called prior to maturity and the Ending Value of the Underlying is less than the Threshold Value, there is full exposure to declines in
the Underlying, and you will lose a significant portion or all of your investment in the Notes. Otherwise, at maturity you will receive
the principal amount. The Notes are not traditional debt securities, and you may lose a significant portion or all 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 Underlying, 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 3.25 years, unless previously automatically called. |
Underlying: |
The S&P 500® Futures Excess Return Index (Bloomberg symbol: “SPXFP”), a price return index. |
Pricing Date: |
January 26, 2024 |
Issue Date: |
January 31, 2024 |
Valuation Date: |
April 26, 2027, 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 29, 2027 |
Starting Value: |
431.43. |
Observation Value: |
The closing level of the Underlying on the Observation Date, as determined by the calculation agent. |
Ending Value: |
The closing level of the Underlying on the Valuation Date, as determined by the calculation agent. |
Call Value: |
431.43, which is 100% of the Starting Value. |
Redemption Barrier: |
431.43, which is 100% of the Starting Value. |
Threshold Value: |
237.29, which is 55% of the Starting Value (rounded to two decimal places). |
Automatic Call: |
All (but not less than all) of the Notes will be automatically called at an amount equal to the Call Amount if the Observation Value of the Underlying is greater than or equal to the Call Value on the Observation Date. If the Notes are automatically called, the Call Amount will be paid on the Call Settlement Date. No further amounts will be payable following an Automatic Call. |
Upside Participation Rate: |
115% |
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 Underlying is greater than the
Redemption Barrier:
;
or
b)
If the Ending Value of the Underlying is equal to or less
than the Redemption Barrier but greater than or equal to the Threshold Value: |
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-2 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
|
$1,000; or
c)
If the Ending Value of the Underlying is less than the
Threshold Value:
In this case, the Redemption Amount will be less than
55% of the principal amount and could be zero. |
Observation Date: |
As set forth on page PS-4. |
Call
Settlement Date: |
As set forth on page PS-4. |
Call Amount (per $1,000 in principal amount): |
As set forth on page PS-4. |
Calculation Agent: |
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance. |
Selling Agent: |
BofAS |
CUSIP: |
09710PPQ3 |
Underlying Return: |
(Ending Value - Starting Value)
Starting Value
|
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 of BofA Finance LLC—Events of Default and Rights of Acceleration; Covenant Breaches” on page 54 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. 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. |
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-3 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Observation Date and Call Settlement Date
|
Observation Date* |
|
Call Settlement Date |
|
Call Amount (per $1,000 in principal amount) |
|
|
January 29, 2025 |
|
February 3, 2025 |
|
$1,100.00 |
|
* The Observation Date is 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-23 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 Underlying. 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-7), reduced the economic terms of the Notes to you and the initial estimated value of the Notes. Due to these factors, the public offering
price you are paying to purchase the Notes is greater than the initial estimated value of the Notes as of the pricing date.
The initial estimated value of the Notes as of the pricing
date is set forth on the cover page of this pricing supplement. For more information about the initial estimated value and the structuring
of the Notes, see “Risk Factors” beginning on page PS-7 and “Structuring the Notes” on page PS-18.
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-4 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Automatic Call and Redemption Amount Determination
On
the Observation Date, your Notes may be automatically called,
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:
Any payment described above is subject to the credit risk of BofA
Finance, as Issuer, and BAC, as Guarantor.
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-5 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Hypothetical Payout Profile and Examples of Payments on the Notes
Auto-Callable Enhanced Return Notes Table
The following table is for purposes
of illustration only. It assumes the Notes have not been 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 Underlying, a hypothetical Threshold Value of
55 for the Underlying, the Upside Participation Rate of 115% and a range of hypothetical Ending Values of the Underlying. The actual
amount you receive and the resulting return will depend on the actual Starting Value, Threshold Value and Ending Value of the Underlying,
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 levels of the Underlying,
see “The Underlying” section below. The Underlying is a price return index and as such its Ending Value will not include any
income generated by dividends paid on the stocks included in the Underlying, which you would otherwise be entitled to receive if you invested
in those stocks directly. In addition, all payments on the Notes are subject to Issuer and Guarantor credit risk.
Ending Value |
Underlying Return |
Redemption Amount per Note |
Return on the Notes |
160.00 |
60.00% |
$1,690.00 |
69.00% |
150.00 |
50.00% |
$1,575.00 |
57.50% |
140.00 |
40.00% |
$1,460.00 |
46.00% |
130.00 |
30.00% |
$1,345.00 |
34.50% |
120.00 |
20.00% |
$1,230.00 |
23.00% |
110.00 |
10.00% |
$1,115.00 |
11.50% |
105.00 |
5.00% |
$1,057.50 |
5.75% |
102.00 |
2.00% |
$1,023.00 |
2.30% |
100.00(1) |
0.00% |
$1,000.00 |
0.00% |
90.00 |
-10.00% |
$1,000.00 |
0.00% |
80.00 |
-20.00% |
$1,000.00 |
0.00% |
55.00(2) |
-45.00% |
$1,000.00 |
0.00% |
54.99 |
-45.01% |
$549.90 |
-45.01% |
50.00 |
-50.00% |
$500.00 |
-50.00% |
0.00 |
-100.00% |
$0.00 |
-100.00% |
| (1) | The hypothetical
Starting Value of 100 used in the table above has been chosen for
illustrative purposes only. The actual Starting Value of the Underlying is set forth on page
PS-2 above. |
| (2) | This is the hypothetical Threshold Value of the Underlying.
|
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-6 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
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-6 of the accompanying prospectus supplement
and page 7 of the accompanying prospectus, each as identified on page PS-22 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 the Underlying is
less than the Threshold Value, at maturity, you will lose 1% of the principal amount for each 1% that the Ending Value of the Underlying
is less than the Starting Value. In that case, you will lose a significant portion or all of your investment in the Notes. |
| ● | The Notes do not bear interest. Unlike a conventional debt security, no interest payments will be
paid over the term of the Notes, regardless of the extent to which the Observation Value or Ending Value of the Underlying exceeds the
Starting Value, Call Value, Redemption Barrier or Threshold Value. |
| ● | The Call Amount or Redemption Amount, as applicable, will not reflect the levels of the Underlying other than on the Observation
Date and the Valuation Date. The levels of the Underlying during the term of the Notes other than on the Observation Date and the
Valuation Date, as applicable will not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware
of the performance of the Underlying while holding the Notes, as the performance of the Underlying may influence the market value of the
Notes. The calculation agent will determine whether the Notes will be automatically called, and will calculate the Call Amount or the
Redemption Amount, as applicable, by comparing only the Starting Value, Call Value, Redemption Barrier or Threshold Value, as applicable,
to the Observation Value or the Ending Value for the Underlying. No other levels of the Underlying will be taken into account. As a result,
if the Notes are not automatically called prior to maturity, and the Ending Value of the Underlying is less than the Threshold Value,
you will receive less than the principal amount at maturity even if the level of the Underlying was always above the Threshold Value prior
to the Valuation Date. |
| ● | The Notes are subject to a potential Automatic Call, which would limit your ability to receive further payment on the Notes.
The Notes are subject to a potential Automatic Call. The Notes will be automatically called if, on the Observation Date, the Observation
Value of the Underlying is greater than or equal to the Call Value. If the Notes are automatically called prior to the Maturity Date,
you will be entitled to receive the Call Amount on the Call Settlement Date, and no further amounts will be payable following the Automatic
Call. In this case, you will lose the opportunity to receive payment of any higher Redemption Amount that might otherwise be payable at
maturity. 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. |
| ● | 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. |
| ● | Any payment on the Notes is subject to the credit risk of BofA Finance and the Guarantor, and any actual or perceived changes in
BofA Finance’s 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 Call 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 Call Settlement
Date or the Maturity Date, regardless of the Ending Value of the Underlying as compared to the Starting Value. No assurance can be given
as to what our financial condition or the financial condition of the Guarantor will be at any time after the pricing date of the Notes.
If we and the Guarantor become unable to meet our respective financial obligations as they become due, you may not receive the amount(s)
payable under the terms of the Notes. |
In addition, our credit ratings and the credit ratings
of the Guarantor are assessments by ratings agencies of our respective abilities to pay our obligations. Consequently, our or the Guarantor’s
perceived creditworthiness and actual or anticipated decreases in our or the Guarantor’s credit ratings or increases in the spread
between the yield on our respective securities and the yield on U.S. Treasury securities (the “credit spread”) prior to the
Maturity Date 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 Underlying,
an improvement in our or the Guarantor’s credit ratings will not reduce the other investment risks related to the Notes.
| ● | We are a finance subsidiary and, as such, have no independent assets, operations, or revenues. We are a finance subsidiary
of the Guarantor, have no operations other than those related to the issuance, administration and repayment of our debt securities that
are guaranteed |
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-7 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
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.
Valuation-and Market-related Risks
| ● | The public offering price you are paying for the Notes exceeds their initial estimated value. The initial estimated value of
the Notes that is provided on the cover page of this pricing supplement is an estimate only, determined as of the pricing date by reference
to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including our credit
spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market terms on hedging transactions, expectations
on interest rates, dividends and volatility, price-sensitivity analysis, and the expected term of the Notes. These pricing models
rely in part on certain forecasts about future events, which may prove to be incorrect. If you attempt to sell the Notes prior to maturity,
their market value may be lower than the price you paid for them and lower than their initial estimated value. This is due to, among other
things, changes in the levels of the Underlying, 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. |
| ● | 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 Underlying, our and
BAC’s creditworthiness and changes in market conditions. |
| ● | 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.
|
Conflict-related Risks
| ● | 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 or units of the Underlying or the securities held by or included in the Underlying, or futures
or options contracts or exchange traded instruments on the Underlying or those securities, or other instruments whose value is derived
from the Underlying or those securities. While we, the Guarantor or one or more of our other affiliates, including BofAS, may from time
to time own securities represented by the Underlying, except to the extent that BAC’s common stock may be included in the Underlying,
we, the Guarantor and our other affiliates, including BofAS, do not control any company included in the Underlying, 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, 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
Underlying in a manner that could be adverse to your investment in the Notes. On or before the pricing date, any purchases or sales by
us, the Guarantor or our other affiliates, including BofAS or others on our or their behalf (including those for the purpose of hedging
some or all of our anticipated exposure in connection with the Notes), may have affected the value of the Underlying. Consequently, the
value of the Underlying may change subsequent to the pricing date, which may adversely affect the market value of the Notes.
We, the Guarantor or one or more of our other affiliates, including BofAS, also may have engaged in hedging activities that could have
affected the value of the Underlying 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 Underlying, the market value of your Notes
prior to maturity or the amounts payable on the Notes. |
| ● | 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.
|
Underlying-related Risks
| ● | The publisher of the Underlying may adjust the Underlying in a way that affects its levels, and the publisher has no obligation
to consider your interests. The publisher of the Underlying can add, delete, or substitute the components included in the Underlying
or make other methodological changes that could change its level. Any of these actions could adversely affect the value of your Notes. |
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-8 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
| ● | The Underlying is subject to significant risks associated with the futures contract to which the Underlying is linked. The
Underlying is linked to the next maturing E-mini S&P 500 futures contract currently listed for trading on the Chicago Mercantile Exchange
(the “CME”). The price of this futures contract depends not only on the level of the S&P 500® Index, which
is the underlying index referenced by the futures contract, but also on a range of other factors, including but not limited to the performance
and volatility of the U.S. stock market, corporate earnings reports, geopolitical events, governmental and regulatory policies and the
policies of the CME. In addition, the futures markets are subject to temporary distortions or other disruptions due to various factors,
including the lack of liquidity in the markets, the participation of speculators and government regulation and intervention. These factors
and others can cause the prices of the underlying futures contract to be volatile and could adversely affect the level of the Underlying
and any payments on, and the value of, your Notes. |
| ● | Higher future prices of the futures contract to which the Underlying is linked relative to its current prices may adversely affect
the value of the Underlying and the value of the Notes. The Underlying is linked to the next maturing E-mini S&P 500 futures contract
currently listed for trading on the CME. As the relevant futures contract approaches expiration, it is replaced by a contract that has
a later expiration. Thus, for example, a contract purchased and held in September may specify a December expiration. As time passes, the
contract expiring in December is replaced by a contract for delivery in March. This process is referred to as “rolling.” If
the market for these contracts is (putting aside other considerations) in “backwardation,” where the prices are lower in the
distant delivery months than in the nearer delivery months, the sale of the December contract would take place at a price that is higher
than the price of the March contract, thereby creating a “roll yield.” While many futures contracts have historically exhibited
consistent periods of backwardation, backwardation will most likely not exist at all times. It is also possible for the market for these
contracts to be in “contango.” Contango markets are those in which the prices of contracts are higher in the distant delivery
months than in the nearer delivery months. The presence of contango and absence of backwardation in the market for these contracts could
result in negative “roll yields,” which could adversely affect the value of the Underlying, and, accordingly, the value of
the Notes. |
| ● | Linking to an equity futures contract is different from linking to the equity index tracked by the equity futures contract. The
return on your Notes will be related to the performance of an equity futures contract and not the equity index tracked by the equity futures
contract. On a given day, a “futures price” is the price at which market participants may agree to buy or sell the asset underlying
a futures contract in the future, and the “spot price” is the current price of such underlying asset for immediate delivery.
A variety of factors can lead to a disparity between the price of a futures contract at a given point in time and the spot price of its
underlying asset, such as the expected dividend yields of any stocks that comprise such underlying asset, the implicit financing cost
associated with the futures contract and market expectations related to the future price of the futures contract’s underlying asset.
Purchasing an equity futures contract is similar to borrowing money to buy the underlying asset of such futures contract because it enables
an investor to gain exposure to such underlying asset without having to pay the full cost of such exposure up front, and therefore entails
a financing cost. As a result, the Underlying is expected to reflect not only the performance of the S&P 500® Index,
but also the implicit financing cost in the E-mini S&P 500 futures contract, among other factors. Such implicit financing cost will
adversely affect the level of the Underlying. Any increase in market interest rates will be expected to further increase this implicit
financing cost and will have an adverse effect on the level of the Underlying and, therefore, the value of and return on the Notes. |
The price movement of a futures contract is typically
correlated with the movements of the price of its underlying asset, but the correlation is generally imperfect, and price movements in
the spot market may not be reflected in the futures market (and vice versa). Accordingly, your Notes may underperform a similar investment
that more directly reflects the return on the S&P 500® Index.
| ● | Suspension or disruptions of market trading in futures markets may adversely affect the value of the Notes. Securities markets
and futures markets are subject to disruptions due to various factors, including the lack of liquidity in the markets, the participation
of speculators and government regulation and intervention. In addition, U.S. futures exchanges and some foreign exchanges have regulations
that limit the amount of fluctuation in futures contract prices that may occur during a single business day. These limits are generally
referred to as “daily price fluctuation limits,” and the maximum or minimum price of a contract on any given day as a result
of these limits is referred to as a “limit price.” Once the limit price has been reached in a particular contract, no trades
may be made at a different price. Limit prices have the effect of precluding trading in a particular contract or forcing the liquidation
of contracts at disadvantageous times or prices. Any such disruption could have an adverse effect on the value of the Underlying or the
manner in which it is calculated, and therefore, the value of the Notes. |
| ● | Legal and regulatory changes could adversely affect the return on and value of your Notes. Futures contracts and options on
futures contracts, including those related to the Underlying, are subject to extensive statutes, regulations, and margin requirements.
The Commodity Futures Trading Commission, commonly referred to as the “CFTC,” and the exchanges on which such futures contracts
trade, are authorized to take extraordinary actions in the event of a market emergency, including, for example, the retroactive implementation
of speculative position limits or higher margin requirements, the establishment of daily limits and the suspension of trading. Furthermore,
certain exchanges have regulations that limit the amount of fluctuations in futures contract prices that may occur during a single five-minute
trading period. These limits could adversely affect the market prices of relevant futures and options contracts and forward contracts. |
| ● | The Notes are linked to an excess return index and not a total return index. The Notes are linked to an excess return index
and not a total return index. An excess return index, such as the Underlying, reflects the returns that are potentially available through
an unleveraged investment in the contracts composing that index. By contrast, a “total return” index, in addition to reflecting
those returns, also reflects interest that could be earned on funds committed to the trading of the underlying futures contracts. |
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-9 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Tax-related Risks
| ● | The U.S. federal income tax consequences of an investment in the Notes are uncertain, and may be adverse to a holder of the Notes.
No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or securities similar to
the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment
in the Notes are not certain. Under the terms of the Notes, you will have agreed with us to treat the Notes as single financial contracts,
as described 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 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. |
Additional Terms of the Notes
Trading Day
The provisions of this section supersede
and replace the definition of “Trading Day” set forth in the accompanying product supplement.
A “Trading Day” means
a day on which the index sponsor of the Index is open for business and the Index is calculated and published by such index sponsor.
Market Disruption Events
The provisions of this section supersede and replace the definition
of “Market Disruption Event” with respect to an Index, as set forth in the accompanying product supplement.
A “Market Disruption Event” means one or more
of the following events, as determined by the calculation agent in its sole discretion:
|
(A) |
the suspension of or material limitation on trading, in each case, for more than two consecutive hours of trading, or during the one-half hour period preceding the close of trading, on the primary exchange where the securities included in the Index trade, as determined by the calculation agent (without taking into account any extended or after-hours trading session), in 20% or more of the securities which then comprise the Index; or |
|
(B)
|
the suspension of or material limitation on trading, in each case, for more than two consecutive hours of trading, or during the one-half hour period preceding the close of trading, on the primary exchange that trades options contracts or futures contracts related to the Index, as determined by the calculation agent (without taking into account any extended or after-hours trading session), in options contracts or futures contracts related to the Index, whether by reason of movements in price otherwise exceeding levels permitted by the relevant exchange or otherwise. |
For the purpose of determining whether a Market Disruption Event
has occurred:
|
(1) |
a limitation on the hours in a trading day for the Index and/or number of days of trading will not constitute a Market Disruption Event if it results from an announced change in the regular business hours of the relevant exchange; |
|
(2) |
a decision to permanently discontinue trading in the relevant futures or options contracts related to the Index will not constitute a Market Disruption Event; |
|
(3) |
a suspension in trading in a futures or options contract on the Index by a major securities market by reason of (a) a price change violating limits set by that securities market, (b) an imbalance of orders relating to those contracts, or (c) a disparity in bid and ask quotes relating to those contracts will constitute a suspension of or material limitation on trading in futures or options contracts related to the Index; |
|
(4) |
a suspension of or material limitation on trading on the relevant exchange for the Index will not include any time when that exchange is closed for trading under ordinary circumstances; and |
|
(5) |
For the purpose of clause (A) above, any limitations on trading during significant market fluctuations under NYSE Rule 80B, or any applicable rule or regulation enacted or promulgated by the NYSE or any other self-regulatory organization or the SEC of similar scope as determined by the calculation agent, will be considered “material.” |
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-10 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
The Underlying
All disclosures contained in this pricing supplement
regarding the Underlying, including, without limitation, its make-up, method of calculation, and changes in its components, have been
derived from publicly available sources. The information reflects the policies of, and is subject to change by, S&P Dow Jones Indices
LLC (“SPDJI”), the sponsor of the SPXFP. We refer to SPDJI as the “Underlying Sponsor”. The Underlying Sponsor,
which licenses the copyright and all other rights to the Underlying, has no obligation to continue to publish, and may discontinue publication
of, the Underlying. The consequences of the Underlying Sponsor discontinuing publication of the Underlying are discussed in “Description
of the Notes — Discontinuance of an Index” in the accompanying product supplement. None of us, the Guarantor, the calculation
agent, or BofAS accepts any responsibility for the calculation, maintenance or publication of the Underlying or any successor index. None
of us, the Guarantor, BofAS or any of our other affiliates makes any representation to you as to the future performance of the Underlying.
You should make your own investigation into the Underlying.
S&P 500® Futures Excess
Return Index
The SPXFP measures the performance of the nearest maturing
quarterly E-mini® S&P 500® futures contracts (Symbol: ES) (the “Underlying Futures Contracts”)
trading on the CME. E-mini® S&P 500® futures contracts are U.S. dollar-denominated futures contracts
based on the S&P 500® Index (the “SPX”). The SPXFP is calculated real-time from the price change of the
Underlying Futures Contracts. The SPXFP is an “excess return” index that is based on price levels of the Underlying Futures
Contracts as well as the discount or premium obtained by “rolling” hypothetical positions in the Underlying Futures Contracts
as they approach delivery. The SPXFP does not reflect interest earned on hypothetical, fully collateralized contract positions.
Index Rolling
As each Underlying Futures Contract approaches maturity,
it is replaced by the next maturing Underlying Futures Contract in a process referred to as “rolling.” The rolling of the
SPXFP occurs quarterly over a one-day rolling period (the “roll day”) every March, June, September and December, effective
after the close of trading five business days preceding the last trading date of the maturing Underlying Futures Contract.
On any scheduled roll day, the occurrence of either
of the following circumstances will result in an adjustment of the roll day according to the procedure set forth in this section:
| · | An exchange holiday occurs on that scheduled roll day. |
| · | The daily contract price of any Underlying Futures Contract within the SPXFP on that scheduled roll day is a limit price. |
If either of the above events occur, the relevant roll
day will take place on the next designated commodity index business day whereby none of the circumstances identified take place.
If a disruption is approaching the last trading day
of a contract expiration, the Index Committee (defined below) will convene to determine the appropriate course of action, which may include
guidance from the CME.
The Index Committee may change the date of a given rebalancing
for reasons including market holidays occurring on or around the scheduled rebalancing date. Any such change will be announced with proper
advance notice where possible.
Index Calculations
The closing level of the SPXFP on any trading day reflects
the change in the daily contract price of the Underlying Futures Contract since the immediately preceding trading day. On each quarterly
roll day, the closing level of the SPXFP reflects the change from the daily contract price of the maturing Underlying Futures Contract
on the immediately preceding trading day to the daily contract price of the next maturing Underlying Futures Contract on that roll day.
The daily contract price of an Underlying Futures Contract
will be the settlement price reported by the CME. If the CME fails to open due to unforeseen circumstances, such as natural disasters,
inclement weather, outages, or other events, the SPXFP uses the prior daily contract prices. In situations where the CME is forced to
close early due to unforeseen events, such as computer or electric power failures, weather conditions or other events, the Index Sponsor
calculates the closing level of the SPXFP based on (1) the daily contract prices published by the CME, or (2) if no daily contract prices
is available, the Index Committee determines the course of action and notifies clients accordingly.
Index Governance
An S&P Dow Jones Indices LLC index committee (the
“Index Committee”) maintains the SPXFP. All committee members are full-time professional members of S&P Dow Jones Indices
LLC’s staff. The Index Committee may revise index policy covering rules for including currencies, the timing of rebalancing or other
matters. The Index Committee considers information about changes to the SPXFP and related matters to be potentially market moving and
material. Therefore, all Index Committee discussions are confidential.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-11 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
The Index Committees reserve the right to make exceptions
when applying the methodology of the SPXFP if the need arises.
In addition to the daily governance of the SPXFP and
maintenance of its index methodology, at least once within any 12-month period, the Index Committee reviews the methodology to ensure
the SPXFP continues to achieve the stated objectives, and that the data and methodology remain effective. In certain instances, the Index
Sponsor may publish a consultation inviting comments from external parties.
Futures Contracts
Overview of Futures Markets
Futures contracts are traded on regulated futures exchanges,
in the over-the-counter market and on various types of electronic trading facilities and markets. As of the date of this term sheet, the
futures contract represented by the SPXFP is an exchange-traded futures contract. A futures contract provides for a specified settlement
month in which the cash settlement is made by the seller (whose position is therefore described as “short”) and acquired by
the purchaser (whose position is therefore described as “long”).
No purchase price is paid or received on the purchase
or sale of a futures contract. Instead, an amount of cash or cash equivalents must be deposited with the broker as “initial margin.”
This amount varies based on the requirements imposed by the exchange clearing houses, but it may be lower than 5% of the notional value
of the contract. This margin deposit provides collateral for the obligations of the parties to the futures contract.
By depositing margin, which may vary in form depending
on the exchange, with the clearing house or broker involved, a market participant may be able to earn interest on its margin funds, thereby
increasing the total return that it may realize from an investment in futures contracts.
At any time prior to the expiration of a futures contract,
a trader may elect to close out its position by taking an opposite position on the exchange on which the trader obtained the position,
subject to the availability of a liquid secondary market. This operates to terminate the position and fix the trader’s profit or
loss. Futures contracts are cleared through the facilities of a centralized clearing house and a brokerage firm that is a member of the
clearing house. Futures exchanges may adopt rules and take other actions that affect trading, including imposing speculative position
limits, maximum price fluctuations and trading halts and suspensions and requiring liquidation of contracts in certain circumstances.
The Underlying Futures Contracts
The Underlying Futures Contracts are U.S. dollar-denominated
futures contracts which are based on the SPX and traded on the CME that represent a contract unit of $50 multiplied by the SPX, measured
in cents per index point. The Underlying Futures Contracts listed for the nearest nine quarters, for each March, June, September and December,
and the nearest three Decembers, are available for trading. Trading of the Underlying Futures Contracts terminates at 9:30 A.M. Eastern
time on the third Friday of the contract month. The daily settlement prices of the Underlying Futures Contracts are based on trading activity
in the relevant contract (and in the case of a lead month also being the expiry month, together with trading activity on lead month-second
month spread contracts) on the CME during a specified settlement period. The final settlement price of Underlying Futures Contracts is
based on the opening prices of the component stocks in the SPX, determined on the third Friday of the contract month.
The S&P 500® Index
The SPX includes a representative sample of 500 companies in leading
industries of the U.S. economy. The SPX is intended to provide an indication of the pattern of common stock price movement. The calculation
of the level of the SPX is based on the relative value of the aggregate market value of the common stocks of 500 companies as of a particular
time compared to the aggregate average market value of the common stocks of 500 similar companies during the base period of the years
1941 through 1943.
The SPX includes companies from eleven main groups: Communication Services;
Consumer Discretionary; Consumer Staples; Energy; Financials; Health Care; Industrials; Information Technology; Real Estate; Materials;
and Utilities. SPDJI, the sponsor of the SPX, may from time to time, in its sole discretion, add companies to, or delete companies from,
the SPX to achieve the objectives stated above.
Company additions to the SPX must have an unadjusted company market
capitalization of $15.8 billion or more (an increase from the previous requirement of an unadjusted company market capitalization of $14.5
billion or more).
SPDJI calculates the SPX by reference to the prices of the constituent
stocks of the SPX without taking account of the value of dividends paid on those stocks. As a result, the return on the Notes will not
reflect the return you would realize if you actually owned the SPX constituent stocks and received the dividends paid on those stocks.
Computation of the SPX
While SPDJI currently employs the following methodology to calculate
the SPX, no assurance can be given that SPDJI will not modify or change this methodology in a manner that may affect payments on the Notes.
Historically, the market value of any component stock of the SPX was
calculated as the product of the market price per share and the number of then outstanding shares of such component stock. In March 2005,
SPDJI began shifting the SPX halfway from a market capitalization weighted formula to a float-adjusted formula, before moving the SPX
to full float adjustment on September 16, 2005. SPDJI’s criteria for selecting stocks for the SPX did not change with the shift
to float adjustment. However, the adjustment affects each company’s weight in the SPX.
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-12 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Under float adjustment, the share counts used in calculating the SPX
reflect only those shares that are available to investors, not all of a company’s outstanding shares. Float adjustment excludes
shares that are closely held by control groups, other publicly traded companies or government agencies.
In September 2012, all shareholdings representing more than 5% of a
stock’s outstanding shares, other than holdings by “block owners,” were removed from the float for purposes of calculating
the SPX. Generally, these “control holders” will include officers and directors, private equity, venture capital and special
equity firms, other publicly traded companies that hold shares for control, strategic partners, holders of restricted shares, ESOPs, employee
and family trusts, foundations associated with the company, holders of unlisted share classes of stock, government entities at all levels
(other than government retirement/pension funds) and any individual person who controls a 5% or greater stake in a company as reported
in regulatory filings. However, holdings by block owners, such as depositary banks, pension funds, mutual funds and ETF providers, 401(k)
plans of the company, government retirement/pension funds, investment funds of insurance companies, asset managers and investment funds,
independent foundations and savings and investment plans, will ordinarily be considered part of the float.
Treasury stock, stock options, restricted shares, equity participation
units, warrants, preferred stock, convertible stock, and rights are not part of the float. Shares held in a trust to allow investors in
countries outside the country of domicile, such as depositary shares and Canadian exchangeable shares, are normally part of the float
unless those shares form a control block. If a company has multiple classes of stock outstanding, shares in an unlisted or non-traded
class are treated as a control block.
For each stock, an investable weight factor (“IWF”) is calculated
by dividing the available float shares by the total shares outstanding. Available float shares are defined as the total shares outstanding
less shares held by control holders. This calculation is subject to a 5% minimum threshold for control blocks. For example, if a company’s
officers and directors hold 3% of the company’s shares, and no other control group holds 5% of the company’s shares, SPDJI
would assign that company an IWF of 1.00, as no control group meets the 5% threshold. However, if a company’s officers and directors
hold 3% of the company’s shares and another control group holds 20% of the company’s shares, SPDJI would assign an IWF of
0.77, reflecting the fact that 23% of the company’s outstanding shares are considered to be held for control. As of July 31, 2017,
companies with multiple share class lines are no longer eligible for inclusion in the SPX. Constituents of the SPX prior to July 31, 2017
with multiple share class lines will be grandfathered in and continue to be included in the SPX. If a constituent company of the SPX reorganizes
into a multiple share class line structure, that company will remain in the SPX at the discretion of the S&P Index Committee in order
to minimize turnover.
The SPX is calculated using a base-weighted aggregate methodology. The
level of the SPX reflects the total market value of all component stocks relative to the base period of the years 1941 through 1943. An
indexed number is used to represent the results of this calculation in order to make the level easier to work with and track over time.
The actual total market value of the component stocks during the base period of the years 1941 through 1943 has been set to an indexed
level of 10. This is often indicated by the notation 1941- 43 = 10. In practice, the daily calculation of the SPX is computed by dividing
the total market value of the component stocks by the “index divisor.” By itself, the index divisor is an arbitrary number.
However, in the context of the calculation of the SPX, it serves as a link to the original base period level of the SPX. The index divisor
keeps the SPX comparable over time and is the manipulation point for all adjustments to the SPX, which is index maintenance.
Index Maintenance
Index maintenance
includes monitoring and completing the adjustments for company additions and deletions, share changes, stock splits, stock dividends,
and stock price adjustments due to company restructuring or spinoffs. Some corporate actions, such as stock splits and stock dividends,
require changes in the common shares outstanding and the stock prices of the companies in the SPX, and do not require index divisor adjustments.
To prevent the level of the SPX from changing due to corporate actions,
corporate actions which affect the total market value of the SPX require an index divisor adjustment. By adjusting the index divisor for
the change in market value, the level of the SPX remains constant and does not reflect the corporate actions of individual companies in
the SPX. Index divisor adjustments are made after the close of trading and after the calculation of the SPX closing level.
Changes in a company’s shares outstanding of 5.00% or more due
to mergers, acquisitions, public offerings, tender offers, Dutch auctions, or exchange offers are made as soon as reasonably possible.
Share changes due to mergers or acquisitions of publicly held companies that trade on a major exchange are implemented when the transaction
occurs, even if both of the companies are not in the same headline index, and regardless of the size of the change. All other changes
of 5.00% or more (due to, for example, company stock repurchases, private placements, redemptions, exercise of options, warrants, conversion
of preferred stock, notes, debt, equity participation units, at-the-market offerings, or other recapitalizations) are made weekly and
are announced on Fridays for implementation after the close of trading on the following Friday. Changes of less than 5.00% are accumulated
and made quarterly on the third Friday of March, June, September, and December, and are usually announced two to five days prior.
If a change in a company’s shares outstanding of 5.00% or more
causes a company’s IWF to change by five percentage points or more, the IWF is updated at the same time as the share change. IWF
changes resulting from partial tender offers are considered on a case by case basis.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-13 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Historical Performance of the SPXFP
The following graph sets forth the daily historical performance of the
SPXFP in the period from January 2, 2019 through the pricing date. 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
SPXFP’s Threshold Value of 237.29 (rounded to two decimal places), which is 55% of the SPXFP’s Starting Value of 431.43.
This historical data on the SPXFP is not necessarily
indicative of the future performance of the SPXFP or what the value of the Notes may be. Any historical upward or downward trend in the
closing level of the SPXFP during any period set forth above is not an indication that the closing level of the SPXFP is more or less
likely to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you should consult publicly
available sources for the closing levels of the SPXFP.
License Agreement
S&P®
is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed for use by
S&P Dow Jones Indices LLC. “Standard & Poor’s®,” “S&P
500®” and “S&P®”
are trademarks of S&P. These trademarks have been sublicensed for certain purposes by our affiliate, Merrill Lynch, Pierce, Fenner
& Smith Incorporated. The SPXFP is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use
by Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Notes are not sponsored, endorsed, sold or promoted
by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P Dow Jones Indices”).
S&P Dow Jones Indices make no representation or warranty, express or implied, to the holders of the Notes or any member of the public
regarding the advisability of investing in securities generally or in the Notes particularly or the ability of the SPXFP to track general
market performance. S&P Dow Jones Indices’ only relationship to Merrill Lynch, Pierce, Fenner & Smith Incorporated with
respect to the SPXFP is the licensing of the SPXFP and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices
and/or its third party licensors. The SPXFP is determined, composed and calculated by S&P Dow Jones Indices without regard to us,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, or the Notes. S&P Dow Jones Indices have no obligation to take our needs,
BAC’s needs or the needs of Merrill Lynch, Pierce, Fenner & Smith Incorporated or holders of the Notes into consideration in
determining, composing or calculating the SPXFP. S&P Dow Jones Indices are not responsible for and have not participated in the determination
of the prices and amount of the Notes or the timing of the issuance or sale of the Notes or in the determination or calculation of the
equation by which the Notes are to be converted into cash. S&P Dow Jones Indices have no obligation or liability in connection with
the administration, marketing or trading of the Notes. There is no assurance that investment products based on the SPXFP will accurately
track index performance or provide positive investment returns. S&P Dow Jones Indices LLC and its subsidiaries are not investment
advisors. Inclusion of a security or futures contract within an index is not a recommendation by S&P Dow Jones Indices to buy, sell,
or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc.
and its affiliates may independently issue and/or sponsor financial products unrelated to the Notes currently being issued by us, but
which may be similar to and competitive with the Notes. In addition, CME Group Inc. and its affiliates may trade financial products which
are linked to the performance of the SPXFP. It is possible that this trading activity will affect the value of the Notes.
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-14 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
S&P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY,
ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE SPXFP OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED
TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT
TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY
US, BAC, BOFAS, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE
OF THE SPXFP OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P
DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS
OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT,
TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES
INDICES AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
|
AUTO-CALLABLE ENHANCED RETURN NOTES | PS-15 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Supplement to the Plan of Distribution; Role of BofAS and Conflicts
of Interest
BofAS, a broker-dealer affiliate of ours, is a member
of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling agent in the distribution of
the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121. BofAS may not make sales in this
offering to any of its discretionary accounts without the prior written approval of the account holder.
We will deliver the Notes against payment therefor in
New York, New York on a date that is greater than two business days following the pricing date. Under Rule 15c6-1 of the Securities Exchange
Act of 1934, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than two business days prior to the original issue
date will be required to specify alternative settlement arrangements to prevent a failed settlement.
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, if any. 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. These broker-dealer affiliates may act as principal or agent in these transactions,
and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion, for a short, undetermined
initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market at a price that may exceed the
initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on then-prevailing market conditions and
other considerations, including the performance of the Underlying 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 has authorized, nor does it authorize, the making of any offer of Notes other than to Qualified Investors. The expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
PROHIBITION OF SALES TO EEA AND UNITED KINGDOM RETAIL
INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the EEA or in the United Kingdom. For these purposes: (a) a retail investor means a
person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID
II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive) where that customer
would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication in any form and by any means
of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe
for the Notes. Consequently no key information document required by Regulation (EU) No 1286/2014, as amended (the “PRIIPs Regulation”)
for offering or selling the Notes or otherwise making them available to retail investors in the EEA or in the United Kingdom has been
prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA or in the United
Kingdom may be unlawful under the PRIIPs Regulation.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-16 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
United Kingdom
The communication of this pricing supplement, the accompanying
product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or materials relating to
the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been approved, by an authorized
person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as amended (the “FSMA”).
Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the United
Kingdom. The communication of such documents and/or materials as a financial promotion is only being made to those persons in the United
Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals
(as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial
Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to
whom it may otherwise lawfully be made under the Financial Promotion Order (all such persons together being referred to as “relevant
persons”). In the United Kingdom, the Notes offered hereby are only available to, and any investment or investment activity to which
this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement and the accompanying prospectus relates
will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely
on this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement or the accompanying prospectus
or any of their contents.
Any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only be communicated or
caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to BofA Finance, as Issuer, or BAC, as Guarantor.
All applicable provisions of the FSMA must be complied
with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the United Kingdom.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-17 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Structuring the Notes
The Notes are our debt securities, the return on which
is linked to the performance of the Underlying. 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, resulted in the initial estimated value of the Notes on the
pricing date being less than their public offering price.
In order to meet our payment obligations on the Notes,
at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options
or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are determined based upon terms
provided by BofAS and its affiliates, and take into account a number of factors, including our and BAC’s creditworthiness, interest
rate movements, the volatility of the Underlying, the tenor of the Notes and the hedging arrangements. The economic terms of the Notes
and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised us that the hedging arrangements will
include hedging related charges, reflecting the costs associated with, and our affiliates’ profit earned from, these hedging arrangements.
Since hedging entails risk and may be influenced by unpredictable market forces, actual profits or losses from these hedging transactions
may be more or less than any expected amounts.
For further information, see “Risk Factors”
beginning on page PS-7 above and “Supplemental Use of Proceeds” on page PS-20 of the accompanying product supplement.
Validity of the Notes
In the opinion of McGuireWoods LLP, as counsel to
BofA Finance, as issuer, and BAC, as guarantor, when the trustee has made the appropriate entries or notations on Schedule 1 to the master
global note that represents the Notes (the “Master Note”) identifying the Notes offered hereby as supplemental obligations
thereunder in accordance with the instructions of BofA Finance, and the Notes have been delivered against payment therefor as contemplated
in this pricing supplement and the related prospectus, prospectus supplement and product supplement, all in accordance with the provisions
of the indenture governing the Notes and the related guarantee, such Notes will be the legal, valid and binding obligations of BofA Finance,
and the related guarantee will be the legal, valid and binding obligation of BAC, subject, in each case, to the effects of applicable
bankruptcy, insolvency (including laws relating to preferences, fraudulent transfers and equitable subordination), reorganization, moratorium
and other similar laws affecting creditors’ rights generally, and to general principles of equity. This opinion is given as of the
date of this pricing supplement and is limited to the Delaware General Corporation Law and the Delaware Limited Liability Company Act
(including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting
either of the foregoing) and the laws of the State of New York as in effect on the date hereof. In addition, this opinion is subject to
customary assumptions about the trustee’s authorization, execution and delivery of the indenture governing the Notes and due authentication
of the Master Note, the validity, binding nature and enforceability of the indenture governing the Notes and the related guarantee with
respect to the trustee, the legal capacity of individuals, the genuineness of signatures, the authenticity of all documents submitted
to McGuireWoods LLP as originals, the conformity to original documents of all documents submitted to McGuireWoods LLP as copies thereof,
the authenticity of the originals of such copies and certain factual matters, all as stated in the opinion letter of McGuireWoods LLP
dated December 8, 2022, which has been filed as an exhibit to the Registration Statement (File Nos. 333-268718 and 333-268718-01) of BAC
and BofA Finance, filed with the SEC on December 8, 2022.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-18 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
U.S. Federal Income Tax Summary
The following summary of the material U.S. federal income
and estate tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and is not exhaustive
of all possible tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”),
regulations promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations),
rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect
and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that
the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. This
summary does not include any description of the tax laws of any state or local governments, or of any foreign government, that may be
applicable to a particular holder.
Although the Notes are issued by us, they will be treated
as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references to “we,”
“our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S. Holders and
Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will hold the Notes
as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment, and that are not
excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor concerning
the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax consequences arising
under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax
laws.
General
Although there is no statutory, judicial, or administrative
authority directly addressing the characterization of the Notes, in the opinion of our counsel, Sidley Austin LLP, and based on certain
factual representations received from us, the Notes should be treated as single financial contracts with respect to the Underlying and
under the terms of the Notes, we and every investor in the Notes agree, in the absence of an administrative determination or judicial
ruling to the contrary, to treat the Notes in accordance with such characterization. This discussion assumes that the Notes constitute
single financial contracts with respect to the Underlying for U.S. federal income tax purposes. If the Notes did not constitute single
financial contracts, the tax consequences described below would be materially different.
This characterization of the Notes is not binding
on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or
any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to their proper
characterization and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences
of an investment in the Notes are not certain, and no assurance can be given that the IRS or any court will agree with the characterization
and tax treatment described in this pricing supplement. Accordingly, you are urged to consult your tax advisor regarding all aspects of
the U.S. federal income tax consequences of an investment in the Notes, including possible alternative characterizations.
Unless otherwise stated, the following discussion is
based on the characterization described above. The discussion in this section assumes that there is a significant possibility of a significant
loss of principal on an investment in the Notes.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-19 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
U.S. Holders
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 and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes
will equal the amount paid by that holder to acquire them. This capital gain or loss generally will be long-term capital gain or loss
if the U.S. Holder held the Notes for more than one year. The deductibility of capital losses is subject to limitations.
Alternative Tax Treatments. Due to the absence
of authorities that directly address the proper tax treatment of the Notes, prospective investors are urged to consult their tax advisors
regarding all possible alternative tax treatments of an investment in the Notes. In particular, the IRS could seek to subject the Notes
to the Treasury regulations governing contingent payment debt instruments. If the IRS were successful in that regard, the timing and character
of income on the Notes would be affected significantly. Among other things, a U.S. Holder would be required to accrue original issue discount
every year at a “comparable yield” determined at the time of issuance. In addition, any gain realized by a U.S. Holder at
maturity or upon a sale, 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.
The IRS released Notice 2008-2 (the “Notice”),
which sought comments from the public on the taxation of financial instruments currently taxed as “prepaid forward contracts.”
This Notice addresses instruments such as the Notes. According to the Notice, the IRS and Treasury are considering whether a holder of
an instrument such as the Notes should be required to accrue ordinary income on a current basis, regardless of whether any payments are
made prior to maturity. It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any such future
guidance may affect the amount, timing and character of income, gain, or loss in respect of the Notes, possibly with retroactive effect.
The IRS and Treasury are also considering additional
issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether foreign holders
of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Code, concerning certain
“constructive ownership transactions,” generally applies or should generally apply to such instruments, and whether any of
these determinations depend on the nature of the underlying asset.
In addition, proposed Treasury regulations require the
accrual of income on a current basis for contingent payments made under certain notional principal contracts. The preamble to the regulations
states that the “wait and see” method of accounting does not properly reflect the economic accrual of income on those contracts,
and requires current accrual of income for some contracts already in existence. While the proposed regulations do not apply to prepaid
forward contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the case of prepaid
forward contracts. If the IRS or Treasury publishes future guidance requiring current economic accrual for contingent payments on prepaid
forward contracts, it is possible that you could be required to accrue income over the term of the Notes.
It is also possible that the IRS could assert that Section
1256 of the Code should apply to your Notes. If Section 1256 were to apply to your Notes, gain or loss recognized with respect to your
Notes would be treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss, without regard to your holding period
in the Notes. You would also be required to mark your Notes to market at the end of each year (i.e., recognize income as if the Notes
had been sold for fair market value). Alternatively, it is also possible that you could be required to recognize gain or loss each time
a futures contract rolls. Such gain or loss may also be subject to Section 1256 as discussed above, under which 60% of the gain or loss
will be treated as long-term capital gain or loss and 40% will be treated as short-term capital gain or loss.
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.
Since the Underlying tracks what
is known as a rolling futures position, it is possible that the Notes could be treated as a series of single financial contracts, each
of which matures on the next date in which futures contracts are “rolled” into other futures contracts. If the Notes were
properly characterized in such a manner, a U.S. Holder would be treated as disposing of the Notes on each date in which futures contracts
are “rolled” into other futures contracts in return for new Notes that mature on the next date in which futures contracts
are “rolled” into other futures contracts, and a U.S. Holder would accordingly likely recognize capital gain or loss on each
such “rolling” date equal to the difference between the holder’s tax basis in the Notes (which would be adjusted to
take into account any prior recognition of gain or loss) and the fair market value of the Notes on such date.
Non-U.S. Holders
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-20 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Except as discussed below, a Non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes provided that the Non-U.S. Holder
complies with applicable certification requirements and that the payment is not effectively connected with the conduct by the Non-U.S.
Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, 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 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 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, 2025. Based on our
determination that the Notes are not delta-one instruments, Non-U.S. Holders should not be subject to withholding on dividend equivalent
payments, if any, under the Notes. However, it is possible that the Notes could be treated as deemed reissued for U.S. federal income
tax purposes upon the occurrence of certain events affecting the Underlying 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 Underlying or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding
tax in the context of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding,
we (or the applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect
to amounts so withheld.
As discussed above, alternative characterizations of
the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or clarification
of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax, tax will be withheld at the
applicable statutory rate. As discussed above, the IRS has indicated in the Notice that it is considering whether income in respect of
instruments such as the Notes should be subject to withholding tax. Prospective Non-U.S. Holders should consult their own tax advisors
regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current law, while
the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those individuals’
gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with respect to which the individual
has retained certain interests or powers), should note that, absent an applicable treaty benefit, a Note is likely to be treated as U.S.
situs property, subject to U.S. federal estate tax. These individuals and entities should consult their own tax advisors regarding the
U.S. federal estate tax consequences of investing in a Note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S. Federal
Income Tax Considerations — General — Backup Withholding and Information Reporting” in the accompanying prospectus for
a description of the applicability of the backup withholding and information reporting rules to payments made on the Notes.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-21 |
Auto-Callable Enhanced Return Notes Linked to the S&P 500® Futures Excess Return Index
Where You Can Find More Information
The terms and risks of the Notes are contained in this
pricing supplement and in the following related product supplement, prospectus supplement and prospectus, which can be accessed at the
following links:
This pricing supplement and the accompanying product
supplement, prospectus supplement and 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
this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus 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 this
pricing supplement and the accompanying product supplement, prospectus supplement and prospectus. Certain terms used but not defined in
this pricing supplement have the meanings set forth in the accompanying product supplement or prospectus supplement. Unless otherwise
indicated or unless the context requires otherwise, all references in this document to “we,” “us,” “our,”
or similar references are to BofA Finance, and not to BAC.
The Notes are our senior debt securities. Any payments
on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee are not insured by the Federal Deposit
Insurance Corporation or secured by collateral. The Notes will rank equally in right of payment with all of our other unsecured and unsubordinated
obligations, except obligations that are subject to any priorities or preferences by law. The related guarantee will rank equally in right
of payment with all of BAC’s other unsecured and unsubordinated obligations, except obligations that are subject to any priorities
or preferences by law, and senior to its subordinated obligations. Any payments due on the Notes, including any repayment of the principal
amount, will be subject to the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor.
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AUTO-CALLABLE ENHANCED RETURN NOTES | PS-22 |
Exhibit 107.1
The prospectus to which this Exhibit is attached is a final prospectus for the related offering. The maximum aggregate offering price for such offering is $1,198,000.00.
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