This pricing supplement, which is not complete and may
be changed, relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying
product supplement, prospectus supplement and prospectus are not an offer to sell these Notes in any country or jurisdiction where
such an offer would not be permitted.
Linked to the Least Performing
of the EURO STOXX Banks Price Index and the Russell 2000® Index
|
•
|
Approximate
5 year term if not called prior to maturity.
|
|
•
|
Payments
on the Notes will depend on the individual performance of the EURO STOXX Banks Price Index and the Russell 2000® Index (each
an “Underlying”).
|
|
•
|
Contingent
coupon rate of 10.00% per annum (2.50% per quarter) payable quarterly if the closing level of each Underlying on the applicable
Observation Date is greater than or equal to 65% of its Starting Value.
|
|
•
|
Beginning
in September 2020, automatically callable quarterly for an amount equal to the principal amount plus the relevant contingent coupon
if the closing level of each Underlying is greater than or equal to its Starting Value on any Observation Date (other than the
final Observation Date).
|
|
•
|
Assuming
the Notes are not called prior to maturity, if either Underlying declines by more than 35% from its Starting Value, at maturity
your investment will be subject to a 1:1 downside, with up to 100% of the principal at risk; otherwise, at maturity investors will
receive the principal amount. At maturity the investor will also receive the final contingent coupon if the closing level of each
Underlying on the final Observation Date is greater than or equal to 65% of its Starting Value.
|
|
•
|
All
payments on the Notes are subject to the credit risk of BofA Finance LLC (“BofA Finance”) and Bank of America Corporation
(“BAC” or the “Guarantor”).
|
|
•
|
The
Notes are expected to price on September 25, 2019, expected to issue on September 30, 2019 and expected to mature on September
30, 2024.
|
|
•
|
The
Notes will not be listed on any securities exchange.
|
The initial estimated
value of the Notes as of the pricing date is expected to be between $900.00 and $950.00 per Note, 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-8 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-8 of this pricing supplement, page PS-5 of the accompanying product supplement,
page S-4 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus. None of the Securities and Exchange
Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of
these securities or determined if this Note Prospectus (as defined on page PS-22) is truthful or complete. Any representation to
the contrary is a criminal offense.
|
Public offering price(1)
|
Underwriting discount(1)
|
Proceeds, before expenses, to BofA Finance
|
Per Note
|
$1,000
|
$35.00
|
$965.00
|
Total
|
|
|
|
|
(1)
|
Certain
dealers who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions,
fees or commissions.
|
The
public offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low as $965.00 per Note.
The Notes and the related
guarantee:
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Selling Agent
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Terms of the Notes
The Contingent
Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
(the “Notes”) provide a quarterly Contingent Coupon Payment of $25.00 on the applicable Contingent Payment Date if,
on any quarterly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier.
The actual Contingent Coupon Payment will be determined on the pricing date. Beginning in
September 2020, if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation
Date (other than the final Observation Date), the Notes will be automatically called, in whole but not in part, at 100%
of the principal amount, together with the relevant Contingent Coupon Payment. No further amounts will be payable following an
Automatic Call. If the Notes are not automatically called prior to maturity and the Least Performing Underlying declines by more
than 35% from its Starting Value, there is full exposure to declines in the Least Performing 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. At maturity you will
also receive the final Contingent Coupon Payment if the Observation Value of each Underlying on the final Observation Date
is greater than or equal to its Coupon Barrier. The Notes are not traditional debt securities and it is possible that the Notes
will not pay any Contingent Coupon Payments, and you may lose 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 Underlyings, subject to our and BAC’s credit risk.
Issuer:
|
BofA Finance
|
Guarantor:
|
BAC
|
Denominations:
|
The Notes will be issued in minimum denominations of $1,000 and whole multiples of $1,000 in excess thereof.
|
Term:
|
Approximately 5 years, unless previously automatically called.
|
Underlyings:
|
The EURO STOXX Banks Price Index (the “SX7E”) (Bloomberg symbol: “SX7E”) and the Russell 2000® Index (the “RTY”) (Bloomberg symbol: “RTY”), each a price return index.
|
Pricing Date*:
|
September 25, 2019
|
Issue Date*:
|
September 30, 2019
|
Valuation Date*:
|
September 25, 2024, subject to postponement as described under “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates” of the accompanying product supplement. If the Valuation Date is not a business day, the Valuation Date will be postponed to the next business day.
|
Maturity Date*:
|
September 30, 2024
|
Starting Value:
|
With respect to each Underlying, its closing level on the pricing date.
|
Observation Value:
|
With respect to each Underlying, its closing level on the applicable Observation Date.
|
Ending Value:
|
With respect to each Underlying, its closing level on the Valuation Date, as determined by the calculation agent.
|
Coupon Barrier:
|
With respect to each Underlying, 65% of its Starting Value.
|
Threshold Value:
|
With respect to each Underlying, 65% of its Starting Value.
|
Contingent Coupon Payment:
|
If, on any quarterly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier, we will pay a Contingent Coupon Payment of $25.00 per $1,000 in principal amount of Notes (equal to a rate of 2.50% per quarter or 10.00% per annum) on the applicable Contingent Payment Date (including the Maturity Date).
|
Automatic Call:
|
Beginning in September 2020, all (but not less than all) of the Notes will be automatically called if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation Date (other than the final Observation Date). If the Notes are automatically called, the Early Redemption Amount will be paid on the applicable Contingent Payment Date. No further amounts will be payable following an Automatic Call.
|
Early Redemption Amount:
|
For each $1,000
in principal amount of Notes, $1,000 plus the applicable Contingent Coupon Payment.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-2
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Redemption Amount:
|
If the Notes have
not been automatically called prior to maturity, the Redemption Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Least Performing Underlying
is greater than or equal to its Threshold Value:
$1,000; or
b)
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value:
$1,000 + ($1,000
x Underlying Return of the Least Performing Underlying)
In this case,
the Redemption Amount will be less than 65% of the principal amount and could be zero.
The Redemption
Amount will also include the final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater
than or equal to its Coupon Barrier.
|
Observation Dates*:
|
As set forth on page PS-4.
|
Contingent Payment Dates*:
|
As set forth on page PS-4.
|
Calculation Agent:
|
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
|
Selling Agent:
|
BofAS
|
CUSIP:
|
09709TUV1
|
Underlying Return:
|
With respect to
each Underlying,
|
Least Performing Underlying:
|
The Underlying with the lowest Underlying Return.
|
Events of Default and Acceleration:
|
If an Event of Default, as defined in the senior indenture and in the section entitled “Events of Default and Rights of Acceleration” beginning on page 35 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “—Redemption Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. We will also determine whether the final Contingent Coupon Payment is payable based upon the levels of the Underlyings on the deemed Valuation Date; any such final Contingent Coupon Payment will be prorated by the calculation agent to reflect the length of the final contingent payment period. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
*Subject to change
|
Additional Terms of the Notes
With respect to the SX7E, a “trading
day” means a day on which (1) the Eurex or any successor is open for trading and (2) the SX7E or any successor is calculated
and published.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-3
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Observation Dates and Contingent Payment Dates
Observation Dates*
|
|
Contingent Payment Dates**
|
December 27, 2019
|
|
January 3, 2020
|
March 25, 2020
|
|
March 30, 2020
|
June 25, 2020
|
|
June 30, 2020
|
September 25, 2020
|
|
September 30, 2020
|
December 28, 2020
|
|
January 4, 2021
|
March 25, 2021
|
|
March 30, 2021
|
June 25, 2021
|
|
June 30, 2021
|
September 27, 2021
|
|
September 30, 2021
|
December 27, 2021
|
|
December 30, 2021
|
March 25, 2022
|
|
March 30, 2022
|
June 27, 2022
|
|
June 30, 2022
|
September 26, 2022
|
|
September 29, 2022
|
December 27, 2022
|
|
December 30, 2022
|
March 27, 2023
|
|
March 30, 2023
|
June 26, 2023
|
|
June 29, 2023
|
September 25, 2023
|
|
September 28, 2023
|
December 27, 2023
|
|
January 2, 2024
|
March 25, 2024
|
|
March 28, 2024
|
June 25, 2024
|
|
June 28, 2024
|
September 25, 2024 ( the “Valuation Date”)
|
|
September 30, 2024 ( the “Maturity Date”)
|
* The Observation Dates are subject to postponement as
set forth in “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates”
on page PS-19 of the accompanying product supplement.
If an Observation Date is not a business day, such Observation Date will be postponed to the next business day.
** Postponement of a quarterly Observation Date will
not cause the postponement of the Contingent Payment Date relating to such Observation Date.
Any
payments on the Notes depend on the credit risk of BofA Finance, as issuer, and BAC, as guarantor, and on the performance of the
Underlyings. The economic terms of the Notes are based on BAC’s internal funding rate, which is the rate it would pay to
borrow funds through the issuance of market-linked notes, and the economic terms of certain related hedging arrangements BAC’s
affiliates enter into. BAC’s internal funding rate is typically lower than the rate it would pay when it issues conventional
fixed or floating rate debt securities. This difference in funding rate, as well as the underwriting discount and the hedging related
charges described below (see “Risk Factors” beginning on page PS-8), will reduce the economic terms of the Notes to
you and the initial estimated value of the Notes. Due to these factors, the public offering price you pay to purchase the Notes
will be greater than the initial estimated value of the Notes as of the pricing date.
The initial
estimated value range of the Notes as of the date of this pricing supplement is set forth on the cover page of this pricing supplement.
The final pricing supplement will set forth the initial estimated value of the Notes as of the pricing date. For more information
about the initial estimated value and the structuring of the Notes, see “Risk Factors” beginning on page PS-8 and “Structuring
the Notes” on page PS-18.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-4
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Contingent Coupon Payment and Redemption
Amount Determination
On each Contingent Payment
Date, you may receive a Contingent Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming the Notes have not been
automatically called, on the Maturity Date, you will receive a cash payment per $1,000 in principal amount of Notes determined
as follows:
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-5
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Total Contingent Coupon Payment Examples
The
table below illustrates the hypothetical total Contingent Coupon Payments per $1,000 in principal amount of Notes over the term
of the Notes, based on the Contingent Coupon Payment of $25.00 per Note, depending on how many Contingent Coupon Payments are payable
prior to an Automatic Call or maturity. Depending on the performance of the Underlyings, you may not receive any Contingent Coupon
Payments during the term of the Notes.
Number of Contingent Coupon Payments
|
Total Contingent Coupon Payments
|
0
|
$0.00
|
2
|
$50.00
|
4
|
$100.00
|
6
|
$150.00
|
8
|
$200.00
|
10
|
$250.00
|
12
|
$300.00
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-6
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Hypothetical Payout Profile and Examples
of Payments at Maturity
Contingent Income Auto-Callable
Yield Notes Table
The following
table is for purposes of illustration only. It assumes the Notes have not been automatically called prior to maturity and is based
on hypothetical values and shows hypothetical returns on the Notes. The table illustrates the calculation of the
Redemption Amount and the return on the Notes based on a hypothetical Starting Value of 100, a hypothetical Coupon Barrier of 65
for the Least Performing Underlying, a hypothetical Threshold Value of 65 for the Least Performing Underlying, the Contingent Coupon
Payment of $25.00 per $1,000 in principal amount of Notes and a range of hypothetical Ending Values of the Least Performing Underlying.
The actual amount you receive and the resulting return will depend on the actual Starting Values, Coupon Barriers, Threshold
Values, Observation Values and Ending Values of the Underlyings, whether the Notes are automatically called prior to maturity,
and whether you hold the Notes to maturity. The following examples do not take into account any tax consequences from investing
in the Notes.
For recent
actual levels of the Underlyings, see “The Underlyings” section below. Each 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 that 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 of the
Least Performing Underlying
|
Underlying Return of the
Least Performing Underlying
|
Redemption Amount per Note (including any final Contingent Coupon Payment)
|
Return
on the Notes(1)
|
160.00
|
60.00%
|
$1,025.00(2)
|
2.50%
|
150.00
|
50.00%
|
$1,025.00
|
2.50%
|
140.00
|
40.00%
|
$1,025.00
|
2.50%
|
130.00
|
30.00%
|
$1,025.00
|
2.50%
|
120.00
|
20.00%
|
$1,025.00
|
2.50%
|
110.00
|
10.00%
|
$1,025.00
|
2.50%
|
105.00
|
5.00%
|
$1,025.00
|
2.50%
|
102.00
|
2.00%
|
$1,025.00
|
2.50%
|
100.00(3)
|
0.00%
|
$1,025.00
|
2.50%
|
90.00
|
-10.00%
|
$1,025.00
|
2.50%
|
80.00
|
-20.00%
|
$1,025.00
|
2.50%
|
65.00(4)
|
-35.00%
|
$1,025.00
|
2.50%
|
64.99
|
-35.01%
|
$649.90
|
-35.01%
|
60.00
|
-40.00%
|
$600.00
|
-40.00%
|
50.00
|
-50.00%
|
$500.00
|
-50.00%
|
0.00
|
-100.00%
|
$0.00
|
-100.00%
|
|
(1)
|
The “Return on the
Notes” is calculated based on the Redemption Amount and potential final Contingent Coupon Payment, not including any Contingent
Coupon Payments paid prior to maturity.
|
|
(2)
|
This amount represents
the sum of the principal amount and the final Contingent Coupon Payment.
|
|
(3)
|
The hypothetical Starting
Value of 100 used in the table above has been chosen for illustrative purposes only and does not represent a likely Starting Value
for any Underlying.
|
|
(4)
|
This is the hypothetical Coupon Barrier and
Threshold Value of the Least Performing Underlying.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-7
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® 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-4 of the accompanying prospectus supplement and page 7 of the accompanying prospectus, each as identified on page PS-22
below.
|
•
|
Your
investment may result in a loss; there is no guaranteed return of principal. There is no fixed principal repayment amount on
the Notes at maturity. If the Notes are not automatically called prior to maturity and the Ending Value of any Underlying
is less than its Threshold Value, you will lose 1% of the principal amount for each 1% that the Ending Value of the Least Performing
Underlying is less than its Starting Value. In that case, you will lose a significant portion or all of your investment in the
Notes.
|
|
•
|
Your
return on the Notes is limited to the return represented by the Contingent Coupon Payments, if any, over the term of the Notes.
Your return on the Notes is limited to the Contingent Coupon Payments paid over the term of the Notes, regardless of the extent
to which the Ending Value of any Underlying exceeds its Starting Value. Similarly, the amount payable at maturity or upon an Automatic
Call will never exceed the sum of the principal amount and the applicable Contingent Coupon Payment, regardless of the extent to
which the Observation Value of any Underlying exceeds its Starting Value. In contrast, a direct investment in the securities included
in one or more of the Underlyings would allow you to receive the benefit of any appreciation in their prices. Thus, any return
on the Notes will not reflect the return you would realize if you actually owned those securities and received the dividends paid
or distributions made on them.
|
|
•
|
The
Notes are subject to a potential Automatic Call, which would limit your ability to receive the Contingent Coupon Payments over
the full term of the Notes. The Notes are subject to a potential Automatic Call. Beginning in September 2020, the Notes will
be automatically called if, on any Observation Date (other than the final Observation Date), the Observation Value of each Underlying
is greater than or equal to its Starting Value. If the Notes are automatically called, you will be entitled to receive the principal
amount and the Contingent Coupon Payment with respect to the applicable Observation Date. In this case, you will lose the opportunity
to continue to receive Contingent Coupon Payments after the date of the Automatic Call. If the Notes are called prior to the Maturity
Date, you may be unable to invest in other securities with a similar level of risk that could provide a return that is similar
to the Notes.
|
|
•
|
You
may not receive any Contingent Coupon Payments. The Notes do not provide for any regular fixed coupon payments. Investors in
the Notes will not necessarily receive any Contingent Coupon Payments on the Notes. If the Observation Value of any Underlying
is less than its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment applicable to that Observation
Date. If the Observation Value of any Underlying is less than its Coupon Barrier on all the Observation Dates during the term of
the Notes, you will not receive any Contingent Coupon Payment during the term of the Notes, and will not receive a positive return
on 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. In addition, if interest rates increase during the term of the Notes, the Contingent Coupon
Payment (if any) may be less than the yield on a conventional debt security of comparable maturity.
|
|
•
|
Any
payments on the Notes are subject to the credit risk of BofA Finance and the Guarantor, and actual or perceived changes in BofA
Finance or the Guarantor’s creditworthiness are expected to affect the value of the Notes. The Notes are our senior unsecured
debt securities. Any payment on the Notes will be fully and unconditionally guaranteed by the Guarantor. The Notes are not guaranteed
by any entity other than the Guarantor. As a result, your receipt of the Early Redemption Amount or the Redemption Amount at maturity,
as applicable, will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the
Notes on the applicable Contingent Payment Date or the Maturity Date, regardless of the Ending Value of the Least Performing Underlying
as compared to its Starting Value.
|
In
addition, our credit ratings and the credit ratings of the Guarantor are assessments by ratings agencies of our respective abilities
to pay our obligations. Consequently, our or the Guarantor’s perceived creditworthiness and actual or anticipated decreases
in our or the Guarantor’s credit ratings or increases in the spread between the yield on our respective securities and the
yield on U.S. Treasury securities (the “credit spread”) prior to the Maturity Date may adversely affect the market
value of the Notes. However, because your return on the Notes depends upon factors in addition to our ability and the ability of
the Guarantor to pay our respective obligations, such as the values of the Underlyings, an improvement in our or the Guarantor’s
credit ratings will not reduce the other investment risks related to the Notes.
|
•
|
We
are a finance subsidiary and, as such, will have limited assets and operations. We are a finance subsidiary of BAC and will
have no assets, operations or revenues other than those related to the issuance, administration and repayment of our debt securities
that are guaranteed by the Guarantor. As a finance subsidiary, to meet our obligations under the Notes, we are dependent upon payment
or contribution of funds and/or repayment of outstanding loans from the Guarantor and/or its other subsidiaries. Therefore, our
ability to make payments on the Notes may be limited.
|
|
•
|
The
public offering price you pay for the Notes will exceed their initial estimated value. The range of initial estimated values
of the Notes
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-8
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
that is provided on the cover page of this
preliminary pricing supplement, and the initial estimated value as of the pricing date that will be provided in the final pricing
supplement, are each estimates only, determined as of a particular point in time by reference to our and our affiliates’
pricing models. These pricing models consider certain assumptions and variables, including our credit spreads and those of
the Guarantor, the Guarantor’s internal funding rate, mid-market terms on hedging transactions, expectations on interest
rates, dividends and volatility, price-sensitivity analysis, and the expected term of the Notes. These pricing models rely
in part on certain forecasts about future events, which may prove to be incorrect. If you attempt to sell the Notes prior to maturity,
their market value may be lower than the price you paid for them and lower than their initial estimated value. This is due to,
among other things, changes in the levels of the Underlyings, 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 Underlyings,
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.
|
|
•
|
The
Contingent Coupon Payment, Early Redemption Amount or Redemption Amount, as applicable, will not reflect the levels of the Underlyings
other than on the Observation Dates. The levels of the Underlyings during the term of the Notes other than on the Observation
Dates will not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware of the performance
of the Underlyings while holding the Notes. The calculation agent will determine whether each Contingent Coupon Payment is payable
and will calculate the Early Redemption Amount or the Redemption Amount, as applicable, by comparing only the Starting Value, the
Coupon Barrier or the Threshold Value, as applicable, to the Observation Value or the Ending Value for each Underlying. No other
levels of the Underlyings will be taken into account. As a result, if the Notes are not automatically called prior to maturity,
you will receive less than the principal amount at maturity even if the level of each Underlying has increased at certain times
during the term of the Notes before the Least Performing Underlying decreases to a level that is less than its Threshold Value
as of the Valuation Date.
|
|
•
|
Because
the Notes are linked to the least performing (and not the average performance) of the Underlyings, you may not receive any return
on the Notes and may lose some or all of your principal amount even if the Observation Value or Ending Value of one Underlying
is always greater than or equal to its Coupon Barrier or Threshold Value, as applicable. Your Notes are linked to the least
performing of the Underlyings, and a change in the level of one Underlying may not correlate with changes in the level of the other
Underlying(s). The Notes are not linked to a basket composed of the Underlyings, where the depreciation in the level of one Underlying
could be offset to some extent by the appreciation in the level of the other Underlying(s). In the case of the Notes, the individual
performance of each Underlying would not be combined, and the depreciation in the level of one Underlying would not be offset by
any appreciation in the level of the other Underlying(s). Even if the Observation Value of an Underlying is at or above its Coupon
Barrier on an Observation Date, you will not receive the Contingent Coupon Payment with respect to that Observation Date if the
Observation Value of another Underlying is below its Coupon Barrier on that day. In addition, even if the Ending Value of an Underlying
is at or above its Threshold Value, you will lose a portion of your principal if the Ending Value of the Least Performing Underlying
is below its Threshold Value.
|
|
•
|
All
of the securities held by the SX7E are concentrated in one industry. The SX7E holds securities issued by companies in the banking
industry. Although an investment in the Notes will not give holders any ownership or other direct interests in the securities held
by the SX7E, the return on an investment in the Notes will be subject to certain risks similar to those associated with direct
equity investments in this sector. Accordingly, by investing in the Notes, you will not benefit from the diversification which
could result from an investment linked to companies that operate in multiple sectors.
|
|
•
|
The Notes are subject to risks associated with
the banking industry. The component stocks of the SX7E are all issued by companies in the banking industry. The performance
of companies in the banking industry are influenced by many complex and unpredictable factors, including industry competition,
interest rates, geopolitical events, the ability of borrowers to repay loans, government regulation, and supply and demand for
the products and services offered by such companies. Any adverse development in the banking industry may have a material adverse
effect on the components of the SX7E, and as a result, on the value of the Notes. The Notes may be subject to greater volatility
and be more adversely affected by a single positive or negative economic, political or regulatory occurrence affecting this industry
than a different investment linked to securities of a more broadly diversified group of issuers.
|
|
•
|
The Notes are subject to risks associated with foreign securities
markets. The SX7E tracks the value of certain foreign equity securities. You should be aware that investments in securities
linked to the value of foreign equity securities involve particular risks. The foreign securities markets comprising the SX7E may
have less liquidity and may be more volatile than U.S. or other securities markets and market developments may affect foreign markets
differently from U.S. or other securities markets. Direct or indirect government intervention to stabilize these foreign securities
markets, as well as cross-shareholdings in foreign companies, may affect trading prices and volumes in these markets. Also, there
is generally less publicly available information about foreign companies than about those U.S. companies that are subject to the
reporting requirements of the U.S. Securities and Exchange Commission, and foreign companies are subject to accounting, auditing
and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-9
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Prices of securities in foreign countries
are subject to political, economic, financial and social factors that apply in those geographical regions. These factors, which
could negatively affect those securities markets, include the possibility of recent or future changes in a foreign government’s
economic and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other laws or restrictions applicable
to foreign companies or investments in foreign equity securities and the possibility of fluctuations in the rate of exchange between
currencies, the possibility of outbreaks of hostility and political instability and the possibility of natural disaster or adverse
public health developments in the region. Moreover, foreign economies may differ favorably or unfavorably from the U.S. economy
in important respects such as growth of gross national product, rate of inflation, capital reinvestment, resources and self-sufficiency.
|
•
|
The
Notes are subject to risks associated with small-size capitalization companies. The stocks composing the RTY are issued by
companies with small-sized market capitalization. The stock prices of small-size companies may be more volatile than stock prices
of large capitalization companies. Small-size capitalization companies may be less able to withstand adverse economic, market,
trade and competitive conditions relative to larger companies. Small-size capitalization companies may also be more susceptible
to adverse developments related to their products or services.
|
|
•
|
The
publisher of an Underlying may adjust that Underlying in a way that affects its levels, and the publisher has no obligation to
consider your interests. The publisher of an Underlying can add, delete, or substitute the components included in that
Underlying or make other methodological changes that could change its level. Any of these actions could adversely affect the value
of your Notes.
|
|
•
|
Trading and hedging
activities by us, the Guarantor and any of our other affiliates 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 the securities held by or included in the Underlyings, or futures or options contracts on the Underlyings or those securities,
or other listed or over-the-counter derivative instruments linked to the Underlyings 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 Underlyings, except
to the extent that BAC’s common stock may be included in the Underlyings, we, the Guarantor and our other affiliates, including
BofAS, do not control any company included in the Underlyings, and have not verified any disclosure made by any other company.
We, the Guarantor or one or more of our other affiliates, including BofAS, may execute such purchases or sales for our own or their
own accounts, for business reasons, or in connection with hedging our obligations under the Notes. These transactions may present
a conflict of interest between your interest in the Notes and the interests we, the Guarantor and our other affiliates, including
BofAS, may have in our or their proprietary accounts, in facilitating transactions, including block trades, for our or their other
customers, and in accounts under our or their management. These transactions may affect the value of the Underlyings in a manner
that could be adverse to your investment in the Notes. On or before the pricing date, any purchases or sales by us, the Guarantor
or our other affiliates, including BofAS or others on its behalf (including for the purpose of hedging anticipated exposures),
may affect the value of the Underlyings. Consequently, the value of the Underlyings may change subsequent to the pricing date,
adversely affecting the market value of the Notes.
|
We, the
Guarantor or one or more of our other affiliates, including BofAS, may also engage in hedging activities that could affect the
value of the Underlyings on the pricing date. In addition, these activities may decrease the market value of your Notes prior to
maturity, and may affect the amounts to be paid on the Notes. We, the Guarantor or one or more of our other affiliates, including
BofAS, may purchase or otherwise acquire a long or short position in the Notes and may hold or resell the Notes. For example, BofAS
may enter into these transactions in connection with any market making activities in which it engages. We cannot assure you that
these activities will not adversely affect the value of the Underlyings, the market value of your Notes prior to maturity or the
amounts payable on the Notes.
|
•
|
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.
|
|
•
|
The U.S. federal income
tax consequences of an investment in the Notes are uncertain, and may be adverse to a holder of the Notes. No statutory, judicial,
or administrative authority directly addresses the characterization of the Notes or securities similar to the Notes for U.S. federal
income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes
are not certain. Under the terms of the Notes, you will have agreed with us to treat the Notes as contingent income-bearing single
financial contracts, as described below under “U.S. Federal Income Tax Summary—General.” If the Internal Revenue
Service (the “IRS”) were successful in asserting an alternative characterization for the Notes, the timing and character
of 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.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-10
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
The Underlyings
All disclosures
contained in this pricing supplement regarding the Underlyings, including, without limitation, their make-up, method of calculation,
and changes in their components, have been derived from publicly available sources. The information reflects the policies of, and
is subject to change by, each of STOXX Limited (“STOXX”), the sponsor of the SX7E, and FTSE Russell, the sponsor
of the RTY. We refer to STOXX and FTSE Russell as the “Underlying Sponsors.” The Underlying Sponsors, which license
the copyright and all other rights to the Underlyings, have no obligation to continue to publish, and may discontinue publication
of, the Underlyings. The consequences of any Underlying Sponsor discontinuing publication of the applicable 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 any
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 Underlyings. You should make your own investigation into the Underlyings.
The EURO STOXX®
Banks Index
The SX7E is
calculated in euros and is reported by Bloomberg under the ticker symbol “SX7E”.
The SX7E was
created by STOXX Limited, a wholly owned subsidiary of Deutsche Börse AG. Publication of the SX7E began on June 15, 1998,
based on an initial value of 100 at December 31, 1991. The SX7E is disseminated on the STOXX Limited website: http://www.stoxx.com,
which sets forth, among other things, the country and industrial sector weightings of the securities included in the SX7E. Information
contained in the STOXX Limited website is not incorporated by reference in, and should not be considered a part of, this pricing
supplement.
Index Composition
and Maintenance
The SX7E is
one of 19 EURO STOXX® Supersector indices that compose the STOXX® Europe 600 Index (the “STOXX Europe 600 Index”).
The STOXX Europe 600 Index contains the 600 largest European stocks by free float market capitalization. Each of the 19 EURO STOXX® Supersector
indices contain the companies within the Eurozone subset of the STOXX Europe 600 Index that fall within the relevant supersector,
determined by reference to the Industry Classification Benchmark (“ICB”), an international system for categorizing
companies that is maintained by FTSE International Limited. The SX7E includes companies in the banks supersector, which tracks
companies providing a broad range of financial services, including retail banking, loans and money transmissions. SX7E currently
includes 30 stocks of banks market sector leaders mainly from the ten largest Eurozone countries: Austria, Belgium, France, Germany,
Greece, Ireland, Italy, the Netherlands, Portugal and Spain.
The composition
of each of the EURO STOXX® Supersector indices is reviewed quarterly, based on the closing stock data on the last trading day
of the month following the implementation of the last quarterly index review. The component stocks are announced on the fourth
Tuesday of the month immediately prior to the review implementation month. Changes to the component stocks are implemented on the
third Friday in each of March, June, September and December and are effective the following trading day.
The SX7E is
also reviewed on an ongoing basis, and any changes affecting the STOXX Europe 600 Index are also applied to the relevant EURO STOXX® Supersector
index. Corporate actions (including initial public offerings, mergers and takeovers, spin-offs, delistings and bankruptcy) that
affect the STOXX Europe 600 Index composition are immediately reviewed. Any changes are announced, implemented and effective in
line with the type of corporate action and the magnitude of the effect.
The free float
factors and weighting cap factors for each component stock used to calculate the EURO STOXX® Supersector indices, as described
below, are reviewed, calculated and implemented on a quarterly basis and are fixed until the next quarterly review. All components
of the SX7E are subject to a 30.00% cap for the largest company and a 15.00% cap for the second-largest company.
Index Calculation
The SX7E is calculated with the “Laspeyres
formula,” which measures the aggregate price changes in the component stocks against a fixed base quantity weight. The formula
for calculating the SX7E value can be expressed as follows:
SX7E=
|
Free float market capitalization of the SX7E
|
Divisor
|
The “free float market capitalization
of the Index” is equal to the sum of the product of the price, the number of shares, the free float factor and the weighting
cap factor for each component stock as of the time the SX7E is being calculated.
The SX7E is also subject to a divisor,
which is adjusted to maintain the continuity of the index values across changes due to corporate actions, such as the deletion
and addition of stocks, the substitution of stocks, stock dividends, and stock splits.
Neither we
nor any of our affiliates, including BofAS, accepts any responsibility for the calculation, maintenance, or publication of, or
for any error, omission, or disruption in, the SX7E or any successor to the SX7E. STOXX does not guarantee the accuracy or the
completeness of the SX7E or any data included in the SX7E. STOXX assumes no liability for any errors, omissions, or disruption
in the calculation and dissemination of the SX7E. STOXX disclaims all responsibility for any errors or omissions in the calculation
and dissemination of the SX7E or the manner in which the SX7E is applied in determining the amount payable on the Notes at maturity.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-11
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Historical Performance
of the SX7E
The following graph sets forth
the daily historical performance of the SX7E in the period from January 1, 2008 through August 28, 2019. 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 SX7E’s hypothetical Coupon Barrier and Threshold Value of 51.77 (rounded
to two decimal places), which is 65% of the SX7E’s hypothetical Starting Value of 79.64, which was its closing level on August
28, 2019. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical data on the SX7E is
not necessarily indicative of the future performance of the SX7E or what the value of the Notes may be. Any historical upward or
downward trend in the level of the SX7E during any period set forth above is not an indication that the level of the SX7E is more
or less likely to increase or decrease at any time over the term of the Notes.
Before investing
in the Notes, you should consult publicly available sources for the levels of the SX7E.
License Agreement
One of our affiliates has entered into a non-exclusive
license agreement with STOXX providing for the license to it and certain of its affiliated companies, including us, of the right
to use indices owned and published by STOXX (including the SX7E) in connection with certain securities, including the Notes.
The license agreement requires that the following language
be stated in this pricing supplement:
“STOXX Limited, Deutsche Börse Group and
their licensors, research partners or data providers have no relationship to us other than the licensing of the SX7E and the related
trademarks for use in connection with the Notes.
STOXX, Deutsche Börse Group and their licensors,
research partners or data providers do not:
·
sponsor, endorse, sell or promote the Notes.
·
recommend that any person invest in the Notes
or any other securities.
·
have any responsibility or liability for or make
any decisions about the timing, amount or pricing of the Notes.
·
have any responsibility or liability for the administration,
management or marketing of the Notes.
·
consider the needs of the Notes or the owners
of the Notes in determining, composing or calculating the SX7E or have any obligation to do so.
STOXX, Deutsche Börse Group and their licensors,
research partners or data providers give no warranty, and exclude any liability (whether in negligence or otherwise), in connection
with the Notes or their performance.
STOXX does not assume any contractual relationship
with the purchasers of the Notes or any other third parties.
Specifically,
·
STOXX, Deutsche Börse Group and their licensors,
research partners or data providers do not give any warranty, express or implied, and exclude any liability about:
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-12
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
·
The results to be obtained by the Notes, the owner
of the Notes or any other person in connection with the use of the SX7E and the data included in the SX7E;
·
The accuracy, timeliness, and completeness of
the SX7E and its data;
·
The merchantability and the fitness for a particular
purpose or use of the SX7E and its data;
·
The performance of the Notes generally.
·
STOXX, Deutsche Börse Group and their licensors,
research partners or data providers give no warranty and exclude any liability, for any errors, omissions or interruptions in the
SX7E or its data;
·
Under no circumstances will STOXX, Deutsche Börse
Group or their licensors, research partners or data providers be liable (whether in negligence or otherwise) for any lost profits
or indirect, punitive, special or consequential damages or losses, arising as a result of such errors, omissions or interruptions
in the SX7E or its data or generally in relation to the Notes, even in circumstances where STOXX, Deutsche Börse Group or
their licensors, research partners or data providers are aware that such loss or damage may occur.
The licensing agreement discussed above is solely for
our benefit and that of STOXX, and not for the benefit of the owners of the Notes or any other third parties.”
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-13
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
The Russell
2000® Index
The RTY was
developed by Russell Investments (“Russell”) before FTSE International Limited and Russell combined in 2015 to create
FTSE Russell, which is wholly owned by London Stock Exchange Group. Additional information on the RTY is available at the following
website: http://www.ftserussell.com. No information on that website is deemed to be included or incorporated by reference in this
pricing supplement.
Russell began
dissemination of the RTY (Bloomberg L.P. index symbol “RTY”) on January 1, 1984. FTSE Russell calculates and publishes
the RTY. The RTY was set to 135 as of the close of business on December 31, 1986. The RTY is designed to track the performance
of the small capitalization segment of the U.S. equity market. As a subset of the Russell 3000® Index, the RTY consists
of the smallest 2,000 companies included in the Russell 3000® Index. The Russell 3000® Index measures
the performance of the largest 3,000 U.S. companies, representing approximately 98% of the investable U.S. equity market. The RTY
is determined, comprised, and calculated by FTSE Russell without regard to the Notes.
Selection of
Stocks Comprising the RTY
All companies
eligible for inclusion in the RTY must be classified as a U.S. company under FTSE Russell’s country-assignment methodology.
If a company is incorporated, has a stated headquarters location, and trades in the same country (American Depositary Receipts
and American Depositary Shares are not eligible), then the company is assigned to its country of incorporation. If any of the three
factors are not the same, FTSE Russell defines three Home Country Indicators (“HCIs”): country of incorporation, country
of headquarters, and country of the most liquid exchange (as defined by a two-year average daily dollar trading volume) (“ADDTV”)
from all exchanges within a country. Using the HCIs, FTSE Russell compares the primary location of the company’s assets with
the three HCIs. If the primary location of its assets matches any of the HCIs, then the company is assigned to the primary location
of its assets. If there is insufficient information to determine the country in which the company’s assets are primarily
located, FTSE Russell will use the primary country from which the company’s revenues are primarily derived for the comparison
with the three HCIs in a similar manner. FTSE Russell uses the average of two years of assets or revenues data to reduce potential
turnover. If conclusive country details cannot be derived from assets or revenues data, FTSE Russell will assign the company to
the country of its headquarters, which is defined as the address of the company’s principal executive offices, unless that
country is a Benefit Driven Incorporation “BDI” country, in which case the company will be assigned to the country
of its most liquid stock exchange. BDI countries include: Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Bonaire,
British Virgin Islands, Cayman Islands, Channel Islands, Cook Islands, Curacao, Faroe Islands, Gibraltar, Guernsey, Isle of Man,
Jersey, Liberia, Marshall Islands, Panama, Saba, Sint Eustatius, Sint Maarten, and Turks and Caicos Islands. For any companies
incorporated or headquartered in a U.S. territory, including countries such as Puerto Rico, Guam, and U.S. Virgin Islands, a U.S.
HCI is assigned.
All securities
eligible for inclusion in the RTY must trade on a major U.S. exchange. Stocks must have a closing price at or above $1.00 on their
primary exchange on the last trading day in May to be eligible for inclusion during annual reconstitution. However, in order to
reduce unnecessary turnover, if an existing member’s closing price is less than $1.00 on the last day of May, it will be
considered eligible if the average of the daily closing prices (from its primary exchange) during the month of May is equal to
or greater than $1.00. Initial public offerings are added each quarter and must have a closing price at or above $1.00 on the last
day of their eligibility period in order to qualify for index inclusion. If an existing stock does not trade on the “rank
day” (typically the last trading day in May but a confirmed timetable is announced each spring) but does have a closing price
at or above $1.00 on another eligible U.S. exchange, that stock will be eligible for inclusion.
An important
criterion used to determine the list of securities eligible for the RTY is total market capitalization, which is defined as the
market price as of the last trading day in May for those securities being considered at annual reconstitution times the total number
of shares outstanding. Where applicable, common stock, non-restricted exchangeable shares and partnership units/membership interests
are used to determine market capitalization. Any other form of shares such as preferred stock, convertible preferred stock, redeemable
shares, participating preferred stock, warrants and rights, installment receipts or trust receipts, are excluded from the calculation.
If multiple share classes of common stock exist, they are combined. In cases where the common stock share classes act independently
of each other (e.g., tracking stocks), each class is considered for inclusion separately. If multiple share classes exist, the
pricing vehicle will be designated as the share class with the highest two-year trading volume as of the rank day in May.
Companies
with a total market capitalization of less than $30 million are not eligible for the RTY. Similarly, companies with only 5% or
less of their shares available in the marketplace are not eligible for the RTY. Royalty trusts, limited liability companies, closed-end
investment companies (companies that are required to report Acquired Fund Fees and Expenses, as defined by the SEC, including business
development companies), blank check companies, special purpose acquisition companies, and limited partnerships are also ineligible
for inclusion. Bulletin board, pink sheets, and over-the-counter (“OTC”) traded securities are not eligible for inclusion.
Exchange traded funds and mutual funds are also excluded.
Annual reconstitution
is a process by which the RTY is completely rebuilt. Based on closing levels of the company’s common stock on its primary
exchange on the rank day of May of each year, FTSE Russell reconstitutes the composition of the RTY using the then existing market
capitalizations of eligible companies. Reconstitution of the RTY occurs on the last Friday in June or, when the last Friday in
June is the 29th or 30th, reconstitution occurs on the prior Friday. In addition, FTSE Russell adds initial public offerings to
the RTY on a quarterly basis based on total market capitalization ranking within the market-adjusted capitalization breaks established
during the most recent reconstitution. After membership is determined, a security’s shares are adjusted to include only those
shares available to the public. This is often referred to as “free float.” The purpose of the adjustment is to exclude
from market calculations the capitalization that is not available for purchase and is not part of the investable opportunity set.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-14
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Historical Performance
of the RTY
The following graph sets forth
the daily historical performance of the RTY in the period from January 1, 2008 through August 28, 2019. 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 RTY’s hypothetical Coupon Barrier and Threshold Value of 957.263 (rounded
to three decimal places), which is 65% of the RTY’s hypothetical Starting Value of 1,472.713, which was its closing level
on August 28, 2019. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical
data on the RTY is not necessarily indicative of the future performance of the RTY or what the value of the Notes may be. Any historical
upward or downward trend in the level of the RTY during any period set forth above is not an indication that the level of the RTY
is more or less likely to increase or decrease at any time over the term of the Notes.
Before investing
in the Notes, you should consult publicly available sources for the levels of the RTY.
License Agreement
“Russell
2000®” and “Russell 3000®” are trademarks of FTSE Russell and have been licensed
for use by our affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”). The Notes are not
sponsored, endorsed, sold, or promoted by FTSE Russell, and FTSE Russell makes no representation regarding the advisability of
investing in the Notes.
FTSE Russell
and MLPF&S have entered into a non-exclusive license agreement providing for the license to MLPF&S and its affiliates,
including us, in exchange for a fee, of the right to use indices owned and published by FTSE Russell in connection with some securities,
including the Notes. The license agreement provides that the following language must be stated in this pricing supplement:
The Notes
are not sponsored, endorsed, sold, or promoted by FTSE Russell. FTSE Russell makes 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 RTY to track general stock market performance or a segment of the same. FTSE Russell’s
publication of the RTY in no way suggests or implies an opinion by FTSE Russell as to the advisability of investment in any or
all of the securities upon which the RTY is based. FTSE Russell’s only relationship to MLPF&S and to us is the licensing
of certain trademarks and trade names of FTSE Russell and of the RTY, which is determined, composed, and calculated by FTSE Russell
without regard to MLPF&S, us, or the Notes. FTSE Russell is not responsible for and has not reviewed the Notes nor any associated
literature or publications and FTSE Russell makes no representation or warranty express or implied as to their accuracy or completeness,
or otherwise. FTSE Russell reserves the right, at any time and without notice, to alter, amend, terminate, or in any way change
the RTY. FTSE Russell has no obligation or liability in connection with the administration, marketing, or trading of the Notes.
FTSE RUSSELL
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RTY OR ANY DATA INCLUDED THEREIN AND FTSE RUSSELL SHALL HAVE NO
LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. FTSE RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY MLPF&S, US, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RTY OR ANY DATA INCLUDED
THEREIN. FTSE RUSSELL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE RTY OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT SHALL FTSE RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS),
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-15
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® 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 expect
to deliver the Notes against payment therefor in New York, New York on a date that is greater than two business days following
the pricing date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required
to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement
of the Notes occurs more than two business days from the pricing date, purchasers who wish to trade the Notes more than two business
days prior to the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
Under our
distribution agreement with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on
the cover of this pricing supplement, less the indicated underwriting discount. BofAS will sell the Notes to other broker-dealers
that will participate in the offering and that are not affiliated with us, at an agreed discount to the principal amount. Each
of those broker-dealers may sell the Notes to one or more additional broker-dealers. BofAS has informed us that these discounts
may vary from dealer to dealer and that not all dealers will purchase or repurchase the Notes at the same discount. Certain dealers
who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees
or commissions. The public offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low
as $965.00 per Note.
BofAS and
any of our other broker-dealer affiliates may use this pricing supplement, and the accompanying product supplement, prospectus
supplement and prospectus for offers and sales in secondary market transactions and market-making transactions in the Notes. However,
they are not obligated to engage in such secondary market transactions and/or market-making transactions. The selling agent may
act as principal or agent in these transactions, and any such sales will be made at prices related to prevailing market conditions
at the time of the sale.
At BofAS’s
discretion, for a short, undetermined initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary
market at a price that may exceed the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based
on then-prevailing market conditions and other considerations, including the performance of the Underlyings and the remaining term
of the Notes. However, none of us, the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes at any
price or at any time, and we cannot assure you that any party will purchase your Notes at a price that equals or exceeds the initial
estimated value of the Notes.
Any price
that BofAS may pay to repurchase the Notes will depend upon then prevailing market conditions, the creditworthiness of us and the
Guarantor, and transaction costs. At certain times, this price may be higher than or lower than the initial estimated value of
the Notes.
European Economic Area
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”) which has implemented the Prospectus Regulation
(each, a “Relevant Member 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 Member
State of Notes which are the subject of the offering contemplated in this pricing supplement, the accompanying product supplement,
the accompanying prospectus and the accompanying prospectus supplement may only do so with respect to Qualified Investors. Neither
BofA Finance nor BAC have authorized, nor do they authorize, the making of any offer of Notes other than to Qualified Investors.
The expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
PROHIBITION
OF SALES TO EEA 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. 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),
as amended or superseded, 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 has been prepared and therefore offering or selling the Notes or
otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
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
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-16
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
documents and/or materials have not been approved,
by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act 2000, as
amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed
on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion
is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and
who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a)
to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial
Promotion Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, the Notes
offered hereby are only available to, and any investment or investment activity to which this pricing supplement, the accompanying
product supplement, the accompanying prospectus supplement and the accompanying prospectus relates will be engaged in only with,
relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this pricing supplement,
the accompanying product supplement, the accompanying prospectus supplement or the accompanying prospectus or any of their contents.
Any invitation or
inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or
sale of the Notes may only be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA
does not apply to the Issuer or the Guarantor.
All applicable
provisions of the FSMA must be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise
involving the United Kingdom.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-17
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Structuring the Notes
The
Notes are our debt securities, the return on which is linked to the performance of the Underlyings. The related guarantee is BAC’s
obligation. As is the case for all of our and BAC’s respective debt securities, including our market-linked notes, the economic
terms of the Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because
market-linked notes result in increased operational, funding and liability management costs to us and BAC, BAC typically borrows
the funds under these types of notes at a rate, which we refer to in this pricing supplement as BAC’s internal funding rate,
that is more favorable to BAC than the rate that it might pay for a conventional fixed or floating rate debt security. This generally
relatively lower internal funding rate, which is reflected in the economic terms of the Notes, along with the fees and charges
associated with market-linked notes, typically results in the initial estimated value of the Notes on the pricing date being less
than their public offering price.
In order
to meet our payment obligations on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements
(which may include call options, put options or other derivatives) with BofAS or one of our other affiliates. The terms of these
hedging arrangements are determined based upon terms provided by BofAS and its affiliates, and take into account a number of factors,
including our and BAC’s creditworthiness, interest rate movements, the volatility of the Underlyings, the tenor of the Notes
and the hedging arrangements. The economic terms of the Notes and their initial estimated value depend in part on the terms of
these hedging arrangements.
BofAS
has advised us that the hedging arrangements will include hedging related charges, reflecting the costs associated with, and our
affiliates’ profit earned from, these hedging arrangements. Since hedging entails risk and may be influenced by unpredictable
market forces, actual profits or losses from these hedging transactions may be more or less than any expected amounts.
For
further information, see “Risk Factors” beginning on page PS-8 above and “Supplemental Use of Proceeds”
on page PS-16 of the accompanying product supplement.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-18
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
U.S. Federal Income Tax Summary
The following summary of the material U.S.
federal income tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under
“U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible
tax considerations. In addition, any reference to “Morrison & Foerster LLP” in the aforementioned tax discussions
in the accompanying prospectus and prospectus supplement should be read as a reference to “Sidley Austin LLP.” 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 Bank of America Corporation for U.S. federal income tax purposes. Accordingly throughout
this tax discussion, references to “we,” “our” or “us” are generally to Bank of America Corporation
unless the context requires otherwise.
This summary is directed solely to U.S.
Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will
hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment,
and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor
concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax
consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes
in U.S. federal or other tax laws.
General
Although there is no statutory, judicial,
or administrative authority directly addressing the characterization of the Notes, we intend to treat the Notes for all tax purposes
as contingent income-bearing single financial contracts with respect to the Underlyings and under the terms of the Notes, we and
every investor in the Notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat
the Notes in accordance with such characterization. In the opinion of our counsel, Sidley Austin LLP, it is reasonable to treat
the Notes as contingent income-bearing single financial contracts with respect to the Underlyings. However, Sidley Austin LLP has
advised us that it is unable to conclude that it is more likely than not that this treatment will be upheld. This discussion assumes
that the Notes constitute contingent income-bearing single financial contracts with respect to the Underlyings for U.S. federal
income tax purposes. If the Notes did not constitute contingent income-bearing single financial contracts, the tax consequences
described below would be materially different.
This characterization of the Notes is
not binding on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization
of the Notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with
respect to their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the
U.S. federal income tax consequences of an investment in the Notes are not certain, and no assurance can be given that the IRS
or any court will agree with the characterization and tax treatment described in this pricing supplement. Accordingly, you are
urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the Notes,
including possible alternative characterizations.
Unless otherwise stated, the following
discussion is based on the characterization described above. The discussion in this section assumes that there is a significant
possibility of a significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether
the issuer of any component stocks included in an Underlying would be treated as a “passive foreign investment company”
(“PFIC”), within the meaning of Section 1297 of the Code, or a United States real property holding corporation, within
the meaning of Section 897(c) of the Code. If the issuer of one or more stocks included in an Underlying were so treated, certain
adverse U.S. federal income tax consequences could possibly apply to a holder of the Notes. You should refer to information filed
with the SEC by the issuers of the component stocks included in the Underlyings and consult your tax advisor regarding the possible
consequences to you, if any, if any issuer of a component stock included in the Underlyings is or becomes a PFIC or is or becomes
a United States real property holding corporation.
U.S. Holders
Although the U.S. federal income tax treatment
of any Contingent Coupon Payment on the Notes is uncertain, we intend to take the position, and
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-19
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
the following discussion assumes, that any Contingent Coupon Payment constitutes
taxable ordinary income to a U.S. Holder at the time received or accrued in accordance with the U.S. Holder’s regular method
of accounting. By purchasing the Notes you agree, in the absence of an administrative determination or judicial ruling to the contrary,
to treat any Contingent Coupon Payment as described in the preceding sentence.
Upon receipt of a cash payment at maturity
or upon a sale, exchange, or redemption of the Notes prior to maturity, a U.S. Holder generally will recognize capital gain or
loss equal to the difference between the amount realized (other than amounts representing any Contingent Coupon Payment, which
would be taxed as described above) and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes
will equal the 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.
In addition, it is possible that the Notes
could be treated as a unit consisting of a deposit and a put option written by the note holder, in which case the timing and character
of income on the Notes would be affected significantly.
The 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.
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.
Because each Underlying is an index that
periodically rebalances, it is possible that the Notes could be treated as a series of contingent income-bearing single financial
contracts, each of which matures on the next rebalancing date. If the Notes were properly characterized in such a manner, a U.S.
Holder would be treated as disposing of the Notes on each rebalancing date in return for new Notes that mature on the next rebalancing
date, and a U.S. Holder would accordingly likely recognize capital gain or loss on each rebalancing 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
Because the U.S. federal income tax treatment
of the Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal income tax at a 30% rate (or
at a lower rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon Payment made
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-20
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
unless such payments are effectively connected with the conduct by the
Non-U.S. Holder of a trade or business in the U.S. (in which case, to avoid withholding, the Non-U.S. Holder will be required to
provide a Form W-8ECI). We will not pay any additional amounts in respect of such withholding. To claim benefits under an income
tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to its eligibility under the appropriate
treaty’s limitations on benefits article, if applicable. In addition, special rules may apply to claims for treaty benefits
made by Non-U.S. Holders that are entities rather than individuals. The availability of a lower rate of withholding under an applicable
income tax treaty will depend on whether such rate applies to the characterization of the payments under U.S. federal income tax
laws. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty may
obtain a refund of any excess amounts withheld by filing an appropriate claim for refund with the IRS.
Except as discussed below, a Non-U.S. Holder
generally will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes (not including,
for the avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject to the rules discussed in
the previous paragraph) upon the sale, exchange or redemption of the Notes or their settlement at maturity, provided that the Non-U.S.
Holder complies with applicable certification requirements and that the payment is not effectively connected with the conduct by
the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange, or redemption of
the Notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien
individual and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange, redemption, or settlement
and certain other conditions are satisfied.
If a Non-U.S. Holder of the Notes is engaged
in the conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized on the settlement
at maturity, or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of such trade or business
(and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.),
the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S. federal income tax on
such Contingent Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders
should read the material under the heading “—U.S. Holders,” for a description of the U.S. federal income tax
consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation, it
may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion
of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the
U.S., subject to certain adjustments.
A “dividend equivalent” payment
is treated as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding
tax if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked
instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified
ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation
for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However,
IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one
instruments and that are issued before January 1, 2021. Based on our determination that the Notes are not delta-one instruments,
Non-U.S. Holders should not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is
possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain
events affecting the Underlyings or the Notes, and following such occurrence the Notes could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlyings
or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context
of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the
applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect
to amounts so withheld.
As discussed above, alternative characterizations
of the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or
clarification of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax in addition
to the withholding tax described above, tax will be withheld at the applicable statutory rate. Prospective Non-U.S. Holders should
consult their own tax advisors regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current
law, while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible
in those individuals’ gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual
and with respect to which the individual has retained certain interests or powers), should note that, absent an applicable treaty
benefit, a note is likely to be treated as U.S. situs property, subject to U.S. federal estate tax. These individuals and entities
should consult their own tax advisors regarding the U.S. federal estate tax consequences of investing in a note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S.
Federal Income Tax Considerations — Taxation of Debt Securities — Backup Withholding and Information Reporting”
in the accompanying prospectus for a description of the applicability of the backup withholding and information reporting rules
to
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-21
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
payments made on the Notes.
Foreign Account Tax Compliance Act (“FATCA”)
The discussion in the accompanying prospectus
under “U.S. Federal Income Tax Considerations – Foreign Account Tax Compliance Act” is hereby modified to reflect
regulations proposed by Treasury indicating its intent to eliminate the requirements under FATCA of withholding on gross proceeds
from the sale, exchange, settlement at maturity, or other disposition of relevant financial instruments. Treasury has indicated
that taxpayers may rely on these proposed regulations pending their finalization.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-22
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the EURO STOXX Banks Price Index and the Russell 2000® Index
Where You Can Find More Information
The terms and risks of the Notes are
contained in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus, which
can be accessed at the following links:
These documents
(together, the “Note Prospectus”) have been filed as part of a registration statement with the SEC, which may, without
cost, be accessed on the SEC website at www.sec.gov or obtained from BofAS by calling 1-800-294-1322. Before you invest, you should
read the Note Prospectus, including this pricing supplement, for information about us, BAC and this offering. Any prior or contemporaneous
oral statements and any other written materials you may have received are superseded by the Note Prospectus. Capitalized 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.
As a result
of the completion of the reorganization of Bank of America’s U.S. broker-dealer business, references to MLPF&S in the
accompanying product supplement, prospectus supplement and prospectus, as such references relate to MLPF&S’s institutional
services, should now be read as references to BofAS.
The Notes
are our senior debt securities. Any payments on the Notes are fully and unconditionally guaranteed by BAC. The
Notes and the related guarantee are not insured by the Federal Deposit Insurance Corporation or secured by collateral. The
Notes will rank equally in right of payment with all of our other unsecured and unsubordinated obligations, and the related guarantee
will rank equally in right of payment with all of BAC’s other unsecured and unsubordinated obligations, except obligations
that are subject to any priorities or preferences by law. Any payments due on the Notes, including any repayment of the principal
amount, will be subject to the credit risk of BofA Finance, as issuer, and BAC, as guarantor.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-23
|
Bank of America Corp. Prfd L (NYSE:BMLPL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Bank of America Corp. Prfd L (NYSE:BMLPL)
Historical Stock Chart
From Jul 2023 to Jul 2024