None of the Securities and Exchange Commission (the “SEC”), any state
securities commission, or any other regulatory body has approved or disapproved of these Notes or the guarantee, or passed upon
the adequacy or accuracy of this pricing supplement, or the accompanying product supplement, prospectus supplement or prospectus.
Any representation to the contrary is a criminal offense. The Notes and the related guarantee of the Notes by the Guarantor are
unsecured and are not savings accounts, deposits, or other obligations of a bank. The Notes are not guaranteed by Bank of America,
N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and involve
investment risks.
You should read carefully this entire pricing supplement and the
accompanying product supplement, prospectus supplement and prospectus to understand fully the terms of the Notes, as well as the
tax and other considerations important to you in making a decision about whether to invest in the Notes. In particular, you should
review carefully the section in this pricing supplement entitled “Risk Factors,” which highlights a number of risks
of an investment in the Notes, to determine whether an investment in the Notes is appropriate for you. If information in this pricing
supplement is inconsistent with the product supplement, prospectus supplement or prospectus, this pricing supplement will supersede
those documents. You are urged to consult with your own attorneys and business and tax advisors before making a decision to purchase
any of the Notes.
The information in the “Summary” section is qualified in
its entirety by the more detailed explanation set forth elsewhere in this pricing supplement and the accompanying product supplement,
prospectus supplement and prospectus. You should rely only on the information contained in this pricing supplement and the accompanying
product supplement, prospectus supplement and prospectus. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information, you should not rely on it. None of us, the Guarantor,
BofAS or UBS is making an offer to sell these Notes in any jurisdiction where the offer or sale is not permitted. You should assume
that the information in this pricing supplement and the accompanying product supplement, prospectus supplement, and prospectus
is accurate only as of the date on their respective front covers.
Certain terms used but not defined in this pricing supplement have the
meanings set forth in the accompanying product supplement, prospectus supplement and prospectus. Unless otherwise indicated or
unless the context requires otherwise, all references in this pricing supplement to “we,” “us,” “our,”
or similar references are to BofA Finance, and not to BAC (or any other affiliate of BofA Finance).
The above-referenced accompanying documents may be accessed at the following
links:
The Notes are our senior debt securities. Any
payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee are not insured by the
Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in right of payment with all of our
other unsecured and unsubordinated obligations, and the related guarantee will rank equally in right of payment with all of BAC’s
other unsecured and unsubordinated obligations, in each case except obligations that are subject to any priorities or preferences
by law. Any payments due on the Notes, including any repayment of the principal amount, will be subject to the credit risk of BofA
Finance, as issuer, and BAC, as guarantor.
|
Summary
|
|
Issuer
|
BofA Finance
|
|
Guarantor:
|
BAC
|
|
Public Offering Price
|
100% of the Stated Principal Amount
|
|
Stated Principal Amount
|
$10.00 per Note
|
|
Minimum Investment
|
$1,000 (100 Notes)
|
|
Term
|
Approximately fourteen months
|
|
Trade Date1
|
July 28, 2020
|
|
Issue Date 1
|
July 31, 2020
|
|
Valuation Date
|
September 28, 2021, subject to postponement as set forth in “Description of the Notes—Certain Terms of the Notes—Events Relating to Calculation Days” beginning on page PS-21 of the accompanying product supplement.
|
|
Maturity Date
|
September 30, 2021
|
|
Underlying
|
iShares® MSCI Emerging Markets ETF (Ticker: EEM)
|
|
Payment At Maturity (per $10.00 Stated Principal
Amount)
|
If the Underlying Return is positive, we will repay the Stated Principal
Amount of the Notes at maturity plus a return equal to the Underlying Return multiplied by the Upside Gearing, but no more than
the Maximum Gain, calculated as follows:
$10.00
× (1 + the lesser of (i) Underlying Return x Upside Gearing and (ii) Maximum Gain)
If the Underlying Return is zero or negative, we will repay less than
the Stated Principal Amount of your Notes at maturity, resulting in a loss that is proportionate to the decline in the price of
the Underlying from the Trade Date to the Valuation Date, calculated as follows:
$10.00
× (1 + Underlying Return)
Accordingly, you may lose all or a substantial portion of your
Stated Principal Amount at maturity, depending on how significantly the Underlying declines.
|
|
Maximum Gain
|
16.80%, which corresponds to a maximum Payment at Maturity of $11.68.
|
|
Underlying Return
|
Final Value – Initial Value
Initial Value
|
|
Upside Gearing:
|
3.00
|
|
Initial Value
|
The Closing Market Price of the Underlying on the Trade Date, as specified on the cover page of this pricing supplement.
|
|
Final Value
|
The Closing Market Price of the Underlying on the Valuation Date, multiplied by its Price Multiplier, as determined by the calculation agent.
|
|
Closing Market Price
|
As defined on page PS-23 of the accompanying product supplement.
|
|
Price Multiplier
|
1, subject to adjustment for certain events as described in “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs” beginning on page PS-27 of the accompanying product supplement.
|
|
Calculation Agent
|
BofAS, an affiliate of BofA Finance.
|
1 See “Supplement
to the Plan of Distribution; Role of BofAS and Conflicts of Interest” in this pricing supplement for additional information.
|
Selling Agents
|
BofAS and UBS.
|
|
Events of Default and Acceleration:
|
If an Event of Default, as defined in the senior indenture and in the section entitled “Description of Debt Securities—Events of Default and Rights of Acceleration” beginning on page 22 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “—Payment at Maturity” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
|
Investment Timeline
|
|
|
|
|
|
|
|
Trade Date
|
|
The Closing Market Price of the Underlying (its Initial Value) is observed and the Maximum Gain for the Underlying is determined.
|
|
|
|
|
|
|
|
Maturity Date
|
|
If the Underlying Return is positive, we will repay the Stated Principal
Amount of the Notes at maturity plus a return equal to the Underlying Return multiplied by the Upside Gearing, but no more than
the Maximum Gain, calculated as follows:
$10.00
× (1 + the lesser of (i) Underlying Return x Upside Gearing and (ii) Maximum Gain)
If the Underlying Return is zero or negative, we will repay less than
the Stated Principal Amount of your Notes at maturity, resulting in a loss that is proportionate to the decline in the price of
the Underlying from the Trade Date to the Valuation Date, calculated as follows:
$10.00
× (1 + Underlying Return)
Accordingly, you may lose all or a substantial portion of your
Stated Principal Amount at maturity, depending on how significantly the Underlying declines.
|
INVESTING IN THE NOTES INVOLVES SIGNIFICANT RISKS. YOU MAY LOSE A
SUBSTANTIAL PORTION OR ALL OF YOUR INITIAL INVESTMENT. YOU WILL BE EXPOSED TO THE MARKET RISK OF THE UNDERLYING. ANY PAYMENT
ON THE NOTES IS SUBJECT TO THE CREDITWORTHINESS OF BOFA FINANCE AND THE GUARANTOR.
Your investment in the Notes entails significant
risks, many of which differ from those of a conventional debt security. Your decision to purchase the Notes should be made only
after carefully considering the risks of an investment in the Notes, including those discussed below, with your advisors in light
of your particular circumstances. The Notes are not an appropriate investment for you if you are not knowledgeable about significant
elements of the Notes or financial matters in general. You should carefully review the more detailed explanation of risks relating
to the Notes in the “Risk Factors” sections beginning on page PS-5 of the accompanying product supplement, page S-5
of the accompanying prospectus supplement and page 7 of the accompanying prospectus identified on page PS-2 above.
|
|
¨
|
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 Final Value is less than the Initial Value, at maturity,
you will lose 1% of the Stated Principal Amount for each 1% that the Final Value is less than the Initial Value. In that case,
you will lose a significant portion or all of your investment in the Notes.
|
|
|
¨
|
The Notes do not bear interest. Unlike a conventional debt security, no interest payments
will be paid over the term of the Notes, regardless of the extent to which the Final Value exceeds the Initial Value.
|
|
|
¨
|
The return on the Notes will be limited to the Maximum
Gain. The return on the Notes will not exceed the Maximum Gain, regardless of
the performance of the Underlying. Your return on the Notes may be less than the return that you could have realized if you invested
directly in the Underlying or in the securities held by the Underlying, and you will not receive the full benefit of any appreciation
in the Underlying beyond that Maximum Gain.
|
|
|
¨
|
The Upside Gearing applies only at maturity. You should be willing to hold your Notes to
maturity. If you are able to sell your Notes in the secondary market prior to maturity, the price you receive will likely not reflect
the full economic value of the Upside Gearing, and the return you realize may be less than the then-current underlying return multiplied
by the Upside Gearing, even if such return is positive. You can receive the full benefit of the Upside Gearing only if you hold
your Notes to maturity. Any payment on the Notes is subject to the credit risk of BofA Finance, as issuer, and BAC, as guarantor.
|
|
|
¨
|
Your return on the Notes may be less than the yield on a conventional debt security of comparable
maturity. Any return that you receive on the Notes may be less than the return you would earn if you purchased a conventional
debt security with the same Maturity Date. As a result, your investment in the Notes may not reflect the full opportunity cost
to you when you consider factors, such as inflation, that affect the time value of money.
|
|
|
¨
|
Any payment on the Notes is subject to our credit risk and the credit risk of the Guarantor,
and actual or perceived changes in our 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 any payment
on the Notes will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the
Notes on the Maturity Date, regardless of the Final Value as compared to the Initial Value. No assurance can be given as to what
our financial condition or the financial condition of the Guarantor will be on the Maturity Date. If we and the Guarantor become
unable to meet our respective financial obligations as they become due, you may not receive the amount payable under the terms
of the Notes and you could lose all of your initial investment.
|
In addition, our credit ratings and the credit
ratings of the Guarantor are assessments by ratings agencies of our respective abilities to pay our obligations. Consequently,
our or the Guarantor’s perceived creditworthiness and actual or anticipated decreases in our or the Guarantor’s credit
ratings or increases in the spread between the yield on our respective securities and the yield on U.S. Treasury securities (the
“credit spread”) prior to the Maturity Date of your Notes may adversely affect the market value of the Notes. However,
because your return on the Notes depends upon factors in addition to our ability and the ability of the Guarantor to pay our respective
obligations, such as the value of the Underlying, an improvement in our or the Guarantor’s credit ratings will not reduce
the other investment risks related to the Notes.
|
|
¨
|
The Notes are subject to the market risk of the Underlying. The return on the Notes, which
may be negative, is directly linked to the performance of the Underlying and indirectly linked to the value of the securities held
by the Underlying. The price of the Underlying can rise or fall sharply due to factors specific to the Underlying and the securities
held by the Underlying and the issuers of such securities, such as stock price volatility, earnings and financial conditions, corporate,
industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such
as general stock market or commodity market volatility and levels, interest rates and economic and political conditions.
|
|
|
¨
|
We are a finance subsidiary and, as such, have no independent assets,
operations or revenues. We are a finance subsidiary of BAC, have no operations other than those related to the issuance, administration
and repayment of our debt securities that are guaranteed by the Guarantor, and are dependent upon the Guarantor and/or its other
subsidiaries to meet our obligations under the Notes in the ordinary course.
|
|
|
¨
|
The public offering price you are paying for the Notes exceeds their initial estimated value.
The initial estimated value of the Notes that is provided on the cover page of this pricing supplement is an estimate only, determined
as of the Trade Date by reference to our and our affiliates' pricing models. These pricing models consider certain assumptions
and variables, including our credit spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market
terms on hedging transactions, expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected
term of the Notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower
than their initial estimated value. This is due to, among other things, changes in the price of the Underlying, changes in
|
the Guarantor’s internal funding rate, and
the inclusion in the public offering price of the underwriting discount and the hedging related charges, all as further described
in “Structuring the Notes” below. These factors, together with various credit, market and economic factors over the
term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will
affect the value of the Notes in complex and unpredictable ways.
|
|
¨
|
The initial estimated value does not represent a minimum or maximum price at which we, BAC, BofAS
or any of our other affiliates would be willing to purchase your Notes in any secondary market (if any exists) at
any time. The value of your Notes at any time after issuance will vary based on many factors that cannot be predicted with
accuracy, including the performance of the Underlying, our and BAC’s creditworthiness and changes in market
conditions.
|
|
|
¨
|
The price of the Notes that may be paid by BofAS in any secondary market (if BofAS makes a
market, which it is not required to do), as well as the price which may be reflected on customer account statements, will be higher
than the then-current estimated value of the Notes for a limited time period after the Trade Date. As agreed by BofAS and UBS,
for approximately a six-month period after the Trade Date, to the extent BofAS offers to buy the Notes in the secondary market,
it will do so at a price that will exceed the estimated value of the Notes at that time. The amount of this excess, which
represents a portion of the hedging-related charges expected to be realized by BofAS and UBS over the term of the Notes, will decline
to zero on a straight line basis over that six-month period. Accordingly, the estimated value of your Notes during this initial
six-month period may be lower than the value shown on your customer account statements. Thereafter, if BofAS buys or sells
your Notes, it will do so at prices that reflect the estimated value determined by reference to its pricing models at that time.
Any price at any time after the Trade Date will be based on then-prevailing market conditions and other considerations, including
the performance of the Underlying and the remaining term of the Notes. However, none of us, the Guarantor, BofAS or any other
party 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.
|
|
|
¨
|
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 development of a trading market for the Notes
will depend on the Guarantor’s financial performance and other factors, including changes in the price of the Underlying.
The number of potential buyers of your Notes in any secondary market may be limited. We anticipate that BofAS will act as a market-maker
for the Notes, but none of us, the Guarantor or BofAS is required to do so. There is no assurance that any party will be willing
to purchase your Notes at any price in any secondary market. BofAS may discontinue its market-making activities as to the Notes
at any time. To the extent that BofAS engages in any market-making activities, it may bid for or offer the Notes. Any price at
which BofAS may bid for, offer, purchase, or sell any Notes may differ from the values determined by pricing models that it may
use, whether as a result of dealer discounts, mark-ups, or other transaction costs. These bids, offers, or completed transactions
may affect the prices, if any, at which the Notes might otherwise trade in the market. In addition, if at any time BofAS were to
cease acting as a market-maker as to the Notes, it is likely that there would be significantly less liquidity in the secondary
market. In such a case, the price at which the Notes could be sold likely would be lower than if an active market existed.
|
|
¨
|
Economic and market factors have affected the terms of the Notes and may affect the market
value of the Notes prior to maturity. Because market-linked notes, including the Notes, can be thought of as having a debt
component and a derivative component, factors that influence the values of debt instruments and options and other derivatives will
also affect the terms and features of the Notes at issuance and the market price of the Notes prior to maturity. These factors
include the price of the Underlying and the securities held by the Underlying; the volatility of the Underlying and the securities
held by the Underlying; the dividend rate paid on the Underlying and on the securities held by the Underlying, if applicable; the
time remaining to the maturity of the Notes; interest rates in the markets; geopolitical conditions and economic, financial, political,
force majeure and regulatory or judicial events; whether the price of the Underlying is currently or has been less than the Initial
Value; the availability of comparable instruments; the creditworthiness of BofA Finance, as issuer, and BAC, as guarantor; and
the then current bid-ask spread for the Notes and the factors discussed under “— Trading and hedging activities by
us, the Guarantor and any of our other affiliates, including BofAS, and UBS and its affiliates, may create conflicts of interest
with you and may affect your return on the Notes and their market value” below. These factors are unpredictable and interrelated
and may offset or magnify each other.
|
|
|
¨
|
The Payment at Maturity will not reflect the price of the Underlying other than on the Valuation
Date. The price of the Underlying during the term of the Notes other than on the Valuation Date will not affect payment on
the Notes. Notwithstanding the foregoing, investors should generally be aware of the performance of the Underlying while holding
the Notes, as the performance of the Underlying may influence the market value of the Notes. The calculation agent will calculate
the Payment at Maturity by comparing only the Initial Value to the Final Value for the Underlying. No other price of the Underlying
will be taken into account. As a result, if the Final Value of the Underlying is less than the Initial Value, you will receive
less than the Stated Principal Amount at maturity, even if the price of the Underlying was always above the Initial Value prior
to the Valuation Date.
|
|
|
¨
|
The anti-dilution adjustments will be limited. The calculation
agent may adjust the Price Multiplier of the Underlying and other terms of the Notes to reflect certain corporate actions by the
Underlying, as described in the section “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating
to ETFs” in the accompanying product supplement. The calculation agent will not be required to make an adjustment for every
event that may affect the Underlying and will have broad discretion to determine whether and to what extent an adjustment is required.
|
|
|
¨
|
The
sponsor or investment advisor of the Underlying may adjust the Underlying in a way that affects its price, and the sponsor or
investment advisor has no obligation to consider your interests. The sponsor or investment advisor of the Underlying can add,
delete, or
|
substitute
the components included in the Underlying or make other methodological changes that could change its price. Any of these actions
could adversely affect the value of your Notes.
|
|
¨
|
The performance of the Underlying may not correlate with the performance
of its underlying index (the “Underlying Index”) as well as the net asset value per share of the Underlying, especially
during periods of market volatility. The performance of the Underlying and that of its Underlying Index generally will vary
due to, for example, transaction costs, management fees, certain corporate actions, and timing variances. Moreover, it is also
possible that the performance of the Underlying may not fully replicate or may, in certain circumstances, diverge significantly
from the performance of its Underlying Index. This could be due to, for example, the Underlying not holding all or substantially
all of the underlying assets included in the Underlying Index and/or holding assets that are not included in the Underlying Index,
the temporary unavailability of certain securities in the secondary market, the performance of any derivative instruments held
by the Underlying, differences in trading hours between the Underlying (or the underlying assets held by the Underlying) and the
Underlying Index, or due to other circumstances. This variation in performance is called the “tracking error,” and,
at times, the tracking error may be significant. In addition, because the shares of the Underlying are traded on a securities exchange
and are subject to market supply and investor demand, the market price of one share of the Underlying may differ from its net asset
value per share; shares of the Underlying may trade at, above, or below its net asset value per share. During periods of market
volatility, securities held by the Underlying may be unavailable in the secondary market, market participants may be unable to
calculate accurately the net asset value per share of the Underlying and the liquidity of the Underlying may be adversely affected.
Market volatility may also disrupt the ability of market participants to trade shares of the Underlying. Further, market volatility
may adversely affect, sometimes materially, the prices at which market participants are willing to buy and sell shares of the Underlying.
As a result, under these circumstances, the market value of shares of the Underlying may vary substantially from the net asset
value per share of the Underlying.
|
|
|
¨
|
The Notes are subject to risks associated with foreign securities markets. The Underlying
and its Underlying Index include 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 Underlying and its
Underlying Index 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 SEC, and foreign companies are subject to accounting, auditing and financial
reporting standards and requirements that differ from those applicable to U.S. reporting companies. 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.
|
|
|
¨
|
An investment in the Notes will involve risks that are associated with investments that are
linked to the equity securities of issuers from emerging markets. The issuers included in the Underlying and its Underlying
Index are based in emerging market nations. Emerging market nations are undergoing rapid institutional change, including the restructuring
of economic, political, financial, and legal systems. The regulatory and tax environments in these nations may be subject to change
without review or appeal, and many emerging markets suffer from underdevelopment of their capital markets and their tax systems.
In addition, in some of these nations, issuers of the relevant securities face the threat of expropriation of their assets, and/or
nationalization of their businesses. It may be more difficult for an investor in these markets to monitor investments in these
companies, because these companies may be subject to fewer disclosure requirements than companies in developed markets, and economic
and financial data about some of these countries may be unreliable.
|
|
|
¨
|
Greater expected volatility generally indicates an increased risk of loss at maturity.
Volatility is a measure of the degree of variation in the price of the Underlying over a period of time. The greater the expected
volatility of the Underlying at the time the terms of the Notes are set, the greater the expectation is at that time that you may
lose a significant portion or all of the Stated Principal Amount at maturity. However, the Underlying's volatility can change significantly
over the term of the Notes, and a relatively lower Initial Value may not necessarily indicate that the Notes have a greater likelihood
of a return of principal at maturity. You should be willing to accept the downside market risk of the Underlying and the potential
to lose a significant portion or all of your initial investment.
|
|
|
¨
|
Trading and hedging activities by us, the Guarantor and any of our
other affiliates, including BofAS, and UBS and its 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, and UBS and
its affiliates, may buy or sell shares of the Underlying or the securities held by or included in the Underlying, or futures or
options contracts on the Underlying or those securities, or other listed or over-the-counter derivative instruments linked to the
Underlying or those securities. We, the Guarantor or one or more of our other affiliates, including BofAS, and UBS and its affiliates
also may issue or underwrite other financial instruments with returns based upon the Underlying. We expect to enter into arrangements
or adjust or close out existing transactions to hedge our obligations under the Notes. We, the Guarantor or our other affiliates,
including BofAS, and UBS and its affiliates also may enter into hedging transactions relating to other notes or instruments, some
of which may have returns calculated in a manner related to that of the Notes offered hereby. We or UBS may enter into such hedging
arrangements with one of our or their affiliates. Our affiliates or their affiliates may enter into additional hedging transactions
with other parties relating to the Notes and the Underlying. This hedging activity is expected to result in a profit to those engaging
in the hedging activity, which could be more or less than initially expected, or the hedging activity could also result in a loss.
We and our affiliates and UBS and its affiliates will price these hedging
|
transactions
with the intent to realize a profit, regardless of whether the value of the Notes increases or decreases. Any profit in connection
with such hedging activities will be in addition to any other compensation that we, the Guarantor and our other affiliates, including
BofAS, and UBS and its affiliates receive for the sale of the Notes, which creates an additional incentive to sell the Notes to
you. While we, the Guarantor or one or more of our other affiliates, including BofAS, and UBS and its affiliates may from time
to time own securities represented by the Underlying, except to the extent that BAC’s or UBS Group AG’s common stock
may be included in the Underlying, as applicable, we, the Guarantor and our other affiliates, including BofAS, and UBS and its
affiliates do not control any company included in the Underlying, and have not verified any disclosure made by any other company.
We, the Guarantor or one or more of our other affiliates, including BofAS, and UBS and its affiliates 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.
The transactions described above may present a conflict of interest between your interest in the Notes and the interests we, the
Guarantor and our other affiliates, including BofAS, and UBS and its affiliates 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.
The transactions
described above may adversely affect the value of the Underlying in a manner that could be adverse to your investment in the Notes.
On or before the Trade Date, any purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on
its behalf, and UBS and its affiliates (including for the purpose of hedging some or all of our anticipated exposure in connection
with the Notes) may have affected the value of the Underlying. Consequently, the value of the Underlying may change subsequent
to the Trade Date, which may adversely affect the market value of the Notes. 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, and UBS and its affiliates may purchase or otherwise acquire a long or short position in
the Notes and may hold or resell the Notes. For example, BofAS may enter into these transactions in connection with any market
making activities in which it engages. We cannot assure you that these activities will not adversely affect the value of the Underlying,
the market value of your Notes prior to maturity or the amounts payable on the Notes.
|
|
t
|
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.
|
|
|
t
|
The U.S. federal income tax consequences of an investment in the Notes are uncertain, and may
be adverse to a holder of the Notes. No statutory, judicial, or administrative authority directly addresses the characterization
of the Notes or securities similar to the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S.
federal income tax consequences of an investment in the Notes are not certain. Under the terms of the Notes, you will have agreed
with us to treat the Notes as single financial contracts, as described below under “U.S. Federal Income Tax Summary—General.”
If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative characterization for the Notes,
the timing and character of income, gain or loss with respect to the Notes may differ. No ruling will be requested from the IRS
with respect to the Notes and no assurance can be given that the IRS will agree with the statements made in the section entitled
“U.S. Federal Income Tax Summary.” You are urged to consult with your own tax advisor regarding all aspects of the
U.S. federal income tax consequences of investing in the Notes.
|
Hypothetical terms only. Actual terms may vary. See
the cover page for actual offering terms.
The examples below illustrate the hypothetical Payment at Maturity for
a $10.00 Stated Principal Amount Note for a range of hypothetical Underlying Returns for the Underlying with the following assumptions*
(amounts may have been rounded for ease of reference and do not take into account any tax consequences from investing in the Notes):
|
|
t
|
Stated Principal Amount: $10
|
|
|
t
|
Hypothetical Initial Value: 100.00
|
*The hypothetical Initial Value
does not represent the actual Initial Value applicable to the Underlying. The actual Initial Value is set forth on the cover page
of this pricing supplement. Any payment on the Notes is subject to issuer and Guarantor credit risk.
|
Final Value
|
Underlying Return
|
Payment at Maturity
|
Return on the Notes
|
|
160.00
|
60.00%
|
$11.68
|
16.80%
|
|
150.00
|
50.00%
|
$11.68
|
16.80%
|
|
140.00
|
40.00%
|
$11.68
|
16.80%
|
|
130.00
|
30.00%
|
$11.68
|
16.80%
|
|
120.00
|
20.00%
|
$11.68
|
16.80%
|
|
105.60
|
5.60%
|
$11.68
|
16.80%(1)
|
|
105.00
|
5.00%
|
$11.50
|
15.00%
|
|
102.00
|
2.00%
|
$10.60
|
6.00%
|
|
100.00(2)
|
0.00%
|
$10.00
|
0.00%
|
|
99.99
|
-0.01%
|
$9.99
|
-0.01%
|
|
90.00
|
-10.00%
|
$9.00
|
-10.00%
|
|
80.00
|
-20.00%
|
$8.00
|
-20.00%
|
|
70.00
|
-30.00%
|
$7.00
|
-30.00%
|
|
60.00
|
-40.00%
|
$6.00
|
-40.00%
|
|
50.00
|
-50.00%
|
$5.00
|
-50.00%
|
|
0.00
|
-100.00%
|
$0.00
|
-100.00%
|
|
(1) The “Return on the Notes” cannot exceed the Maximum Gain and is calculated based on the Public Offering Price of $10 per Note.
|
|
(2) The hypothetical Initial Value of 100 used in the table above has been chosen for illustrative purposes only. The actual Initial Value for the Underlying is set forth on the cover page of this pricing supplement.
|
Example 1 — The Final Value of 110.00 is greater than the Initial
Value of 100.00, resulting in an Underlying Return of 10.00%.
Since the Underlying Return is positive, we will repay the Stated Principal
Amount of the Notes at maturity plus a return equal to the Underlying Return multiplied by the Upside Gearing, but no more than
the Maximum Gain, calculated as follows:
$10.00 ×
(1 + the lesser of (i) 10.00% × 3.00 and (ii) 16.80%) = $11.68
Example 2 — The Final Value
of 105.00 is greater than the Initial Value of 100.00, resulting in an Underlying Return of 5.00%.
Since the Underlying Return is positive,
we will repay the Stated Principal Amount of the Notes at maturity plus a return equal to the Underlying Return multiplied by the
Upside Gearing, but no more than the Maximum Gain, calculated as follows:
$10.00 ×
(1 + the lesser of (i) 5.00% x 3.00 and (ii) 16.80%) = $11.50
Example 3 — The Final Value of 50.00 is less than the Initial
Value of 100.00, resulting in an Underlying Return of -50.00%.
Since the Underlying Return is negative and the Final Value is less than
the Initial Value, we will repay less than the Stated Principal Amount of your Notes at maturity, resulting in a loss that is proportionate
to the decline in the price of the Underlying from the Trade Date to the Valuation Date, calculated as follows:
$10.00 × (1 + -50.00%) = $5.00
The
Underlying
All disclosures contained in this pricing supplement regarding
the Underlying, including, without limitation, its make-up, method of calculation, and changes in its components, have been derived
from publicly available sources. The information reflects the policies of, and is subject to change by, BlackRock Fund Advisors
(“BFA”), the investment advisor of the EEM. We refer to BFA as the “Investment Advisor.” The Investment
Advisor, which licenses the copyright and all other rights to the Underlying, has no obligation to continue to publish, and may
discontinue publication of, the Underlying. The consequences of the Investment Advisor discontinuing publication of the Underlying
are discussed in “Description of the Notes— Anti-Dilution and Discontinuance Adjustments Relating to ETFs— Discontinuance
of or Material Change to an ETF” in the accompanying product supplement. None of us, the Guarantor,
the calculation agent, or either selling agent accepts any responsibility for the calculation, maintenance or publication of the
Underlying or any successor underlying.
None of us, the Guarantor, the selling agents or any of our or their respective
affiliates makes any representation to you as to the future performance of the Underlying.
You should make your own investigation into the Underlying.
The iShares® MSCI Emerging Markets ETF
The shares of the EEM are issued by iShares, Inc., a registered investment
company. The EEM seeks investment results that correspond generally to the price and yield performance, before fees and expenses,
of the MSCI Emerging Markets Index (“MXEF”). The EEM typically earns income dividends from securities included in the
EEM. These amounts, net of expenses and taxes (if applicable), are passed along to the EEM’s shareholders as “ordinary
income.” In addition, the EEM realizes capital gains or losses whenever it sells securities. Net long-term capital gains
are distributed to shareholders as “capital gain distributions.” However, because the Notes are linked only to the
share price of the EEM, you will not be entitled to receive income, dividend, or capital gain distributions from the EEM or any
equivalent payments. The EEM trades on the NYSE Arca under the ticker symbol “EEM.”
As investment adviser, BFA has overall responsibility for the general
management and administration of the EEM. For its investment advisory services to the EEM, BFA is paid a management fee based on
the EEM’s average daily net assets as follows: 0.75% per annum of net assets of the EEM less than or equal to $14.0
billion, plus 0.68% per annum of the net assets of the EEM on amounts over $14.0 billion, up to and including $28.0 billion,
plus 0.61% per annum of the net assets of the EEM on amounts over $28.0 billion up to and including $42.0 billion, plus 0.54% per
annum of the net assets of the EEM on amounts over $42.0 billion, up to and including $56.0 billion, plus 0.47% per annum
of the net assets of the EEM on amounts over $56.0 billion, up to and including $70.0 billion, plus 0.41% per annum of the
net assets of the EEM on amounts over $70.0 billion, up to and including $84.0 billion, plus 0.35% per annum of the net assets
of the EEM on amounts in excess of $84.0 billion. As of December 31, 2019, the expense ratio of the EEM was 0.68% per annum.
Investment Objective and Strategy
The EEM seeks to provide investment results that correspond generally
to the price and yield performance, before fees and expenses, of publicly traded securities in emerging markets, as represented
by the MXEF. The EEM’s investment objective and the MXEF may be changed at any time without shareholder approval. Notwithstanding
the EEM’s investment objective, the return on your Notes will not reflect any dividends paid on the EEM shares, on the securities
purchased by the EEM or on the securities that comprise the MXEF.
The return on your Notes is linked to the performance of the iShares®
MSCI Emerging Markets ETF, and not to the performance of the MSCI Emerging Markets Index on which the EEM is based. Although the
EEM seeks results that correspond generally to the performance of the MXEF, the EEM follows a strategy of “representative
sampling,” which means the EEM’s holdings do not identically correspond to the holdings and weightings of the MXEF,
and may significantly diverge from the MXEF. Currently, the EEM holds substantially fewer securities than the MXEF. Additionally,
when the EEM purchases securities not held by the MXEF, the EEM may be exposed to additional risks, such as counterparty credit
risk or liquidity risk, to which the MXEF components are not exposed. Therefore, the EEM will not directly track the performance
of the MXEF and there may be significant variation between the performance of the EEM and the MXEF on which it is based.
Representative Sampling
BFA uses a representative sampling strategy to track the MXEF. Representative
sampling is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment
profile similar to that of the MXEF. The securities selected are expected to have, in the aggregate, investment characteristics
(based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability
and yield) and liquidity measures similar to those of the MXEF. The EEM may or may not hold all of the securities that are included
in the MXEF.
The EEM generally invests at least 90% of its assets in the securities
of the MXEF and in American Depositary Receipts or Global Depositary Receipts representing securities of the MXEF. The EEM may
invest the remainder of its assets in securities, including securities that are not in the MXEF, but which BFA believes will help
the EEM track the MXEF, and futures contracts, options on futures contracts, other types of options and swaps related to the MXEF,
as well as cash and cash equivalents, including shares of money market funds affiliated with BFA or its affiliates. BFA will waive
portfolio management fees in an amount equal to the portfolio management fees of such other iShares funds for any portion of the
EEM’s assets invested in shares of such other funds.
The MSCI Emerging Markets Index
The MXEF is intended to measure equity market performance in the global
emerging markets. The MXEF is a free float--adjusted market capitalization index with a base date of December 31, 1987 and an initial
value of 100. The MXEF is calculated daily in U.S. dollars and published in real time every 60 seconds during market trading hours.
The MXEF has a base value of 100.00 and a base date of December 31, 1987. As of February 28, 2020, the MXEF consists of the following
26 emerging market country indices: Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia,
Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand,
Turkey and United Arab Emirates.
The MXEF is an “MSCI Index.”
The Country Indices
Each country’s index included in an MSCI Index is referred to as
a “Country Index.” Under the MSCI methodology, each Country Index is an “MSCI Global Standard Index.” The
components of each Country Index used to be selected by the index sponsor from among the universe of securities eligible for inclusion
in the relevant Country Index so as to target an 85% free float-adjusted market representation level within each of a number of
industry groups, subject to adjustments to (i) provide for sufficient liquidity, (ii) reflect foreign investment restrictions (only
those securities that can be held by non-residents of the country corresponding to the relevant Country Index are included) and
(iii) meet certain other investibility criteria. Following a change in the index sponsor’s methodology implemented in May
2008, the 85% target is now measured at the level of the country universe of eligible securities rather than the industry group
level-so each Country Index will seek to include the securities that represent 85% of the free float-adjusted market capitalization
of all securities eligible for inclusion-but will still be subject to liquidity, foreign investment restrictions and other investibility
adjustments. The index sponsor defines “free float” as total shares excluding shares held by strategic investors such
as governments, corporations, controlling shareholders and management, and shares subject to foreign ownership restrictions.
Calculation of the Country Indices
Each Country Index is a free float-adjusted market capitalization index
that is designed to measure the market performance, including price performance, of the equity securities in that country. Each
Country Index is calculated in the relevant local currency as well as in U.S. dollars, with price, gross and net returns.
Each component is included in the relevant Country Index at a weight
that reflects the ratio of its free float-adjusted market capitalization (i.e., free public float multiplied by price) to
the free float-adjusted market capitalization of all the components in that Country Index. The index sponsor defines the free float
of a security as the proportion of shares outstanding that is deemed to be available for purchase in the public equity markets
by international investors.
Calculation of the MSCI Indices
The performance of an MSCI Index on any given day represents the weighted
performance of all of the components included in all of the Country Indices. Each component in an MSCI Index is included at a weight
that reflects the ratio of its free float-adjusted market capitalization (i.e., free public float multiplied by price) to
the free float-adjusted market capitalization of all the components included in all of the Country Indices.
Maintenance of and Changes to the MSCI Indices
The index sponsor maintains the MSCI Indices with the objective of reflecting,
on a timely basis, the evolution of the underlying equity markets and segments. In maintaining the indices, emphasis is also placed
on continuity, continuous investibility of the constituents, replicability, index stability and low turnover in the indices.
As part of the changes to the index sponsor’s methodology which
became effective in May 2008, maintenance of the indices falls into three broad categories:
|
|
·
|
semi-annual reviews, which will occur each May and November
and will involve a comprehensive
reevaluation of the market, the universe of eligible securities and other factors involved in composing the indices;
|
|
|
·
|
quarterly reviews, which will occur each February, May,
August and November and will focus on
significant changes in the market since the last semi-annual review and on including significant new
eligible securities (such as IPOs, which were not eligible for earlier inclusion in the indices); and
|
|
|
·
|
ongoing event-related changes, which will generally be
reflected in the indices at the time of the event
and will include changes resulting from mergers, acquisitions, spin-offs, bankruptcies, reorganizations and other similar corporate
events.
|
Prices and Exchange Rates
Prices
The prices used to calculate the MSCI Indices are the official exchange
closing prices or those figures accepted as such. The index sponsor reserves the right to use an alternative pricing source on
any given day.
Exchange Rates
The index sponsor uses the closing spot rates published by WM / Reuters
at 4:00 p.m., London time. The index sponsor uses WM / Reuters rates for all countries for which it provides indices.
In case WM/Reuters does not provide rates for specific markets on given
days (for example Christmas Day and New Year’s Day), the previous business day’s rates are normally used. The index
sponsor independently monitors the exchange rates on all its indices and may, under exceptional circumstances, elect to use an
alternative exchange rate if the WM / Reuters rates are not available, or if the index sponsor determines that the WM / Reuters
rates are not reflective of market circumstances for a given currency on a particular day. In such circumstances, an announcement
would be sent to clients with the related information. If appropriate, the index sponsor may conduct a consultation with the investment
community to gather feedback on the most relevant exchange rate.
Historical Performance of the EEM
The following graph sets forth the daily historical performance of the
EEM in the period from January 1, 2008 through the Trade Date. We obtained this historical data from Bloomberg L.P. We have not
independently verified the accuracy or completeness of the information obtained from Bloomberg L.P.
This historical data on the EEM is not necessarily indicative of the
future performance of the EEM or what the value of the Notes may be. Any historical upward or downward trend in the price of the
EEM during any period set forth above is not an indication that the price of the EEM is more or less likely to increase or decrease
at any time over the term of the Notes.
Before investing in the Notes, you should consult publicly available
sources for the prices and trading patterns of the EEM.
|
Supplement to the Plan of Distribution; Role of BofAS and Conflicts of Interest
|
BofAS, an affiliate of BofA Finance and the lead selling agent for the sale
of the Notes, will receive an underwriting discount of $0.20 for any Note sold in this offering. UBS, as selling agent for sales
of the Notes, has agreed to purchase from BofAS, and BofAS has agreed to sell to UBS, all of the Notes sold in this offering for
$9.80 per Note. UBS proposes to offer the Notes to the public at a price of $10.00 per Note. UBS will receive an underwriting discount
of $0.20 for each Note it sells to the public. The underwriting discount will be received by UBS and its financial advisors collectively.
If all of the Notes are not sold at the initial offering price, BofAS may change the public offering price and other selling terms.
BofAS, a broker-dealer affiliate of ours, is a member of the Financial
Industry Regulatory Authority, Inc. (“FINRA”) and will participate as lead selling agent in the distribution of the
Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121. BofAS may not make sales in
this offering to any of its discretionary accounts without the prior written approval of the account holder.
We will deliver the Notes against payment therefor in New York, New York
on a date that is greater than two business days following the Trade Date. Under Rule 15c6-1 of the Securities Exchange Act of
1934, trades in the secondary market generally are required to settle in two business days, unless the parties to any such trade
expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than two business days prior to the Issue Date
will be required to specify alternative settlement arrangements to prevent a failed settlement.
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. BofAS 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.
As agreed by BofAS and UBS, for approximately a six-month period after
the Trade Date, to the extent BofAS offers to buy the Notes in the secondary market, it will do so at a price that will exceed
the estimated value of the Notes at that time. The amount of this excess will decline on a straight line basis over that period.
Thereafter, if BofAS buys or sells your Notes, it will do so at prices that reflect the estimated value determined by reference
to its pricing models at that time. Any price at any time after the Trade Date will be based on then-prevailing market conditions
and other considerations, including the performance of the Underlying and the remaining term of the Notes. However, none of us,
the Guarantor, BofAS, UBS or any other party is obligated to purchase your Notes at any price or at any time, and we cannot assure
you that any party will purchase your Notes at a price that equals or exceeds the initial estimated value of the Notes.
Any price that BofAS may pay to repurchase the Notes will depend upon
then prevailing market conditions, the creditworthiness of us and the Guarantor, and transaction costs. At certain times, this
price may be higher than or lower than the initial estimated value of the Notes.
Sales Outside of the United States
The Notes have not been approved for public sale in any jurisdiction
outside of the United States. There has been no registration or filing as to the Notes with any regulatory, securities, banking,
or local authority outside of the United States and no action has been taken by BofA Finance, BAC, BofAS or any other affiliate
of BAC, or by UBS or any of its affiliates, to offer the Notes in any jurisdiction other than the United States. As such, these
Notes are made available to investors outside of the United States only in jurisdictions where it is lawful to make such offer
or sale and only under circumstances that will result in compliance with applicable laws and regulations, including private placement
requirements.
Further, no offer or sale of the Notes is being made to residents of:
You are urged to carefully review the selling restrictions that may
be applicable to your jurisdiction beginning on page S-68 of the accompanying prospectus supplement.
European Economic Area and United Kingdom
None of this pricing supplement, the accompanying
product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus for the purposes of the
Prospectus Regulation (as defined below). This pricing supplement, the accompanying product supplement, the accompanying prospectus
and the accompanying prospectus supplement have been prepared on the basis that any offer of Notes in any Member State of the European
Economic Area (the “EEA”) or in the United Kingdom (each, a “Relevant State”) will only be made to a legal
entity which is a qualified investor under the Prospectus Regulation (“Qualified Investors”). Accordingly any person
making or intending to make an offer in that Relevant State of Notes which are the subject of the offering contemplated in this
pricing supplement, the accompanying product supplement, the accompanying prospectus and the accompanying prospectus supplement
may only do so with respect to Qualified Investors. Neither BofA Finance nor BAC have authorized, nor do they authorize, the making
of any offer of Notes other than to Qualified Investors. The expression “Prospectus Regulation” means Regulation (EU)
2017/1129.
PROHIBITION OF SALES TO EEA AND UNITED KINGDOM
RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA or in the United Kingdom. For these purposes: (a) a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as
amended (“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive),
where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not
a qualified investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication
in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an
investor to decide to purchase or subscribe for the Notes. Consequently no key information document required by Regulation (EU)
No 1286/2014, as amended (the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available
to retail investors in the EEA or in the United Kingdom has been prepared and therefore offering or selling the Notes or otherwise
making them available to any retail investor in the EEA or in the United Kingdom may be unlawful under the PRIIPs Regulation.
United Kingdom
The communication of this pricing supplement, the
accompanying product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or
materials relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been
approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act
2000, as amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must
not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial
promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments
and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article
49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under
the Financial Promotion Order (all such persons together being referred to as “relevant persons”). In the United Kingdom,
the Notes offered hereby are only available to, and any investment or investment activity to which this pricing supplement, the
accompanying product supplement, the accompanying prospectus supplement and the accompanying prospectus relates will be engaged
in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this pricing
supplement, the accompanying product supplement, the accompanying prospectus supplement or the accompanying prospectus or any of
their contents.
Any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only be communicated
or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantor.
All applicable provisions of the FSMA must be complied with in respect
to anything done by any person in relation to the Notes in, from or otherwise involving the United Kingdom.
Structuring
the Notes
The Notes are our debt securities, the return on which is linked
to the performance of the Underlying. The related guarantees are BAC’s obligations. Any payments on the Notes depend on the
credit risk of BofA Finance and BAC and on the performance of the Underlying. The economic terms of the Notes reflect our and BAC’s
actual or perceived creditworthiness at the time of pricing and 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
it enters 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 elsewhere in this pricing supplement, reduced the economic terms of the Notes to you and the initial estimated
value of the Notes. Due to these factors, the public offering price you are paying to purchase the Notes is greater than the initial
estimated value of the Notes as of the Trade Date.
On the cover page of this pricing supplement, we have provided the initial
estimated value for the Notes as of the Trade Date.
In order to meet our payment obligations on the Notes, at the
time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options
or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are determined based upon
terms provided by BofAS and its affiliates, and take into account a number of factors, including our and BAC’s creditworthiness,
interest rate movements, the volatility of the Underlying, the tenor of the Notes and the hedging arrangements. The economic terms
of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised us that the hedging arrangements will include
hedging related charges, reflecting the costs associated with, and our affiliates’ profit earned from, these hedging arrangements.
Since hedging entails risk and may be influenced by unpredictable market forces, actual profits or losses from these hedging transactions
may be more or less than any expected amounts.
For further information, see “Risk Factors” beginning
on page PS-5 above and “Supplemental Use of Proceeds” on page PS-19 of the accompanying product supplement.
Validity
of the Notes
In the opinion of McGuireWoods LLP, as counsel to BofA Finance
and BAC, when the trustee has made the appropriate entries or notations on the applicable schedule to the master global note that
represents the Notes (the “master note”) identifying the Notes offered hereby as supplemental obligations thereunder
in accordance with the instructions of BofA Finance and the provisions of the indenture governing the Notes and the related guarantee,
and the Notes have been delivered against payment therefor as contemplated in this pricing supplement and the related prospectus,
prospectus supplement and product supplement, such Notes will be the legal, valid and binding obligations of BofA Finance, and
the related guarantee will be the legal, valid and binding obligation of BAC, subject, in each case, to the effects of applicable
bankruptcy, insolvency (including laws relating to preferences, fraudulent transfers and equitable subordination), reorganization,
moratorium and other similar laws affecting creditors' rights generally, and to general principles of equity. This opinion is given
as of the date of this pricing supplement and is limited to the laws of the State of New York and the Delaware Limited Liability
Company Act and the Delaware General Corporation Law (including the statutory provisions, all applicable provisions of the Delaware
Constitution and reported judicial decisions interpreting the foregoing) as in effect on the date hereof. In addition, this opinion
is subject to customary assumptions about the trustee's authorization, execution and delivery of the indenture governing the Notes
and due authentication of the master note, the validity, binding nature and enforceability of the indenture governing the Notes
and the related guarantee with respect to the trustee, the legal capacity of individuals, the genuineness of signatures, the authenticity
of all documents submitted to McGuireWoods LLP as originals, the conformity to original documents of all documents submitted to
McGuireWoods LLP as copies thereof, the authenticity of the originals of such copies and certain factual matters, all as stated
in the letter of McGuireWoods LLP dated December 30, 2019, which has been filed as an exhibit to Pre-Effective Amendment No. 1
to the Registration Statement (File No. 333-234425) of BofA Finance and BAC, filed with the SEC on December 30, 2019.
Sidley Austin LLP, New York, New York, is acting as counsel
to BofAS and as special tax counsel to BofA Finance and BAC.
|
U.S. Federal Income Tax Summary
|
The following summary of the material U.S. federal income tax considerations
of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent supersedes, the discussions
under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under “U.S. Federal Income
Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible tax considerations. This
summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated under the
Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations), rulings, current
administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect and all
of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that
the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.
This summary does not include any description of the tax laws of any state or local governments, or of any foreign government,
that may be applicable to a particular holder.
Although the Notes are issued by us, they will be treated as if they were issued
by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references to “we,” “our”
or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S. Holders and Non-U.S. Holders that, except
as otherwise specifically noted, will purchase the Notes upon original issuance and will hold the Notes as capital assets within
the meaning of Section 1221 of the Code, which generally means property held for investment, and that are not excluded from the
discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor concerning the U.S. federal income
tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax consequences arising under the laws
of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax laws.
General
Although there is no statutory, judicial, or administrative authority directly
addressing the characterization of the Notes, in the opinion of our counsel, Sidley Austin LLP, and based on certain factual representations
received from us, the Notes should be treated as single financial contracts with respect to the Underlying and under the terms
of the Notes, we and every investor in the Notes agree, in the absence of an administrative determination or judicial ruling to
the contrary, to treat the Notes in accordance with such characterization. This discussion assumes that the Notes constitute single
financial contracts with respect to the Underlying for U.S. federal income tax purposes. If the Notes did not constitute single
financial contracts, the tax consequences described below would be materially different.
This characterization of the Notes is not binding on the IRS or the courts.
No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or any similar instruments
for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to their proper characterization
and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences of an
investment in the Notes are not certain, and no assurance can be given that the IRS or any court will agree with the characterization
and tax treatment described in this pricing supplement. Accordingly, you are urged to consult your tax advisor regarding all aspects
of the U.S. federal income tax consequences of an investment in the Notes, including possible alternative characterizations.
Unless otherwise stated, the following discussion is based on the characterization
described above. The discussion in this section assumes that there is a significant possibility of a significant loss of principal
on an investment in the Notes.
We will not attempt to ascertain whether the issuer of the 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 the 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 issuer of the Underlying and consult your tax advisor regarding the possible consequences
to you, if any, if the issuer of the Underlying is or becomes a PFIC or is or becomes a United States real property holding corporation.
U.S. Holders
Upon receipt of a cash payment at maturity or upon a sale or exchange of the
Notes prior to maturity, a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount
realized and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes will equal the amount
paid by that holder to acquire them. Subject to the discussion below concerning the possible application of the
“constructive ownership” rules of Section 1260 of the Code, this
capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder held the Notes for more than one year.
The deductibility of capital losses is subject to limitations.
Possible Application of Section 1260 of the Code. Since the Underlying is the
type of financial asset described under Section 1260 of the Code (including, among others, any equity interest in pass-through
entities such as exchange traded funds, regulated investment companies, real estate investment trusts, partnerships, and passive
foreign investment companies, each a “Section 1260 Financial Asset”), while the matter is not entirely clear, there
may exist a risk that an investment in the Notes will be treated as a “constructive ownership transaction” to which
Section 1260 of the Code applies. If Section 1260 of the Code applies, all or a portion of any long-term capital gain recognized
by a U.S. Holder in respect of the Notes will be recharacterized as ordinary income (the “Excess Gain”). In addition,
an interest charge will also apply to any deemed underpayment of tax in
respect of any Excess Gain to the extent such gain would have resulted in gross
income inclusion for the U.S. Holder in taxable years prior to the taxable year of the sale, exchange, or settlement (assuming
such income accrued at a constant rate equal to the applicable federal rate as of the date of sale, exchange, or settlement).
If an investment in the Notes is treated as a constructive ownership transaction,
it is not clear to what extent any long-term capital gain of a U.S. Holder in respect of the Notes will be recharacterized as ordinary
income. It is possible, for example, that the amount of the Excess Gain (if any) that would be recharacterized as ordinary income
in respect of the Notes will equal the excess of (i) any long-term capital gain recognized by the U.S. Holder in respect of the
Notes and attributable to Section 1260 Financial Assets, over (ii) the “net underlying long-term capital gain” (as
defined in Section 1260 of the Code) such U.S. Holder would have had if such U.S. Holder had acquired an amount of the corresponding
Section 1260 Financial Assets at fair market value on the original issue date for an amount equal to the portion of the issue price
of the Notes attributable to the corresponding Section 1260 Financial Assets and sold such amount of Section 1260 Financial Assets
at maturity or upon sale or exchange of the Notes at fair market value. Unless otherwise established by clear and convincing evidence,
the net underlying long-term capital gain is treated as zero and therefore it is possible that all long-term capital gain recognized
by a U.S. Holder in respect of the Notes will be recharacterized as ordinary income if Section 1260 of the Code applies to an investment
in the Notes. U.S. Holders should consult their tax advisors regarding the potential application of Section 1260 of the Code to
an investment in the Notes.
As described below, the IRS, as indicated in Notice 2008-2 (the “Notice”),
is considering whether Section 1260 of the Code generally applies or should apply to the Notes, including in situations where the
Underlying is not the type of financial asset described under Section 1260 of the Code.
Alternative Tax Treatments. Due to the absence of authorities that directly
address the proper tax treatment of the Notes, prospective investors are urged to consult their tax advisors regarding all possible
alternative tax treatments of an investment in the Notes. In particular, the IRS could seek to subject the Notes to the Treasury
regulations governing contingent payment debt instruments. If the IRS were successful in that regard, the timing and character
of income on the Notes would be affected significantly. Among other things, a U.S. Holder would be required to accrue original
issue discount every year at a “comparable yield” determined at the time of issuance. In addition, any gain realized
by a U.S. Holder at maturity or upon a sale or exchange of the Notes generally would be treated as ordinary income, and any loss
realized at maturity or upon a sale or exchange of the Notes generally would be treated as ordinary loss to the extent of the U.S.
Holder’s prior accruals of original issue discount, and as capital loss thereafter.
The Notice sought comments from the public on the taxation of financial instruments
currently taxed as “prepaid forward contracts.” This Notice addresses instruments such as the Notes. According to the
Notice, the IRS and Treasury are considering whether a holder of an instrument such as the Notes should be required to accrue ordinary
income on a current basis, regardless of whether any payments are made prior to maturity. It is not possible to determine what
guidance the IRS and Treasury will ultimately issue, if any. Any such future guidance may affect the amount, timing and character
of income, gain, or loss in respect of the Notes, possibly with retroactive effect.
The IRS and Treasury are also considering additional issues, including whether
additional gain or loss from such instruments should be treated as ordinary or capital, whether foreign holders of such instruments
should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Code, concerning certain “constructive
ownership transactions,” generally applies or should generally apply to such instruments, and whether any of these determinations
depend on the nature of the underlying asset.
In addition, proposed Treasury regulations require the accrual of income
on a current basis for contingent payments made under certain notional principal contracts. The preamble to the regulations states
that the “wait and see” method of accounting does not properly reflect the economic accrual of income on those contracts,
and requires current accrual of income for some contracts already in existence. While the proposed regulations do not apply to
prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar timing issues exist in the
case of prepaid forward contracts. If the IRS or Treasury publishes future guidance requiring current economic accrual for contingent
payments on prepaid forward contracts, it is possible that you could be required to accrue income over the term of the Notes.
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 or exchange of the Notes should be treated as ordinary gain or loss.
Non-U.S. Holders
Except as discussed below, a Non-U.S. Holder generally will not be subject to
U.S. federal income or withholding tax for amounts paid in respect of the Notes provided that the Non-U.S. Holder complies with
applicable certification requirements and that the payment is not effectively connected with the conduct by the Non-U.S. Holder
of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale or exchange 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, 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 gain realized on the settlement at maturity, or upon sale or exchange of the Notes, is effectively connected
with the conduct of such trade or business (and, if certain tax treaties apply, is attributable to a permanent establishment maintained
by the Non-U.S. Holder in the U.S.), the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be
subject to U.S. federal income tax on such gain on a net income basis in the same manner as if it were a U.S.
Holder. Such Non-U.S. Holders should read the material under the heading “—U.S.
Holders,” for a description of the U.S. federal income tax consequences of acquiring, owning, and disposing of the Notes.
In addition, if such Non-U.S. Holder is a foreign corporation, it may also be subject to a branch profits tax equal to 30% (or
such lower rate provided by any applicable tax treaty) of a portion of its earnings and profits for the taxable year that are effectively
connected with its conduct of a trade or business in the U.S., subject to certain adjustments.
A “dividend equivalent” payment is treated as a dividend from sources
within the United States and such payments generally would be subject to a 30% U.S. withholding tax if paid to a Non-U.S. Holder.
Under Treasury regulations, payments (including deemed payments) with respect to equity-linked instruments (“ELIs”)
that are “specified ELIs” may be treated as dividend equivalents if such specified ELIs reference an interest in an
“underlying security,” which is generally any interest in an entity taxable as a corporation for U.S. federal income
tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However, IRS guidance provides
that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are
issued before January 1, 2023. Based on our determination that the Notes are not delta-one instruments, Non-U.S. Holders should
not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is possible that the Notes
could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the Underlying
or the Notes, and following such occurrence the Notes could be treated as subject to withholding on dividend equivalent payments.
Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlying or the Notes should consult
their tax advisors as to the application of the dividend equivalent withholding tax in the context of the Notes and their other
transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the applicable paying agent) would
be entitled to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.
As discussed above, alternative characterizations of the Notes for U.S. federal
income tax purposes are possible. Should an alternative characterization, by reason of change or clarification of the law, by regulation
or otherwise, cause payments as to the Notes to become subject to withholding tax, tax will be withheld at the applicable statutory
rate. As discussed above, the IRS has indicated in the Notice that it is considering whether income in respect of instruments such
as the Notes should be subject to withholding tax. Prospective Non-U.S. Holders should consult their own tax advisors regarding
the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current law, while the matter is not entirely
clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those individuals’ gross estates
for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with respect to which the individual
has retained certain interests or powers), should note that, absent an applicable treaty benefit, a Note is likely to be treated
as U.S. situs property, subject to U.S. federal estate tax. These individuals and entities should consult their own tax advisors
regarding the U.S. federal estate tax consequences of investing in a Note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S. Federal Income Tax Considerations
— Taxation of Debt Securities — Backup Withholding and Information Reporting” in the accompanying prospectus
for a description of the applicability of the backup withholding and information reporting rules to payments made on the Notes.
Grafico Azioni Bank of America (NYSE:BAC)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Bank of America (NYSE:BAC)
Storico
Da Apr 2023 a Apr 2024
