Linked to the Common Stock of Apple
Inc.
|
•
|
Approximate
15 month term if not called prior to maturity.
|
|
•
|
Payments
on the Notes will depend on the performance of the common stock of Apple Inc. (the “Underlying Stock”).
|
|
•
|
Contingent
coupon rate of 10.75% per annum (0.89584% per month) payable monthly if the Observation Value of the Underlying Stock on the applicable
Observation Date is greater than or equal to 67.50% of the Starting Value.
|
|
•
|
Beginning
in April 2021, automatically callable monthly for an amount equal to the principal amount plus the relevant contingent coupon if
the Observation Value of the Underlying Stock is greater than or equal to the Starting Value on any Observation Date (other than
the final Observation Date).
|
|
•
|
Assuming
the Notes are not called prior to maturity, if the Underlying Stock declines by more than 32.50% from the 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 Observation Value of
the Underlying Stock on the final Observation Date is greater than or equal to 67.50% 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 priced on October 2, 2020, will issue on October 7, 2020 and will mature on January 6, 2022.
|
|
•
|
The
Notes will not be listed on any securities exchange.
|
The initial estimated value of the Notes as of the pricing date is $963.20 per $1,000 in principal amount of Notes, which is
less than the public offering price listed below. The actual value of your Notes at any time will reflect many factors and
cannot be predicted with accuracy. See “Risk Factors” beginning on page PS-8 of this pricing supplement and “Structuring
the Notes” on page PS-14 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-5 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus.
None of the Securities and Exchange
Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of
these securities or determined if this Note Prospectus (as defined on page PS-18) is truthful or complete. Any representation to
the contrary is a criminal offense.
|
Public offering price
|
Underwriting discount (1)
|
Proceeds, before expenses, to BofA Finance
|
Per Note
|
$1,000.00
|
$0.00
|
$1,000.00
|
Total
|
$644,000.00
|
$0.00
|
$644,000.00
|
|
(1)
|
An affiliate of BofA Finance will pay a referral
fee of up to $7.50 per $1,000 in principal amount of Notes in connection with the distribution of the Notes to other registered
broker-dealers.
|
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 Common Stock of Apple Inc.
|
Terms of the Notes
The
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc. (the “Notes”) provide a monthly
Contingent Coupon Payment of $8.9584 on the applicable Contingent Payment Date if, on any monthly Observation Date, the Observation
Value of the Underlying Stock is greater than or equal to the Coupon Barrier. Beginning in April 2021, if the Observation Value
of the Underlying Stock is greater than or equal to the 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 Underlying Stock declines by more than 32.50% from the Starting Value, there is full exposure to declines
in the Underlying Stock, 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 the Underlying Stock 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 Underlying Stock, 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 15 months, unless previously automatically called.
|
Underlying Stock:
|
The common stock of Apple Inc. (Nasdaq Global Select Market (“Nasdaq”) symbol: “AAPL”).
|
Pricing Date:
|
October 2, 2020
|
Issue Date:
|
October 7, 2020
|
Valuation Date:
|
January 3, 2022, subject to postponement as described under “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates” in the accompanying product supplement.
|
Maturity Date:
|
January 6, 2022
|
Starting Value:
|
AAPL: $113.02
|
Observation Value:
|
The Closing Market Price of the Underlying Stock on the applicable Observation Date multiplied by its Price Multiplier, as determined by the calculation agent.
|
Ending Value:
|
The Observation Value of the Underlying Stock on the Valuation Date.
|
Coupon Barrier:
|
AAPL: $76.29, which is 67.50% of the Starting Value (rounded to two decimal places).
|
Threshold Value:
|
AAPL: $76.29, which is 67.50% of the Starting Value (rounded to two decimal places).
|
Price Multiplier:
|
1, subject to adjustment for certain corporate events relating to the Underlying Stock as described in “Description of the Notes—Anti-Dilution Adjustments” beginning on page PS-23 of the accompanying product supplement.
|
Contingent Coupon Payment:
|
If, on any monthly Observation Date, the Observation Value is greater than or equal to the Coupon Barrier, we will pay a Contingent Coupon Payment of $8.9584 per $1,000 in principal amount of Notes (equal to a rate of 0.89584% per month or 10.75% per annum) on the applicable Contingent Payment Date (including the Maturity Date).
|
Automatic Call:
|
Beginning in April 2021, all (but not less than all) of the Notes will be automatically called if the Observation Value is greater than or equal to the 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 Common Stock of Apple Inc.
|
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 is greater than or equal to
the Threshold Value:
$1,000; or
b)
If the Ending Value is less than the Threshold
Value:
$1,000 + ($1,000
x the Underlying Stock Return)
In
this case, the Redemption Amount will be less than 67.50% of the principal amount and could be zero.
The Redemption
Amount will also include the final Contingent Coupon Payment if the Ending Value is greater than or equal to the 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:
|
09709TW64
|
Underlying Stock Return:
|
|
Events of Default and Acceleration:
|
If an Event of Default, as defined in the senior indenture relating to the Notes and in the section entitled “Description of Debt Securities – Events of Default and Rights of Acceleration” beginning on page 22 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “Redemption Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. We will also determine whether the final Contingent Coupon Payment is payable based upon the price of the Underlying Stock 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.
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-3
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Observation Dates
and Contingent Payment Dates
Observation Dates*
|
|
Contingent Payment Dates
|
|
November 2, 2020
|
|
November 5, 2020
|
|
December 2, 2020
|
|
December 7, 2020
|
|
January 4, 2021
|
|
January 7, 2021
|
|
February 2, 2021
|
|
February 5, 2021
|
|
March 2, 2021
|
|
March 5, 2021
|
|
April 5, 2021
|
|
April 8, 2021
|
|
May 3, 2021
|
|
May 6, 2021
|
|
June 2, 2021
|
|
June 7, 2021
|
|
July 2, 2021
|
|
July 8, 2021
|
|
August 2, 2021
|
|
August 5, 2021
|
|
September 2, 2021
|
|
September 8, 2021
|
|
October 4, 2021
|
|
October 7, 2021
|
|
November 2, 2021
|
|
November 5, 2021
|
|
December 2, 2021
|
|
December 7, 2021
|
|
January 3, 2022 (the “Valuation Date”)
|
|
January 6, 2022 (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-21 of the accompanying product supplement.
Any payments
on the Notes depend on the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance of the Underlying
Stock. 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 referral fee and the hedging related charges described
below (see “Risk Factors” beginning on page PS-8), reduced the economic
terms of the Notes to you and the initial estimated value of the Notes. Due to these factors, the public offering price you are
paying to purchase the Notes is greater than the initial estimated value of the Notes as of the pricing date.
The initial
estimated value of the Notes as of the pricing date is set forth on the cover page of this pricing supplement. For more information
about the initial estimated value and the structuring of the Notes, see “Risk Factors” beginning on page PS-8 and “Structuring
the Notes” on page PS-14.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-4
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Contingent Coupon Payment and Redemption
Amount Determination
On each Contingent Payment
Date, you may receive a Contingent Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming the Notes have not
been automatically called, on the Maturity Date, you will receive a cash payment per $1,000 in principal amount of Notes determined
as follows:
All payments described above
are subject to Issuer and Guarantor credit risk.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-5
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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 $8.9584, depending on how many Contingent Coupon Payments are payable prior
to an Automatic Call or maturity. Depending on the performance of the Underlying Stock, you may not receive any Contingent Coupon
Payments during the term of the Notes.
Number of Contingent Coupon Payments
|
Total Contingent Coupon Payments
|
0
|
$0.0000
|
3
|
$26.8752
|
6
|
$53.7504
|
9
|
$80.6256
|
12
|
$107.5008
|
15
|
$134.3760
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-6
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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 60,
a hypothetical Threshold Value of 67.50, the Contingent Coupon Payment of $8.9584 per $1,000 in principal amount of Notes and a
range of hypothetical Ending Values. The actual amount you receive and the resulting return will depend on the actual Starting
Value, Coupon Barrier, Threshold Value, Observation Value and Ending Value, whether the Notes are automatically called prior to
maturity, and whether you hold the Notes to maturity. The following examples do not take into account any tax consequences
from investing in the Notes.
For recent
actual prices of the Underlying Stock, see “The Underlying Stock” section below. The Ending Value will not include
any income generated by dividends paid on the Underlying Stock, which you would otherwise be entitled to receive if you invested
in the Underlying Stock directly. In addition, all payments on the Notes are subject to Issuer and Guarantor credit risk.
Ending Value
|
Underlying Stock Return
|
Redemption Amount per Note (including any final Contingent Coupon Payment)
|
Return
on the Notes(1)
|
160.00
|
60.00%
|
$1,008.9584(2)
|
0.89584%
|
150.00
|
50.00%
|
$1,008.9584
|
0.89584%
|
140.00
|
40.00%
|
$1,008.9584
|
0.89584%
|
130.00
|
30.00%
|
$1,008.9584
|
0.89584%
|
120.00
|
20.00%
|
$1,008.9584
|
0.89584%
|
110.00
|
10.00%
|
$1,008.9584
|
0.89584%
|
100.00(3)
|
0.00%
|
$1,008.9584
|
0.89584%
|
90.00
|
-10.00%
|
$1,008.9584
|
0.89584%
|
75.00
|
-25.00%
|
$1,008.9584
|
0.89584%
|
70.00
|
-30.00%
|
$1,008.9584
|
0.89584%
|
67.50(4)
|
-32.50%
|
$1,008.9584
|
0.89584%
|
67.49
|
-32.51%
|
$674.9000
|
-32.51000%
|
50.00
|
-50.00%
|
$500.0000
|
-50.00000%
|
30.00
|
-70.00%
|
$300.0000
|
-70.00000%
|
0.00
|
-100.00%
|
$0.0000
|
-100.00000%
|
|
(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. The actual Starting Value is set forth on
page PS-2 above.
|
|
(4)
|
This is the hypothetical
Coupon Barrier and Threshold Value.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-7
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Risk Factors
Your investment in the Notes
entails significant risks, many of which differ from those of a conventional debt security. Your decision to purchase the Notes
should be made only after carefully considering the risks of an investment in the Notes, including those discussed below, with
your advisors in light of your particular circumstances. The Notes are not an appropriate investment for you if you are not knowledgeable
about significant elements of the Notes or financial matters in general. You should carefully review the more detailed explanation
of risks relating to the Notes in the “Risk Factors” sections beginning on page PS-5 of the accompanying product supplement,
page S-5 of the accompanying prospectus supplement and page 7 of the accompanying prospectus, each as identified on page PS-18
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 is less than the Threshold
Value, at maturity you will lose 1% of the principal amount for each 1% that the Ending Value is less than the 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 exceeds the 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 exceeds the Starting Value. In contrast, a direct investment in the Underlying Stock would allow you to receive
the benefit of any appreciation in its price. Thus, any return on the Notes will not reflect the return you would realize if you
actually owned shares of the Underlying Stock 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 April 2021, the Notes will be
automatically called if, on any Observation Date (other than the final Observation Date), the Observation Value is greater than
or equal to the 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 is less than the Coupon
Barrier on an Observation Date, you will not receive the Contingent Coupon Payment applicable to that Observation Date. If the
Observation Value is less than the 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
payment on the Notes is subject to the credit risk of BofA Finance and the Guarantor, and actual or perceived changes in BofA Finance
or the Guarantor’s creditworthiness are expected to affect the value of the Notes. The Notes are our senior unsecured
debt securities. Any payment on the Notes will be fully and unconditionally guaranteed by the Guarantor. The Notes are not guaranteed
by any entity other than the Guarantor. As a result, your receipt of the Early Redemption Amount or the Redemption Amount at maturity,
as applicable, will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the
Notes on the applicable Contingent Payment Date or the Maturity Date, regardless of the Ending Value as compared to the 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 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 price of the Underlying Stock, an improvement in our or the Guarantor’s
credit ratings will not reduce the other investment risks related to the Notes.
|
•
|
We
are a finance subsidiary and, as such, have no independent assets, operations or revenues. We are a finance subsidiary of BAC,
have no operations other than those related to the issuance, administration and repayment of our debt securities that are guaranteed
by the Guarantor, and are dependent upon the Guarantor and/or its other subsidiaries to meet our obligations under the Notes in
the ordinary course. Therefore, our ability to make payments on the Notes may be limited.
|
|
•
|
The
public offering price you are paying for the Notes exceeds their initial estimated value. The initial estimated value of the
Notes that is provided on the cover page of this pricing supplement is an estimate only, determined as of the pricing date by reference
to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including our
credit spreads and those of the
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-8
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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
Stock, changes in the Guarantor’s internal funding rate, and the inclusion in the public offering price of the referral fee
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
Stock, 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 price of the Underlying
Stock other than on the Observation Dates. The price of the Underlying Stock 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 Underlying Stock 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. No other
price of the Underlying Stock 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 price of the Underlying Stock has increased at certain
times during the term of the Notes before the Underlying Stock decreases to a price that is less than the Threshold Value as of
the Valuation Date.
|
|
•
|
Trading and hedging activities by us, the Guarantor
and any of our other affiliates, including BofAS, may create conflicts of interest with you and may affect your return on the Notes
and their market value. We, the Guarantor or one or more of our other affiliates, including BofAS, may buy or sell shares of
the Underlying Stock, or futures or options contracts on the Underlying Stock, or other listed or over-the-counter derivative instruments
linked to the Underlying Stock. We, the Guarantor or one or more of our other affiliates, including BofAS, may execute such purchases
or sales for our own or their own accounts, for business reasons, or in connection with hedging our obligations under the Notes.
These transactions may present a conflict of interest between your interest in the Notes and the interests we, the Guarantor and
our other affiliates, including BofAS, may have in our or their proprietary accounts, in facilitating transactions, including block
trades, for our or their other customers, and in accounts under our or their management. These transactions may adversely affect
the price of the Underlying Stock in a manner that could be adverse to your investment in the Notes. On or before the pricing date,
any purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on its behalf (including for the
purpose of hedging some or all of our anticipated exposure in connection with the Notes), may have affected the price of the Underlying
Stock. Consequently, the price of the Underlying Stock may change subsequent to the pricing date, which may adversely affect the
market value of the Notes.
|
We, the
Guarantor or one or more of our other affiliates, including BofAS, may also have engaged in hedging activities that could have
affected the price of the Underlying Stock on the pricing date. In addition, these hedging activities, including the unwinding
of a hedge, may decrease the market value of your Notes prior to maturity, and may affect the amounts to be paid on the Notes.
We, the Guarantor or one or more of our other affiliates, including BofAS, may purchase or otherwise acquire a long or short position
in the Notes and may hold or resell the Notes. For example, BofAS may enter into these transactions in connection with any market
making activities in which it engages. We cannot assure you that these activities will not adversely affect the price of the Underlying
Stock, 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
terms of the Notes will not be adjusted for all corporate events that could affect the issuer of the Underlying Stock. The
Price Multiplier, the determination of the payments on the Notes, and other terms of the Notes may be adjusted for the specified
corporate events affecting the Underlying Stock, as described in the section entitled “Description of the Notes—Anti-Dilution
Adjustments” beginning on page PS-23 of the accompanying product supplement. However, these adjustments do not cover
all corporate events that could affect the market price of the Underlying Stock, such as offerings of common shares for cash or
in connection with certain acquisition transactions. The occurrence of any event that does not require the calculation agent to
adjust the applicable Price Multiplier or the amounts that may be paid on the Notes at maturity may adversely affect the price
of the Underlying Stock, and, as a result, the market value of the Notes.
|
|
•
|
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,
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-9
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-10
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
The Underlying Stock
We
have derived the following information on the Underlying Stock and the company issuing the Underlying Stock (the “Underlying
Company”) from publicly available documents. Because the Underlying Stock is registered under the Securities Exchange Act
of 1934, the Underlying Company is required to file periodically certain financial and other information specified by the SEC.
Information provided to or filed with the SEC by the Underlying Company can be located through the SEC’s website at sec.gov
by reference to the applicable CIK number set forth below.
This
document relates only to the offering of the Notes and does not relate to any offering of Underlying Stock or any other securities
of the Underlying Company. None of us, the Guarantor, BofAS or any of our other affiliates has made any due diligence inquiry with
respect to the Underlying Company in connection with the offering of the Notes. None of us, the Guarantor, BofAS or any of our
other affiliates has independently verified the accuracy or completeness of the publicly available documents or any other publicly
available information regarding the Underlying Company and hence makes no representation regarding the same. Furthermore, there
can be no assurance that all events occurring prior to the date of this document, including events that would affect the accuracy
or completeness of these publicly available documents that would affect the trading price of the Underlying Stock, have been or
will be publicly disclosed. Subsequent disclosure of any events or the disclosure of or failure to disclose material future events
concerning the Underlying Company could affect the price of the applicable Underlying Stock and therefore could affect your return
on the Notes. The selection of the Underlying Stock is not a recommendation to buy or sell the Underlying Stock.
Apple Inc.
Apple Inc. designs, manufactures and
markets personal computers and related personal computing and mobile communication devices along with a variety of related software,
services, peripherals and networking solutions. This Underlying Stock trades on the Nasdaq under the symbol "AAPL." The
company's CIK number is 0000320193.
Historical Performance
of AAPL
The following
graph sets forth the daily historical performance of AAPL in the period from January 1, 2008 through the pricing date. We obtained
this historical data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained
from Bloomberg L.P. The graph below may have been adjusted to reflect certain corporate actions, such as stock splits and reverse
stock splits. The horizontal line in the graph represents AAPL’s Coupon Barrier and Threshold Value of $76.29
(rounded to two decimal places), which is 67.50% of AAPL’s Starting Value of $113.02, which
was its Closing Market Price on the pricing date.
This historical data on AAPL is not necessarily
indicative of the future performance of AAPL or what the value of the Notes may be. Any historical upward or downward trend in
the Closing Market Price of AAPL during any period set forth above is not an indication that the Closing Market Price of AAPL is
more or less likely to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you should
consult publicly available sources for the Closing Market Prices and trading pattern of AAPL.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-11
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Supplement to the Plan of Distribution; Role
of BofAS and Conflicts of Interest
BofAS, a broker-dealer
affiliate of ours, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate
as selling agent in the distribution of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA
Rule 5121. BofAS may not make sales in this offering to any of its discretionary accounts without the prior written approval of
the account holder.
We will deliver the Notes against
payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under Rule
15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more
than two business days prior to the original issue date will be required to specify alternative settlement arrangements to prevent
a failed settlement.
Under our
distribution agreement with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on
the cover of this pricing supplement. 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. An affiliate of BofA Finance will pay a referral fee of
up to $7.50 per $1,000 in principal amount of Notes in connection with the distribution of the Notes to other registered broker-dealers.
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 Underlying Stock and the remaining
term of the Notes. However, none of us, the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes
at any price or at any time, and we cannot assure you that any party will purchase your Notes at a price that equals or exceeds
the initial estimated value of the Notes.
Any price that BofAS may pay to
repurchase the Notes will depend upon then prevailing market conditions, the creditworthiness of us and the Guarantor, and transaction
costs. At certain times, this price may be higher than or lower than the initial estimated value of the Notes.
European Economic Area and United
Kingdom
None of this pricing
supplement, the accompanying product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus
for the purposes of the Prospectus Regulation (as defined below). This pricing supplement, the accompanying product supplement,
the accompanying prospectus and the accompanying prospectus supplement have been prepared on the basis that any offer of Notes
in any Member State of the European Economic Area (the “EEA”) or in the United Kingdom (each, a “Relevant State”)
will only be made to a legal entity which is a qualified investor under the Prospectus Regulation (“Qualified Investors”).
Accordingly any person making or intending to make an offer in that Relevant State of Notes which are the subject of the offering
contemplated in this pricing supplement, the accompanying product supplement, the accompanying prospectus and the accompanying
prospectus supplement may only do so with respect to Qualified Investors. Neither BofA Finance nor BAC has authorized, nor 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
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-12
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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-13
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Structuring the Notes
The
Notes are our debt securities, the return on which is linked to the performance of the Underlying Stock. The related guarantee
is BAC’s obligation. As is the case for all of our and BAC’s respective debt securities, including our market-linked
notes, the economic terms of the Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing.
In addition, because market-linked notes result in increased operational, funding and liability management costs to us and BAC,
BAC typically borrows the funds under these types of notes at a rate, which we refer to in this pricing supplement as BAC’s
internal funding rate, that is more favorable to BAC than the rate that it might pay for a conventional fixed or floating rate
debt security. This generally relatively lower internal funding rate, which is reflected in the economic terms of the Notes, along
with the fees and charges associated with market-linked notes, resulted in the initial estimated value of the Notes on the pricing
date being less than their public offering price.
In order
to meet our payment obligations on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements
(which may include call options, put options or other derivatives) with BofAS or one of our other affiliates. The terms of these
hedging arrangements are determined based upon terms provided by BofAS and its affiliates, and take into account a number of factors,
including our and BAC’s creditworthiness, interest rate movements, the volatility of the Underlying Stock, 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-18 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.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-14
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
U.S. Federal Income Tax Summary
The following summary
of the material U.S. federal income tax considerations of the acquisition, ownership, and disposition of the Notes supplements,
and to the extent inconsistent supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying
prospectus and under “U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not
exhaustive of all possible tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”),
regulations promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary
regulations), rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all
as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect.
No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax
consequences described below. This summary does not include any description of the tax laws of any state or local governments,
or of any foreign government, that may be applicable to a particular holder.
Although the Notes
are issued by us, they will be treated as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout
this tax discussion, references to “we,” “our” or “us” are generally to BAC unless the context
requires otherwise.
This summary is
directed solely to U.S. Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon
original issuance and will hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means
property held for investment, and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations”
in the accompanying prospectus.
You should consult
your own tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes,
as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible
effects of changes in U.S. federal or other tax laws.
General
Although there is
no statutory, judicial, or administrative authority directly addressing the characterization of the Notes, we intend to treat the
Notes for all tax purposes as contingent income-bearing single financial contracts with respect to the Underlying Stock 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 Underlying
Stock. 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 Underlying Stock 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 the Underlying Stock 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 Stock was 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 Stock and consult your tax advisor regarding the possible consequences to you, if any, if the issuer of the Underlying
Stock is or becomes a PFIC or is or becomes a United States real property holding corporation.
U.S. Holders
Although the U.S.
federal income tax treatment of any Contingent Coupon Payment on the Notes is uncertain, we intend to take the position, and the
following discussion assumes, that any Contingent Coupon Payment constitutes taxable ordinary income to a U.S. Holder at the time
received or accrued in accordance with the U.S. Holder’s regular method of accounting. By purchasing the Notes you agree,
in the absence of an administrative
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-15
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
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.
Non-U.S. Holders
Because the U.S.
federal income tax treatment of the Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal
income tax at a 30% rate (or at a lower rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon
Payment made unless such payments are effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the
U.S. (in which case, to avoid withholding, the Non-U.S. Holder will be required to provide a Form W-8ECI). We will not pay any
additional amounts in respect of such withholding. To claim benefits under an income tax treaty, a Non-U.S. Holder must obtain
a taxpayer identification number and certify as to its eligibility under the appropriate treaty’s limitations on benefits
article, if applicable. In addition, special rules may apply to claims for treaty benefits made by Non-U.S. Holders that are entities
rather than individuals. The availability of a lower rate of withholding under an applicable income tax treaty will depend on whether
such rate applies to the characterization of the payments under U.S. federal income tax laws. A Non-U.S. Holder that is eligible
for a reduced rate of U.S. federal withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld
by filing an appropriate claim for refund with the IRS.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-16
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Except as discussed
below, a Non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax for amounts paid in respect of
the Notes (not including, for the avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject
to the rules discussed in the previous paragraph) upon the sale, exchange, or redemption of the Notes or their settlement at maturity,
provided that the Non-U.S. Holder complies with applicable certification requirements and that the payment is not effectively connected
with the conduct by the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange,
or redemption of the Notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is
a non-resident alien individual and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange,
redemption, or settlement and certain other conditions are satisfied.
If a Non-U.S. Holder
of the Notes is engaged in the conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized
on the settlement at maturity, or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of
such trade or business (and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S.
Holder in the U.S.), the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S.
federal income tax on such Contingent Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder.
Such Non-U.S. Holders should read the material under the heading “—U.S. Holders,” for a description of the U.S.
federal income tax consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign
corporation, it may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty)
of a portion of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business
in the U.S., subject to certain adjustments.
A “dividend
equivalent” payment is treated as a dividend from sources within the United States and such payments generally would be subject
to a 30% U.S. withholding tax if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with
respect to equity-linked instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents
if such specified ELIs reference an interest in an “underlying security,” which is generally any interest in an entity
taxable as a corporation for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S.
source dividend. However, IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs
that are not delta-one instruments and that are issued before January 1, 2023. Based on our determination that the Notes are not
delta-one instruments, Non-U.S. Holders should not be subject to withholding on dividend equivalent payments, if any, under the
Notes. However, it is possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the
occurrence of certain events affecting the Underlying Stock 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 Stock 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 payments made on the Notes.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-17
|
Contingent Income Auto-Callable Yield Notes Linked to the Common Stock of Apple Inc.
|
Where You Can Find More Information
The terms and risks of the Notes are
contained in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus, which
can be accessed at the following links:
These documents (together, the “Note Prospectus”)
have been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the SEC website at www.sec.gov
or obtained from BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus, including this pricing
supplement, for information about us, BAC and this offering. Any prior or contemporaneous oral statements and any other written
materials you may have received are superseded by the Note Prospectus. Certain terms used but not defined in this pricing supplement
have the meanings set forth in the accompanying product supplement or prospectus supplement. Unless otherwise indicated or unless
the context requires otherwise, all references in this document to “we,” “us,” “our,” or similar
references are to BofA Finance, and not to BAC.
The Notes are our senior debt securities. Any
payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee are not insured by the
Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in right of payment with
all of our other unsecured and unsubordinated obligations, and the related guarantee will rank equally in right of payment with
all of BAC’s other unsecured and unsubordinated obligations, in each case, except obligations that are subject to any priorities
or preferences by law. Any payments due on the Notes, including any repayment of the principal amount, will be subject to the credit
risk of BofA Finance, as Issuer, and BAC, as Guarantor.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-18
|
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