This pricing supplement, which is not complete and may
be changed, relates to an effective Registration Statement under the Securities Act of 1933. This pricing supplement and the accompanying
product supplement, prospectus supplement and prospectus are not an offer to sell these notes in any country or jurisdiction where
such an offer would not be permitted.
Linked to the Least Performing of the Dow Jones Industrial
Average® and the Nasdaq-100®
Index
|
●
|
Approximate 1 year term
if not called prior to maturity.
|
|
●
|
Payments on the Notes will depend on the individual
performance of the Dow Jones Industrial Average® and
the Nasdaq-100® Index (each
an “Underlying”).
|
|
●
|
Contingent coupon rate of 10.00% per
annum (0.83334% per month) payable
monthly if the closing level of each Underlying
on the applicable Observation Date is greater than or equal to 70% of
its Starting Value.
|
|
●
|
Beginning in October 2020,
automatically callable monthly for an amount equal to the principal amount
plus the relevant contingent coupon if the closing level of each Underlying
is greater than or equal to its Starting Value on any Observation Date
(other than the final Observation Date).
|
|
●
|
Assuming the Notes are not called prior to maturity,
if either Underlying declines by more than 30%
from its Starting Value, at maturity your investment will be subject to a 1:1 downside, with up to 100%
of the principal at risk; otherwise, at maturity investors will receive the principal amount. At maturity the investor will also
receive the final contingent coupon if the closing level of each
Underlying on the final Observation Date is greater than or equal to 70%
of its Starting Value.
|
|
●
|
All payments on the Notes are subject to the
credit risk of BofA Finance LLC (“BofA Finance”) and Bank of America Corporation (“BAC” or the “Guarantor”).
|
|
●
|
The Notes are expected to price on July
17, 2020, expected to issue on July 22, 2020 and
expected to mature on July 23, 2021.
|
|
●
|
The Notes will not be listed on any securities
exchange.
|
The initial estimated value of the Notes as of
the pricing date is expected to be between $950.00 and $980.00 per Note, which is less than the public offering price listed below.
The actual value of your Notes at any time will reflect many factors and cannot be predicted with accuracy. See “Risk Factors”
beginning on page PS-9 of this pricing supplement and “Structuring the Notes” on page PS-22 of this pricing supplement
for additional information.
Potential purchasers of the Notes should consider
the information in “Risk Factors” beginning on page PS-9 of this pricing supplement, page PS-5 of the accompanying
product supplement, page S-5 of the accompanying prospectus supplement, and page 7 of the accompanying prospectus.
None of the Securities and Exchange Commission (the
“SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these securities
or determined if this Note Prospectus (as defined on page PS-18) is truthful or complete. Any representation to the contrary is
a criminal offense.
|
Public offering price(1)
|
Underwriting discount(1)
|
Proceeds, before expenses, to BofA Finance
|
Per Note
|
$1,000.00
|
$11.00
|
$989.00
|
Total
|
|
|
|
(1)
|
Certain dealers who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low as $989.00 per $1,000 in principal amount of the Notes.
|
The Notes and the related guarantee:
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
|
Selling Agent
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Terms of the Notes
The Contingent Income Auto-Callable Yield Notes Linked
to the Least Performing of the Dow Jones Industrial Average®
and the Nasdaq-100® Index (the “Notes”) provide
a monthly Contingent Coupon Payment of $8.3334 on the applicable Contingent Payment Date if, on any monthly Observation Date, the
Observation Value of each Underlying is greater than or equal to its Coupon Barrier.
Beginning in October 2020, if the Observation Value
of each Underlying is greater than or equal to its Starting Value on any Observation Date (other than the final Observation
Date), the Notes will be automatically called, in whole but not in part, at 100% of the principal amount, together with the relevant
Contingent Coupon Payment. No further amounts will be payable following an Automatic Call. If the Notes are not automatically called
prior to maturity and the Least Performing Underlying declines by more than 30% from its Starting Value, there is full exposure
to declines in the Least Performing Underlying, and you will lose a significant portion or all of your investment in the Notes.
Otherwise, at maturity you will receive the principal amount. At maturity you will also receive the final Contingent Coupon Payment
if the Observation Value of each Underlying on the final Observation Date is greater than or equal to its Coupon Barrier.
The Notes are not traditional debt securities and it is possible that the Notes will not pay any Contingent Coupon Payments, and
you may lose a significant portion or all of your principal amount at maturity. Any payments on the Notes will be calculated based
on $1,000 in principal amount of Notes and will depend on the performance of the Underlyings, subject to our and BAC’s credit
risk.
Issuer:
|
BofA Finance
|
Guarantor:
|
BAC
|
Denominations:
|
The Notes will be issued in minimum denominations of $1,000 and whole multiples of $1,000 in excess thereof.
|
Term:
|
Approximately 1 years, unless previously automatically called.
|
Underlyings:
|
The Dow Jones Industrial Average® (Bloomberg symbol: “INDU”) and the Nasdaq-100® Index (Bloomberg symbol: “NDX”), each a price return index.
|
Pricing Date*:
|
July 17, 2020
|
Issue Date*:
|
July 22, 2020
|
Valuation Date*:
|
July 20, 2021, 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*:
|
July 23, 2021
|
Starting Value:
|
With respect to each Underlying, its closing level on the pricing date.
|
Observation Value:
|
With respect to each Underlying, its closing level on the applicable Observation Date.
|
Ending Value:
|
With respect to each Underlying, its closing level on the Valuation Date, as determined by the calculation agent.
|
Coupon Barrier:
|
With respect to each Underlying, 70% of its Starting Value.
|
Threshold Value:
|
With respect to each Underlying, 70% of its Starting Value.
|
Contingent
Coupon
Payment:
|
If, on any monthly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier, we will pay a Contingent Coupon Payment of $8.3334 per $1,000 in principal amount of Notes (equal to a rate of 0.83334% per month or 10.00% per annum) on the applicable Contingent Payment Date (including the Maturity Date).
|
Automatic Call:
|
Beginning in October 2020, all (but not less than all) of the Notes will be automatically called if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation Date (other than the final Observation Date). If the Notes are automatically called, the Early Redemption Amount will be paid on the applicable Contingent Payment Date. No further amounts will be payable following an Automatic Call.
|
Early
Redemption
Amount:
|
For each $1,000 in principal amount of Notes, $1,000
plus the applicable Contingent Coupon Payment.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-2
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Redemption Amount:
|
If the Notes have not been automatically called prior to maturity, the Redemption Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Least Performing Underlying
is greater than or equal to its Threshold Value:
$1,000; or
b)
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value:
$1,000 + ($1,000
x Underlying Return of the Least Performing Underlying)
In this case, the Redemption Amount will be less than 70% of the principal amount and could be zero.
The Redemption Amount will also include the final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater than or equal to its Coupon Barrier.
|
Observation Dates*:
|
As set forth on page PS-4.
|
Contingent
Payment
Dates*:
|
As set forth on page PS-4.
|
Calculation Agent:
|
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
|
Selling Agent:
|
BofAS
|
CUSIP:
|
09709TH61
|
Underlying Return:
|
With respect to each Underlying,
|
Least
Performing
Underlying:
|
The Underlying with the lowest Underlying Return.
|
Events of Default and Acceleration:
|
If an Event of Default, as defined in the senior indenture relating to the Notes and in the section entitled “Description of Debt Securities—Events of Default and Rights of Acceleration” beginning on page 35 of the accompanying prospectus, with respect to the Notes occurs and is continuing, the amount payable to a holder of the Notes upon any acceleration permitted under the senior indenture will be equal to the amount described under the caption “Redemption Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation Date were the third trading day prior to the date of acceleration. We will also determine whether the final Contingent Coupon Payment is payable based upon the levels of the Underlyings on the deemed Valuation Date; any such final Contingent Coupon Payment will be prorated by the calculation agent to reflect the length of the final contingent payment period. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
*Subject
to change.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-3
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Observation Dates and Contingent Payment Dates
|
Observation Dates*
|
|
Contingent Payment Dates
|
|
|
August 17, 2020
|
|
August 20, 2020
|
|
|
September 17, 2020
|
|
September 22, 2020
|
|
|
October 19, 2020
|
|
October 22, 2020
|
|
|
November 17, 2020
|
|
November 20, 2020
|
|
|
December 17, 2020
|
|
December 22, 2020
|
|
|
January 19, 2021
|
|
January 22, 2021
|
|
|
February 17, 2021
|
|
February 22, 2021
|
|
|
March 17, 2021
|
|
March 22, 2021
|
|
|
April 19, 2021
|
|
April 22, 2021
|
|
|
May 17, 2021
|
|
May 20, 2021
|
|
|
June 17, 2021
|
|
June 22, 2021
|
|
|
July 20, 2021 (the “Valuation Date”)
|
|
July 23, 2021 (the “Maturity Date”)
|
|
* The Observation Dates are subject to postponement as set forth in
“Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates” beginning on
page PS-22 of the accompanying product supplement.
Any payments on the Notes depend on the credit risk
of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance of the Underlyings. The economic terms of the Notes are
based on BAC’s internal funding rate, which is the rate it would pay to borrow funds through the issuance of market-linked
notes, and the economic terms of certain related hedging arrangements BAC’s affiliates enter into BAC’s internal funding
rate is typically lower than the rate it would pay when it issues conventional fixed or floating rate debt securities. This difference
in funding rate, as well as the underwriting discount and the hedging related charges described below (see “Risk Factors”
beginning on page PS-9), will reduce the economic terms of the Notes to you and the initial estimated value of the Notes. Due to
these factors, the public offering price you pay to purchase the Notes will be greater than the initial estimated value of the
Notes as of the pricing date.
The initial estimated value range of the Notes as
of the date of this pricing supplement is set forth on the cover page of this pricing supplement. The final pricing supplement
will set forth the initial estimated value of the Notes as of the pricing date. For more information about the initial estimated
value and the structuring of the Notes, see “Risk Factors” beginning on page PS-9 and “Structuring the Notes”
on page PS-22.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-4
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Contingent Coupon Payment and Redemption Amount Determination
On
each Contingent Payment Date, you may receive a
Contingent
Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming
the Notes have not been automatically called,
on
the Maturity Date, you will receive a cash payment per $1,000 in principal amount of Notes determined as follows:
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-5
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
All payments described above are subject to the credit risk
of BofA Finance, as Issuer, and BAC, as Guarantor.
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-6
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Total Contingent Coupon Payment Examples
The table below illustrates the hypothetical total
Contingent Coupon Payments per $1,000 in principal amount of Notes over the term of the Notes, based on the Contingent Coupon Payment
of $8.3334, depending on how many Contingent Coupon Payments are payable prior to an Automatic Call or maturity. Depending on the
performance of the Underlyings, you may not receive any Contingent Coupon Payments during the term of the Notes.
|
Number of Contingent Coupon Payments
|
|
Total Contingent Coupon Payments
|
|
|
0
|
|
$0.0000
|
|
|
2
|
|
$16.6668
|
|
|
4
|
|
$33.3336
|
|
|
6
|
|
$50.0004
|
|
|
8
|
|
$66.6672
|
|
|
10
|
|
$83.3340
|
|
|
12
|
|
$100.0008
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-7
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Hypothetical Payout Profile and Examples of Payments at Maturity
Contingent
Income Auto-Callable Yield Notes Table
The following table is for purposes of illustration
only. It assumes the Notes have not been automatically called prior to maturity and is based on hypothetical values and
shows hypothetical returns on the Notes. The table illustrates the calculation of the Redemption Amount and the return on the Notes
based on a hypothetical Starting Value of 100, a hypothetical Coupon Barrier of 70 for the Least Performing Underlying, a hypothetical
Threshold Value of 70 for the Least Performing Underlying, the Contingent Coupon Payment of $8.3334 per $1,000 in principal amount
of Notes and a range of hypothetical Ending Values of the Least Performing Underlying. The actual amount you receive and the
resulting return will depend on the actual Starting Values, Coupon Barriers, Threshold Values, Observation Values and Ending Values
of the Underlyings, whether the Notes are automatically called prior to maturity, and whether you hold the Notes to maturity.
The following examples do not take into account any tax consequences from investing in the Notes.
For recent actual levels of the Underlyings, see “The
Underlyings” section below. Each Underlying is a price return index and as such its Ending Value will not include any income
generated by dividends paid on the stocks included in that Underlying, which you would otherwise be entitled to receive if you
invested in those stocks directly. In addition, all payments on the Notes are subject to Issuer and Guarantor credit risk.
Ending
Value of the Least Performing Underlying
|
Underlying
Return of the Least Performing Underlying
|
Redemption
Amount per Note (including any final Contingent Coupon Payment)
|
Return
on the Notes(1)
|
160.00
|
60.00%
|
$1,008.3334(2)
|
0.83334%
|
150.00
|
50.00%
|
$1,008.3334
|
0.83334%
|
140.00
|
40.00%
|
$1,008.3334
|
0.83334%
|
130.00
|
30.00%
|
$1,008.3334
|
0.83334%
|
120.00
|
20.00%
|
$1,008.3334
|
0.83334%
|
110.00
|
10.00%
|
$1,008.3334
|
0.83334%
|
105.00
|
5.00%
|
$1,008.3334
|
0.83334%
|
102.00
|
2.00%
|
$1,008.3334
|
0.83334%
|
100.00(3)
|
0.00%
|
$1,008.3334
|
0.83334%
|
90.00
|
-10.00%
|
$1,008.3334
|
0.83334%
|
80.00
|
-20.00%
|
$1,008.3334
|
0.83334%
|
70.00(4)
|
-30.00%
|
$1,008.3334
|
0.83334%
|
69.99
|
-30.01%
|
$699.9000
|
-30.01000%
|
50.00
|
-50.00%
|
$500.0000
|
-50.00000%
|
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 and does not represent a likely Starting Value for any Underlying.
|
(4)
|
This is the hypothetical Coupon Barrier and Threshold Value of the Least Performing Underlying.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-8
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
Risk Factors
Your investment in the Notes entails significant
risks, many of which differ from those of a conventional debt security. Your decision to purchase the Notes should be made only
after carefully considering the risks of an investment in the Notes, including those discussed below, with your advisors in light
of your particular circumstances. The Notes are not an appropriate investment for you if you are not knowledgeable about significant
elements of the Notes or financial matters in general. You should carefully review the more detailed explanation of risks relating
to the Notes in the “Risk Factors” sections beginning on page PS-5 of the accompanying product supplement, page S-5
of the accompanying prospectus supplement and page 7 of the accompanying prospectus, each as identified on page PS-27 below.
|
●
|
Your investment may result in a loss; there is no guaranteed return of principal. There is no fixed principal repayment
amount on the Notes at maturity. If the Notes are not automatically called prior to maturity and the Ending Value of any
Underlying is less than its Threshold Value, at maturity, you will lose 1% of the principal amount for each 1% that the Ending
Value of the Least Performing Underlying is less than its 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 Observation Value or Ending Value of any Underlying exceeds its Coupon Barrier or Starting Value, as
applicable. Similarly, the amount payable at maturity or upon an Automatic Call will never exceed the sum of the principal amount
and the applicable Contingent Coupon Payment, regardless of the extent to which the Observation Value of any Underlying exceeds
its Starting Value. In contrast, a direct investment in the securities included in one or more of the Underlyings would allow you
to receive the benefit of any appreciation in their values. Thus, any return on the Notes will not reflect the return you would
realize if you actually owned those securities 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 October 2020, the Notes
will be automatically called if, on any Observation Date (other than the final Observation Date), the Observation Value of each
Underlying is greater than or equal to its Starting Value. If the Notes are automatically called prior to the Maturity Date, you
will be entitled to receive the principal amount and the Contingent Coupon Payment with respect to the applicable Observation Date.
In this case, you will lose the opportunity to continue to receive Contingent Coupon Payments after the date of the Automatic Call.
If the Notes are called prior to the Maturity Date, you may be unable to invest in other securities with a similar level of risk
that could provide a return that is similar to the Notes.
|
|
●
|
You may not receive any Contingent Coupon Payments. The Notes do not provide for any regular fixed coupon payments.
Investors in the Notes will not necessarily receive any Contingent Coupon Payments on the Notes. If the Observation Value of any
Underlying is less than its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment applicable
to that Observation Date. If the Observation Value of any Underlying is less than its Coupon Barrier on all the Observation Dates
during the term of the Notes, you will not receive any Contingent Coupon Payments during the term of the Notes, and will not receive
a positive return on the Notes.
|
|
●
|
Your return on the Notes may be less than the yield on a conventional debt security of comparable maturity. Any return
that you receive on the Notes may be less than the return you would earn if you purchased a conventional debt security with the
same Maturity Date. As a result, your investment in the Notes may not reflect the full opportunity cost to you when you consider
factors, such as inflation, that affect the time value of money. In addition, if interest rates increase during the term of the
Notes, the Contingent Coupon Payment (if any) may be less than the yield on a conventional debt security of comparable maturity.
|
|
●
|
Any payments on the Notes are subject to our credit risk and the credit risk of the Guarantor, and any 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 the Early Redemption Amount or the Redemption
Amount at maturity, as applicable, will be dependent upon our ability and the ability of the Guarantor to repay our respective
obligations under the Notes on the applicable Contingent Payment Date or the Maturity Date, regardless of the Ending Value of the
Least Performing Underlying as compared to its Starting Value.
In addition, our credit ratings and the credit ratings of the Guarantor are assessments by ratings agencies of our respective abilities
to pay our obligations. Consequently, our or the Guarantor’s perceived creditworthiness and actual or anticipated decreases
in our or the Guarantor’s credit ratings or increases in the spread between the yield on our respective securities and the
yield on U.S. Treasury securities (the “credit spread”) prior to the Maturity Date may adversely affect the market
value of the Notes. However, because your return on the Notes depends upon factors in addition to our ability and the ability of
the Guarantor to pay our respective obligations, such as the values of the Underlyings, an improvement in our or the Guarantor’s
credit ratings will not reduce the other investment risks related to the Notes.
|
|
●
|
We are a finance subsidiary and, as such, have no independent assets, operations, or revenues. We are a finance subsidiary
of the Guarantor, have no operations other than those related to the issuance, administration and repayment of our debt securities
that are guaranteed
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-9
|
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
|
by the Guarantor, and are dependent upon the Guarantor
and/or its other subsidiaries to meet our obligations under the Notes in the ordinary course. Therefore, our ability to make payments
on the Notes may be limited.
|
●
|
The public offering price you pay for the Notes will exceed their initial estimated value. The range of initial estimated
values of the Notes that is provided on the cover page of this preliminary pricing supplement, and the initial estimated value
as of the pricing date that will be provided in the final pricing supplement, are each estimates only, determined as of a particular
point in time by reference to our and our affiliates’ pricing models. These pricing models consider certain assumptions and
variables, including our credit spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market terms
on hedging transactions, expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected
term of the Notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower
than their initial estimated value. This is due to, among other things, changes in the levels of the Underlyings, changes in the
Guarantor’s internal funding rate, and the inclusion in the public offering price of the underwriting discount and the hedging
related charges, all as further described in “Structuring the Notes” below. These factors, together with various credit,
market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes
in any secondary market and will affect the value of the Notes in complex and unpredictable ways.
|
|
●
|
The initial estimated value does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates
would be willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any
time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Underlyings,
our and BAC’s creditworthiness and changes in market conditions.
|
|
●
|
We cannot assure you that a trading market for your Notes will ever develop or be maintained. We will not list the Notes
on any securities exchange. We cannot predict how the Notes will trade in any secondary market or whether that market will be liquid
or illiquid.
|
|
●
|
The Contingent Coupon Payment, Early Redemption Amount or Redemption Amount, as applicable, will not reflect the levels
of the Underlyings other than on the Observation Dates. The levels of the Underlyings during the term of the Notes other than
on the Observation Dates will not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware
of the performance of the Underlyings while holding the Notes, as the performance of the Underlyings may influence the market value
of the Notes. The calculation agent will determine whether each Contingent Coupon Payment is payable and will calculate the Early
Redemption Amount or the Redemption Amount, as applicable, by comparing only the Starting Value, the Coupon Barrier or the Threshold
Value, as applicable, to the Observation Value or the Ending Value for each Underlying. No other levels of the Underlyings will
be taken into account. As a result, if the Notes are not automatically called prior to maturity, and the Ending Value of the Least
Performing Underlying is less than the Threshold Value, you will receive less than the principal amount at maturity even if the
level of each Underlying was always above its Threshold Value prior to the Valuation Date.
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Because the Notes are linked to the least performing (and not the average performance) of the Underlyings, you may not receive
any return on the Notes and may lose a significant portion or all of your principal amount even if the Observation Value or Ending
Value of one Underlying is always greater than or equal to its Coupon Barrier or Threshold Value, as applicable. Your Notes
are linked to the least performing of the Underlyings, and a change in the level of one Underlying may not correlate with changes
in the level of the other Underlying(s). The Notes are not linked to a basket composed of the Underlyings, where the depreciation
in the level of one Underlying could be offset to some extent by the appreciation in the level of the other Underlying(s). In the
case of the Notes, the individual performance of each Underlying would not be combined, and the depreciation in the level of one
Underlying would not be offset by any appreciation in the level of the other Underlying(s). Even if the Observation Value of an
Underlying is at or above its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment with respect
to that Observation Date if the Observation Value of another Underlying is below its Coupon Barrier on that day. In addition, even
if the Ending Value of an Underlying is at or above its Threshold Value, you will lose a portion of your principal if the Ending
Value of the Least Performing Underlying is below its Threshold Value.
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The Notes are subject to risks associated with foreign securities markets. The NDX includes 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 NDX may have less liquidity and may be more volatile than U.S. or other securities markets
and market developments may affect foreign markets differently from U.S. or other securities markets. Direct or indirect government
intervention to stabilize these foreign securities markets, as well as cross-shareholdings in foreign companies, may affect trading
prices and volumes in these markets. Also, there is generally less publicly available information about foreign companies than
about those U.S. companies that are subject to the reporting requirements of the U.S. Securities and Exchange Commission, and foreign
companies are subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable
to U.S. reporting companies. 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.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-10
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
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The publisher of an Underlying may adjust that Underlying in a way that affects its levels, and the publisher has no obligation
to consider your interests. The publisher of an Underlying can add, delete, or substitute the components included in that Underlying
or make other methodological changes that could change its level. Any of these actions could adversely affect the value of your
Notes.
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Trading and hedging activities by us, the Guarantor and any of our other affiliates, including BofAS, may create conflicts
of interest with you and may affect your return on the Notes and their market value. We, the Guarantor or one or more of our
other affiliates, including BofAS, may buy or sell the securities held by or included in the Underlyings, or futures or options
contracts or exchange traded instruments on the Underlyings or those securities, or other instruments whose value is derived from
the Underlyings or those securities. While we, the Guarantor or one or more of our other affiliates, including BofAS, may from
time to time own securities represented by the Underlyings, except to the extent that BAC’s common stock may be included
in the Underlyings, we, the Guarantor and our other affiliates, including BofAS, do not control any company included in the Underlyings,
and have not verified any disclosure made by any other company. We, the Guarantor or one or more of our other affiliates, including
BofAS, may execute such purchases or sales for our own or their own accounts, for business reasons, or in connection with hedging
our obligations under the Notes. These transactions may present a conflict of interest between your interest in the Notes and the
interests we, the Guarantor and our other affiliates, including BofAS, may have in our or their proprietary accounts, in facilitating
transactions, including block trades, for our or their other customers, and in accounts under our or their management. These transactions
may adversely affect the value of the Underlyings in a manner that could be adverse to your investment in the Notes. On or before
the pricing date, any purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on our or their
behalf (including those for the purpose of hedging some or all of our anticipated exposure in connection with the Notes), may affect
the value of the Underlyings. Consequently, the value of the Underlyings may change subsequent to the pricing date, which may adversely
affect the market value of the Notes.
We, the Guarantor or one or more of our other affiliates, including BofAS, may also engage in hedging activities that could affect
the value of the Underlyings on the pricing date. In addition, these hedging activities, including the unwinding of a hedge, may
decrease the market value of your Notes prior to maturity, and may affect the amounts to be paid on the Notes. We, the Guarantor
or one or more of our other affiliates, including BofAS, may purchase or otherwise acquire a long or short position in the Notes
and may hold or resell the Notes. For example, BofAS may enter into these transactions in connection with any market making activities
in which it engages. We cannot assure you that these activities will not adversely affect the value of the Underlyings, the market
value of your Notes prior to maturity or the amounts payable on the Notes.
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There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours. We
have the right to appoint and remove the calculation agent. One of our affiliates will be the calculation agent for the Notes and,
as such, will make a variety of determinations relating to the Notes, including the amounts that will be paid on the Notes. Under
some circumstances, these duties could result in a conflict of interest between its status as our affiliate and its responsibilities
as calculation agent.
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The U.S. federal income tax consequences of an investment in the Notes are uncertain, and may be adverse to a holder of
the Notes. No statutory, judicial, or administrative authority directly addresses the characterization of the Notes or securities
similar to the Notes for U.S. federal income tax purposes. As a result, significant aspects of the U.S. federal income tax consequences
of an investment in the Notes are not certain. Under the terms of the Notes, you will have agreed with us to treat the Notes as
contingent income-bearing single financial contracts, as described below under “U.S. Federal Income Tax Summary—General.”
If the Internal Revenue Service (the “IRS”) were successful in asserting an alternative characterization for the Notes,
the timing and character of income, gain or loss with respect to the Notes may differ. No ruling will be requested from the IRS
with respect to the Notes and no assurance can be given that the IRS will agree with the statements made in the section entitled
“U.S. Federal Income Tax Summary.” You are urged to consult with your own tax advisor regarding all aspects of the
U.S. federal income tax consequences of investing in the Notes.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-11
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
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The Underlyings
All disclosures contained in this pricing supplement
regarding the Underlyings, including, without limitation, their make-up, method of calculation, and changes in their components,
have been derived from publicly available sources. The information reflects the policies of, and is subject to change by, each
of SPDJI (“SPDJI”), the sponsor of the INDU and Nasdaq, Inc, the sponsor of the NDX. We refer to SPDJI and Nasdaq,
Inc as the “Underlying Sponsors”. The Underlying Sponsors, which license the copyright and all other rights to the
Underlyings, have no obligation to continue to publish, and may discontinue publication of, the Underlyings. The consequences of
any Underlying Sponsor discontinuing publication of the applicable Underlying are discussed in “Description of the Notes
— Discontinuance of an Index” in the accompanying product supplement. None of us, the Guarantor, the calculation agent,
or BofAS accepts any responsibility for the calculation, maintenance or publication of any Underlying or any successor index. None
of us, the Guarantor, BofAS or any of our other affiliates makes any representation to you as to the future performance of the
Underlyings. You should make your own investigation into the Underlyings.
The Dow Jones
Industrial Average®
Unless otherwise stated, all information on the INDU
provided in this pricing supplement is derived from Dow Jones Indexes, the marketing name and a licensed trademark of CME Group
Index Services, LLC. The INDU is a price-weighted index, which means an underlying stock’s weight in the INDU is based on
its price per share rather than the total market capitalization of the issuer. The INDU is designed to provide an indication of
the composite performance of 30 common stocks of corporations representing a broad cross-section of U.S. industry. The corporations
represented in the INDU tend to be market leaders in their respective industries and their stocks are typically widely held by
individuals and institutional investors.
The INDU is maintained by an Averages Committee comprised
of the Managing Editor of The Wall Street Journal (“WSJ”), the head of Dow Jones Indexes research and the head of CME
Group Inc. research. The Averages Committee was created in March 2010, when Dow Jones Indexes became part of CME Group Index Services,
LLC, a joint venture company owned 90% by CME Group Inc. and 10% by Dow Jones & Company. Generally, composition changes occur
only after mergers, corporate acquisitions or other dramatic shifts in a component's core business. When such an event necessitates
that one component be replaced, the entire INDU is reviewed. As a result, when changes are made they typically involve more than
one component. While there are no rules for component selection, a stock typically is added only if it has an excellent reputation,
demonstrates sustained growth, is of interest to a large number of investors and accurately represents the sector(s) covered by
the average.
Changes in the composition of the INDU are made entirely
by the Averages Committee without consultation with the corporations represented in the INDU, any stock exchange, any official
agency or us. Unlike most other indices, which are reconstituted according to a fixed review schedule, constituents of the INDU
are reviewed on an as-needed basis. Changes to the common stocks included in the INDU tend to be made infrequently, and the underlying
stocks of the INDU may be changed at any time for any reason. The companies currently represented in the INDU are incorporated
in the United States and its territories and their stocks are listed on the New York Stock Exchange and NASDAQ.
The INDU initially consisted of 12 common stocks and
was first published in the WSJ in 1896. The INDU was increased to include 20 common stocks in 1916 and to include 30 common stocks
in 1928. The number of common stocks in the INDU has remained at 30 since 1928, and, in an effort to maintain continuity, the constituent
corporations represented in the INDU have been changed on a relatively infrequent basis. The INDU includes companies from nine
main groups: Basic Materials; Consumer Goods; Consumer Services; Financials; Healthcare; Industrials; Oil & Gas; Technology;
and Telecommunications.
Computation of the INDU
The level of the INDU is the sum of the primary exchange
prices of each of the 30 component stocks included in the INDU, divided by a divisor that is designed to provide a meaningful continuity
in the level of the INDU. Because the INDU is price-weighted, stock splits or changes in the component stocks could result in distortions
in the INDU level. In order to prevent these distortions related to extrinsic factors, the divisor is periodically changed in accordance
with a mathematical formula that reflects adjusted proportions within the INDU. The current divisor of the INDU is published daily
in the WSJ and other publications. In addition, other statistics based on the INDU may be found in a variety of publicly available
sources.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-12
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the Dow Jones Industrial Average® and the Nasdaq-100® Index
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Historical Performance of the INDU
The following graph sets forth the daily historical
performance of the INDU in the period from January 1, 2008 through June 29, 2020. We obtained this historical data from Bloomberg
L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. The horizontal
line in the graph represents the INDU’s hypothetical Coupon Barrier and Threshold Value of 17.917.06 (rounded to two decimal
places), which is 70% of the INDU’s hypothetical Starting Value of 25,595.80, which was its closing level on June 29, 2020.
The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical data on the INDU is not necessarily
indicative of the future performance of the INDU or what the value of the Notes may be. Any historical upward or downward trend
in the level of the INDU during any period set forth above is not an indication that the level of the INDU is more or less likely
to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you should consult
publicly available sources for the levels of the INDU.
License Agreement
S&P® is a registered trademark of Standard
& Poor’s Financial Services LLC (“S&P”) and Dow Jones® is a registered trademark of Dow Jones Trademark
Holdings LLC (“Dow Jones”). These trademarks have been licensed for use by SPDJI. “Standard & Poor’s®,”
“S&P 500®” and “S&P®” are trademarks of S&P. These trademarks have been sublicensed
for certain purposes by our affiliate, Merrill Lynch, Pierce, Fenner & Smith Incorporated. The INDU is a product of SPDJI and/or
its affiliates and has been licensed for use by Merrill Lynch, Pierce, Fenner & Smith Incorporated.
The Notes are not sponsored, endorsed, sold or promoted
by SPDJI, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P Dow Jones Indices”). S&P
Dow Jones Indices make no representation or warranty, express or implied, to the holders of the Notes or any member of the public
regarding the advisability of investing in securities generally or in the Notes particularly or the ability of the INDU to track
general market performance. S&P Dow Jones Indices’ only relationship to Merrill Lynch, Pierce, Fenner & Smith Incorporated
with respect to the INDU is the licensing of the INDU and certain trademarks, service marks and/or trade names of S&P Dow Jones
Indices and/or its third party licensors. The INDU is determined, composed and calculated by S&P Dow Jones Indices without
regard to us, Merrill Lynch, Pierce, Fenner & Smith Incorporated, or the Notes. S&P Dow Jones Indices have no obligation
to take our needs, BAC’s needs or the needs of Merrill Lynch, Pierce, Fenner & Smith Incorporated or holders of the Notes
into consideration in determining, composing or calculating the INDU. S&P Dow Jones Indices are not responsible for and have
not participated in the determination of the prices, and amount of the Notes or the timing of the issuance or sale of the Notes
or in the determination or calculation of the equation by which the Notes are to be converted into cash. S&P Dow Jones Indices
have no obligation or liability in connection with the administration, marketing or trading of the Notes. There is no assurance
that investment products based on the INDU will accurately track index performance or provide positive investment returns. SPDJI
and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation
by S&P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice.
Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-13
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sponsor financial products unrelated to the Notes
currently being issued by us, but which may be similar to and competitive with the Notes. In addition, CME Group Inc. and its affiliates
may trade financial products which are linked to the performance of the INDU. It is possible that this trading activity will affect
the value of the Notes.
S&P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY,
ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDU OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED
TO, ORAL OR WRITTEN COMMUNICATIONS (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS
OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR
AS TO RESULTS TO BE OBTAINED BY US, BAC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, HOLDERS OF THE NOTES, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDU OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL
DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES
OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-14
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The Nasdaq-100®
Index
The NDX is intended to measure the performance of
the 100 largest domestic and international non-financial securities listed on NASDAQ based on market capitalization. The NDX reflects
companies across major industry groups including computer hardware and software, telecommunications, retail/wholesale trade and
biotechnology. It does not contain securities of financial companies including investment companies.
The NDX began trading on January 31, 1985 at a base
value of 125.00. The NDX is calculated and published by Nasdaq, Inc. In administering the NDX, Nasdaq, Inc. will exercise reasonable
discretion as it deems appropriate.
Underlying Stock Eligibility Criteria
NDX eligibility is limited to specific security types
only. The security types eligible for the NDX include foreign or domestic common stocks, ordinary shares, ADRs and tracking stocks.
Security types not included in the NDX are closed-end funds, convertible debt securities, exchange traded funds, limited liability
companies, limited partnership interests, preferred stocks, rights, shares or units of beneficial interest, warrants, units, and
other derivative securities. The NDX does not contain securities of investment companies. For purposes of the NDX eligibility criteria,
if the security is a depositary receipt representing a security of a non-U.S. issuer, then references to the “issuer”
are references to the issuer of the underlying security.
Initial Eligibility Criteria
To be eligible for initial inclusion in the NDX, a
security must be listed on NASDAQ and meet the following criteria:
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the security’s U.S. listing must be exclusively
on the Nasdaq Global Select Market or the Nasdaq Global Market (unless the security was dually listed on another U.S. market prior
to January 1, 2004 and has continuously maintained such listing);
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the security must be of a non-financial company;
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the security may not be issued by an issuer currently
in bankruptcy proceedings;
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the security must have a minimum three-month
average daily trading volume of at least 200,000 shares;
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if the issuer of the security is organized under
the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the
U.S. or be eligible for listed-options trading on a recognized options market in the U.S.;
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the issuer of the security may not have entered
into a definitive agreement or other arrangement which would likely result in the security no longer being eligible for inclusion
in the NDX;
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the issuer of the security may not have annual
financial statements with an audit opinion that is currently withdrawn; and
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the issuer of the security must have “seasoned”
on NASDAQ, NYSE or NYSE Amex. Generally, a company is considered to be seasoned if it has been listed on a market for at least
three full months (excluding the first month of initial listing).
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Continued Eligibility Criteria
In
addition, to be eligible for continued inclusion in the NDX, the following criteria apply:
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the security’s U.S. listing must be exclusively
on the Nasdaq Global Select Market or the Nasdaq Global Market;
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the security must be of a non-financial company;
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the security may not be issued by an issuer currently
in bankruptcy proceedings;
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the security must have a minimum three-month
average daily trading volume of at least 200,000 shares;
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if the issuer of the security is organized under
the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the
U.S. or be eligible for listed-options trading on a recognized options market in the U.S. (measured annually during the ranking
review process);
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the security must have an adjusted market capitalization
equal to or exceeding 0.10% of the aggregate adjusted market capitalization of the NDX at each month-end. In the event a company
does not meet this criterion for two consecutive month-ends, it will be removed from the NDX effective after the close of trading
on the third Friday of the following month; and
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the issuer of the security may not have annual
financial statements with an audit opinion that is currently withdrawn.
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Computation of the NDX
The
value of the NDX equals the aggregate value of the NDX share weights (the “NDX Shares”) of each of the NDX securities
multiplied by each such security’s last sale price (last sale price refers to the last sale price on NASDAQ), and divided
by the divisor of the NDX. If trading in an NDX security is halted while the market is open, the last traded price for that security
is used for all NDX computations until trading resumes. If trading is halted before the market is open, the previous day’s
last sale price is used. The formula for determining the NDX value is as follows:
The NDX is ordinarily calculated without regard to
cash dividends on NDX securities. The NDX is calculated during the trading day and is disseminated once per second from 09:30:01
to 17:16:00 ET. The closing level of the NDX may change up until 17:15:00 ET due to corrections to the last sale price of the NDX
securities. The official closing value of the NDX is ordinarily disseminated at 17:16:00 ET.
NDX Maintenance
Changes to NDX Constituents
Changes to the NDX constituents may be made during
the annual ranking review. In addition, if at any time during the year other than the annual review, it is determined that an NDX
security issuer no longer meets the criteria for continued inclusion in the NDX, or is otherwise determined to have become ineligible
for continued inclusion in the NDX, it is replaced with the largest market capitalization issuer not currently in the NDX that
meets the applicable eligibility criteria for initial inclusion in the NDX.
Ordinarily, a security will be removed from the NDX
at its last sale price. However, if at the time of its removal the NDX security is halted from trading on its primary listing market
and an official closing price cannot readily be determined, the NDX security may, in Nasdaq, Inc.’s discretion, be removed
at a price of $0.00000001 (“zero price”). This zero price will be applied to the NDX security after the close of the
market but prior to the time the official closing value of the NDX is disseminated.
Divisor Adjustments
The divisor is adjusted to ensure that changes in
the NDX constituents either by corporate actions (that adjust either the price or shares of an NDX security) or NDX participation
outside of trading hours do not affect the value of the NDX. All divisor changes occur after the close of the applicable index
security markets.
Quarterly NDX Rebalancing
The NDX will be rebalanced on a quarterly basis if
it is determined that (1) the current weight of the single NDX security with the largest market capitalization is greater than
24.0% of the NDX or (2) the collective weight of those securities whose individual current weights are in excess of 4.5% exceeds
48.0% of the NDX. In addition, a “special rebalancing” of the NDX may be conducted at any time if Nasdaq, Inc. determines
it necessary to maintain the integrity and continuity of the NDX. If either one or both of the above weight distribution conditions
are met upon quarterly review, or Nasdaq, Inc. determines that a special rebalancing is necessary, a weight rebalancing will be
performed.
If the first weight distribution condition is met
and the current weight of the single NDX security with the largest market capitalization is greater than 24.0%, then the weights
of all securities with current weights greater than 1.0% (“large securities”) will be scaled down proportionately toward
1.0% until the adjusted weight of the single largest NDX security reaches 20.0%.
If the second weight distribution condition is met
and the collective weight of those securities whose individual current weights are in excess of 4.5% (or adjusted weights in accordance
with the previous step, if applicable) exceeds 48.0% of the NDX, then the weights of all such large securities in that group will
be scaled down proportionately toward 1.0% until their collective weight, so adjusted, is equal to 40.0%.
The aggregate weight reduction among the large securities
resulting from either or both of the rebalancing steps above will then be redistributed to those securities with weightings of
less than 1.0% (“small securities”) in the following manner. In the first iteration, the weight of the largest small
security will be scaled upwards by a factor which sets it equal to the average NDX weight of 1.0%. The weights of each of the smaller
remaining small securities will be scaled up by the same factor reduced in relation to each security’s relative ranking among
the small securities such that the smaller the NDX security in the ranking, the less its weight will be scaled upward. This is
intended to reduce the market impact of the weight rebalancing on the smallest component securities in the NDX.
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In the second iteration of the small security rebalancing,
the weight of the second largest small security, already adjusted in the first iteration, will be scaled upwards by a factor which
sets it equal to the average NDX weight of 1.0%. The weights of each of the smaller remaining small securities will be scaled up
by this same factor reduced in relation to each security’s relative ranking among the small securities such that, once again,
the smaller the security in the ranking, the less its weight will be scaled upward. Additional iterations will be performed until
the accumulated increase in weight among the small securities equals the aggregate weight reduction among the large securities
that resulted from the rebalancing in accordance with the two weight distribution conditions discussed above.
Finally, to complete the rebalancing process, once
the final weighting percentages for each NDX security have been set, the NDX Shares will be determined anew based upon the last
sale prices and aggregate capitalization of the NDX at the close of trading on the last calendar day in February, May, August and
November. Changes to the NDX Shares will be made effective after the close of trading on the third Friday in March, June, September
and December, and an adjustment to the divisor is made to ensure continuity of the NDX. Ordinarily, new rebalanced NDX Shares will
be determined by applying the above procedures to the current NDX Shares. However, Nasdaq, Inc. may, from time to time, determine
rebalanced weights, if necessary, by applying the above procedure to the actual current market capitalization of the NDX components.
In such instances, Nasdaq, Inc. would announce the different basis for rebalancing prior to its implementation.
During the quarterly rebalancing, data is cutoff as
of the previous month end and no changes are made to the NDX from that cutoff until the quarterly index share change effective
date, except in the case of changes due to corporate actions with an ex-date.
Adjustments for Corporate Actions
Changes in the price and/or NDX Shares driven by corporate
events such as stock dividends, splits, and certain spin-offs and rights issuances will be adjusted on the ex-date. If the change
in total shares outstanding arising from other corporate actions is greater than or equal to 10.0%, the change will be made as
soon as practicable. Otherwise, if the change in total shares outstanding is less than 10.0%, then all such changes are accumulated
and made effective at one time on a quarterly basis after the close of trading on the third Friday in each of March, June, September,
and December. The NDX Shares are derived from the security’s total shares outstanding. The NDX Shares are adjusted by the
same percentage amount by which the total shares outstanding have changed.
Historical Performance of the NDX
The following graph sets forth the daily historical
performance of the NDX in the period from January 1, 2008 through June 29, 2020. We obtained this historical data from Bloomberg
L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg L.P. The horizontal
line in the graph represents the NDX’s hypothetical Coupon Barrier and Threshold Value of 6,972.814 (rounded to three decimal
places), which is 70% of the NDX’s hypothetical Starting Value of 9,961.163, which was its closing level on June 29, 2020.
The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
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This historical data on the NDX is not necessarily
indicative of the future performance of the NDX or what the value of the Notes may be. Any historical upward or downward trend
in the level of the NDX during any period set forth above is not an indication that the level of the NDX is more or less likely
to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you should consult
publicly available sources for the levels of the NDX.
License Agreement
The Notes are not sponsored, endorsed, sold or promoted
by Nasdaq, Inc. or its affiliates (Nasdaq, with its affiliates, are referred to as the “Corporations”). The Corporations
have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, the
Notes. The Corporations make no representation or warranty, express or implied, to the owners of the Notes or any member of the
public regarding the advisability of investing in securities generally or in the Notes particularly, or the ability of the NDX
to track general stock market performance. The Corporations’ only relationship to Merrill Lynch, Pierce, Fenner & Smith
Incorporated (“Licensee”) is in the licensing of the NASDAQ®, OMX®, NASDAQ OMX®, and NDX registered trademarks,
and certain trade names of the Corporations or their licensor and the use of the NDX which is determined, composed and calculated
by Nasdaq without regard to Licensee or the Notes. Nasdaq has no obligation to take the needs of the Licensee or the owners of
the Notes into consideration in determining, composing or calculating the NDX. The Corporations are not responsible for and have
not participated in the determination of the timing of, prices at, or quantities of the Notes to be issued or in the determination
or calculation of the equation by which the Notes are to be converted into cash. The Corporations have no liability in connection
with the administration, marketing or trading of the Notes.
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR
UNINTERRUPTED CALCULATION OF THE NDX OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NDX OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NDX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL
DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
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Supplement to the Plan of Distribution; Role of BofAS and Conflicts
of Interest
BofAS, a broker-dealer affiliate of ours, is a member
of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling agent in the distribution
of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121. BofAS may not make sales
in this offering to any of its discretionary accounts without the prior written approval of the account holder.
We expect to deliver the Notes against payment therefor
in New York, New York on a date that is greater than two business days following the pricing date. Under Rule 15c6-1 of the Securities
Exchange Act of 1934, trades in the secondary market generally are required to settle in two business days, unless the parties
to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the Notes occurs more than two business
days from the pricing date, purchasers who wish to trade the Notes more than two business days prior to the original issue date
will be required to specify alternative settlement arrangements to prevent a failed settlement.
Under our distribution agreement with BofAS, BofAS
will purchase the Notes from us as principal at the public offering price indicated on the cover of this pricing supplement, less
the indicated underwriting discount. BofAS will sell the Notes to other broker-dealers that will participate in the offering and
that are not affiliated with us, at an agreed discount to the principal amount. Each of those broker-dealers may sell the Notes
to one or more additional broker-dealers. BofAS has informed us that these discounts may vary from dealer to dealer and that not
all dealers will purchase or repurchase the Notes at the same discount. Certain dealers who purchase the Notes for sale to certain
fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public offering price
for investors purchasing the Notes in these fee-based advisory accounts may be as low as $989.00 per Note.
BofAS and any of our other broker-dealer affiliates
may use this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus for offers and sales
in secondary market transactions and market-making transactions in the Notes. However, they are not obligated to engage in such
secondary market transactions and/or market-making transactions. These broker-dealer affiliates may act as principal or agent in
these transactions, and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion, for a short, undetermined
initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market at a price that may exceed
the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on then-prevailing market conditions
and other considerations, including the performance of the Underlyings and the remaining term of the Notes. However, none of us,
the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes at any price or at any time, and we cannot
assure you that any party will purchase your Notes at a price that equals or exceeds the initial estimated value of the Notes.
Any price that BofAS may pay to repurchase the Notes
will depend upon then prevailing market conditions, the creditworthiness of us and the Guarantor, and transaction costs. At certain
times, this price may be higher than or lower than the initial estimated value of the Notes.
European Economic Area and United Kingdom
None of this pricing supplement, the accompanying
product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus for the purposes of the
Prospectus Regulation (as defined below). This pricing supplement, the accompanying product supplement, the accompanying prospectus
and the accompanying prospectus supplement have been prepared on the basis that any offer of Notes in any Member State of the European
Economic Area (the “EEA”) or in the United Kingdom (each, a “Relevant State”) will only be made to a legal
entity which is a qualified investor under the Prospectus Regulation (“Qualified Investors”). Accordingly any person
making or intending to make an offer in that Relevant State of Notes which are the subject of the offering contemplated in this
pricing supplement, the accompanying product supplement, the accompanying prospectus and the accompanying prospectus supplement
may only do so with respect to Qualified Investors. Neither BofA Finance nor BAC has authorized, nor does it authorize, the making
of any offer of Notes other than to Qualified Investors. The expression “Prospectus Regulation” means Regulation (EU)
2017/1129.
PROHIBITION OF SALES TO EEA AND UNITED KINGDOM
RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA or in the United Kingdom. For these purposes: (a) a retail investor
means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as
amended (“MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive)
where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not
a qualified investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes the communication
in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an
investor to decide to purchase or subscribe for the Notes. Consequently no key information document required by Regulation (EU)
No 1286/2014, as amended (the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available
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to retail investors in the EEA or in the United Kingdom
has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the
EEA or in the United Kingdom may be unlawful under the PRIIPs Regulation.
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United Kingdom
The communication of this pricing supplement, the
accompanying product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other document or
materials relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials have not been
approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services and Markets Act
2000, as amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must
not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial
promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments
and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets
Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article
49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under
the Financial Promotion Order (all such persons together being referred to as “relevant persons”). In the United Kingdom,
the Notes offered hereby are only available to, and any investment or investment activity to which this pricing supplement, the
accompanying product supplement, the accompanying prospectus supplement and the accompanying prospectus relates will be engaged
in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this pricing
supplement, the accompanying product supplement, the accompanying prospectus supplement or the accompanying prospectus or any of
their contents.
Any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only be communicated
or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to BofA Finance, as issuer, or
BAC, as guarantor.
All applicable provisions of the FSMA must be complied
with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the United Kingdom.
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Structuring the Notes
The Notes are our debt securities, the return on which
is linked to the performance of the Underlyings. The related guarantee is BAC’s obligation. As is the case for all of our
and BAC’s respective debt securities, including our market-linked notes, the economic terms of the Notes reflect our and
BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because market-linked notes result in increased
operational, funding and liability management costs to us and BAC, BAC typically borrows the funds under these types of notes at
a rate, which we refer to in this pricing supplement as BAC’s internal funding rate, that is more favorable to BAC than the
rate that it might pay for a conventional fixed or floating rate debt security. This generally relatively lower internal funding
rate, which is reflected in the economic terms of the Notes, along with the fees and charges associated with market-linked notes,
typically results in the initial estimated value of the Notes on the pricing date being less than their public offering price.
In order to meet our payment obligations on the Notes,
at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call options, put options
or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are determined based upon
terms provided by BofAS and its affiliates, and take into account a number of factors, including our and BAC’s creditworthiness,
interest rate movements, the volatility of the Underlyings, the tenor of the Notes and the hedging arrangements. The economic terms
of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised us that the hedging arrangements
will include hedging related charges, reflecting the costs associated with, and our affiliates’ profit earned from, these
hedging arrangements. Since hedging entails risk and may be influenced by unpredictable market forces, actual profits or losses
from these hedging transactions may be more or less than any expected amounts.
For further information, see “Risk Factors”
beginning on page PS-9 above and “Supplemental Use of Proceeds” on page PS-19 of the
accompanying product supplement.
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U.S. Federal Income Tax Summary
The following summary of the material U.S. federal
income tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under
“U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible
tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations
promulgated under the Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations),
rulings, current administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently
in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance
can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences
described below. This summary does not include any description of the tax laws of any state or local governments, or of any foreign
government, that may be applicable to a particular holder.
Although the Notes are issued by us, they will be
treated as if they were issued by BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references
to “we,” “our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S. Holders and
Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will hold the
Notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment, and
that are not excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor concerning
the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax consequences
arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal
or other tax laws.
General
Although there is no statutory, judicial, or administrative
authority directly addressing the characterization of the Notes, we intend to treat the Notes for all tax purposes as contingent
income-bearing single financial contracts with respect to the Underlyings and under the terms of the Notes, we and every investor
in the Notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat the Notes in
accordance with such characterization. In the opinion of our counsel, Sidley Austin LLP, it is reasonable to treat the Notes as
contingent income-bearing single financial contracts with respect to the Underlyings. However, Sidley Austin LLP has advised us
that it is unable to conclude that it is more likely than not that this treatment will be upheld. This discussion assumes that
the Notes constitute contingent income-bearing single financial contracts with respect to the Underlyings for U.S. federal income
tax purposes. If the Notes did not constitute contingent income-bearing single financial contracts, the tax consequences described
below would be materially different.
This characterization of the Notes is not binding
on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization of the Notes
or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to
their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal
income tax consequences of an investment in the Notes are not certain, and no assurance can be given that the IRS or any court
will agree with the characterization and tax treatment described in this pricing supplement. Accordingly, you are urged to consult
your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the Notes, including possible
alternative characterizations.
Unless otherwise stated, the following discussion
is based on the characterization described above. The discussion in this section assumes that there is a significant possibility
of a significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether the issuer
of any component stocks included in an Underlying would be treated as a “passive foreign investment company” (“PFIC”),
within the meaning of Section 1297 of the Code, or a United States real property holding corporation, within the meaning of Section
897(c) of the Code. If the issuer of one or more stocks included in an Underlying were so treated, certain adverse U.S. federal
income tax consequences could possibly apply to a holder of the Notes. You should refer to information filed with the SEC by the
issuers of the component stocks included in the Underlyings and consult your tax advisor regarding the possible consequences to
you, if any, if any issuer of a component stock included in an Underlying is or becomes a PFIC or is or becomes a United States
real property holding corporation.
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U.S. Holders
Although the U.S. federal income tax treatment of
any Contingent Coupon Payment on the Notes is uncertain, we intend to take the position, and the following discussion assumes,
that any Contingent Coupon Payment constitutes taxable ordinary income to a U.S. Holder at the time received or accrued in accordance
with the U.S. Holder’s regular method of accounting. By purchasing the Notes you agree, in the absence of an administrative
determination or judicial ruling to the contrary, to treat any Contingent Coupon Payment as described in the preceding sentence.
Upon receipt of a cash payment at maturity or upon
a sale, exchange, or redemption of the Notes prior to maturity, a U.S. Holder generally will recognize capital gain or loss equal
to the difference between the amount realized (other than amounts representing any Contingent Coupon Payment, which would be taxed
as described above) and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes will equal
the amount paid by that holder to acquire them. This capital gain or loss generally will be long-term capital gain or loss if the
U.S. Holder held the Notes for more than one year. The deductibility of capital losses is subject to limitations.
Alternative Tax Treatments. Due to the absence
of authorities that directly address the proper tax treatment of the Notes, prospective investors are urged to consult their tax
advisors regarding all possible alternative tax treatments of an investment in the Notes. In particular, the IRS could seek to
subject the Notes to the Treasury regulations governing contingent payment debt instruments. If the IRS were successful in that
regard, the timing and character of income on the Notes would be affected significantly. Among other things, a U.S. Holder would
be required to accrue original issue discount every year at a “comparable yield” determined at the time of issuance.
In addition, any gain realized by a U.S. Holder at maturity or upon a sale, exchange, or redemption of the Notes generally would
be treated as ordinary income, and any loss realized at maturity or upon a sale, exchange, or redemption of the Notes generally
would be treated as ordinary loss to the extent of the U.S. Holder’s prior accruals of original issue discount, and as capital
loss thereafter.
In addition, it is possible that the Notes could be
treated as a unit consisting of a deposit and a put option written by the Note holder, in which case the timing and character of
income on the Notes would be affected significantly.
The IRS released Notice 2008-2 (the “Notice”),
which sought comments from the public on the taxation of financial instruments currently taxed as “prepaid forward contracts.”
This Notice addresses instruments such as the Notes. According to the Notice, the IRS and Treasury are considering whether a holder
of an instrument such as the Notes should be required to accrue ordinary income on a current basis, regardless of whether any payments
are made prior to maturity. It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any
such future guidance may affect the amount, timing and character of income, gain, or loss in respect of the Notes, possibly with
retroactive effect.
The IRS and Treasury are also considering additional
issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether foreign
holders of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of the Code,
concerning certain “constructive ownership transactions,” generally applies or should generally apply to such instruments,
and whether any of these determinations depend on the nature of the underlying asset.
In addition, proposed Treasury regulations require
the accrual of income on a current basis for contingent payments made under certain notional principal contracts. The preamble
to the regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual
of income on those contracts, and requires current accrual of income for some contracts already in existence. While the proposed
regulations do not apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar
timing issues exist in the case of prepaid forward contracts. If the IRS or Treasury publishes future guidance requiring current
economic accrual for contingent payments on prepaid forward contracts, it is possible that you could be required to accrue income
over the term of the Notes.
Because of the absence of authority regarding the
appropriate tax characterization of the Notes, it is also possible that the IRS could seek to characterize the Notes in a manner
that results in tax consequences that are different from those described above. For example, the IRS could possibly assert that
any gain or loss that a holder may recognize at maturity or upon the sale, exchange, or redemption of the Notes should be treated
as ordinary gain or loss.
Because each Underlying is an index that periodically
rebalances, it is possible that the Notes could be treated as a series of contingent income-bearing single financial contracts,
each of which matures on the next rebalancing date. If the Notes were properly characterized in such a manner, a U.S. Holder would
be treated as disposing of the Notes on each rebalancing date in return for new Notes that mature on the next rebalancing date,
and a U.S. Holder would accordingly likely recognize capital gain or loss on each rebalancing date equal to the difference between
the holder’s tax basis in the Notes (which would be adjusted to take into account any prior recognition of gain or loss)
and the fair market value of the Notes on such date.
Non-U.S. Holders
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Because the U.S. federal income tax treatment of the
Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal income tax at a 30% rate (or at a lower
rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon Payment made unless such payments are
effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. (in which case, to avoid withholding,
the Non-U.S. Holder will be required to provide a Form W-8ECI). We will not pay any additional amounts in respect of such withholding.
To claim benefits under an income tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to
its eligibility under the appropriate treaty’s limitations on benefits article, if applicable. In addition, special rules
may apply to claims for treaty benefits made by Non-U.S. Holders that are entities rather than individuals. The availability of
a lower rate of withholding under an applicable income tax treaty will depend on whether such rate applies to the characterization
of the payments under U.S. federal income tax laws. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Except as discussed below, a Non-U.S. Holder generally
will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes (not including, for the
avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject to the rules discussed in the previous
paragraph) upon the sale, exchange, or redemption of the Notes or their settlement at maturity, provided that the Non-U.S. Holder
complies with applicable certification requirements and that the payment is not effectively connected with the conduct by the Non-U.S.
Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange, or redemption of the Notes or
their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien individual
and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange, redemption, or settlement and certain
other conditions are satisfied.
If a Non-U.S. Holder of the Notes is engaged in the
conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized on the settlement at maturity,
or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of such trade or business (and, if
certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.), the Non-U.S.
Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S. federal income tax on such Contingent
Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders should read
the material under the heading “—U.S. Holders,” for a description of the U.S. federal income tax consequences
of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation, it may also be
subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion of its earnings
and profits for the taxable year that are effectively connected with its conduct of a trade or business in the U.S., subject to
certain adjustments.
A “dividend equivalent” payment is treated
as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding tax
if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked instruments
(“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified ELIs reference
an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation for
U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However,
IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one
instruments and that are issued before January 1, 2023. Based on our determination that the Notes are not delta-one instruments,
Non-U.S. Holders should not be subject to withholding on dividend equivalent payments, if any, under the Notes. However, it is
possible that the Notes could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain
events affecting the Underlyings or the Notes, and following such occurrence the Notes could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlyings
or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context
of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the
applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect
to amounts so withheld.
As discussed above, alternative characterizations
of the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or
clarification of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax in addition
to the withholding tax described above, tax will be withheld at the applicable statutory rate. Prospective Non-U.S. Holders should
consult their own tax advisors regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under current law,
while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those
individuals’ gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with
respect to which the individual has retained certain interests or powers), should note that, absent an applicable treaty benefit,
a Note is likely to 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
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Please see the discussion under “U.S. Federal
Income Tax Considerations — Taxation of Debt Securities — Backup Withholding and Information Reporting” in the
accompanying prospectus for a description of the applicability of the backup withholding and information reporting rules to payments
made on the Notes.
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Where You Can Find More Information
The terms and risks of the Notes
are contained in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus,
which can be accessed at the following links:
This pricing supplement and the
accompanying product supplement, prospectus supplement and prospectus have been filed as part of a registration statement with
the SEC, which may, without cost, be accessed on the SEC website at www.sec.gov or obtained from BofAS by calling 1-800-294-1322.
Before you invest, you should read this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus
for information about us, BAC and this offering. Any prior or contemporaneous oral statements and any other written materials you
may have received are superseded by this pricing supplement and the accompanying product supplement, prospectus supplement and
prospectus. Certain terms used but not defined in this pricing supplement have the meanings set forth in the accompanying product
supplement or prospectus supplement. Unless otherwise indicated or unless the context requires otherwise, all references in this
document to “we,” “us,” “our,” or similar references are to BofA Finance, and not to BAC.
The Notes are our senior debt
securities. Any payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee are
not insured by the Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in right of payment
with all of our other unsecured and unsubordinated obligations, and the related guarantee will rank equally in right of payment
with all of BAC’s other unsecured and unsubordinated obligations, in each case except obligations that are subject to any
priorities or preferences by law. Any payments due on the Notes, including any repayment of the principal amount, will be subject
to the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-27
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