Filed Pursuant
to Rule 424(b)(2)
Registration
Statement No. 333-202354
Pricing
Supplement No. 2
(To Prospectus dated May 1,
2015
and Series
L Prospectus Supplement dated May 4, 2015)
May
18, 2015
$25,000,000
Fixed
to Floating Rate Notes with a Maximum Interest Rate, due May 20, 2022
| • | The
notes are senior unsecured debt securities issued by Bank of America Corporation (“BAC”).
All payments and return of principal on the notes are subject to our credit risk. |
| • | The
notes will mature on May 20, 2022. At maturity, you will receive a cash payment equal
to 100% of the principal amount of your notes, plus any accrued and unpaid interest. |
| • | Interest
will be paid on February 20, May 20, August 20, and November 20 of each year, beginning
on August 20, 2015. |
| • | From,
and including, the issue date to, but excluding, May 20, 2017, the notes will bear interest
at the fixed rate of 2.375% per annum. |
| • | From,
and including, May 20, 2017, to, but excluding, the maturity date (the “Floating
Rate Period”), the notes will bear interest at a per annum floating rate equal
to 3-month U.S. dollar LIBOR plus the Spread (as defined below). However, the maximum
rate of interest payable on the notes during the Floating Rate Period (the “Cap”)
is as follows: |
| • | from,
and including, May 20, 2017, to, but excluding, May 20, 2020, 4.00% per annum; and |
| • | from,
and including, May 20, 2020, to, but excluding, the maturity date, 5.00% per annum. |
| • | We
will not have the option to redeem the notes prior to maturity. |
| • | The
notes are issued in minimum denominations of $1,000
and whole multiples
of $1,000. |
| • | The
notes will not be listed on any securities exchange. |
| • | The
CUSIP number for the notes is 06048WQV5. |
The
notes:
Are
Not FDIC Insured |
Are
Not Bank Guaranteed |
May
Lose Value |
|
Per
Note |
|
Total |
Public
Offering Price |
100.00% |
|
$25,000,000 |
Underwriting
Discount |
0.25%* |
|
$ 62,500
|
Proceeds
(before expenses) to BAC |
99.75% |
|
$24,937,500 |
*
We or one of our affiliates may pay varying selling concessions of up to 0.25% in connection with the distribution of the notes
to other registered broker-dealers.
The
notes are unsecured and are not savings accounts, deposits, or other obligations of a bank. The notes are not guaranteed by Bank
of America, N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency
and involve investment risks. Potential purchasers of the notes should consider the information in “Risk Factors”
beginning on page PS-5 of this pricing supplement, page S-5 of the attached prospectus supplement, and page 9 of the attached
prospectus.
None
of the Securities and Exchange Commission, any state securities commission, or any other regulatory body has approved or disapproved
of these notes or passed upon the adequacy or accuracy of this pricing supplement, the accompanying prospectus supplement, or
the accompanying prospectus. Any representation to the contrary is a criminal offense.
We
will deliver the notes in book-entry form only through The Depository Trust Company on May 20, 2015 against payment in immediately
available funds.
Series
L MTN prospectus supplement dated May 4, 2015
and
prospectus dated May 1, 2015
BofA
Merrill Lynch
SUMMARY
OF TERMS
This
pricing supplement supplements the terms and conditions in the prospectus, dated May 1, 2015, as supplemented by the Series L
prospectus supplement, dated May 4, 2015 (as so supplemented, together with all documents incorporated by reference, the “prospectus”),
and should be read with the prospectus. Unless otherwise defined in this pricing supplement, terms used herein have the same meanings
as are given to them in the prospectus.
• Title
of the Series: |
|
Fixed
to Floating Rate Notes with a Maximum Interest Rate, due May 20, 2022 |
• Aggregate
Principal Amount
Initially Being Issued: |
|
$25,000,000 |
• Issue
Date: |
|
May
20, 2015 |
• CUSIP
No.: |
|
06048WQV5 |
• Maturity
Date: |
|
May
20, 2022 |
• Minimum
Denominations: |
|
$1,000
and multiples of $1,000 in excess of $1,000 |
• Ranking: |
|
Senior,
unsecured |
• Day
Count Fraction: |
|
30/360 |
• Interest
Periods: |
|
Quarterly.
Each interest period (other than the first interest period, which will begin on the issue date) will begin on, and will
include, an interest payment date, and will extend to, but will exclude, the next succeeding interest payment date (or the
maturity date, as applicable). |
• Interest
Payment Dates: |
|
February
20, May 20, August 20, and November 20 of each year, beginning on August 20, 2015. |
• Interest
Reset Dates: |
|
February 20, May 20, August 20, and
November 20 of each year, beginning on May 20, 2017. |
• Interest
Rates: |
|
Fixed
Rate Period. From, and including, the issue date to, but excluding, May 20, 2017, the notes will bear interest at
the fixed rate of 2.375% per annum.
Floating
Rate Period. From, and including, May 20, 2017, to, but excluding, the maturity date (the “Floating Rate Period”),
the notes will bear interest at a per annum floating rate equal to 3-month U.S. dollar LIBOR plus the Spread (as defined
below). However, the maximum rate of interest payable on the notes during the Floating Rate Period (the “Cap”)
is as follows:
•
from, and including, May 20, 2017, to, but excluding, May 20, 2020, 4.00% per annum; and
•
from, and including, May 20, 2020, to, but excluding, the maturity date, 5.00% per annum.
The
rate of interest payable on the notes during the Floating Rate Period will not be less than 0%.
3-month
U.S. dollar LIBOR will be determined based on Reuters page LIBOR01. For additional information as to the determination
of 3-month U.S. dollar LIBOR and the |
|
|
calculation
of interest during the Floating Rate Period, see “Description of Debt Securities—Floating-Rate Notes—LIBOR Notes”
in the attached prospectus. If 3-month U.S. dollar LIBOR cannot be determined as provided in the first three subparagraphs of
“Description of Debt Securities — Floating-Rate Notes — LIBOR Notes” in the accompanying prospectus on
the first interest determination date for the Floating Rate Period, then the calculation agent will determine 3-month U.S. dollar
LIBOR on that day in a manner that it considers commercially reasonable under the circumstances. |
•
Interest Determination Date: |
|
The “interest
determination date” for each quarterly interest period during the Floating Rate Period will be the second London Banking
Day (as defined in the prospectus) prior to the beginning of the applicable quarterly interest period. |
• Spread: |
|
0.95% |
• Index
Maturity: |
|
3 months |
• Calculation
Agent: |
|
Merrill Lynch Capital
Services, Inc. |
• Business
Days: |
|
If any interest
payment date or the maturity date occurs on a day that is not a business day in New York, New York, then the payment will
be postponed until the next business day in New York, New York. No additional interest will accrue on the notes
as a result of such postponement, and no adjustment will be made to the length of the relevant interest period. |
• Redemption
at Our Option: |
|
None |
• Repayment
at Option of Holder: |
|
None |
• Record
Dates for Interest Payments: |
|
For
book-entry only notes, one business day in New York, New York prior to the payment date. If notes are not held in book-entry
only form, the record dates will be the first day of the month in which the applicable interest payment is due. |
• Listing:
|
|
None |
|
|
|
RISK
FACTORS
Your
investment in the notes entails significant risks, many of which differ from those of a conventional 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.
Payments
on the notes are subject to our credit risk, and actual or perceived changes in our creditworthiness are expected to affect the
value of the notes. The notes are our senior unsecured debt securities. As a result, your receipt of all payments of interest
and principal on the notes is dependent upon our ability to repay our obligations on the applicable payment date. No assurance
can be given as to what our financial condition will be at any time during the term of the notes or on the maturity date. If we
default on our financial obligations, you may not receive the amounts payable under the terms of the notes.
Our
credit ratings are an assessment by ratings agencies of our ability to pay our obligations. Consequently, our perceived creditworthiness
and actual or anticipated decreases in our credit ratings or increases in our credit spreads prior to the maturity date of the
notes may adversely affect the market value of the notes. However, because your return on the notes depends upon factors in addition
to our ability to pay our obligations, such as the difference between the interest rates accruing on the notes and current market
interest rates, an improvement in our credit ratings will not reduce the other investment risks related to the notes.
The
interest rate on the notes is capped. During the Floating Rate Period, the interest rate that will be payable on the notes
in any quarterly interest period will be limited to the applicable Cap. Accordingly, as a holder of the notes, you will not benefit
from three-month U.S. dollar LIBOR being greater than the difference between the applicable Cap and the Spread in any quarterly
interest period during the Floating Rate Period.
We
have included in the terms of the notes the costs of developing,
hedging, and distributing them, and the
price, if any, at which you may
sell the notes in any secondary market transaction will likely be lower than the public offering price due to, among other things,
the inclusion of these costs. In determining the economic terms of the notes, and consequently the
potential return on the notes to you, a number of factors are taken into account. Among these factors are certain costs associated
with developing, hedging, and
offering the notes.
Assuming
there is no change in market conditions or any other relevant factors, the price, if any, at which the selling agent or another
purchaser might be willing to purchase the notes in a secondary market transaction is expected to be lower than the
price that you paid for them.
This is due to, among other things, the inclusion of these
costs, and the costs of unwinding any relating hedging.
The
quoted price of any of our affiliates for the notes could be higher or lower than the price
that you paid for them.
We
cannot assure you that a trading market for the notes will ever develop or be maintained. We will not list the notes on any
securities exchange. We cannot predict how the notes will trade in any secondary market, or whether that market will be liquid
or illiquid.
The
development of a trading market for the notes will depend on our financial performance and other factors. The number of potential
buyers of the notes in any secondary market may be limited. We anticipate that MLPF&S will act as a market-maker for the notes,
but neither MLPF&S nor any of our other affiliates is required to do so. MLPF&S may discontinue its market-making activities
as to the notes at any time. To the extent that
MLPF&S
engages in any market-making activities, it may bid for or offer the notes. Any price at which MLPF&S may bid for, offer,
purchase, or sell any notes may differ from the values determined by pricing models that it may use, whether as a result of dealer
discounts, mark-ups, or other transaction costs. These bids, offers, or completed transactions may affect the prices, if any,
at which the notes might otherwise trade in the market.
In
addition, if at any time MLPF&S were to cease acting as a market-maker for the notes, it is likely that there would be significantly
less liquidity in the secondary market. In such a case, the price at which the notes could be sold likely would be lower than
if an active market existed.
Many
economic and other factors will impact the market value of the notes. The market for, and the market value of, the notes may
be affected by a number of factors that may either offset or magnify each other, including:
| • | the
time remaining to maturity of the notes; |
| • | the
aggregate amount outstanding of the notes; |
| • | the
level, direction, and volatility of market interest rates generally; |
| • | general
economic conditions of the capital markets in the United States; |
| • | geopolitical
conditions and other financial, political, regulatory, and judicial events that affect
the capital markets generally; |
| • | our
financial condition and creditworthiness; and |
| • | any
market-making activities with respect to the notes. |
Please
see the section in the prospectus, “Risk Factors—Reform of LIBOR and EURIBOR and Proposed Regulation of These and
Other ‘Benchmarks,’” which describes some of the risks relating to LIBOR.
Our
trading and hedging activities may create conflicts of interest with you. We or one or more of our affiliates, including MLPF&S,
may engage in trading activities related to the notes that are not for your account or on your behalf. We expect to enter into
arrangements to hedge the market risks associated with our obligation to pay the amounts due under the notes. We may seek competitive
terms in entering into the hedging arrangements for the notes, but are not required to do so, and we may enter into such hedging
arrangements with one of our subsidiaries or affiliates. This hedging activity is expected to result in a profit to those engaging
in the hedging activity, which could be more or less than initially expected, but which could also result in a loss for the hedging
counterparty. These trading and hedging activities may present a conflict of interest between your interest in the notes and the
interests we and our affiliates may have in our proprietary accounts, in facilitating transactions for our other customers, and
in accounts under our management.
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 is based upon the advice of Morrison & Foerster LLP, our tax counsel. The following discussion 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 Internal Revenue Service (“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.
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. This summary assumes that the issue price of the notes, as determined for
U.S. federal income tax purposes, equals the principal amount thereof.
U.S.
Holders
The
notes will be treated as variable rate debt instruments providing for stated interest at a single fixed rate and one or more qualified
floating rates. Under Treasury regulations applicable to such instruments, you generally will be required to account for interest
on the notes as described below. You will be required to construct an “equivalent fixed rate debt instrument” for
the notes and apply the general rules applicable to debt instruments described under the section of the prospectus entitled “U.S.
Federal Income Tax Considerations – Taxation of Debt Securities.” The applicable rules require (i) replacing the initial
fixed rate by a “qualified floating rate” that would preserve the fair market value of the notes, and (ii) determining
the fixed rate substitute for each floating rate. The fixed rate substitute for each qualified floating rate is the value of the
rate on the issue date of the notes. The equivalent fixed rate debt instrument is the hypothetical instrument that has terms that
are identical to those of the notes, except that the equivalent fixed rate debt instrument provides for the fixed rate substitutes
in lieu of the rates on the notes. Under these rules, the equivalent fixed rate debt instrument will have stated interest equal
to the fixed rate substitutes. The amount of OID is determined for the equivalent fixed rate debt instrument under the rules applicable
to fixed rate debt instruments and is taken into account as if the holder held the equivalent fixed rate debt instrument. Please
see the discussion in the prospectus under the section entitled “U.S. Federal Income Tax Considerations – Taxation
of Debt Securities – Consequences to U.S. Holders – Original Issue Discount” for a discussion of these rules.
Under these rules, based on the rates in effect as of the date of this pricing supplement, we expect that the notes will be issued
with no more than de minimis OID. You will be required to make appropriate adjustments for interest actually paid on the notes.
Qualified stated interest and OID, if any, allocable to an accrual period must be increased (or decreased) if the interest actually
accrued or paid during an accrual period exceeds (or is less than) the interest assumed to be accrued or paid during the accrual
period under the equivalent fixed rate debt instrument. This increase or decrease is an adjustment to qualified stated interest
for the accrual period if the equivalent fixed rate debt instrument provides for qualified stated interest and the increase or
decrease is reflected in the amount actually paid during the accrual period. Otherwise, this increase or decrease is an adjustment
to OID, if any, for the accrual period.
Upon
the sale, exchange, retirement, or other disposition of a note, a U.S. Holder will recognize gain or loss equal to the
difference between the amount realized upon the sale, exchange, retirement, or other disposition (less an amount equal to any
accrued interest not previously included in income if the note is disposed of between interest payment dates, which will be
included in income as interest income for U.S. federal income tax purposes) and the U.S. Holder’s adjusted tax basis in
the note. A U.S. Holder’s adjusted tax basis in a note generally will be the cost of the note to such U.S. Holder,
increased by any OID previously included in income with respect to the note, and decreased by the amount of any payment
(other than a payment of qualified stated interest) received in respect of the note. Any gain or loss realized on the sale,
exchange, retirement, or other disposition of a note generally will be capital gain or loss and will be long-term capital
gain or loss if the note has been held for more than one year. The ability of U.S. Holders to deduct capital losses is
subject to limitations under the Code.
Non-U.S.
Holders
Please
see the discussion under “U.S. Federal Income Tax Considerations—Taxation of Debt Securities—Consequences to
Non-U.S. Holders” in the accompanying prospectus for the material U.S. federal income tax consequences that will apply to
Non-U.S. Holders of the notes.
Backup
Withholding and Information Reporting
Please
see the discussion under “U.S. Federal Income Tax Considerations—Taxation of Debt Securities—Backup Withholding
and Information Reporting” in the accompanying prospectus for a description of the applicability of the backup withholding
and information reporting rules to payments made on the notes.
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.
VALIDITY
OF THE NOTES
In
the opinion of McGuireWoods LLP, as counsel to BAC, when the trustee has made an appropriate entry on Schedule 1 to the Master
Registered Global Senior Note, dated May 1, 2015 (the “Master Note”) identifying the notes offered hereby as supplemental
obligations thereunder in accordance with the instructions of BAC and the notes have been delivered against payment therefor as
contemplated in this pricing supplement and the related prospectus supplement and prospectus, all in accordance with the provisions
of the indenture governing the notes, such notes will be legal, valid and binding obligations of BAC, subject to the effect of
applicable bankruptcy, insolvency (including laws relating to preferences, fraudulent transfers and equitable subordination),
reorganization, moratorium and other similar laws affecting creditors’ rights generally, and to general principles of equity.
This opinion is given as of the date hereof and is limited to the laws of the State of New York and the Delaware General Corporation
Law (including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions
interpreting the foregoing). In addition, this opinion is subject to the assumption that the trustee’s certificate of authentication
of the Master Note has been manually signed by one of the trustee’s authorized officers and to customary assumptions about
the trustee’s authorization, execution and delivery of the indenture governing the notes, the validity, binding nature and
enforceability of the indenture governing the notes with respect to the trustee, the legal capacity of natural persons, the genuineness
of signatures, the authenticity of all documents submitted to McGuireWoods LLP as originals, the conformity to original documents
of all documents submitted to McGuireWoods LLP as copies thereof, the authenticity of the originals of such copies and certain
factual matters, all as stated in the letter of McGuireWoods LLP dated February 27, 2015, which has been filed as an exhibit to
BAC’s Registration Statement relating to the notes filed with the SEC on February 27, 2015.
SUPPLEMENTAL
PLAN OF DISTRIBUTION—conflicts of interest
Our
broker-dealer subsidiary, MLPF&S, will act as our selling agent in connection with the offering of the notes. The selling
agent is a party to the Distribution Agreement described in the “Supplemental Plan of Distribution (Conflicts of Interest)”
beginning on page S-15 of the accompanying prospectus supplement.
The
selling agent will receive the compensation set forth on the cover page of this pricing supplement as to the notes sold through
its efforts.
The
selling agent is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Accordingly, the offering
of the notes will conform to the requirements of FINRA Rule 5121.
The
selling agent is not acting as your fiduciary or advisor solely as a result of the offering of the notes, and you should not rely
upon any communication from the selling agent in connection with the notes as investment advice or a recommendation to purchase
the notes. You should make your own investment decision regarding the notes after consulting with your legal, tax, and other advisors.
Under
the terms of our distribution agreement with MLPF&S, MLPF&S will purchase the notes from us on the issue date as principal
at the purchase price indicated on the cover of this pricing supplement, less the indicated underwriting discount.
MLPF&S
may 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. MLPF&S
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.
MLPF&S
and any of our other broker-dealer affiliates may use this pricing supplement, and the accompanying 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. Our affiliates may act as principal
or agent in these transactions, and any such sales will be made at prices related to prevailing market prices at the time of the
sale.
ERISA
CONSIDERATIONS
Each
fiduciary of a pension, profit-sharing, or other employee benefit plan subject to the Employee Retirement Income Security Act
of 1974 (“ERISA”) (a “Plan”), should consider the fiduciary standards of ERISA in the context of the Plan’s
particular circumstances before authorizing an investment in the notes. Accordingly, among other factors, the fiduciary should
consider whether the investment would satisfy the prudence and diversification requirements of ERISA and would be consistent with
the documents and instruments governing the Plan.
In
addition, we and certain of our subsidiaries and affiliates, may be each considered a party in interest within the meaning of
ERISA, or a disqualified person (within the meaning of the Code), with respect to many Plans, as well as many individual retirement
accounts and Keogh plans (also “Plans”). Prohibited transactions within the meaning of ERISA or the Code would likely
arise, for example, if the notes are acquired by or with the assets of a Plan with respect to which we or any of our affiliates
is a party in interest, unless the notes are acquired under an exemption from the prohibited transaction rules. A violation of
these prohibited transaction rules could result in an excise tax or other liabilities under ERISA and/or Section 4975 of the Code
for such persons, unless exemptive relief is available under an applicable statutory or administrative exemption.
Under
ERISA and various prohibited transaction class exemptions (“PTCEs”) issued by the U.S. Department of Labor, exemptive
relief may be available for direct or indirect prohibited transactions resulting from the purchase, holding, or disposition of
the notes. Those exemptions are PTCE 96-23 (for certain transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for certain transactions involving bank collective investment
funds), PTCE 90-1 (for certain transactions involving insurance company separate accounts), PTCE 84-14 (for certain transactions
determined by independent qualified asset managers), and the exemption under Section 408(b)(17) of ERISA and Section 4975(d)(20)
of the Code for certain arm’s-length transactions with a person that is a party in interest solely by reason of providing
services to Plans or being an affiliate of such a service provider (the “Service Provider Exemption”).
Because
we may be considered a party in interest with respect to many Plans, the notes may not be purchased, held, or disposed of by any
Plan, any entity whose underlying assets include plan assets by reason of any Plan’s investment in the entity (a “Plan
Asset Entity”) or any person investing plan assets of any Plan, unless such purchase, holding, or disposition is eligible
for exemptive relief, including relief available under PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or the Service Provider Exemption,
or such purchase, holding, or disposition is otherwise not prohibited. Any purchaser, including any fiduciary purchasing on behalf
of a Plan, transferee or holder of the notes will be deemed to have represented, in its corporate and its fiduciary capacity,
by its purchase and holding of the notes that either (a) it is not a Plan or a Plan Asset Entity and is not purchasing such notes
on behalf of or with plan assets of any Plan or any plan subject to similar laws or (b) its purchase, holding, and disposition
are eligible for exemptive relief or such purchase, holding, and disposition are not prohibited by ERISA or Section 4975 of the
Code or similar laws.
Further,
any person acquiring or holding the notes on behalf of any plan or with any plan assets shall be deemed to represent on behalf
of itself and such plan that (x) the plan is paying no more than, and is receiving no less than, adequate consideration within
the meaning of Section 408(b)(17) of ERISA in connection with the transaction or any redemption of the notes, (y) none of us,
MLPF&S, or any other selling agent directly or indirectly exercises any discretionary authority or control or renders investment
advice or otherwise acts in a fiduciary capacity with respect to the assets of the plan within the meaning of ERISA and (z) in
making the foregoing representations and warranties, such person has applied sound business principles in determining whether
fair market value will be paid, and has made such determination acting in good faith.
The
fiduciary investment considerations summarized above generally apply to employee benefit plans maintained by private-sector
employers and to individual retirement accounts and other arrangements subject to Section 4975 of the Code, but generally do
not apply to governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of
ERISA), and foreign plans (as described in Section 4(b)(4) of ERISA). However, these other plans may be subject to similar
provisions under applicable federal, state, local, foreign, or other regulations, rules, or laws (“similar
laws”). The fiduciaries of plans subject to similar laws should also consider the foregoing issues in general terms as
well as any further issues arising under the applicable similar laws.
In
addition, any purchaser, that is a Plan or a Plan Asset Entity or that is acquiring the notes on behalf of a Plan or a Plan Asset
Entity, including any fiduciary purchasing on behalf of a Plan or Plan Asset entity, will be deemed to have represented, in its
corporate and its fiduciary capacity, by its purchase and holding of the notes that (a) none of us, MLPF&S, or any of our
other affiliates is a “fiduciary” (under Section 3(21) of ERISA, or under any final or proposed regulations thereunder,
or with respect to a governmental, church, or foreign plan under any similar laws) with respect to the acquisition, holding or
disposition of the notes, or as a result of any exercise by us or our affiliates of any rights in connection with the notes, (b)
no advice provided by us or any of our affiliates has formed a primary basis for any investment decision by or on behalf of such
purchaser in connection with the notes and the transactions contemplated with respect to the notes, and (c) such purchaser recognizes
and agrees that any communication from us or any of our affiliates to the purchaser with respect to the notes is not intended
by us or any of our affiliates to be impartial investment advice and is rendered in its capacity as a seller of such notes and
not a fiduciary to such purchaser. Purchasers of the notes have exclusive responsibility for ensuring that their purchase, holding,
and disposition of the notes do not violate the prohibited transaction rules of ERISA or the Code or any similar regulations applicable
to governmental or church plans, as described above.
This
discussion is a general summary of some of the rules which apply to benefit plans and their related investment vehicles. This
summary does not include all of the investment considerations relevant to Plans and other benefit plan investors such as governmental,
church, and foreign plans and should not be construed as legal advice or a legal opinion. Due to the complexity of these rules
and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important
that fiduciaries or other persons considering purchasing the notes on behalf of or with “plan assets” of any Plan
or other benefit plan investor consult with their legal counsel prior to directing any such purchase.
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