Filed
Pursuant to Rule 424(b)(2)
Registration
Statement No. 333-213265
The information in
this preliminary pricing supplement is not complete and may be changed. This preliminary pricing supplement is not an offer to
sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion. Dated June 6, 2019.
|
BofA
Finance LLC
$
Autocallable
Buffered S&P 500
®
Index-Linked Notes due
Fully and Unconditionally Guaranteed by
Bank of America Corporation
|
The
notes do not bear interest.
The notes will mature on the stated maturity date (expected to be the second scheduled business
day after the determination date) unless they are automatically called on either call observation date (expected to be approximately
12 months and 24 months after the trade date, respectively). The notes will be automatically called on a call observation date
if the closing level of the S&P 500
®
Index (which we refer to as the “underlier”) on that date is
equal to or greater than the initial underlier level (set on the trade date and may be higher or lower than the actual closing
level of the underlier on the trade date), resulting in a payment on the corresponding call payment date equal to the face amount
of your notes times (i) between 107.48% and 108.80% with respect to the first call observation date and (ii) between 114.96% and
117.60% with respect to the second call observation date.
If the notes are not automatically called, the amount that you
will be paid on your notes on the stated maturity date will be based on the performance of the underlier as measured from the trade
date to and including the determination date (expected to be approximately 36 months after the trade date).
If the final underlier level on the determination date is equal
to or greater than the initial underlier level, you will receive the maximum settlement amount (expected to be between $1,224.40
and $1,264.00 for each $1,000 face amount of your notes). If the final underlier level declines by up to 10.00% from the initial
underlier level, you will receive the face amount of your notes.
If the final underlier level declines by more than 10.00% from
the initial underlier level, you will be exposed on a leveraged basis to any decrease in the final underlier level beyond 10.00%.
In this case, the return on your notes will be negative. You may lose some or all of your investment in the notes.
If the notes are not automatically called on either call observation
date, to determine your payment at maturity, we will calculate the underlier return, which is the percentage increase or decrease
in the final underlier level from the initial underlier level. On the stated maturity date, for each $1,000 face amount of your
notes, you will receive an amount in cash equal to:
|
●
|
if the underlier return is
zero or positive
(the final underlier level is equal to or greater
than the initial underlier level), the maximum settlement amount of between $1,224.40 and $1,264.00;
|
|
●
|
if the
underlier
return is
negative
but
not below
-10.00%
(the final
underlier
level is
less than
the initial
underlier
level, but not by
more than 10.00%), $1,000; or
|
|
●
|
if the u
nderlier
return is
negative
and is
below
-10.00%
(the final
underlier
level is
less than
the initial
underlier
level by more than 10.00%),
the
sum
of (i) $1,000
plus
(ii) the
product
of (a) approximately 1.1111
times
(b) the
sum of
the
underlier
return
plus
10.00%
times
(c) $1,000.
|
The notes will not be listed
on any securities exchange. Investment in the notes involves certain risks, including the credit risk of BofA Finance LLC (“BofA
Finance”), as issuer of the notes, and the credit risk of Bank of America Corporation (“BAC” or the “Guarantor”),
as guarantor of the notes. Potential purchasers of the notes should consider the information in “Risk Factors” beginning
on page PS-11 of this pricing supplement, page PS-5 of the accompanying product supplement, page S-4 of the accompanying prospectus
supplement, and page 7 of the accompanying prospectus.
As of the date of this pricing supplement, the initial
estimated value of the notes at the time of pricing is expected to be between $950 and $965 per $1,000 in face amount. See “Summary
Information” beginning on page PS-3 of this pricing supplement, “Risk Factors” beginning on page PS-11 of this
pricing supplement and “Structuring the Notes” on page PS-21 of this pricing supplement for additional information.
The actual value of your notes at any time will reflect many factors and cannot be predicted with accuracy.
Original issue date:
|
, 2019
|
Price to public
(2)
:
|
100.00% of the face amount
|
Underwriting discount
(1)(2)
:
|
[2.00]% of the face amount
|
Net proceeds to the issuer:
|
[98.00]% of the face amount
|
(1)
BofA Securities, Inc. (“BofAS”), an affiliate
of BofA Finance, will participate as selling agent in the distribution of the notes. See “Supplemental Plan of Distribution—Conflicts
of Interest” on page PS-20 of this pricing supplement.
(2)
The price to public for certain investors will be between
98.00% and 100.00% of the face amount, reflecting a forgone underwriting discount with respect to such notes; see “Supplemental
Plan of Distribution—Conflicts of Interest” on page PS-20 of this pricing supplement.
Neither the Securities and Exchange
Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy
of this pricing supplement or the accompanying prospectus, prospectus supplement or product supplement. Any representation to the
contrary is a criminal offense. The notes and the related guarantee of the notes by the Guarantor are unsecured and are not savings
accounts, deposits, or other obligations of a bank. The notes are not guaranteed by Bank of America, N.A. or any other bank, are
not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
BofA
Merrill Lynch
Selling Agent
The price
to public, underwriting discount and net proceeds listed above relate to the notes we sell initially. We may decide to sell additional
notes after the date of this pricing supplement, at prices to public and with underwriting discounts and net proceeds that differ
from the amounts set forth above. The return (whether positive or negative) on your investment in notes will depend in part on
the price to public you pay for such notes.
BofAS and any of our other broker-dealer affiliates may use this
pricing supplement in the initial sale of the notes. In addition, BofAS and any of our other broker-dealer affiliates may use this
pricing supplement in a market-making transaction in a note after its initial sale.
Unless BofAS or any of our other broker-dealer
affiliates informs the purchaser otherwise in the confirmation of sale, this pricing supplement is being used in a market-making
transaction.
As a result of the completion of the reorganization of Bank of
America’s U.S. broker-dealer business, references to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”)
in the accompanying product supplement, prospectus supplement and prospectus, as such references relate to MLPF&S’s institutional
services, should now be read as references to BofAS.
About Your Prospectus
The notes are unsecured senior notes issued by BofA Finance,
a direct, wholly-owned subsidiary of BAC. Payments on the notes are fully and unconditionally guaranteed by the Guarantor. This
prospectus includes this pricing supplement and the accompanying documents listed below. This pricing supplement constitutes a
supplement to the documents listed below and should be read in conjunction with those documents:
Product supplement EQUITY-1 dated January 24, 2017:
https://www.sec.gov/Archives/edgar/data/70858/000119312517016445/d331325d424b5.htm
Series A MTN prospectus supplement dated November 4, 2016 and
prospectus dated November 4, 2016:
https://www.sec.gov/Archives/edgar/data/70858/000119312516760144/d266649d424b3.htm
The information in this pricing supplement supersedes any conflicting
information in the documents listed above. In addition, some of the terms or features described in the listed documents may not
apply to your notes.
|
SUMMARY INFORMATION
We refer to the notes we are offering by this pricing supplement
as the “offered notes” or the “notes”. Each of the offered notes has the terms described below. Capitalized
terms used but not defined in this pricing supplement have the meanings set forth in the accompanying product supplement, prospectus
supplement and prospectus. Unless otherwise indicated or unless the context requires otherwise, all references in this pricing
supplement to “we,” “us,” “our,” or similar references are to BofA Finance, and not to BAC
(or any other affiliate of BofA Finance).
This section is meant as a summary and should be read in conjunction
with the accompanying product supplement, prospectus supplement and prospectus. This pricing supplement supersedes any conflicting
provisions of the documents listed above.
|
Key
Terms
Issuer:
|
BofA Finance LLC (“BofA Finance”)
|
Guarantor:
|
Bank of America Corporation (“BAC”)
|
Underlier:
|
The S&P 500
®
Index (Bloomberg symbol, “SPX Index”), as published by S&P Dow Jones Indices LLC (“SPDJI” or the “Underlier Sponsor”)
|
Specified Currency:
|
U.S. dollars (“$”)
|
Face Amount:
|
Each note will have a face amount of $1,000; $ in the aggregate for all the offered notes; the aggregate face amount of the offered notes may be increased if we, at our sole option, decide to sell an additional amount of the offered notes on a date subsequent to the date of this pricing supplement.
|
Purchase at Amount Other Than the Face Amount:
|
The amount we will pay you at the stated maturity date for your notes will not be adjusted based on the price to public you pay for your notes, so if you acquire notes at a premium (or discount) to face amount and hold them to the stated maturity date, it could affect your investment in a number of ways. The return on your investment in such notes will be lower (or higher) than it would have been had you purchased the notes at face amount. Also, the stated Buffer Level would not offer the same measure of protection to your investment as would be the case if you had purchased the notes at face amount. See “Risk Factors
—
If You Purchase Your Notes at a Premium to Face Amount, the Return on Your Investment Will Be Lower Than the Return on Notes Purchased at Face Amount and the Impact of Certain Key Terms of the Notes Will Be Negatively Affected” on page PS-14 of this pricing supplement.
|
Cash Settlement Amount (on Either Call Payment Date)
:
|
If your notes are automatically called on a Call Observation Date because the closing level of the Underlier on such day is equal to or greater than the Call Level, for each $1,000 face amount of your notes, we will pay you an amount in cash equal to the sum of (i) $1,000 plus (ii) the product of $1,000 times the Call Premium Amount applicable to the corresponding Call Observation Date.
|
Cash Settlement Amount (on the Stated Maturity Date):
|
If your notes are
not
automatically called, for each
$1,000 face amount of your notes, we will pay you on the stated maturity date an amount in cash equal to:
●
if the Final Underlier Level is
equal to
or
greater than
the Initial Underlier Level, the
sum
of (1)
$1,000 plus (2) the product of $1,000 times the Maturity Date Premium Amount;
●
if the Final Underlier Level is
less than
the Initial Underlier Level but
equal to
or
greater than
the Buffer Level, $1,000; or
●
if the Final Underlier Level is
less than
the Buffer Level, the
sum
of (1) $1,000
plus
(2) the product
of (i) $1,000
times
(ii) the Buffer Rate
times
(iii) the
sum
of the Underlier Return
plus
the Buffer
Amount. In this case, the Cash Settlement Amount will be less than the face amount of the notes, and you will lose some or all
of the face amount.
|
Initial Underlier Level:
|
The closing level or an intraday level of the Underlier on the trade date, as determined by the calculation agent in its sole discretion and which may be higher or lower than the actual closing level of the Underlier on the trade date.
|
Final Underlier Level:
|
The closing level of the Underlier on the Determination Date, except in the limited circumstances described under “Description of the Notes —Market Disruption Events” below and “Description of the Notes—Certain Terms of the Notes—Events Relating to Calculation Days,” “Description of the Notes —Adjustments to an Index” and “Description of the Notes —Discontinuance of an Index” in the accompanying product supplement.
|
Underlier Return:
|
The
quotient
of (1) the Final Underlier Level
minus
the Initial Underlier Level
divided
by (2) the Initial Underlier Level, expressed as a percentage
|
Buffer Level:
|
90.00% of the Initial Underlier Level
|
Buffer Amount:
|
10.00%
|
Buffer Rate:
|
The
quotient
of the Initial Underlier Level
divided
by the Buffer Level, which equals approximately 111.11%
|
Call Observation Dates:
|
Expected to be approximately 12 months and 24 months after the trade date (to be set on the trade date), respectively, subject to adjustment as described under “Description of the Notes — Certain Terms of the Notes—Events Relating to Observation Dates” on page PS-19 of the accompanying product supplement
|
Call Payment Dates:
|
Expected to be the second scheduled business day after the corresponding Call Observation Date (to be set on the trade date), subject to postponement as described under “Description of the Notes — Certain Terms of the Notes—Events Relating to Observation Dates” on page PS-19 of the accompanying product supplement
|
Call Premium Amount:
|
Expected to be between 7.48% and 8.80% with respect to the first scheduled Call Observation Date and expected to be between 14.96% and 17.60% with respect to the second scheduled Call Observation Date. Each Call Premium Amount will be set on the trade date.
|
Call Level:
|
100.00% of the Initial Underlier Level
|
Maturity Date Premium Amount:
|
Expected to be between 22.44% and 26.40% (to be set on the trade date)
|
Trade Date:
|
|
Original Issue Date (Settlement Date):
|
Expected to be the fifth scheduled business day following the trade date
(to be set on the trade date)
|
Determination Date:
|
A specified date that is expected to be approximately 36 months following the trade date (to be set on the trade date), subject to postponement of up to five scheduled trading days, as set forth in the section “Description of the Notes—Certain Terms of the Notes—Events Relating to Calculation Days” of the accompanying product supplement
|
Stated Maturity Date:
|
A specified date that is expected to be the second scheduled business day following the Determination Date (to be set on the trade date), subject to postponement as set forth below and in the section “Description of the Notes–Certain Terms of the Notes—Events Relating to Calculation Days” of the accompanying product supplement
|
Business Day:
|
As described under “Description of the Notes—Certain Terms of the Notes—Business Days” in the accompanying product supplement
|
Trading Day:
|
As described under “Description of the Notes—Certain Terms of the Notes—Trading Days” in the accompanying product supplement
|
Closing Level of the Underlier:
|
The official closing level of the Underlier or any successor index published by the Underlier Sponsor on such trading day for that Underlier
|
Market Disruption Events:
|
The following replaces in its entirety the
section entitled “Description of the Notes—Market Disruption Events—Indices” in the accompanying product
supplement:
With respect to any given trading day, any
of the following will be a Market Disruption Event with respect to the Underlier:
·
a suspension, absence or material limitation of trading in Underlier Stocks (as defined below) constituting 20% or more,
by weight, of the Underlier on their respective primary markets, in each case for more than two consecutive hours of trading or
during the one-half hour before the close of trading in that market, as determined by the calculation agent in its sole discretion,
·
a suspension, absence or material limitation of trading in option or futures contracts, if available, relating to the Underlier
or to Underlier Stocks constituting 20% or more, by weight, of the Underlier in their respective primary markets for those contracts,
in each case for more than two consecutive hours of trading or during the one-half hour before the close of trading in that market,
as determined by the calculation agent in its sole discretion, or
·
Underlier Stocks constituting 20% or more, by weight, of the Underlier, or option or futures contracts, if available, relating
to the Underlier or to Underlier Stocks
|
|
|
|
|
constituting 20% or more, by weight,
of the Underlier do not trade on what were the respective primary markets for those Underlier Stocks or contracts, as determined
by the calculation agent in its sole discretion,
and, in the case of any of these events,
the calculation agent determines in its sole discretion that the event could materially interfere with the ability of us or any
of our affiliates or a similarly situated party to unwind all or a material portion of a hedge that could be effected with respect
to the notes. For more information about hedging by us and/or any of our affiliates, see “Supplemental Use of Proceeds”
on page PS-16 of product supplement EQUITY-1.
The following events will not be Market Disruption
Events with respect to the Underlier:
·
a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in
the regular business hours of the relevant market, and
·
a decision to permanently discontinue trading in the option or futures contracts relating to the Underlier or to any Underlier
Stock.
For this purpose, an “absence of trading”
in the primary securities market on which an Underlier Stock, or on which option or futures contracts, if available, relating to
the Underlier or to any Underlier Stock are traded will not include any time when that market is itself closed for trading under
ordinary circumstances. In contrast, a suspension or limitation of trading in an Underlier Stock or in option or futures contracts,
if available, relating to the Underlier or to any Underlier Stock in the primary market for that stock or those contracts, by reason
of:
·
a price change exceeding limits set by that market,
·
an imbalance of orders relating to that Underlier Stock or those contracts, or
·
a disparity in bid and ask quotes relating to that Underlier Stock or those contracts,
will constitute a suspension or material
limitation of trading in the Underlier or those contracts in that market.
If the Determination Date is postponed due
to a Market Disruption Event, the payment due at maturity may be postponed by the same number of business days, as set forth in
the section “Description of the Notes—Certain Terms of the Notes—Events Relating to Calculation Days” of
the accompanying product supplement.
|
No Listing:
|
The notes will not be listed on any securities exchange or interdealer quotation system
|
No Interest:
|
The notes do not bear interest
|
No Optional Redemption:
|
The notes will not be subject to any optional redemption right
|
Events of Default:
|
If an Event of Default, as defined in the Senior Indenture and in the section entitled “Events of Default and Rights of Acceleration” beginning on page 35 of the accompanying prospectus, with respect to the notes occurs and is continuing, the amount payable to a holder of the notes upon any acceleration permitted under the Senior Indenture will be equal to the amount described under the caption “—Cash Settlement Amount (on the Stated Maturity Date),” calculated as though the date of acceleration were the maturity date of the notes and as though the determination date were the second trading day prior to the date of acceleration. The calculation agent shall pro-rate the Maturity Date Premium Amount, if payable, according to the period of time elapsed between the settlement date of the notes and the date of acceleration. In case of a default in the payment of the notes, the notes will not bear a default interest rate.
|
Calculation Agent:
|
BofAS, an affiliate of BofA Finance.
|
Selling Agent:
|
BofAS, an affiliate of BofA Finance. See “Supplemental Plan of Distribution —Conflicts of Interest” on page PS-20 of this pricing supplement.
|
CUSIP/ISIN:
|
09709TRR4 / US09709TRR40
|
Initial Estimated Value:
|
The range of initial estimated values of
the notes as of the date of this preliminary 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 trade date.
Payments on the notes, including the applicable
Cash Settlement Amount, depend on the credit risk of BofA Finance and BAC and on the performance of the Underlier. 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 it enters into. BAC’s internal funding
rate is typically lower than
|
|
the rate it would pay when it issues conventional
fixed or floating rate debt securities. This difference in funding rate, as well as the underwriting discount and the hedging related
charges described below, 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 trade date.
For more information about the initial estimated
value and the structuring of the notes, see “Risk Factors” beginning on page PS-11 and “Structuring the Notes”
on page PS-21.
|
The trade date, issue date and other dates set
forth above are subject to change, and will be set forth in the final pricing supplement relating to the notes.
Supplemental Terms of the Notes
For purposes of the notes offered by this pricing supplement,
all references to each of the following terms used in the accompanying product supplement will be deemed to refer to the corresponding
term used in this pricing supplement, as set forth in the table below:
Product Supplement Term
|
Pricing Supplement Term
|
pricing date
|
trade date
|
maturity date
|
stated maturity date
|
calculation day
|
Determination Date
|
observation date
|
Call Observation Date
|
principal amount
|
face amount
|
Market Measure
|
Underlier
|
Index
|
Underlier
|
HYPOTHETICAL
EXAMPLES
The following examples are provided for purposes of illustration
only. They should not be taken as an indication or prediction of future investment results and merely are intended to illustrate
the impact that the various hypothetical levels of the Underlier on a Call Observation Date or on the Determination Date, as the
case may be, could have on the Cash Settlement Amount on a Call Payment Date or at maturity assuming all other variables remain
constant.
The examples below are based on a range of levels of the Underlier
that are entirely hypothetical; the level of the Underlier on any day throughout the life of the notes, including its level on
the Call Observation Dates or on the Determination Date, cannot be predicted. The Underlier has been highly volatile in the past
— meaning that the level of the Underlier has changed considerably in relatively short periods — and its performance
cannot be predicted for any future period.
The information in the following examples reflects hypothetical
rates of return on the offered notes assuming that they are purchased on the original issue date at the face amount and held to
the applicable Call Payment Date or the stated maturity date, as the case may be. If you sell your notes in a secondary market
prior to the stated maturity date, your return will depend upon the market value of your notes at the time of sale, which may be
affected by a number of factors that are not reflected in the table below, such as interest rates, the volatility of the Underlier,
the creditworthiness of BofA Finance, as issuer, and the creditworthiness of BAC, as guarantor. In addition, the initial estimated
value of your notes at the time the terms of your notes are set on the trade date (as determined by reference to pricing models
used by us and our affiliates) is less than the original price to public of your notes. For more information on the estimated value
of your notes, see “Risk Factors — The Public Offering Price You Pay for the Notes Will Exceed Their Initial Estimated
Value” on page PS-12 of this pricing supplement. The information in the table also reflects the key terms and assumptions
in the box below.
Key Terms and Assumptions
|
Face Amount
|
$1,000
|
Buffer Level
|
90.00% of the Initial Underlier Level
|
Buffer Rate
|
Approximately 111.11%
|
Buffer Amount
|
10.00%
|
Call Level
|
100.00% of the Initial Underlier Level
|
Call Premium Amount
|
7.48%
for the first Call Observation Date
14.96%
for the second Call Observation Date
|
Maturity Date Premium Amount
|
22.44%
|
Neither a Market Disruption Event nor a non-trading day occurs on an originally scheduled Call Observation Date or the originally scheduled Determination Date, and the Underlier is not discontinued on or prior to those dates
|
No change in or affecting any of the stocks included in the Underlier (the “Underlier Stocks”) or the method by which the Underlier Sponsor calculates the Underlier
|
Notes purchased on original issue date at the face amount and held to the stated maturity date or a Call Payment Date
|
Moreover, we have not yet set the Initial Underlier Level
that will serve as the baseline for determining the Underlier Return and the amount that we will pay on your notes, if any, on
a Call Payment Date or at maturity. We will not do so until the trade date. As a result, the actual Initial Underlier Level may
differ substantially from the level of the Underlier prior to the trade date and may be higher or lower than the actual closing
level of the Underlier on that date.
For these reasons, the actual performance of the Underlier
over the life of your notes, as well as the amount payable, if any, on a Call Payment Date or at maturity, may bear little relation
to the hypothetical examples shown below or to the historical levels of the Underlier shown elsewhere in this pricing supplement.
For information about the historical levels of the Underlier during recent periods, see “The Underlier — Historical
Closing Levels of the Underlier” below. Before investing in the offered notes, you should consult publicly available information
to determine the levels of the Underlier between the date of this pricing supplement and the date of your purchase of the offered
notes.
Also, the hypothetical examples shown below do not take into
account the effects of applicable taxes. Because of the U.S. tax treatment applicable to your notes, tax liabilities could affect
the after-tax rate of return on your notes to a comparatively greater extent than the after-tax return on the Underlier Stocks.
If your notes are automatically called on the first Call
Observation Date
(i.e., on the first Call Observation Date the closing level of the Underlier is equal to or greater than the
Call Level), the Cash Settlement Amount that we would deliver for each $1,000 face amount of your notes on the applicable Call
Payment Date would be the sum of $1,000 plus the product of the applicable Call Premium Amount times $1,000. If, for example, the
closing level of the Underlier on the first Call Observation Date is 110.000% of the Initial Underlier Level, the notes would be
automatically called and the Cash Settlement Amount that we would deliver on the notes on the corresponding Call Payment Date would
be 107.48% of the face amount of your notes, or $1,074.80 for each $1,000 of the face amount of your notes.
If, for example, the notes are
not
automatically
called on the first Call Observation Date and are automatically called on the second Call Observation Date
(i.e., on the first
Call Observation Date, the closing level of the Underlier is less than the Call Level and on the second Call Observation Date,
the closing level of the Underlier is equal to or greater than the Call Level), the Cash Settlement Amount that we would deliver
for each $1,000 face amount of the notes on the applicable Call Payment Date would be the sum of $1,000 plus the product of the
applicable Call Premium Amount times $1,000. If, for example, the closing level of the Underlier on the second Call Observation
Date is 120.000% of the Initial Underlier Level, the notes would be automatically called and the Cash Settlement Amount that we
would deliver on the notes on the corresponding Call Payment Date would be 114.96% of the face amount of the notes, or $1,149.60
for each $1,000 of the face amount of your notes.
If the notes are not automatically called on either Call
Observation Date
(i.e., on each of the Call Observation Dates, the closing level of the Underlier is less than the Call Level),
the Cash Settlement Amount we would deliver for each $1,000 face amount of the notes on the stated maturity date will depend on
the performance of the Underlier on the determination date, as shown in the table below. The table below assumes that
the notes
have
not
been automatically called on either Call Observation Date
and reflects hypothetical Cash Settlement Amounts
that you could receive on the stated maturity date. The levels in the left column of the table below represent hypothetical Final
Underlier Levels and are expressed as percentages of the Initial Underlier Level. The amounts in the right column represent the
hypothetical Cash Settlement Amounts, based on the corresponding hypothetical Final Underlier Level, and are expressed as percentages
of the face amount of a note (rounded to the nearest one-thousandth of a percent). Thus, a hypothetical Cash Settlement Amount
of 100.000% means that the value of the cash payment that we would deliver for each $1,000 of the outstanding face amount of the
offered notes on the stated maturity date would equal 100.000% of the face amount of a note, based on the corresponding hypothetical
Final Underlier Level and the assumptions noted above.
The Notes Have
Not
Been Automatically
Called
|
Hypothetical Final Underlier Level on the
Determination Date
(as Percentage of Initial Underlier Level)
|
Hypothetical Cash Settlement Amount at
Maturity if the Notes Have
Not
Been
Automatically Called on a Call Observation
Date
(as Percentage of Face Amount)
|
|
150.000%
|
122.440%
|
|
140.000%
|
122.440%
|
|
130.000%
|
122.440%
|
|
120.000%
|
122.440%
|
|
110.000%
|
122.440%
|
|
105.000%
|
122.440%
|
|
100.000%
|
122.440%
|
|
96.000%
|
100.000%
|
|
92.000%
|
100.000%
|
|
90.000%
|
100.000%
|
|
85.000%
|
94.444%
|
|
75.000%
|
83.333%
|
|
50.000%
|
55.556%
|
|
25.000%
|
27.778%
|
|
0.000%
|
0.000%
|
If, for example, the notes have not been automatically
called on a Call Observation Date
, and the Final Underlier Level were determined to be 25.000% of the Initial Underlier Level,
the Cash Settlement Amount that we would deliver on your notes at maturity would be approximately 27.778% of the face amount of
your notes (which would be equal to a Cash Settlement Amount of approximately $277.78), as shown in the table above. As a result,
if you purchased your notes on the original issue date at the face amount and held them to the stated maturity date, you would
lose approximately 72.222% of your investment (if you purchased your notes at a premium to face amount you would lose a correspondingly
higher percentage of your investment). If the Final Underlier Level were determined to be 0.000% of the Initial Underlier Level,
you would lose your entire investment in the notes. In addition, if the Final Underlier Level were determined to be 150.000% of
the Initial Underlier Level, the Cash Settlement Amount that we would deliver on your notes at maturity would be $1,224.40, or
122.440% of each $1,000 face amount of your notes, as shown in the table above. As a result, if you held your notes to the stated
maturity date, the Cash Settlement Amount would be capped, and you would not benefit from any increase in the closing level of
the Underlier above the Initial Underlier Level on the determination date.
The Cash Settlement Amounts shown above are entirely hypothetical;
they are based on market prices for the Underlier Stocks that may not be achieved on any Call Observation Date or the Determination
Date, and on assumptions that may prove to be erroneous. The actual market value of your notes on each Call Observation Date and
on the stated maturity date or at any other time, including any time you may wish to sell your notes, may bear little relation
to the hypothetical Cash Settlement Amounts shown above, and these amounts should not be viewed as an indication of the financial
return on an investment in the offered notes. The hypothetical Cash Settlement Amounts on the notes held to the Call Payment Date
or the stated maturity date in the examples above assume you purchased your notes at their face amount and have not been adjusted
to reflect the actual price to public you pay for your notes. The return on your investment (whether positive or negative) in your
notes will be affected by the amount you pay for your notes. If you purchase your notes for a price other than the face amount,
the return on your investment will differ from, and may be significantly lower than, the hypothetical returns suggested by the
above examples. Please read “Risk Factors — If You Purchase Your Notes at a Premium to Face Amount, the Return on Your
Investment Will Be Lower Than the Return on Notes Purchased at Face Amount and the Impact of Certain Key Terms of the Notes Will
Be Negatively Affected” below.
Payments on the notes are economically equivalent to the amounts
that would be paid on a combination of other instruments. For example, payments on the notes are economically equivalent to a combination
of an interest-bearing bond bought by the holder and one or more options entered into between the holder and us (with one or more
implicit option premiums paid over time). The discussion in this paragraph does not modify or affect the terms of the notes or
the U.S. federal income tax treatment of the notes, as described elsewhere in this pricing supplement.
We cannot predict the actual closing level of the Underlier on any Call Observation Date or the Final Underlier Level, or what the market value of your notes will be on any particular trading day, nor can we predict the relationship between the level of the Underlier and the market value of your notes at any time during the term of the notes. The actual amount that you will receive, if any, at maturity and the rate of return on the offered notes will depend on the actual Initial Underlier Level, the Call Premium Amounts and the Maturity Date Premium Amount, which we will set on the trade date, and the actual closing level of the Underlier on the Call Observation Dates and the Final Underlier Level determined by the calculation agent as described above. Moreover, the assumptions on which the hypothetical returns are based may turn out to be inaccurate. Consequently, the amount of cash to be paid in respect of your notes, if any, on a Call Payment Date or on the stated maturity date may be very different from the information reflected in the examples above.
|
RISK
FACTORS
An investment in your notes is subject to the risks described below, as well as the risks and considerations described in the accompanying prospectus, prospectus supplement and product supplement. You should carefully review these risks and considerations as well as the terms of the notes described herein and in the accompanying prospectus, prospectus supplement and product supplement. Your notes are a riskier investment than ordinary debt securities. Also, your notes are not equivalent to investing directly in the Underlier Stocks, i.e., the stocks comprising the Underlier to which your notes are linked. You should carefully consider whether the offered notes are suited to your particular circumstances.
|
You May Lose Your Entire Investment
in the Notes
You can lose your entire
investment in the notes. Assuming your notes are not automatically called on either Call Observation Date, the cash payment on
your notes, if any, on the stated maturity date will be based on the performance of the Underlier as measured from the Initial
Underlier Level set on the trade date (which could be higher or lower than the actual closing level of the Underlier on that date)
to the closing level on the Determination Date. If the Final Underlier Level is
less than
the Buffer Level, you will have
a loss for each $1,000 of the face amount of your notes equal to the
product
of (i) the Buffer Rate
times
(ii) the
sum
of the Underlier Return
plus
the Buffer Amount
times
(iii) $1,000. Thus, you will be exposed on a leveraged
basis to any decrease in the Final Underlier Level beyond the Buffer Amount, and the return on your investment will be negative.
You may lose your entire investment in the notes, which would include any premium to face amount you paid when you purchased the
notes.
Also, the market price of your notes prior to the stated maturity
date may be significantly lower than the purchase price you pay for your notes. Consequently, if you sell your notes before the
stated maturity date, you may receive far less than the amount of your investment in the notes.
The Cash Settlement Amount You Will
Receive on a Call Payment Date or on the Stated Maturity Date, as the Case May Be, Will Be Capped
Regardless of the closing level of the Underlier on each of
the Call Observation Dates, the Cash Settlement Amount you may receive on a Call Payment Date is capped. Even if the closing level
of the Underlier on a Call Observation Date exceeds the Initial Underlier Level, causing the notes to be automatically called,
the Cash Settlement Amount on the Call Payment Date will be capped, and you will not benefit from any increases in the closing
level of the Underlier above the Initial Underlier Level on either Call Observation Date. If your notes are automatically called
on a Call Observation Date, the maximum payment you will receive for each $1,000 face amount of your notes will depend on the applicable
Call Premium Amount, which will be set on the trade date. In addition, the Cash Settlement Amount you may receive on the stated
maturity date is capped. Accordingly, the amount payable for on the notes may be significantly less than it would have been had
you invested directly in the Underlier Stocks.
Your Notes Are Subject to Automatic
Redemption
We will call and automatically redeem all, but not part, of
the notes on a Call Payment Date, if the closing level of the Underlier on the corresponding Call Observation Date is equal to
or greater than the Call Level. Therefore, the term of the notes may be reduced to as short as approximately 12 months after the
trade date. If the notes are called, you may not be able to reinvest the proceeds from an investment in the notes at a comparable
return for a similar level of risk.
Any Payment on the Notes Is Subject
to Our Credit Risk and the Credit Risk of the Guarantor, and Actual or Perceived Changes in Our or the Guarantor’s Creditworthiness
Are Expected to Affect the Value of the Notes
The notes are our senior unsecured debt securities. Any payment
on the notes will be fully and unconditionally guaranteed by the Guarantor. The notes are not guaranteed by any entity other than
the Guarantor. As a result, your receipt of the Cash Settlement Amount at maturity or on any Call Payment Date will be dependent
upon our ability and the ability of the Guarantor to repay our obligations under the notes on the applicable payment date, regardless
of the level of the Underlier. No assurance can be given as to what our financial condition or the financial condition of the Guarantor
will be on the stated maturity date or any Call Payment Date. If we and the Guarantor become unable to meet our respective financial
obligations as they become due, you may not receive the amounts payable under the terms of the notes.
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 determination date or
any Call Observation 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 level of the Underlier, an improvement in our or the Guarantor’s
credit ratings will not reduce the other investment risks related to the notes.
We Are a Finance Subsidiary and, as
Such, Will Have Limited Assets and Operations
We are a finance subsidiary of BAC and will have no assets,
operations or revenues other than those related to the issuance, administration and repayment of our debt securities that are guaranteed
by the Guarantor. As a finance subsidiary, to meet our obligations under the notes, we are dependent upon payment or contribution
of funds and/or repayment of outstanding loans from the Guarantor and/or its other subsidiaries. Therefore, our ability to make
payments on the notes may be limited. In addition, we will have no independent assets available for distributions to holders of
the notes if they make claims in respect of the notes in a bankruptcy, resolution or similar proceeding. Accordingly, any recoveries
by such holders may be limited to those available under the related guarantee by the Guarantor, and that guarantee will rank equally
with all other unsecured senior obligations of the Guarantor.
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 in this preliminary pricing supplement, and the initial estimated value of the notes that will be provided in the final
pricing supplement, are each an estimate 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.
The initial estimated value does not represent a minimum or
maximum price at which we, the Guarantor, BofAS or any other entities 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 the date of this pricing supplement will vary based
on many factors that cannot be predicted with accuracy, including our and the Guarantor’s creditworthiness and changes in
market conditions.
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 level of the Underlier, 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 Price of the Notes That May Be Paid
by BofAS (and Which May Be Reflected on Customer Account Statements) May Be Higher than the Then-Current Estimated Value of the
Notes for a Limited Time Period After the Trade Date
As agreed by BofAS and the distribution participants, for approximately
a three-month period after the trade date, BofAS expects to offer to buy the notes in the secondary market at a price that will
exceed the estimated value of the notes at that time. The amount of this excess, which represents a portion of the underwriting
discount and the hedging-related charges expected to be realized by BofAS and the distribution participants over the term of the
notes, will decline to zero on a straight line basis over that three-month period. Accordingly, the estimated value of your notes
during this initial three-month period may be lower than the value shown on your customer account statements. Thereafter, if BofAS
buys or sells your notes, it will do so at prices that reflect the estimated value determined by reference to its pricing models
at that time. Any price at any time after the trade date will be based on then-prevailing market conditions and other considerations,
including the performance of the Underlier and the remaining term of the notes. However, none of us, the Guarantor, BofAS or any
other party is obligated to purchase your notes at any price or at any time, and we cannot assure you that any party will purchase
your notes at a price that equals or exceeds the initial estimated value of the notes.
We Cannot Assure You that a Trading
Market for Your Notes Will Ever Develop or Be Maintained
We will not list the notes on any securities exchange. We cannot
predict how the notes will trade in any secondary market or whether that market will be liquid or illiquid.
The development of a trading market for the notes will depend
on the Guarantor’s financial performance and other factors, including changes in the level of the Underlier. The number of
potential buyers of your notes in any secondary market may be limited. We anticipate that BofAS will act as a market-maker for
the notes, but none of us, the Guarantor or BofAS is required to do so. There is no assurance that any party will be willing to
purchase your notes at any price in any secondary market. BofAS may discontinue its market-making activities as to the notes at
any time. To
the extent that BofAS engages in any market-making activities,
it may bid for or offer the notes. Any price at which BofAS may bid for, offer, purchase, or sell any notes may differ from the
values determined by pricing models that it may use, whether as a result of dealer discounts, mark-ups, or other transaction costs.
These bids, offers, or completed transactions may affect the prices, if any, at which the notes might otherwise trade in the market.
In addition, if at any time BofAS were to cease acting as a
market-maker as to the notes, it is likely that there would be significantly less liquidity in the secondary market. In such a
case, the price at which the notes could be sold likely would be lower than if an active market existed.
The Cash Settlement Amount You Will
Receive on a Call Payment Date or on the Stated Maturity Date is Not Linked to the Level of the Underlier at Any Time Other Than
on the Applicable Call Observation Date or the Determination Date, as the Case May Be
The Cash Settlement Amount you will receive on a Call Payment
Date, if any, will be paid only if the closing level of the Underlier on the applicable Call Observation Date is equal to or greater
than the Initial Underlier Level. Therefore, the closing level of the Underlier on dates other than the Call Observation Dates
will have no effect on any Cash Settlement Amount paid in respect of your notes on the Call Payment Date. In addition, the Cash
Settlement Amount you will receive on the stated maturity date, if any, will be based on the closing level of the Underlier on
the Determination Date. Therefore, for example, if the closing level of the Underlier declined precipitously on the Determination
Date, the Cash Settlement Amount for the notes may be significantly less than it would have been had the Cash Settlement Amount
been linked to the closing level of the Underlier prior to such decrease in the level of the Underlier. Although the actual level
of the Underlier on the Call Payment Dates, stated maturity date or at other times during the life of your notes may be higher
than the closing level of the Underlier on the Call Observation Dates or the Determination Date, you will not benefit from the
closing level of the Underlier at any time other than on the Call Observation Dates or on the Determination Date.
Your Notes Will Not Bear Interest
You will not receive any interest payments on your notes. As
a result, even if the notes are automatically called or the Cash Settlement Amount payable for your notes on the stated maturity
date exceeds the face amount of your notes, the overall return you earn on your notes may be less than you would have earned by
investing in a non-indexed debt security of comparable maturity that bears interest at a prevailing market rate.
The Initial Underlier Level Will Be Determined
at the Discretion of the Calculation Agent
The Initial Underlier Level will be the closing
level or an intraday level of the Underlier on the trade date, as determined by the calculation agent in its sole discretion. As
such, the Initial Underlier Level may not be based on the closing level of the Underlier on the trade date. The Initial Underlier
Level may be higher or lower than the actual closing level of the Underlier on the trade date.
The Probability that the Final Underlier
Level Will Be Less Than the Buffer Level Will Depend in Part on the Volatility of the Underlier
“Volatility” refers to the frequency
and magnitude of changes in the level of the Underlier. The greater the expected volatility with respect to the Underlier on the
trade date, the higher the expectation as of the trade date that the Final Underlier Level could be less than the Buffer Level,
indicating a higher expected risk of loss on the notes. The terms of the notes are set, in part, based on expectations about the
volatility of the Underlier as of the trade date. The volatility of the Underlier can change significantly over the term of the
notes. The level of the Underlier could fall sharply, which could result in a significant loss of principal. You should be willing
to accept the downside market risk of the Underlier and the potential to lose a significant amount of your principal at maturity.
You Have No Shareholder Rights or Rights
to Receive Any Underlier Stock
Investing in your notes will not make you a holder of any of
the Underlier Stocks. Neither you nor any other holder or owner of your notes will have any rights with respect to the Underlier
Stocks, including voting rights, any right to receive dividends or other distributions, any rights to make a claim against the
Underlier Stocks or any other rights of a holder of the Underlier Stocks. Your notes will be paid in cash and you will have no
right to receive delivery of any Underlier Stocks.
The Publisher of the Underlier May Adjust
the Underlier in a Way that Affects Its Levels, and the Publisher Has No Obligation to Consider Your Interests
The publisher of the Underlier can add, delete,
or substitute the components included in the Underlier or make other methodological changes that could change its level. A new
security included in the Underlier may perform significantly better or worse than the replaced security, and the performance will
impact the level of the Underlier. Additionally, the publisher of the Underlier may alter, discontinue, or suspend calculation
or dissemination of the Underlier. Any of
these actions could adversely affect the
value of your notes. The publisher of the Underlier will have no obligation to consider your interests in calculating or revising
the Underlier.
We May Sell Additional Notes at a Different
Issue Price
At our sole option, we may decide to sell an additional aggregate
face amount of the notes subsequent to the date of this pricing supplement. The price to public of the notes in the subsequent
sale may differ substantially (higher or lower) from the original price to public you paid as provided on the cover of this pricing
supplement.
If You Purchase Your Notes at a Premium
to Face Amount, the Return on Your Investment Will Be Lower Than the Return on Notes Purchased at Face Amount and the Impact of
Certain Key Terms of the Notes Will Be Negatively Affected
The Cash Settlement Amount will not be adjusted based on the
price to public you pay for the notes. If you purchase notes at a price that differs from the face amount of the notes, then the
return on your investment in such notes held to the stated maturity date will differ from, and may be substantially less than,
the return on notes purchased at face amount. If you purchase your notes at a premium to face amount and hold them to the stated
maturity date, the return on your investment in the notes will be lower than it would have been had you purchased the notes at
face amount or a discount to face amount. In addition, the impact of the Buffer Level on the return on your investment will depend
upon the price you pay for your notes relative to face amount. For example, if you purchase your notes at a premium to face amount,
the Buffer Level, while still providing some protection for the return on the notes, will allow a greater percentage decrease in
your investment in the notes than would have been the case for notes purchased at face amount or a discount to face amount.
If the Level of the Underlier Changes,
the Market Value of Your Notes May Not Change in the Same Manner
Your notes may trade quite differently from the performance
of the Underlier. Changes in the levels of the Underlier may not result in a comparable change in the market value of your notes.
We discuss some of the reasons for this disparity under “— The Market Value of the Notes Will Be Affected by Various
Factors That Interrelate in Complex Ways, and Their Market Value May Be Less Than the Face Amount” below.
Trading and Hedging Activities by Us,
the Guarantor and Any of Our Other Affiliates May Affect Your Return on the Notes and Their Market Value
We, the Guarantor and our other affiliates, including BofAS,
and any other distributors of the notes may buy or sell the securities represented by the Underlier, or futures or options contracts
on the Underlier or those securities, or other listed or over-the-counter derivative instruments linked to the Underlier or the
Underlier Stocks. We, the Guarantor and any of our other affiliates, including BofAS, and any other distributors of the notes 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 could affect the value of these securities and, in turn, the value of the Underlier in a manner
that could be adverse to your investment in the notes. On or before the applicable trade date, any purchases or sales by us, the
Guarantor or other entities (including for the purpose of hedging anticipated exposures) may affect the level of the Underlier
or the Underlier Stocks. Consequently, the level of the Underlier or the prices of the Underlier Stocks may change subsequent to
the trade date of an issue of the notes, adversely affecting the market value of the notes.
We, the Guarantor or one or more of our other affiliates, including
BofAS, and any other distributors of the notes may also engage in hedging activities that could affect the level of the Underlier
on the trade date. In addition, these activities may decrease the market value of your notes prior to maturity, and may affect
the amounts to be paid on the notes. We, the Guarantor or one or more of our other affiliates, including BofAS, and any other distributors
of the notes 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 they engage. We cannot assure
you that these activities will not adversely affect the level of the Underlier, the market value of your notes prior to maturity,
whether the notes are automatically called, or the amounts payable on the notes.
Our Trading, Hedging and Other Business
Activities May Create Conflicts of Interest With You
We, the Guarantor or one or more of our other affiliates, including
BofAS, and any other distributors of the notes may engage in trading activities related to the Underlier and to the Underlier Stocks
that are not for your account or on your behalf. We, the Guarantor or one or more of our other affiliates, including BofAS, and
any other distributors of the notes also may issue or underwrite other financial instruments with returns based upon the Underlier.
These trading and other business activities may present a conflict of interest between your interest in the notes and the interests
we, the Guarantor and our other affiliates, including BofAS, and any other distributors of the notes 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 trading and other business activities, if they influence the level of the Underlier or secondary trading
in your notes, could be adverse to your interests as a beneficial owner of the notes.
We expect to enter into arrangements or adjust or close out
existing transactions to hedge our obligations under the notes. We, the Guarantor or our other affiliates, including BofAS, and
any other distributors of the notes also may enter into hedging transactions relating to other notes or instruments, some of which
may have returns calculated in a manner related to the notes. We may enter into such hedging arrangements with one of our affiliates.
Our affiliates or such other distributors may enter into additional hedging transactions with other parties relating to the notes
and the Underlier. This hedging activity is expected to result in a profit to those engaging in the hedging activity, which could
be more or less than initially expected, or the hedging activity could also result in a loss. We and these other entities will
price these hedging transactions with the intent to realize a profit, regardless of whether the value of the notes increases or
decreases. Any profit in connection with such hedging activities will be in addition to any other compensation that we or other
parties receive for the sale of the notes, which creates an additional incentive to sell the notes to you.
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
BofAS 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. These conflicts could occur, for instance, in connection with the calculation agent’s determination as to whether
a Market Disruption Event has occurred. The calculation agent will be required to carry out its duties in good faith and use its
reasonable judgment. However, because we expect that the Guarantor will control the calculation agent, potential conflicts of interest
could arise.
The Market Value of the Notes Will Be
Affected by Various Factors That Interrelate in Complex Ways, and Their Market Value May Be Less Than the Face Amount
If you wish to liquidate your investment in the notes prior
to maturity, your only option would be to sell them in the secondary market. At that time, there may be an illiquid market for
your notes or no market at all. Even if you were able to sell your notes, there are many factors outside of our control that may
affect their market value, such as the level and the volatility of the Underlier, economic and other conditions generally, interest
rates, dividend yields on the securities represented by the Underlier, exchange rate movements and volatility, our and the guarantor’s
financial condition and creditworthiness and time to maturity. The impact of any one factor may be offset or magnified by the effect
of another factor. See “Risk Factors—General Risks Relating to the Notes—The notes are not designed to be short-term
trading instruments and if you attempt to sell the notes prior to maturity, their market value, if any, will be affected by various
factors that interrelate in complex ways, and their market value may be less than the principal amount” beginning on page
PS-8 of product supplement EQUITY-1.
The U.S. Federal Income Tax Consequences
of an Investment in the Notes Are Uncertain, and May Be Adverse to a Holder of the Notes
No statutory, judicial, or administrative authority directly
addresses the characterization of the notes or securities similar to the notes for U.S. federal income tax purposes. As a result,
significant aspects of the U.S. federal income tax consequences of an investment in the notes are not certain. Under the terms
of the notes, you will have agreed with us to treat the notes as single financial contracts, as described below under “U.S.
Federal Income Tax Summary—General.” If the Internal Revenue Service (the “IRS”) were successful in asserting
an alternative characterization for the notes, the timing and character of 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.
THE UNDERLIER
All disclosures contained in this pricing supplement regarding the
Underlier, including, without limitation, its make-up, method of calculation, and changes in its components, have been derived
from publicly available sources. The information reflects the policies of, and is subject to change by S&P Dow Jones Indices
LLC (“SPDJI” or the “Underlier Sponsor”). The Underlier Sponsor, which licenses the copyright and all other
rights to the Underlier, has no obligation to continue to publish, and may discontinue publication of, the Underlier. The consequences
of the Underlier Sponsor discontinuing publication of the applicable Underlier 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 the Underlier 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 Underlier.
You should make your own investigation into the Underlier.
The S&P 500
®
Index
The Underlier includes a representative sample of 500 companies in
leading industries of the U.S. economy. The Underlier is intended to provide an indication of the pattern of common stock price
movement. The calculation of the level of the Underlier is based on the relative value of the aggregate market value of the common
stocks of 500 companies as of a particular time compared to the aggregate average market value of the common stocks of 500 similar
companies during the base period of the years 1941 through 1943.
Effective February 20, 2019, company additions to the underlier must
have an unadjusted company market capitalization of $8.2 billion or more (an increase from the previous requirement of an unadjusted
company market capitalization of $6.1 billion or more).
The Underlier Sponsor calculates the Underlier by reference to the
prices of the constituent stocks of the Underlier without taking account of the value of dividends paid on those stocks. As a result,
the return on the notes will not reflect the return you would realize if you actually owned the Underlier constituent stocks and
received the dividends paid on those stocks. Additional information is available on the following websites: us.spindices.com/indices/equity/sp-500
and spdji.com/. We are not incorporating by reference the websites or any material they include in this pricing supplement.
As of May 31, 2019, the companies included in the Underlier were
divided into eleven Global Industry Classification Sectors. The Global Industry Classification Sectors include (with the approximate
percentage currently included in such sectors indicated in parentheses): Information Technology (21.1%); Health Care (14.2%); Financials
(13.2%); Communication Services (10.4%); Consumer Discretionary (10.2%); Industrials (9.3%); Consumer Staples (7.4%); Energy (4.9%);
Utilities (3.4%); Real Estate (3.2%) and Materials (2.6%). (Sector designations are determined by the Underlier Sponsor using criteria
it has selected or developed. Index sponsors may use very different standards for determining sector designations. In addition,
many companies operate in a number of sectors, but are listed in only one sector and the basis on which that sector is selected
may also differ. As a result, sector comparisons between indices with different index sponsors may reflect differences in methodology
as well as actual differences in the sector composition of the indices.) As of the close of business on September 21, 2018, S&P
and MSCI, Inc. updated the Global Industry Classification Sector structure. Among other things, the update broadened the Telecommunications
Services sector and renamed it the Communication Services sector. The renamed sector includes the previously existing Telecommunication
Services Industry group, as well as the Media Industry group, which was moved from the Consumer Discretionary sector and renamed
the Media & Entertainment Industry group. The Media & Entertainment Industry group contains three industries: Media, Entertainment
and Interactive Media & Services. The Media industry continues to consist of the Advertising, Broadcasting, Cable & Satellite
and Publishing sub-industries. The Entertainment industry contains the Movies & Entertainment sub-industry (which includes
online entertainment streaming companies in addition to companies previously classified in such industry prior to September 21,
2018) and the Interactive Home Entertainment sub-industry (which includes companies previously classified in the Home Entertainment
Software sub-industry prior to September 21, 2018 (when the Home Entertainment Software sub-industry was a sub-industry in the
Information Technology sector)), as well as producers of interactive gaming products, including mobile gaming applications). The
Interactive Media & Services industry and sub-industry includes companies engaged in content and information creation or distribution
through proprietary platforms, where revenues are derived primarily through pay-per-click advertisements, and includes search engines,
social media and networking platforms, online classifieds and online review companies. The Global Industry Classification Sector
structure
changes are effective for the S&P 500® Index as of the open
of business on September 24, 2018 to coincide with the September 2018 quarterly rebalancing.
Computation of the Underlier
While the Underlier Sponsor currently employs the following methodology
to calculate the Underlier, no assurance can be given that the Underlier Sponsor will not modify or change this methodology in
a manner that may affect the Cash Settlement Amount.
Historically, the market value of any component stock of the Underlier
was calculated as the product of the market price per share and the number of then outstanding shares of such component stock.
In March 2005, the Underlier Sponsor began shifting the Underlier halfway from a market capitalization weighted formula to a float-adjusted
formula, before moving the Underlier to full float adjustment on September 16, 2005. The Underlier Sponsor’s criteria for
selecting stocks for the Underlier did not change with the shift to float adjustment. However, the adjustment affects each company’s
weight in the Underlier.
Under float adjustment, the share counts used in calculating the
Underlier reflect only those shares that are available to investors, not all of a company’s outstanding shares. Float adjustment
excludes shares that are closely held by control groups, other publicly traded companies or government agencies.
In September 2012, all shareholdings representing more than 5% of
a stock’s outstanding shares, other than holdings by “block owners,” were removed from the float for purposes
of calculating the Underlier. Generally, these “control holders” will include officers and directors, private equity,
venture capital and special equity firms, other publicly traded companies that hold shares for control, strategic partners, holders
of restricted shares, ESOPs, employee and family trusts, foundations associated with the company, holders of unlisted share classes
of stock, government entities at all levels (other than government retirement/pension funds) and any individual person who controls
a 5% or greater stake in a company as reported in regulatory filings. However, holdings by block owners, such as depositary banks,
pension funds, mutual funds and ETF providers, 401(k) plans of the company, government retirement/pension funds, investment funds
of insurance companies, asset managers and investment funds, independent foundations and savings and investment plans, will ordinarily
be considered part of the float.
Treasury stock, stock options, restricted shares, equity participation
units, warrants, preferred stock, convertible stock, and rights are not part of the float. Shares held in a trust to allow investors
in countries outside the country of domicile, such as depositary shares and Canadian exchangeable shares are normally part of the
float unless those shares form a control block.
For each stock, an investable weight factor (“IWF”) is
calculated by dividing the available float shares by the total shares outstanding. Available float shares are defined as the total
shares outstanding less shares held by control holders. This calculation is subject to a 5% minimum threshold for control blocks.
For example, if a company’s officers and directors hold 3% of the company’s shares, and no other control group holds
5% of the company’s shares, the Underlier Sponsor would assign that company an IWF of 1.00, as no control group meets the
5% threshold. However, if a company’s officers and directors hold 3% of the company’s shares and another control group
holds 20% of the company’s shares, the Underlier Sponsor would assign an IWF of 0.77, reflecting the fact that 23% of the
company’s outstanding shares are considered to be held for control. As of July 31, 2017, companies with multiple share class
lines are no longer eligible for inclusion in the Underlier. Constituents of the Underlier prior to July 31, 2017 with multiple
share class lines will be grandfathered in and continue to be included in the Underlier. If a constituent company of the Underlier
reorganizes into a multiple share class line structure, that company will remain in the Underlier at the discretion of the S&P
Index Committee in order to minimize turnover.
The Underlier is calculated using a base-weighted aggregate methodology.
The level of the Underlier reflects the total market value of all component stocks relative to the base period of the years 1941
through 1943. An indexed number is used to represent the results of this calculation in order to make the level easier to work
with and track over time. The actual total market value of the component stocks during the base period of the years 1941 through
1943 has been set to an indexed level of 10. This is often indicated by the notation 1941- 43 = 10. In practice, the daily calculation
of the Underlier is computed by dividing the total market value of the component stocks by the “index divisor.” By
itself, the index divisor is an arbitrary number. However, in the context of the calculation of the Underlier, it serves as a link
to the original base period level of the Underlier. The index divisor keeps the Underlier comparable over time and is the manipulation
point for all adjustments to the Underlier, which is index maintenance.
Index Maintenance
Index maintenance includes monitoring and completing the adjustments
for company additions and deletions, share changes, stock splits, stock dividends, and stock price adjustments due to company restructuring
or spinoffs. Some
corporate actions, such as stock splits and stock dividends, require
changes in the common shares outstanding and the stock prices of the companies in the Underlier, and do not require index divisor
adjustments.
To prevent the level of the Underlier from changing due to corporate
actions, corporate actions which affect the total market value of the Underlier require an index divisor adjustment. By adjusting
the index divisor for the change in market value, the level of the Underlier remains constant and does not reflect the corporate
actions of individual companies in the Underlier. Index divisor adjustments are made after the close of trading and after the calculation
of the Underlier closing level.
Changes in a company’s shares outstanding and IWF due to its
acquisition of another public company are made as soon as reasonably possible. At the Underlier Sponsor’s discretion, de
minimis merger and acquisition share changes are accumulated and implemented with the quarterly share rebalancing.
All other changes of less than 5% are accumulated and made quarterly
on the third Friday of March, June, September, and December.
Changes in a company’s total shares outstanding of 5% or more
due to public offerings are made as soon as reasonably possible. Other changes of 5% or more (for example, due to tender offers,
Dutch auctions, voluntary exchange offers, company stock repurchases, private placements, acquisitions of private companies or
non-index companies that do not trade on a major exchange, redemptions, exercise of options, warrants, conversion of preferred
stock, notes, debt, equity participations, at-the-market stock offerings or other recapitalizations) are made weekly, and are generally
announced on Fridays for implementation after the close of trading the following Friday (one week later). If a 5% or more share
change causes a company’s IWF to change by five percentage points or more, the IWF is updated at the same time as the share
change. IWF changes resulting from partial tender offers are considered on a case-by-case basis.
Changes in IWFs of more than five percentage points caused by corporate
actions (such as merger and acquisition activity, restructurings, or spinoffs) will be made as soon as reasonably possible. Other
changes in IWFs will be made annually when IWFs are reviewed.
Historical Closing Levels of the Underlier
The closing level of the Underlier has fluctuated in the
past and may, in the future, experience significant fluctuations. Any historical upward or downward trend in the closing level
of the Underlier during the period shown below is not an indication that the Underlier is more or less likely to increase or decrease
at any time during the life of your notes.
You should not take the historical
levels of the Underlier as an indication of its future performance.
We cannot give you any assurance that the future performance
of the Underlier or the Underlier Stocks will result in the notes being automatically called or your receiving an amount greater
than the outstanding face amount of your notes on the stated maturity date.
Neither we nor any of our affiliates make any representation
to you as to the performance of the Underlier. Before investing in the offered notes, you should consult publicly available information
to determine the levels of the Underlier between the date of this pricing supplement and the date of your purchase of the offered
notes. The actual performance of the Underlier over the life of the offered notes, as well as the Cash Settlement Amount payable
upon an automatic call or at maturity, may bear little relation to the historical closing levels shown below.
The graph below shows the daily historical closing levels of
the Underlier from June 5, 2009 through June 5, 2019. We obtained the closing levels in the graph below from Bloomberg Financial
Services, without independent verification.
Historical
Performance of the S&P 500
®
Index
SUPPLEMENTAL PLAN OF DISTRIBUTION—CONFLICTS
OF INTEREST
BofA Finance expects to agree to sell to BofAS, and BofAS expects
to agree to purchase from BofA Finance, the aggregate face amount of the offered notes specified on the front cover of this pricing
supplement. BofAS proposes initially to offer the notes to the public at the price to public set forth on the cover page of this
pricing supplement and to certain unaffiliated securities dealers at such prices less a concession not in excess of 2.00% of the
face amount. The price to public for notes purchased by certain fee-based advisory accounts will be between 98.00% and 100.00%
of the face amount, which reflects a foregone underwriting discount with respect to such notes (i.e., the underwriting discount
specified on the cover of this pricing supplement with respect to such notes is 0.00%).
We expect to deliver the notes against payment therefor in New York,
New York on , 2019, which is expected to be the fifth scheduled
business day following the trade date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market
generally are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly,
purchasers who wish to trade the notes on any date prior to two business days before delivery will be required, by virtue of the
fact that the notes are initially expected to settle in five business days (T + 5), to specify alternative settlement arrangements
to prevent a failed settlement.
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.
BofAS and any of our other broker-dealer affiliates, may use this
pricing supplement, and the accompanying product supplement, prospectus supplement and prospectus for offers and sales in secondary
market transactions and market-making transactions in the notes. However, they are not obligated to engage in such secondary market
transactions and/or market-making transactions. The selling agent may act as principal or agent in these transactions, and any
such sales will be made at prices related to prevailing market conditions at the time of the sale.
As agreed by BofAS and the distribution participants, for approximately
a three-month period after the trade date, BofAS expects to offer to buy the notes in the secondary market at a price that will
exceed the estimated value of the notes at that time; the amount of this excess will decline on a straight line basis over that
period. Thereafter, if BofAS buys or sells your notes, it will do so at prices that reflect the estimated value determined by reference
to its pricing models at that time. Any price at any time after the trade date will be based on then-prevailing market conditions
and other considerations, including the performance of the Underlier and the remaining term of the notes. However, none of us,
the Guarantor, BofAS or any other party is obligated to purchase your notes at any price or at any time, and we cannot assure you
that any party will purchase your notes at a price that equals or exceeds the initial estimated value of the notes.
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.
No Prospectus (as defined in Directive 2003/71/EC (as amended, the
“Prospectus Directive”)) will be prepared in connection with these notes. Accordingly, these notes may not be offered
to the public in any member state of the European Economic Area (the “EEA”), and any purchaser of these notes who subsequently
sells any of these notes in any EEA member state must do so only in accordance with the requirements of the Prospectus Directive,
as implemented in that member state.
The notes are not intended to be offered, sold or otherwise
made available to, and should not be offered, sold or otherwise made available to, any retail investor in the EEA. For these purposes,
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 the notes, and a “retail
investor” means a person who is one (or more) of: (a) a retail client, as defined in point (11) of Article 4(1) of Directive
2014/65/EU (as amended ,“MiFID II”); or (b) a customer, within the meaning of Insurance Distribution Directive 2016/97/EU,
as amended, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II;
or (c) not a qualified investor as defined in the Prospectus Directive. Consequently, no key information document required by Regulation
(EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the notes or otherwise making them
available to retail investors in the EEA has been prepared, and therefore, offering or selling the notes or otherwise making them
available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
STRUCTURING THE NOTES
The notes are our debt securities, the return on which is linked
to the performance of the Underlier. The related guarantees are BAC’s obligations. 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 trade 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 Underlier, 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-11 above and “Supplemental Use of Proceeds” on page PS-16 of product supplement EQUITY-1.
U.S. FEDERAL
INCOME TAX SUMMARY
The following summary of the material U.S. federal income tax considerations
of the acquisition, ownership, and disposition of the notes supplements, and to the extent inconsistent supersedes, the discussions
under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under “U.S. Federal Income
Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible tax considerations. In
addition, any reference to “Morrison & Foerster LLP” in the aforementioned tax discussions in the accompanying
prospectus and prospectus supplement should be read as a reference to “Sidley Austin LLP.” This summary is based upon
the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated under the Code by the U.S. Treasury
Department (“Treasury”) (including proposed and temporary regulations), rulings, current administrative interpretations
and official pronouncements of the IRS, and judicial decisions, all as currently in effect and all of which are subject to differing
interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that
a court would not sustain, a position contrary to any of the tax consequences described below. This summary does not include any
description of the tax laws of any state or local governments, or of any foreign government, that may be applicable to a particular
holder.
Although the notes are issued by us, they will be treated as if they
were issued by Bank of America Corporation for U.S. federal income tax purposes. Accordingly throughout this tax discussion, references
to “we,” “our” or “us” are generally to Bank of America Corporation unless the context requires
otherwise.
This summary is directed solely to U.S. Holders and Non-U.S. Holders
that, except as otherwise specifically noted, will purchase the notes upon original issuance and will hold the notes as capital
assets within the meaning of Section 1221 of the Code, which generally means property held for investment, and that are not excluded
from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor concerning the U.S. federal
income tax consequences to you of acquiring, owning, and disposing of the notes, as well as any tax consequences arising under
the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or other tax
laws.
General
Although there is no statutory, judicial, or administrative authority
directly addressing the characterization of the notes, in the opinion of our counsel, Sidley Austin LLP, and based on certain factual
representations received from us, the notes should be treated as single financial contracts with respect to the Underlier and under
the terms of the notes, we and every investor in the notes agree, in the absence of an administrative determination or judicial
ruling to the contrary, to treat the notes in accordance with such characterization. This discussion assumes that the notes constitute
single financial contracts with respect to the Underlier for U.S. federal income tax purposes. If the notes did not constitute
single financial contracts, the tax consequences described below would be materially different.
This characterization of the notes is not binding on the IRS or
the courts. No statutory, judicial, or administrative authority directly addresses the characterization of the notes or any similar
instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with respect to their proper characterization
and treatment. Due to the absence of authorities on point, significant aspects of the U.S. federal income tax consequences of an
investment in the notes are not certain, and no assurance can be given that the IRS or any court will agree with the characterization
and tax treatment described in this pricing supplement. Accordingly, you are urged to consult your tax advisor regarding all aspects
of the U.S. federal income tax consequences of an investment in the notes, including possible alternative characterizations.
Unless otherwise stated, the following discussion is based on the
characterization described above. The discussion in this section assumes that there is a significant possibility of a significant
loss of principal on an investment in the notes.
We will not attempt to ascertain whether the issuer of any component
stocks included in the Underlier 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 the Underlier 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 Underlier and consult your tax advisor regarding the possible consequences to you, if any,
if any issuer of a component stock included in the Underlier is or becomes a PFIC or is or becomes a United States real property
holding corporation.
U.S. Holders
Upon receipt of a cash payment at maturity or upon a sale, 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 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.
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 the Underlier is an index that periodically rebalances, it
is possible that the notes could be treated as a series of 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
Except as discussed below, a Non-U.S. Holder generally will not be
subject to U.S. federal income or withholding tax for amounts paid in respect of the notes provided that the Non-U.S. Holder complies
with applicable certification requirements and that the payment is not effectively connected with the conduct by the Non-U.S. Holder
of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, 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 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 gain on a net income basis in the same manner as
if it were a U.S. Holder. Such Non-U.S. Holders should read the material under the heading “—U.S. Holders,” for
a description of the U.S. federal income tax consequences of acquiring, owning, and disposing of the notes. In addition, if such
Non-U.S. Holder is a foreign corporation, it may also be subject to a branch profits tax equal to 30% (or such lower rate provided
by any applicable tax treaty) of a portion of its earnings and profits for the taxable year that are effectively connected with
its conduct of a trade or business in the U.S., subject to certain adjustments.
A “dividend equivalent” payment is treated as a dividend
from sources within the United States and such payments generally would be subject to a 30% U.S. withholding tax if paid to a Non-U.S.
Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked instruments (“ELIs”)
that are “specified ELIs” may be treated as dividend equivalents if such specified ELIs reference an interest in an
“underlying security,” which is generally any interest in an entity taxable as a corporation for U.S. federal income
tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However, IRS guidance provides
that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one instruments and that are
issued before January 1, 2021. Based on our determination that the notes are not delta-one instruments, Non-U.S. Holders should
not be subject to withholding on dividend equivalent payments, if any, under the notes. However, it is possible that the notes
could be treated as deemed reissued for U.S. federal income tax purposes upon the occurrence of certain events affecting the Underlier
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 Underlier or the notes should consult their
tax advisors as to the application of the dividend equivalent withholding tax in the context of the notes and their other transactions.
If any payments are treated as dividend equivalents subject to withholding, we (or the applicable paying agent) would be entitled
to withhold taxes without being required to pay any additional amounts with respect to amounts so withheld.
As discussed above, alternative characterizations of the notes for
U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or clarification of
the law, by regulation or otherwise, cause payments as to the notes to become subject to withholding tax, tax will be withheld
at the applicable statutory rate. As discussed above, the IRS has indicated in the Notice that it is considering whether income
in respect of instruments such as the notes should be subject to withholding tax. Prospective Non-U.S. Holders should consult their
own tax advisors regarding the tax consequences of such alternative characterization.
U.S. Federal Estate Tax.
Under current law, while the matter
is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible in those individuals’
gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual and with respect to which
the individual has retained certain interests or powers), should note that, absent an applicable treaty benefit, a note is likely
to be treated as U.S. situs property, subject to U.S. federal estate tax. These individuals and entities should consult their own
tax advisors regarding the U.S. federal estate tax consequences of investing in a note.
Backup Withholding and Information Reporting
Please see the discussion under “U.S. Federal Income
Tax Considerations — Taxation of Debt Securities — Backup Withholding and Information Reporting” in the accompanying
prospectus for a description of the applicability of the backup withholding and information reporting rules to payments made on
the notes.
Foreign Account Tax Compliance Act (“FATCA”)
The discussion in the accompanying prospectus under “U.S.
Federal Income Tax Considerations – Foreign Account Tax Compliance Act” is hereby modified to reflect regulations proposed
by Treasury indicating its intent to eliminate
the requirements under FATCA of withholding on gross proceeds
from the sale, exchange, settlement at maturity, or other disposition of relevant financial instruments. Treasury has indicated
that taxpayers may rely on these proposed regulations pending their finalization.
TABLE OF CONTENTS
Pricing Supplement
|
|
We
have not authorized anyone to provide any information or to make any representations other than those contained or incorporated
by reference in this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement or the accompanying
prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others
may give you. These documents are an offer to sell only the notes offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in each such document is current only as of its respective date.
$
BofA Finance
LLC
Autocallable
Buffered S&P 500
®
Index-Linked Notes due
Fully and
Unconditionally Guaranteed by
Bank of America Corporation
BofA Merrill
Lynch
|
|
Page
|
Summary Information
|
PS-3
|
Hypothetical Examples
|
PS-7
|
Risk Factors
|
PS-11
|
The Underlier
|
PS-16
|
Supplemental Plan of Distribution—Conflicts of Interest
|
PS-20
|
Structuring the Notes
|
PS-21
|
U.S. Federal Income Tax Summary
|
PS-22
|
Product Supplement EQUITY-1 dated January 24, 2017
|
|
Summary
|
PS-3
|
Risk Factors
|
PS-5
|
Supplemental Use of Proceeds
|
PS-16
|
Description of the Notes
|
PS-17
|
Supplemental Plan of Distribution; Conflicts of Interest
|
PS-28
|
U.S. Federal Income Tax Considerations
|
PS-29
|
Prospectus Supplement dated November 4, 2016
|
|
About this Prospectus Supplement
|
S-3
|
Risk Factors
|
S-4
|
Description of the Notes
|
S-7
|
U.S. Federal Income Tax Considerations
|
S-15
|
Supplemental Plan of Distribution (Conflicts of Interest)
|
S-15
|
|
Legal Matters
|
S-26
|
Prospectus dated November 4, 2016
|
|
About this Prospectus
|
3
|
|
Prospectus Summary
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4
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Risk Factors
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7
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Bank of America Corporation
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13
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BofA Finance LLC
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13
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Use of Proceeds
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13
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Description of Debt Securities
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14
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Registration and Settlement
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42
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U.S. Federal Income Tax Considerations
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50
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EU Directive on the Taxation of Savings Income
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68
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Plan of Distribution (Conflicts of Interest)
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69
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ERISA Considerations
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73
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Where You Can Find More Information
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74
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Forward-Looking Statements
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76
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Legal Matters
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76
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Experts
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77
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Bank of America Corp. Prfd L (NYSE:BMLPL)
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From Mar 2024 to Apr 2024
Bank of America Corp. Prfd L (NYSE:BMLPL)
Historical Stock Chart
From Apr 2023 to Apr 2024