Linked to the Least Performing
of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
|
•
|
Approximate
2.5 year term if not called prior to maturity.
|
|
•
|
Payments
on the Notes will depend on the individual performance of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell
2000® Index (each an “Underlying”).
|
|
•
|
Contingent
coupon rate of 8.44% per annum (2.11% per quarter) payable quarterly if the closing level of each Underlying on the applicable
Observation Date is greater than or equal to 65% of its Starting Value.
|
|
•
|
Callable
quarterly at our option for an amount equal to the principal amount plus the relevant contingent coupon on or after April 6, 2020.
|
|
•
|
Assuming
the Notes are not called prior to maturity, if any Underlying declines by more than 35% from its Starting Value, at maturity
your investment will be subject to a 1:1 downside, with up to 100% of the principal at risk; otherwise, at maturity investors will
receive the principal amount. At maturity the investor will also receive the final contingent coupon if the closing level of each
Underlying on the final Observation Date is greater than or equal to 65% of its Starting Value.
|
|
•
|
All
payments on the Notes are subject to the credit risk of BofA Finance LLC (“BofA Finance”) and Bank of America Corporation
(“BAC” or the “Guarantor”).
|
|
•
|
The
Notes priced on October 1, 2019, will issue on October 4, 2019 and will mature on April 6, 2022.
|
|
•
|
The
Notes will not be listed on any securities exchange.
|
The initial estimated
value of the Notes as of the pricing date is $977.50 per Note, which is less than the public offering price listed below. The
actual value of your Notes at any time will reflect many factors and cannot be predicted with accuracy. See “Risk Factors”
beginning on page PS-8 of this pricing supplement and “Structuring the Notes” on page PS-21 of this pricing supplement
for additional information. Potential purchasers of the Notes should consider the information in “Risk Factors”
beginning on page PS-8 of this pricing supplement, page PS-5 of the accompanying product supplement, page S-4 of the accompanying
prospectus supplement, and page 7 of the accompanying prospectus.
None of the Securities and Exchange
Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of
these securities or determined if this Note Prospectus (as defined on page PS-25) is truthful or complete. Any representation to
the contrary is a criminal offense.
|
Public offering price(1)
|
Underwriting discount(1)(2)
|
Proceeds, before expenses, to BofA Finance
|
Per Note
|
$1,000.00
|
$17.50
|
$982.50
|
Total
|
$2,525,000.00
|
$44,187.50
|
$2,480,812.50
|
|
(1)
|
Certain
dealers who purchase the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions,
fees or commissions. The public offering price for investors purchasing the Notes in these fee-based advisory accounts may be
as low as $982.50 per note.
|
The Notes and the related
guarantee:
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Selling Agent
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Terms of the Notes
The Contingent Income Issuer Callable
Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000®
Index (the “Notes”) provide a quarterly Contingent Coupon Payment of $21.10 on the applicable Contingent Payment Date
if, on any quarterly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier. Prior to the maturity date, on each Call Date, we
have the right to redeem all, but not less than all, of the Notes at 100% of the principal amount, together with the relevant Contingent
Coupon Payment, if payable. No further amounts will be payable following an Optional Early Redemption. At
maturity, if the Notes are not called prior to maturity and the Least Performing Underlying declines by more than 35% from its
Starting Value, there is full exposure to declines in the Least Performing Underlying, and you will lose a significant portion
or all of your investment in the Notes. Otherwise, at maturity you will receive the principal amount. At maturity you will also
receive the final Contingent Coupon Payment if the Observation Value of each Underlying on the final Observation Date is
greater than or equal to its Coupon Barrier. The Notes are not traditional debt securities and it is possible that the Notes will
not pay any Contingent Coupon Payments, and you may lose a significant portion or all of your principal amount at maturity. Any
payments on the Notes will be calculated based on $1,000 in principal amount of Notes and will depend on the performance of the
Underlyings, subject to our and BAC’s credit risk.
Issuer:
|
BofA Finance
|
Guarantor:
|
BAC
|
Denominations:
|
The Notes will be issued in minimum denominations of $1,000 and whole multiples of $1,000 in excess thereof.
|
Term:
|
Approximately 2.5 years, unless previously called.
|
Underlyings:
|
The MSCI Emerging Markets Index (the “MXEF”) (Bloomberg symbol: “MXEF”), the S&P 500® Index (the “SPX”) (Bloomberg symbol: “SPX”) and the Russell 2000® Index (the “RTY”) (Bloomberg symbol: “RTY”), each a price return index.
|
Pricing Date:
|
October 1, 2019
|
Issue Date:
|
October 4, 2019
|
Valuation Date:
|
April 1, 2022, subject to postponement as described under “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates” of the accompanying product supplement. If the Valuation Date is not a business day, the Valuation Date will be postponed to the next business day.
|
Maturity Date:
|
April 6, 2022
|
Starting Value:
|
MXEF: 998.48
SPX: 2,940.25
RTY: 1,493.432
|
Observation Value:
|
With respect to each Underlying, its closing level on the applicable Observation Date.
|
Ending Value:
|
With respect to each Underlying, its closing level on the Valuation Date, as determined by the calculation agent.
|
Coupon Barrier:
|
MXEF: 649.01, which
is 65% of its Starting Value (rounded to two decimal places).
SPX: 1,911.16,
which is 65% of its Starting Value (rounded to two decimal places).
RTY: 970.731, which
is 65% of its Starting Value (rounded to three decimal places).
|
Threshold Value:
|
MXEF: 649.01, which
is 65% of its Starting Value (rounded to two decimal places).
SPX: 1,911.16,
which is 65% of its Starting Value (rounded to two decimal places).
RTY: 970.731, which
is 65% of its Starting Value (rounded to three decimal places).
|
Contingent Coupon Payment:
|
If, on any quarterly Observation Date, the Observation Value of each Underlying is greater than or equal to its Coupon Barrier, we will pay a Contingent Coupon Payment of $21.10 per $1,000 in principal amount (equal to a rate of 2.11% per quarter or 8.44% per annum) on the applicable Contingent Payment Date.
|
Optional Early Redemption:
|
On any Call Date, we have the right to redeem all, but not less than all, of the Notes at the Early Redemption Amount. No further amounts will be payable following an Optional Early Redemption. We will give notice to the trustee at least five business days but not more than 60 calendar days before the applicable Call Date.
|
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-2
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Early Redemption Amount:
|
For each $1,000 in principal amount of Notes, $1,000 plus the applicable Contingent Coupon Payment, if payable
|
|
Redemption Amount:
|
If the Notes have
not been called prior to maturity, the Redemption Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Least Performing Underlying
is greater than or equal to its Threshold Value:
$1,000; or
b)
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value:
$1,000 + ($1,000
x Underlying Return of the Least Performing Underlying)
In this case,
the Redemption Amount will be less than 65% of the principal amount and could be zero.
The Redemption
Amount will also include the final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater
than or equal to its Coupon Barrier.
|
|
Observation Dates:
|
As set forth on page PS-4.
|
|
Contingent Payment Dates:
|
As set forth on page PS-4.
|
|
Call Dates:
|
The quarterly Contingent Payment Dates beginning on April 6, 2020 and ending on January 6, 2022.
|
|
Calculation Agent:
|
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
|
|
Selling Agent:
|
BofAS
|
|
CUSIP:
|
09709TVW8
|
|
Underlying Return:
|
With respect to
each Underlying,
|
|
Least Performing Underlying:
|
The Underlying with the lowest Underlying Return.
|
|
Events of Default and Acceleration:
|
If an Event of Default,
as defined in the senior indenture 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 “—Redemption
Amount” above, calculated as though the date of acceleration were the Maturity Date of the Notes and as though the Valuation
Date were the third trading day prior to the date of acceleration. We will also determine whether the final Contingent Coupon Payment
is payable based upon the levels of the Underlyings on the deemed Valuation Date; any such final Contingent Coupon Payment will
be prorated by the calculation agent to reflect the length of the final contingent payment period. In case of a default in the
payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
|
|
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-3
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Observation Dates and Contingent Payment
Dates
Observation Dates*
|
|
Contingent Payment Dates**
|
January 2, 2020
|
|
January 7, 2020
|
April 1, 2020
|
|
April 6, 2020
|
July 1, 2020
|
|
July 7, 2020
|
October 1, 2020
|
|
October 6, 2020
|
January 4, 2021
|
|
January 7, 2021
|
April 1, 2021
|
|
April 7, 2021
|
July 1, 2021
|
|
July 7, 2021
|
October 1, 2021
|
|
October 6, 2021
|
January 3, 2022
|
|
January 6, 2022
|
April 1, 2022 ( the “Valuation Date”)
|
|
April 6, 2022 ( the “Maturity Date”)
|
* The Observation Dates are subject to postponement as
set forth in “Description of the Notes—Certain Terms of the Notes—Events Relating to Observation Dates”
on page PS-19 of the accompanying product supplement. If an Observation Date is not a business day, such Observation Date will
be postponed to the next business day.
** Postponement of a quarterly Observation Date will
not cause the postponement of the Contingent Payment Date relating to such Observation Date.
Any payments
on the Notes depend on the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor, and on the performance of the Underlyings.
The economic terms of the Notes are based on BAC’s internal funding rate, which is the rate it would pay to borrow funds
through the issuance of market-linked notes, and the economic terms of certain related hedging arrangements BAC’s affiliates
enter into. BAC’s internal funding rate is typically lower than the rate it would pay when it issues conventional fixed or
floating rate debt securities. This difference in funding rate, as well as the underwriting discount and the hedging related charges
described below (see “Risk Factors” beginning on page PS-8), reduced the economic terms of the Notes to you and the
initial estimated value of the Notes. Due to these factors, the public offering price you are paying to purchase the Notes is greater
than the initial estimated value of the Notes as of the pricing date.
The initial estimated value of
the Notes as of the pricing date is set forth on the cover page of this pricing supplement. For more information about the initial
estimated value and the structuring of the Notes, see “Risk Factors” beginning on page PS-8 and “Structuring
the Notes” on page PS-21.
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-4
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Contingent Coupon Payment and Redemption
Amount Determination
On each Contingent Payment
Date, you may receive a Contingent Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming the Notes have not
been previously called, on the Maturity Date, you will receive a cash payment per $1,000 in principal amount of Notes determined
as follows:
All payments described above
are subject to Issuer and Guarantor credit risk.
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-5
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Total Contingent Coupon Payment Examples
The
table below illustrates the hypothetical total Contingent Coupon Payments per $1,000 in principal amount of Notes over the term
of the Notes, based on a Contingent Coupon Payment of $21.10 per note, depending on how many Contingent Coupon Payments are payable
prior to Optional Early Redemption or maturity. Depending on the performance of the Underlyings, you may not receive any Contingent
Coupon Payments during the term of the Notes.
Number of Contingent Coupon Payments
|
Total Contingent Coupon Payments
|
0
|
$0.00
|
2
|
$42.20
|
4
|
$84.40
|
6
|
$126.60
|
8
|
$168.80
|
10
|
$211.00
|
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-6
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Hypothetical Payout Profile and Examples
of Payments at Maturity
Contingent Income Issuer Callable
Yield Notes® Table
The following table is for purposes
of illustration only. It assumes the Notes have not been called prior to maturity and is based on hypothetical values and
shows hypothetical returns on the Notes. The table illustrates the calculation of the Redemption Amount and the return on
the Notes based on a hypothetical Starting Value of 100, a hypothetical Coupon Barrier of 65 for the Least Performing Underlying,
a hypothetical Threshold Value of 65 for the Least Performing Underlying, the Contingent Coupon Payment of $21.10 per $1,000 in
principal amount of Notes and a range of hypothetical Ending Values of the Least Performing Underlying. The actual amount you
receive and the resulting total return will depend on the actual Starting Values, Coupon Barriers, Threshold Values, Observation
Values and Ending Values of the Underlyings, whether the Notes are called prior to maturity, and whether you hold the Notes to
maturity. The following examples do not take into account any tax consequences from investing in the Notes.
For recent actual levels of the
Underlyings, see “The Underlyings” section below. Each Underlying is a price return index and as such its Ending Value
will not include any income generated by dividends paid on the stocks included in that Underlying, which you would otherwise be
entitled to receive if you invested in those stocks directly. In addition, all payments on the Notes are subject to Issuer and
Guarantor credit risk.
Ending Value of the
Least Performing Underlying
|
Underlying Return of the
Least Performing Underlying
|
Redemption Amount per Note (including any final Contingent Coupon Payment)
|
Return
on the Notes(1)
|
160.00
|
60.00%
|
$1,021.10
|
2.11%
|
150.00
|
50.00%
|
$1,021.10
|
2.11%
|
140.00
|
40.00%
|
$1,021.10
|
2.11%
|
130.00
|
30.00%
|
$1,021.10
|
2.11%
|
120.00
|
20.00%
|
$1,021.10
|
2.11%
|
110.00
|
10.00%
|
$1,021.10
|
2.11%
|
105.00
|
5.00%
|
$1,021.10
|
2.11%
|
102.00
|
2.00%
|
$1,021.10
|
2.11%
|
100.00(2)
|
0.00%
|
$1,021.10
|
2.11%
|
90.00
|
-10.00%
|
$1,021.10
|
2.11%
|
80.00
|
-20.00%
|
$1,021.10
|
2.11%
|
65.00(3)
|
-35.00%
|
$1,021.10(4)
|
2.11%
|
64.99
|
-35.01%
|
$649.99
|
-35.01%
|
60.00
|
-40.00%
|
$600.00
|
-40.00%
|
50.00
|
-50.00%
|
$500.00
|
-50.00%
|
0.00
|
-100.00%
|
$0.00
|
-100.00%
|
|
(1)
|
The “Return on
the Notes” is calculated based on the Redemption Amount, which includes the final Contingent Coupon Payment (if
payable), not including any Contingent Coupon Payments paid prior to maturity.
|
|
(2)
|
The hypothetical Starting
Value of 100 used in the table above has been chosen for illustrative purposes only. The actual Starting Value for each Underlying
is set forth on page PS-2 above.
|
|
(3)
|
This is the hypothetical Coupon Barrier and
Threshold Value of the Least Performing Underlying.
|
|
(4)
|
This amount represents the
sum of the principal amount and the final Contingent Coupon Payment.
|
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-7
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Risk Factors
Your investment in the Notes entails significant
risks, many of which differ from those of a conventional debt security. Your decision to purchase the Notes should be made only
after carefully considering the risks of an investment in the Notes, including those discussed below, with your advisors in light
of your particular circumstances. The Notes are not an appropriate investment for you if you are not knowledgeable about significant
elements of the Notes or financial matters in general. You should carefully review the more detailed explanation of risks relating
to the Notes in the “Risk Factors” sections beginning on page PS-5 of the accompanying product supplement, page S-4
of the accompanying prospectus supplement and page 7 of the accompanying prospectus, each as identified on page PS-25 below.
|
•
|
Your investment may result in a loss; there is
no guaranteed return of principal. There is no fixed principal repayment amount on the Notes at maturity. If the Notes are
not called and the Ending Value of any Underlying is less than its Threshold Value, you will lose 1% of the principal amount
for each 1% that the Ending Value of the Least Performing Underlying is less than its Starting Value. In that case, you will lose
a significant portion or all of your investment in the Notes.
|
|
•
|
Your return on the Notes is limited to the return
represented by the Contingent Coupon Payments, if any, over the term of the Notes. Your return on the Notes is limited to the
Contingent Coupon Payments paid over the term of the Notes, regardless of the extent to which the Ending Value of any Underlying
exceeds its Starting Value. Similarly, the amount payable at maturity or upon Optional Early Redemption will never exceed the sum
of the principal amount and the applicable Contingent Coupon Payment, regardless of the extent to which the Observation Value of
any Underlying exceeds its Starting Value. In contrast, a direct investment in the securities included in one or more of the Underlyings
would allow you to receive the benefit of any appreciation in their prices. Thus, any return on the Notes will not reflect the
return you would realize if you actually owned those securities and received the dividends paid or distributions made on them.
|
|
•
|
The Notes are subject to Optional Early Redemption.
On each Call Date, at our option, we may redeem your Notes in whole, but not in part. Even if we do not exercise our option
to redeem your Notes, our ability to do so may adversely affect the market value of your Notes. It is our sole option whether to
redeem your Notes prior to maturity on any such Call Date and we may or may not exercise this option for any reason. Because of
this Optional Early Redemption potential, the term of your Notes could be anywhere between 6 months and 2.5 years. If your Notes
are redeemed early, you will not have the right to receive any future Contingent Coupon Payments that you may otherwise have received.
Further, if your Notes are redeemed early, you may not be able to reinvest the Early Redemption Amount at a comparable return for
a similar level of risk.
|
|
•
|
You may not receive any Contingent Coupon Payments.
The Notes do not provide for any regular fixed coupon payments. Investors in the Notes will not necessarily receive any Contingent
Coupon Payments on the Notes. If the Observation Value of any Underlying is less than its Coupon Barrier on an Observation Date,
you will not receive the Contingent Coupon Payment applicable to that Observation Date. If the Observation Value of any Underlying
is less than its Coupon Barrier on all the Observation Dates during the term of the Notes, you will not receive any Contingent
Coupon Payment during the term of the Notes, and will not receive a positive return on the Notes.
|
|
•
|
Your return on the Notes may be less than the yield on a conventional
debt security of comparable maturity. Any return that you receive on the Notes may be less than the return you would earn if
you purchased a conventional debt security with the same Maturity Date. As a result, your investment in the Notes may not reflect
the full opportunity cost to you when you consider factors, such as inflation, that affect the time value of money. In addition,
if interest rates increase during the term of the Notes, the Contingent Coupon Payment (if any) may be less than the yield on a
conventional debt security of comparable maturity.
|
|
•
|
Any payments on the
Notes are subject to the credit risk of BofA Finance and the Guarantor, and actual or perceived changes in BofA Finance or the
Guarantor’s creditworthiness are expected to affect the value of the Notes. The Notes are our senior unsecured debt securities.
Any payment on the Notes will be fully and unconditionally guaranteed by the Guarantor. The Notes are not guaranteed by any entity
other than the Guarantor. As a result, your receipt of the Early Redemption Amount or the Redemption Amount at maturity, as applicable,
will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the Notes on the
applicable Contingent Payment Date or the Maturity Date, regardless of the Ending Value of the Least Performing Underlying as compared
to its Starting Value.
|
In addition,
our credit ratings and the credit ratings of the Guarantor are assessments by ratings agencies of our respective abilities to pay
our obligations. Consequently, our or the Guarantor’s perceived creditworthiness and actual or anticipated decreases in our
or the Guarantor’s credit ratings or increases in the spread between the yield on our respective securities and the yield
on U.S. Treasury securities (the “credit spread”) prior to the Maturity Date may adversely affect the market value
of the Notes. However, because your return on the Notes depends upon factors in addition to our ability and the ability of the
Guarantor to pay our respective obligations, such as the values of the Underlyings, an improvement in our or the Guarantor’s
credit ratings will not reduce the other investment risks related to the Notes.
|
•
|
We are a finance
subsidiary and, as such, 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.
|
|
•
|
The public offering
price you are paying for the Notes exceeds their initial estimated value. The initial estimated value of the Notes that is
provided on the cover of this pricing supplement is an estimate only, determined as of the pricing date by reference to our and
our affiliates’
|
|
CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-8
|
Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
pricing models. These pricing models consider certain assumptions
and variables, including our credit spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market
terms on hedging transactions, expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected
term of the Notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
If you attempt to sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower
than their initial estimated value. This is due to, among other things, changes in the levels of the Underlyings, the Guarantor’s
internal funding rate, and the inclusion in the public offering price of the underwriting discount and the hedging related charges,
all as further described in "Structuring the Notes" below. These factors, together with various credit, market and economic
factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary
market and will affect the value of the Notes in complex and unpredictable ways.
|
•
|
The initial estimated
value does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates
would be willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any
time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Underlyings,
our and BAC’s creditworthiness and changes in market conditions.
|
|
•
|
We cannot assure
you that a trading market for your Notes will ever develop or be maintained. We will not list the Notes on any securities exchange.
We cannot predict how the Notes will trade in any secondary market or whether that market will be liquid or illiquid.
|
|
•
|
The
Contingent Coupon Payment, Early Redemption Amount or Redemption Amount, as applicable, will not reflect the levels of the Underlyings
other than on the Observation Dates. The levels of the Underlyings during the term of the Notes other than on the Observation
Dates will not affect payments on the Notes. Notwithstanding the foregoing, investors should generally be aware of the performance
of the Underlyings while holding the Notes. The calculation agent will determine whether each Contingent Coupon Payment is payable
and will calculate the Early Redemption Amount or the Redemption Amount, as applicable, by comparing only the Starting Value, the
Coupon Barrier or the Threshold Value, as applicable, to the Observation Value or the Ending Value for each Underlying. No other
levels of the Underlyings will be taken into account. As a result, if the Notes are not called prior to maturity, you will receive
less than the principal amount at maturity even if the level of each Underlying has increased at certain times during the term
of the Notes before the Least Performing Underlying decreases to a level that is less than its Threshold Value as of the Valuation
Date.
|
|
•
|
Because the Notes
are linked to the least performing (and not the average performance) of the Underlyings, you may not receive any return on the
Notes and may lose some or all of your principal amount even if the Observation Value or Ending Value of one Underlying is always
greater than or equal to its Coupon Barrier or Threshold Value, as applicable. Your Notes are linked to the least performing
of the Underlyings, and a change in the level of one Underlying may not correlate with changes in the level of the other Underlying(s).
The Notes are not linked to a basket composed of the Underlyings, where the depreciation in the level of one Underlying could be
offset to some extent by the appreciation in the level of the other Underlying(s). In the case of the Notes, the individual performance
of each Underlying would not be combined, and the depreciation in the level of one Underlying would not be offset by any appreciation
in the level of the other Underlying(s). Even if the Observation Value of an Underlying is at or above its Coupon Barrier on an
Observation Date, you will not receive the Contingent Coupon Payment with respect to that Observation Date if the Observation Value
of another Underlying is below its Coupon Barrier on that day. In addition, even if the Ending Value of an Underlying is at or
above its Threshold Value, you will lose a portion of your principal if the Ending Value of the Least Performing Underlying is
below its Threshold Value.
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The Notes are subject to risks associated with
small-size capitalization companies. The stocks composing the RTY are issued by companies with small-sized market capitalization.
The stock prices of small-size companies may be more volatile than stock prices of large capitalization companies. Small-size capitalization
companies may be less able to withstand adverse economic, market, trade and competitive conditions relative to larger companies.
Small-size capitalization companies may also be more susceptible to adverse developments related to their products or services.
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The publisher of
an Underlying may adjust that Underlying in a way that affects its levels, and the publisher has no obligation to consider your
interests. The publisher of an Underlying can add, delete, or substitute the components included in that Underlying or
make other methodological changes that could change its level. Any of these actions could adversely affect the value of your Notes.
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The Notes are subject
to risks associated with foreign securities markets. The MXEF includes certain foreign equity securities. You should be aware
that investments in securities linked to the value of foreign equity securities involve particular risks. The foreign securities
markets comprising the MXEF may have less liquidity and may be more volatile than U.S. or other securities markets and market developments
may affect foreign markets differently from U.S. or other securities markets. Direct or indirect government intervention to stabilize
these foreign securities markets, as well as cross-shareholdings in foreign companies, may affect trading prices and volumes in
these markets. Also, there is generally less publicly available information about foreign companies than about those U.S. companies
that are subject to the reporting requirements of the U.S. Securities and Exchange Commission, and foreign companies are subject
to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting
companies. Prices of securities in foreign countries are subject to political, economic, financial and social factors that apply
in those geographical regions. These factors, which could negatively affect those securities markets, include the possibility of
recent or future changes in a foreign government’s economic and fiscal policies, the possible imposition of, or changes in,
currency exchange laws or other laws or restrictions applicable to foreign companies or investments in foreign equity securities
and the possibility of fluctuations in the rate of exchange between currencies, the possibility of outbreaks of hostility and political
instability and the possibility of natural disaster or adverse public health developments in the region. Moreover, foreign economies
may differ favorably or unfavorably from the U.S. economy in important respects such as growth of gross national
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-9
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
product, rate of inflation, capital reinvestment, resources and
self-sufficiency.
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Trading and hedging activities by us, the Guarantor
and any of our other affiliates may create conflicts of interest with you and may affect your return on the Notes and their market
value. We, the Guarantor or one or more of our other affiliates, including BofAS, may buy or sell the securities held by or
included in the Underlyings, or futures or options contracts on the Underlyings or those securities, or other listed or over-the-counter
derivative instruments linked to the Underlyings or those securities. While we, the Guarantor or one or more of our other affiliates,
including BofAS, may from time to time own securities represented by the Underlyings, except to the extent that BAC’s common
stock may be included in the Underlyings, we, the Guarantor and our other affiliates, including BofAS, do not control any company
included in the Underlyings, and have not verified any disclosure made by any other company. We, the Guarantor or one or more of
our other affiliates, including BofAS, may execute such purchases or sales for our own or their own accounts, for business reasons,
or in connection with hedging our obligations under the Notes. These transactions may present a conflict of interest between your
interest in the Notes and the interests we, the Guarantor and our other affiliates, including BofAS, may have in our or their proprietary
accounts, in facilitating transactions, including block trades, for our or their other customers, and in accounts under our or
their management. These transactions may affect the value of the Underlyings in a manner that could be adverse to your investment
in the Notes. On or before the pricing date, any purchases or sales by us, the Guarantor or our other affiliates, including BofAS
or others on its behalf (including for the purpose of hedging anticipated exposures), may have affected the value of the Underlyings.
Consequently, the value of the Underlyings may change subsequent to the pricing date, adversely affecting the market value of the
Notes.
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We, the Guarantor or one or more
of our other affiliates, including BofAS, may also have engaged in hedging activities that could have affected the value of the
Underlyings on the pricing 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, may
purchase or otherwise acquire a long or short position in the Notes and may hold or resell the Notes. For example, BofAS may enter
into these transactions in connection with any market making activities in which it engages. We cannot assure you that these activities
will not adversely affect the value of the Underlyings, the market value of your Notes prior to maturity or the amounts payable
on the Notes.
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There may be potential conflicts of interest involving
the calculation agent, which is an affiliate of ours. We have the right to appoint and remove the calculation agent. One of
our affiliates will be the calculation agent for the Notes and, as such, will make a variety of determinations relating to the
Notes, including the amounts that will be paid on the Notes. Under some circumstances, these duties could result in a conflict
of interest between its status as our affiliate and its responsibilities as calculation agent.
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The U.S. federal income tax consequences of an
investment in the Notes are uncertain, and may be adverse to a holder of the Notes. No statutory, judicial, or administrative
authority directly addresses the characterization of the Notes or securities similar to the Notes for U.S. federal income tax purposes.
As a result, significant aspects of the U.S. federal income tax consequences of an investment in the Notes are not certain. Under
the terms of the Notes, you will have agreed with us to treat the Notes as contingent income-bearing single financial contracts,
as described below under “U.S. Federal Income Tax Summary—General.” If the Internal Revenue Service (the “IRS”)
were successful in asserting an alternative characterization for the Notes, the timing and character of gain or loss with respect
to the Notes may differ. No ruling will be requested from the IRS with respect to the Notes and no assurance can be given that
the IRS will agree with the statements made in the section entitled “U.S. Federal Income Tax Summary.” You are urged
to consult with your own tax advisor regarding all aspects of the U.S. federal income tax consequences of investing in the Notes.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-10
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
The Underlyings
All disclosures contained in this
pricing supplement regarding the Underlyings, including, without limitation, their make-up, method of calculation, and changes
in their components, have been derived from publicly available sources. The information reflects the policies of, and is subject
to change by, each of S&P Dow Jones Indices LLC (“SPDJI”), the sponsor of the SPX, FTSE Russell, the sponsor of
the RTY, and MSCI Inc. (“MSCI”), the sponsor of the MXEF. We refer to SPJDI, FTSE Russell and MSCI, Inc. as the “Underlying
Sponsors.” The Underlying Sponsors, which license the copyright and all other rights to the Underlyings, have no obligation
to continue to publish, and may discontinue publication of, the Underlyings. The consequences of any Underlying Sponsor discontinuing
publication of the applicable Underlying are discussed in “Description of the Notes—Discontinuance of an Index”
in the accompanying product supplement. None of us, the Guarantor, the calculation agent, or BofAS accepts any responsibility for
the calculation, maintenance or publication of any Underlying or any successor index. None of us, the Guarantor, BofAS or any of
our other affiliates makes any representation to you as to the future performance of the Underlyings. You should make your own
investigation into the Underlyings.
The MSCI Emerging Markets Index
The MXEF is intended to measure
equity market performance in the global emerging markets. The MXEF is a free float--adjusted market capitalization index with a
base date of December 31, 1987 and an initial value of 100. The MXEF is calculated daily in U.S. dollars and published in real
time every 60 seconds during market trading hours. The MXEF has a base value of 100.00 and a base date of December 31, 1987. As
of March 31, 2019, the MXEF consists of the following 24 emerging market country indices: Brazil, Chile, China, Colombia, Czech
Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Russia, Qatar, South
Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MXEF is an “MSCI Index.”
The Country Indices
Each country’s index included
in an MSCI Index is referred to as a “Country Index.” Under the MSCI methodology, each Country Index is an “MSCI
Global Standard Index.” The components of each Country Index used to be selected by the index sponsor from among the universe
of securities eligible for inclusion in the relevant Country Index so as to target an 85% free float-adjusted market representation
level within each of a number of industry groups, subject to adjustments to (i) provide for sufficient liquidity, (ii) reflect
foreign investment restrictions (only those securities that can be held by non-residents of the country corresponding to the relevant
Country Index are included) and (iii) meet certain other investibility criteria. Following a change in the index sponsor’s
methodology implemented in May 2008, the 85% target is now measured at the level of the country universe of eligible securities
rather than the industry group level-so each Country Index will seek to include the securities that represent 85% of the free float-adjusted
market capitalization of all securities eligible for inclusion-but will still be subject to liquidity, foreign investment restrictions
and other investibility adjustments. The index sponsor defines “free float” as total shares excluding shares held by
strategic investors such as governments, corporations, controlling shareholders and management, and shares subject to foreign ownership
restrictions.
Calculation of the Country
Indices
Each Country Index is a free float-adjusted
market capitalization index that is designed to measure the market performance, including price performance, of the equity securities
in that country. Each Country Index is calculated in the relevant local currency as well as in U.S. dollars, with price, gross
and net returns.
Each component is included in the
relevant Country Index at a weight that reflects the ratio of its free float-adjusted market capitalization (i.e., free
public float multiplied by price) to the free float-adjusted market capitalization of all the components in that Country Index.
The index sponsor defines the free float of a security as the proportion of shares outstanding that is deemed to be available for
purchase in the public equity markets by international investors.
Calculation of the MSCI
Indices
The performance of a MSCI Index
on any given day represents the weighted performance of all of the components included in all of the Country Indices. Each component
in a MSCI Index is included at a weight that reflects the ratio of its free float-adjusted market capitalization (i.e.,
free public float multiplied by price) to the free float-adjusted market capitalization of all the components included in all of
the Country Indices.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-11
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Maintenance of and Changes
to the MSCI Indices
The index sponsor maintains the
MSCI Indices with the objective of reflecting, on a timely basis, the evolution of the underlying equity markets and segments.
In maintaining the indices, emphasis is also placed on continuity, continuous investibility of the constituents, replicability,
index stability and low turnover in the indices.
As part of the changes to the index
sponsor’s methodology which became effective in May 2008, maintenance of the indices falls into three broad categories:
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1. semi-annual reviews, which will occur each May and November and will involve a comprehensive reevaluation of the market, the universe of eligible securities and other factors involved in composing the indices;
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2. quarterly reviews, which will occur each February, May, August and November and will focus on significant changes in the market since the last semi-annual review and on including significant new eligible securities (such as IPOs, which were not eligible for earlier inclusion in the indices); and
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3. ongoing event-related changes, which will generally be reflected in the indices at the time of the event and will include changes resulting from mergers, acquisitions, spin-offs, bankruptcies, reorganizations and other similar corporate events.
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Prices and Exchange Rates
Prices
The prices used to calculate the
MSCI Indices are the official exchange closing prices or those figures accepted as such. The index sponsor reserves the right to
use an alternative pricing source on any given day.
Exchange Rates
The index sponsor uses the closing
spot rates published by WM / Reuters at 4:00 p.m., London time. The index sponsor uses WM / Reuters rates for all countries for
which it provides indices.
In case WM/Reuters does not provide
rates for specific markets on given days (for example Christmas Day and New Year’s Day), the previous business day’s
rates are normally used. The index sponsor independently monitors the exchange rates on all its indices and may, under exceptional
circumstances, elect to use an alternative exchange rate if the WM / Reuters rates are not available, or if the index sponsor determines
that the WM / Reuters rates are not reflective of market circumstances for a given currency on a particular day. In such circumstances,
an announcement would be sent to clients with the related information. If appropriate, the index sponsor may conduct a consultation
with the investment community to gather feedback on the most relevant exchange rate.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-12
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Historical Performance
of the MXEF
The following graph sets forth
the daily historical performance of the MXEF in the period from January 1, 2008 through the pricing date. We obtained this historical
data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg
L.P. The horizontal line in the graph represents the MXEF’s Coupon Barrier and Threshold Value of 649.01 (rounded to two
decimal places), which is 65% of the MXEF’s Starting Value of 998.48.
This historical data on the MXEF is
not necessarily indicative of the future performance of the MXEF or what the value of the Notes may be. Any historical upward or
downward trend in the level of the MXEF during any period set forth above is not an indication that the level of the MXEF is more
or less likely to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you
should consult publicly available sources for the levels of the MXEF.
License Agreement
Our affiliate, Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“MLPF&S”) has entered into a non-exclusive license agreement with MSCI whereby
MLPF&S and certain of its affiliates, in exchange for a fee, are permitted to use the MSCI indices in connection with certain
securities, including the notes. We are not affiliated with MSCI, the only relationship between MSCI and us is any licensing of
the use of MSCI’s indices and trademarks relating to them.
The license agreement provides that
the following language must be set forth herein:
THE NOTES ARE NOT SPONSORED, ENDORSED,
SOLD, OR PROMOTED BY MSCI, ANY OF ITS AFFILIATES, ANY OF ITS INFORMATION PROVIDERS, OR ANY OTHER THIRD PARTY INVOLVED IN, OR RELATED
TO, COMPILING, COMPUTING, OR CREATING THE MSCI INDEX (COLLECTIVELY, THE “MSCI PARTIES”). THE MSCI INDEX IS THE EXCLUSIVE
PROPERTY OF MSCI. MSCI AND THE MSCI INDEX ARE SERVICE MARKS OF MSCI OR ITS AFFILIATES AND HAVE BEEN LICENSED TO US FOR USE FOR
CERTAIN PURPOSES. THE NOTES HAVE NOT BEEN PASSED ON BY ANY OF THE MSCI PARTIES AS TO THEIR LEGALITY OR SUITABILITY WITH RESPECT
TO ANY PERSON OR ENTITY AND NONE OF THE MSCI PARTIES MAKES ANY WARRANTIES OR BEARS ANY LIABILITY WITH RESPECT TO THE NOTES. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, NONE OF THE MSCI PARTIES MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO
US OR OWNERS OF THE NOTES OR ANY OTHER PERSON OR ENTITY REGARDING THE ADVISABILITY OF INVESTING IN ANY SECURITIES GENERALLY OR
IN THIS OFFERING PARTICULARLY OR THE ABILITY OF ANY MSCI INDEX TO TRACK CORRESPONDING STOCK MARKET PERFORMANCE. MSCI OR ITS AFFILIATES
ARE THE LICENSORS OF CERTAIN TRADEMARKS, SERVICE MARKS, AND TRADE NAMES OF THE MSCI INDEX, WHICH ARE DETERMINED, COMPOSED, AND
CALCULATED BY MSCI WITHOUT REGARD TO THE NOTES, TO US, TO THE OWNERS OF THE NOTES, OR TO ANY OTHER PERSON OR ENTITY. NONE OF THE
MSCI PARTIES HAS ANY OBLIGATION TO TAKE THE NEEDS OF US OR OWNERS OF THE NOTES OR ANY OTHER PERSON OR ENTITY INTO CONSIDERATION
IN DETERMINING, COMPOSING, OR CALCULATING THE MSCI INDEX. NONE OF THE MSCI PARTIES IS RESPONSIBLE FOR OR HAS PARTICIPATED IN THE
DETERMINATION OF THE TIMING OF, PRICES AT, OR QUANTITIES OF THE NOTES TO BE ISSUED OR IN THE DETERMINATION OR CALCULATION OF THE
AMOUNT THAT MAY BE PAID AT MATURITY ON THE NOTES. NONE OF THE MSCI PARTIES HAS ANY OBLIGATION OR LIABILITY TO US OR TO OWNERS OF
THE NOTES OR ANY OTHER PERSON OR ENTITY IN CONNECTION WITH THE ADMINISTRATION, MARKETING OR, OFFERING OF THE NOTES.
No purchaser, seller or holder of the
notes, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse,
market or promote the notes without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances
may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-13
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
The Russell 2000® Index
The RTY was developed by Russell
Investments (“Russell”) before FTSE International Limited and Russell combined in 2015 to create FTSE Russell, which
is wholly owned by London Stock Exchange Group. Additional information on the RTY is available at the following website: http://www.ftserussell.com.
No information on that website is deemed to be included or incorporated by reference in this pricing supplement.
Russell began dissemination of
the RTY (Bloomberg L.P. index symbol “RTY”) on January 1, 1984. FTSE Russell calculates and publishes the RTY. The
RTY was set to 135 as of the close of business on December 31, 1986. The RTY is designed to track the performance of the small
capitalization segment of the U.S. equity market. As a subset of the Russell 3000® Index, the RTY consists of the
smallest 2,000 companies included in the Russell 3000® Index. The Russell 3000® Index measures the
performance of the largest 3,000 U.S. companies, representing approximately 98% of the investable U.S. equity market. The RTY is
determined, comprised, and calculated by FTSE Russell without regard to the Notes.
Selection
of Stocks Comprising the RTY
All companies eligible for inclusion
in the RTY must be classified as a U.S. company under FTSE Russell’s country-assignment methodology. If a company is incorporated,
has a stated headquarters location, and trades in the same country (American Depositary Receipts and American Depositary Shares
are not eligible), then the company is assigned to its country of incorporation. If any of the three factors are not the same,
FTSE Russell defines three Home Country Indicators (“HCIs”): country of incorporation, country of headquarters, and
country of the most liquid exchange (as defined by a two-year average daily dollar trading volume) (“ADDTV”) from all
exchanges within a country. Using the HCIs, FTSE Russell compares the primary location of the company’s assets with the three
HCIs. If the primary location of its assets matches any of the HCIs, then the company is assigned to the primary location of its
assets. If there is insufficient information to determine the country in which the company’s assets are primarily located,
FTSE Russell will use the primary country from which the company’s revenues are primarily derived for the comparison with
the three HCIs in a similar manner. FTSE Russell uses the average of two years of assets or revenues data to reduce potential turnover.
If conclusive country details cannot be derived from assets or revenues data, FTSE Russell will assign the company to the country
of its headquarters, which is defined as the address of the company’s principal executive offices, unless that country is
a Benefit Driven Incorporation “BDI” country, in which case the company will be assigned to the country of its most
liquid stock exchange. BDI countries include: Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Bonaire, British
Virgin Islands, Cayman Islands, Channel Islands, Cook Islands, Curacao, Faroe Islands, Gibraltar, Guernsey, Isle of Man, Jersey,
Liberia, Marshall Islands, Panama, Saba, Sint Eustatius, Sint Maarten, and Turks and Caicos Islands. For any companies incorporated
or headquartered in a U.S. territory, including countries such as Puerto Rico, Guam, and U.S. Virgin Islands, a U.S. HCI is assigned.
All securities eligible for inclusion
in the RTY must trade on a major U.S. exchange. Stocks must have a closing price at or above $1.00 on their primary exchange on
the last trading day in May to be eligible for inclusion during annual reconstitution. However, in order to reduce unnecessary
turnover, if an existing member’s closing price is less than $1.00 on the last day of May, it will be considered eligible
if the average of the daily closing prices (from its primary exchange) during the month of May is equal to or greater than $1.00.
Initial public offerings are added each quarter and must have a closing price at or above $1.00 on the last day of their eligibility
period in order to qualify for index inclusion. If an existing stock does not trade on the “rank day” (typically the
last trading day in May but a confirmed timetable is announced each spring) but does have a closing price at or above $1.00 on
another eligible U.S. exchange, that stock will be eligible for inclusion.
An important criterion used to
determine the list of securities eligible for the RTY is total market capitalization, which is defined as the market price as of
the last trading day in May for those securities being considered at annual reconstitution times the total number of shares outstanding.
Where applicable, common stock, non-restricted exchangeable shares and partnership units/membership interests are used to determine
market capitalization. Any other form of shares such as preferred stock, convertible preferred stock, redeemable shares, participating
preferred stock, warrants and rights, installment receipts or trust receipts, are excluded from the calculation. If multiple share
classes of common stock exist, they are combined. In cases where the common stock share classes act independently of each other
(e.g., tracking stocks), each class is considered for inclusion separately. If multiple share classes exist, the pricing vehicle
will be designated as the share class with the highest two-year trading volume as of the rank day in May.
Companies with a total market capitalization
of less than $30 million are not eligible for the RTY. Similarly, companies with only 5% or less of their shares available in the
marketplace are not eligible for the RTY. Royalty trusts, limited liability companies, closed-end investment companies (companies
that are required to report Acquired Fund Fees and Expenses, as defined by the SEC, including business development companies),
blank check companies, special purpose acquisition companies, and limited partnerships are also ineligible for inclusion. Bulletin
board, pink sheets, and over-the-counter (“OTC”) traded securities are not eligible for inclusion. Exchange traded
funds and mutual funds are also excluded.
Annual reconstitution is a process
by which the RTY is completely rebuilt. Based on closing levels of the company’s common stock on its primary exchange on
the rank day of May of each year, FTSE Russell reconstitutes the composition of the RTY using the then existing market capitalizations
of eligible companies. Reconstitution of the RTY occurs on the last Friday in June or, when the last Friday in June is the 29th
or 30th, reconstitution occurs on the prior Friday. In addition, FTSE Russell adds initial public offerings to the RTY on a quarterly
basis based on total market capitalization ranking within the market-adjusted capitalization breaks established during the most
recent reconstitution. After membership is determined, a security’s shares are adjusted to include only those shares available
to the public. This is often referred to as “free float.” The purpose of the adjustment is to exclude from market calculations
the capitalization that is not available for purchase and is not part of the investable opportunity set.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-14
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Historical
Performance of the RTY
The following graph sets forth
the daily historical performance of the RTY in the period from January 1, 2008 through the pricing date. We obtained this historical
data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg
L.P. The horizontal line in the graph represents the RTY’s Coupon Barrier and Threshold Value of 970.731 (rounded to three
decimal places), which is 65% of the RTY’s Starting Value of 1,493.432.
This historical data on the RTY
is not necessarily indicative of the future performance of the RTY or what the value of the Notes may be. Any historical upward
or downward trend in the level of the RTY during any period set forth above is not an indication that the level of the RTY is more
or less likely to increase or decrease at any time over the term of the Notes.
Before investing in the Notes,
you should consult publicly available sources for the levels of the RTY.
License
Agreement
“Russell 2000®”
and “Russell 3000®” are trademarks of FTSE Russell and have been licensed for use by our affiliate,
MLPF&S. The Notes are not sponsored, endorsed, sold, or promoted by FTSE Russell, and FTSE Russell makes no representation
regarding the advisability of investing in the Notes.
FTSE Russell and MLPF&S
have entered into a non-exclusive license agreement providing for the license to MLPF&S and its affiliates, including us, in
exchange for a fee, of the right to use indices owned and published by FTSE Russell in connection with some securities, including
the Notes. The license agreement provides that the following language must be stated in this pricing supplement:
The Notes are not sponsored,
endorsed, sold, or promoted by FTSE Russell. FTSE Russell makes no representation or warranty, express or implied, to the holders
of the Notes or any member of the public regarding the advisability of investing in securities generally or in the Notes particularly
or the ability of the RTY to track general stock market performance or a segment of the same. FTSE Russell’s publication
of the RTY in no way suggests or implies an opinion by FTSE Russell as to the advisability of investment in any or all of the securities
upon which the RTY is based. FTSE Russell’s only relationship to MLPF&S and to us is the licensing of certain trademarks
and trade names of FTSE Russell and of the RTY, which is determined, composed, and calculated by FTSE Russell without regard to
MLPF&S, us, or the Notes. FTSE Russell is not responsible for and has not reviewed the Notes nor any associated literature
or publications and FTSE Russell makes no representation or warranty express or implied as to their accuracy or completeness, or
otherwise. FTSE Russell reserves the right, at any time and without notice, to alter, amend, terminate, or in any way change the
RTY. FTSE Russell has no obligation or liability in connection with the administration, marketing, or trading of the Notes.
FTSE RUSSELL DOES NOT GUARANTEE
THE ACCURACY AND/OR THE COMPLETENESS OF THE RTY OR ANY DATA INCLUDED THEREIN AND FTSE RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. FTSE RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY MLPF&S,
US, HOLDERS OF THE NOTES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RTY OR ANY DATA INCLUDED THEREIN. FTSE RUSSELL MAKES
NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE RTY OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL FTSE RUSSELL
HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-15
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
The S&P 500®
Index
The SPX includes a representative sample
of 500 companies in leading industries of the U.S. economy. The SPX is intended to provide an indication of the pattern of common
stock price movement. The calculation of the level of the SPX 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.
The
SPX includes companies from eleven main groups: Communication Services; Consumer Discretionary; Consumer Staples; Energy; Financials;
Health Care; Industrials; Information Technology; Real Estate; Materials; and Utilities. The Underlying Sponsor may from time to
time, in its sole discretion, add companies to, or delete companies from, the SPX to achieve the objectives stated above.
Company additions to the SPX 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).
SPDJI calculates the SPX by reference
to the prices of the constituent stocks of the SPX 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 SPX constituent stocks
and received the dividends paid on those stocks.
Computation
of the SPX
While the SPDJI sponsor currently
employs the following methodology to calculate the Underlying, no assurance can be given that the Underlying sponsor will not modify
or change this methodology in a manner that may affect the Redemption Amount.
Historically, the market value of any
component stock of the SPX 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, SPDJI began shifting the SPX halfway from a market capitalization weighted formula to a
float-adjusted formula, before moving the SPX to full float adjustment on September 16, 2005. SPDJI’s criteria for selecting
stocks for the SPX did not change with the shift to float adjustment. However, the adjustment affects each company’s weight
in the SPX.
Under float adjustment, the share counts
used in calculating the SPX 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 SPX. 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. If a company has multiple classes of stock outstanding,
shares in an unlisted or non-traded class are treated as 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, SPDJI 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, SPDJI 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 SPX. Constituents of the SPX prior to July 31, 2017 with multiple share class lines will be
grandfathered in and continue to be included in the SPX. If a constituent company of the SPX reorganizes into a multiple share
class line structure, that company will remain in the SPX at the discretion of the S&P Index Committee in order to minimize
turnover.
The SPX is calculated using a base-weighted
aggregate methodology. The level of the SPX 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 SPX 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 SPX, it serves as a link
to the original base period level of the SPX. The index divisor keeps the SPX comparable over time and is the manipulation point
for all adjustments to the SPX, 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 SPX, and do not require index divisor adjustments.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-16
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
To prevent the level of the SPX from
changing due to corporate actions, corporate actions which affect the total market value of the SPX require an index divisor adjustment.
By adjusting the index divisor for the change in market value, the level of the SPX remains constant and does not reflect the corporate
actions of individual companies in the SPX. Index divisor adjustments are made after the close of trading and after the calculation
of the SPX closing level.
Changes in a company’s shares
outstanding of 5.00% or more due to mergers, acquisitions, public offerings, tender offers, Dutch auctions, or exchange offers
are made as soon as reasonably possible. Share changes due to mergers or acquisitions of publicly held companies that trade
on a major exchange are implemented
when the transaction occurs, even if both of the companies are not in the same headline index, and regardless of the size of the
change. All other changes of 5.00% or more (due to, for example, company stock repurchases, private placements, redemptions, exercise
of options, warrants, conversion of preferred stock, Notes, debt, equity participation units, at-the-market offerings, or other
recapitalizations) are made weekly and are announced on Fridays for implementation after the close of trading on the following
Friday.
Changes of less than 5.00% are accumulated
and made quarterly on the third Friday of March, June, September, and December, and are usually announced two to five days prior.
If
a change in a company’s shares outstanding of 5.00% or more 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.
Historical
Performance of the SPX
The following graph sets forth
the daily historical performance of the SPX in the period from January 1, 2008 through the pricing date. We obtained this historical
data from Bloomberg L.P. We have not independently verified the accuracy or completeness of the information obtained from Bloomberg
L.P. The horizontal line in the graph represents the SPX’s Coupon Barrier and Threshold Value of 1,911.16 (rounded to two
decimal places), which is 65% of the SPX’s Starting Value of 2,940.25.
This historical data on the SPX is
not necessarily indicative of the future performance of the SPX or what the value of the Notes may be. Any historical upward or
downward trend in the level of the SPX during any period set forth above is not an indication that the level of the SPX is more
or less likely to increase or decrease at any time over the term of the Notes.
Before investing in the Notes, you
should consult publicly available sources for the levels of the SPX.
License Agreement
S&P® is a registered
trademark of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones® is a registered
trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”). These trademarks have been licensed for use by S&P
Dow Jones Indices LLC. “Standard & Poor’s®,” “S&P 500®” and
“S&P®” are trademarks of S&P. These trademarks have been sublicensed for certain purposes by
MLPF&S. The SPX is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by MLPF&S.
The Notes are not sponsored, endorsed,
sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or any of their respective affiliates (collectively, “S&P
Dow Jones Indices”). S&P Dow Jones Indices make no representation or warranty, express or implied, to the holders of
the Notes or any member of the public regarding the advisability of investing in securities generally or in the Notes particularly
or the ability of the SPX to track general market performance. S&P Dow Jones Indices’ only relationship to MLPF&S
with respect to the SPX is the licensing of the SPX and certain trademarks, service marks and/or trade names of S&P Dow Jones
Indices and/or its third party licensors. The SPX is determined, composed and calculated by S&P Dow Jones Indices without regard
to us, MLPF&S, or the Notes. S&P Dow Jones Indices have no obligation to take our needs, BAC’s
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-17
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
needs or the needs of MLPF&S or holders of the Notes into consideration
in determining, composing or calculating the SPX. S&P Dow Jones Indices are not responsible for and have not participated in
the determination of the prices, and amount of the Notes or the timing of the issuance or sale of the Notes or in the determination
or calculation of the equation by which the Notes are to be converted into cash. S&P Dow Jones Indices have no obligation or
liability in connection with the administration, marketing or trading of the Notes. There is no assurance that investment products
based on the SPX will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC
and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation
by S&P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice.
Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated
to the Notes currently being issued by us, but which may be similar to and competitive with the Notes. In addition, CME Group Inc.
and its affiliates may trade financial products which are linked to the performance of the SPX. It is possible that this trading
activity will affect the value of the Notes.
S&P
DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED
THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS)
WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR
DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY US, BAC, MLPF&S, HOLDERS OF THE NOTES, ORANY
OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA
RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING,
IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL
DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES
OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND MLPF&S, OTHER THAN THE LICENSORS OF S&P DOW JONES
INDICES.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-18
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Supplement to the Plan of Distribution; Role
of BofAS and Conflicts of Interest
BofAS, a broker-dealer affiliate
of ours, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling
agent in the distribution of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121.
BofAS may not make sales in this offering to any of its discretionary accounts without the prior written approval of the account
holder.
We will deliver the Notes against
payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under Rule
15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more
than two business days prior to the original issue date will be required to specify alternative settlement arrangements to prevent
a failed settlement.
Under our distribution agreement
with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on the cover of this pricing
supplement, less the indicated underwriting discount. BofAS will sell the Notes to other broker-dealers that will participate in
the offering and that are not affiliated with us, at an agreed discount to the principal amount. Each of those broker-dealers may
sell the Notes to one or more additional broker-dealers. BofAS has informed us that these discounts may vary from dealer to dealer
and that not all dealers will purchase or repurchase the Notes at the same discount. Certain dealers who purchase the Notes for
sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public
offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low as $982.50 per Note.
BofAS and any of our other broker-dealer
affiliates, may use this pricing supplement, and the accompanying product supplement, prospectus supplement and prospectus for
offers and sales in secondary market transactions and market-making transactions in the Notes. However, they are not obligated
to engage in such secondary market transactions and/or market-making transactions. The selling agent may act as principal or agent
in these transactions, and any such sales will be made at prices related to prevailing market conditions at the time of the sale.
At BofAS’s discretion, for
a short, undetermined initial period after the issuance of the Notes, BofAS may offer to buy the Notes in the secondary market
at a price that may exceed the initial estimated value of the Notes. Any price offered by BofAS for the Notes will be based on
then-prevailing market conditions and other considerations, including the performance of the Underlyings and the remaining term
of the Notes. However, none of us, the Guarantor, BofAS or any of our other affiliates is obligated to purchase your Notes at any
price or at any time, and we cannot assure you that any party will purchase your Notes at a price that equals or exceeds the initial
estimated value of the Notes.
Any price that BofAS may pay to
repurchase the Notes will depend upon then prevailing market conditions, the creditworthiness of us and the Guarantor, and transaction
costs. At certain times, this price may be higher than or lower than the initial estimated value of the Notes.
European Economic Area
None of this pricing supplement,
the accompanying product supplement, the accompanying prospectus or the accompanying prospectus supplement is a prospectus for
the purposes of the Prospectus Regulation (as defined below). This pricing supplement, the accompanying product supplement, the
accompanying prospectus and the accompanying prospectus supplement have been prepared on the basis that any offer of Notes in any
Member State of the European Economic Area (the “EEA”) which has implemented the Prospectus Regulation (each, a “Relevant
Member State”) will only be made to a legal entity which is a qualified investor under the Prospectus Regulation (“Qualified
Investors”). Accordingly any person making or intending to make an offer in that Relevant Member State of Notes which are
the subject of the offering contemplated in this pricing supplement, the accompanying product supplement, the accompanying prospectus
and the accompanying prospectus supplement may only do so with respect to Qualified Investors. Neither BofA Finance nor BAC have
authorized, nor do they authorize, the making of any offer of Notes other than to Qualified Investors. The expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
PROHIBITION OF SALES TO EEA
RETAIL INVESTORS – The Notes are not intended to be offered, sold or otherwise made available to and should not be offered,
sold or otherwise made available to any retail investor in the EEA. For these purposes: (a) a retail investor means a person who
is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended (“MiFID
II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive), as amended
or superseded, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID
II; or (iii) not a qualified investor as defined in the Prospectus Regulation; and (b) the expression “offer” includes
the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered
so as to enable an investor to decide to purchase or subscribe for the Notes. Consequently no key information document required
by
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-19
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
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.
The communication of this pricing
supplement, the accompanying product supplement, the accompanying prospectus supplement, the accompanying prospectus and any other
document or materials relating to the issue of the Notes offered hereby is not being made, and such documents and/or materials
have not been approved, by an authorized person for the purposes of section 21 of the United Kingdom’s Financial Services
and Markets Act 2000, as amended (the “FSMA”). Accordingly, such documents and/or materials are not being distributed
to, and must not be passed on to, the general public in the United Kingdom. The communication of such documents and/or materials
as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters
relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who
fall within Article 49(2)(a) to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully
be made under the Financial Promotion Order (all such persons together being referred to as “relevant persons”). In
the United Kingdom, the Notes offered hereby are only available to, and any investment or investment activity to which this pricing
supplement, the accompanying product supplement, the accompanying prospectus supplement and the accompanying prospectus relates
will be engaged in only with, relevant persons. Any person in the United Kingdom that is not a relevant person should not act or
rely on this pricing supplement, the accompanying product supplement, the accompanying prospectus supplement or the accompanying
prospectus or any of their contents.
Any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only
be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to the BAC.
All applicable
provisions of the FSMA must be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise
involving the United Kingdom.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-20
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Structuring the Notes
The Notes are
our debt securities, the return on which is linked to the performance of the Underlyings. The related guarantee is BAC’s
obligation. As is the case for all of our and BAC’s respective debt securities, including our market-linked notes, the economic
terms of the Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because
market-linked notes result in increased operational, funding and liability management costs to us and BAC, BAC typically borrows
the funds under these types of notes at a rate, which we refer to in this pricing supplement as BAC’s internal funding rate,
that is more favorable to BAC than the rate that it might pay for a conventional fixed or floating rate debt security. This generally
relatively lower internal funding rate, which is reflected in the economic terms of the Notes, along with the fees and charges
associated with market-linked notes, resulted in the initial estimated value of the Notes on the pricing date being less than their
public offering price.
In order to meet our payment obligations
on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include call
options, put options or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements are
determined based upon terms provided by BofAS and its affiliates, and take into account a number of factors, including our and
BAC’s creditworthiness, interest rate movements, the volatility of the Underlyings, the tenor of the Notes and the hedging
arrangements. The economic terms of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has advised
us that the hedging arrangements will include hedging related charges, reflecting the costs associated with, and our affiliates’
profit earned from, these hedging arrangements. Since hedging entails risk and may be influenced by unpredictable market forces,
actual profits or losses from these hedging transactions may be more or less than any expected amounts.
For further
information, see “Risk Factors” beginning on page PS-8 above and “Supplemental Use of Proceeds” on page
PS-16 of the accompanying product supplement.
Validity of the Notes
In the opinion
of McGuireWoods LLP, as counsel to BofA Finance and BAC, when the trustee has made an appropriate entry on Schedule 1 to the Master
Registered Global Note dated November 4, 2016 that represents the Notes (the “Master Note”) identifying the Notes offered
hereby as supplemental obligations thereunder in accordance with the instructions of BofA Finance, and the Notes have been delivered
against payment therefor as contemplated in this pricing supplement and the related prospectus, prospectus supplement and product
supplement, all in accordance with the provisions of the indenture governing the Notes and the related guarantee, such Notes will
be legal, valid and binding obligations of BofA Finance, and the related guarantee will be the legal, valid and binding obligations
of BAC, subject, in each case, to the effects of applicable bankruptcy, insolvency (including laws relating to preferences, fraudulent
transfers and equitable subordination), reorganization, moratorium and other similar laws affecting creditors’ rights generally,
and to general principles of equity. This opinion is given as of the date of this pricing supplement and is limited to the laws
of the State of New York and the Delaware Limited Liability Company Act and the Delaware General Corporation Law (including the
statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing)
as in effect on the date hereof. In addition, this opinion is subject to customary assumptions about the trustee’s authorization,
execution and delivery of the indenture governing the Notes and due authentication of the Master Note, the validity, binding nature
and enforceability of the indenture governing the Notes and the related guarantee with respect to the trustee, the legal capacity
of individuals, the genuineness of signatures, the authenticity of all documents submitted to McGuireWoods LLP as originals, the
conformity to original documents of all documents submitted to McGuireWoods LLP as copies thereof, the authenticity of the originals
of such copies and certain factual matters, all as stated in the letter of McGuireWoods LLP dated August 23, 2016, which has been
filed as an exhibit to the Registration Statement of BofA Finance and BAC relating to the Notes and the related guarantees initially
filed with the Securities and Exchange Commission on August 23, 2016.
Sidley Austin
LLP, New York, New York, is acting as counsel to BofAS and as special tax counsel to BofA Finance and BAC.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-21
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
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 BAC for U.S. federal income tax purposes. Accordingly throughout this tax discussion,
references to “we,” “our” or “us” are generally to BAC unless the context requires otherwise.
This summary is directed solely to U.S.
Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will
hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment,
and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor
concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax
consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes
in U.S. federal or other tax laws.
General
Although there is no statutory, judicial,
or administrative authority directly addressing the characterization of the Notes, we intend to treat the Notes for all tax purposes
as contingent income-bearing single financial contracts with respect to the Underlyings and under the terms of the Notes, we and
every investor in the Notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat
the Notes in accordance with such characterization. In the opinion of our counsel, Sidley Austin LLP, it is reasonable to treat
the Notes as contingent income-bearing single financial contracts with respect to the Underlyings. However, Sidley Austin LLP has
advised us that it is unable to conclude that it is more likely than not that this treatment will be upheld. This discussion assumes
that the Notes constitute contingent income-bearing single financial contracts with respect to the Underlyings for U.S. federal
income tax purposes. If the Notes did not constitute contingent income-bearing single financial contracts, the tax consequences
described below would be materially different.
This characterization of the Notes
is not binding on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization
of the Notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with
respect to their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the
U.S. federal income tax consequences of an investment in the Notes are not certain, and no assurance can be given that the IRS
or any court will agree with the characterization and tax treatment described in this pricing supplement. Accordingly, you are
urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the Notes,
including possible alternative characterizations.
Unless otherwise stated, the following
discussion is based on the characterization described above. The discussion in this section assumes that there is a significant
possibility of a significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether
any issuer of a component stock included in an Underlying would be treated as a “passive foreign investment company”
(“PFIC”), within the meaning of Section 1297 of the Code, or a United States real property holding corporation, within
the meaning of Section 897(c) of the Code. If the issuer of one or more stocks included in an Underlying were so treated, certain
adverse U.S. federal income tax consequences could possibly apply to a holder of the Notes. You should refer to information filed
with the SEC by the issuers of the component stocks included in the Underlyings and consult your tax advisor regarding the possible
consequences to you, if any, if any issuer of a component stock included in the Underlyings is or becomes a PFIC or is or becomes
a United States real property holding corporation.
U.S. Holders
Although the U.S. federal income tax
treatment of any Contingent Coupon Payment on the Notes is uncertain, we intend to take the position, and the following discussion
assumes, that any Contingent Coupon Payment constitutes taxable ordinary income to a U.S. Holder at the time received or accrued
in accordance with the U.S. Holder’s regular method of accounting. By purchasing the Notes you agree, in the absence of an
administrative determination or judicial ruling to the contrary, to treat any Contingent Coupon Payment as described in the preceding
sentence.
Upon receipt of a cash payment at maturity
or upon a sale, exchange, or redemption of the Notes prior to maturity, a U.S. Holder generally will recognize capital gain or
loss equal to the difference between the amount realized (other than amounts representing any Contingent Coupon Payment, which
would be taxed as described above) and the U.S. Holder’s tax basis in the Notes. A U.S. Holder’s tax basis in the Notes
will equal the amount paid by that holder to acquire them. This capital gain or loss generally will be long-term capital gain or
loss if the U.S. Holder held the Notes
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-22
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
for more than one year. The deductibility of capital losses is subject
to limitations.
Alternative Tax Treatments. Due
to the absence of authorities that directly address the proper tax treatment of the Notes, prospective investors are urged to consult
their tax advisors regarding all possible alternative tax treatments of an investment in the Notes. In particular, the IRS could
seek to subject the Notes to the Treasury regulations governing contingent payment debt instruments. If the IRS were successful
in that regard, the timing and character of income on the Notes would be affected significantly. Among other things, a U.S. Holder
would be required to accrue original issue discount every year at a “comparable yield” determined at the time of issuance.
In addition, any gain realized by a U.S. Holder at maturity or upon a sale, exchange, or redemption of the Notes generally would
be treated as ordinary income, and any loss realized at maturity or upon a sale, exchange, or redemption of the Notes generally
would be treated as ordinary loss to the extent of the U.S. Holder’s prior accruals of original issue discount, and as capital
loss thereafter.
In addition, it is possible that the
Notes could be treated as a unit consisting of a deposit and a put option written by the Note holder, in which case the timing
and character of income on the Notes would be affected significantly.
The IRS released Notice 2008-2 (the “Notice”),
which sought comments from the public on the taxation of financial instruments currently taxed as “prepaid forward contracts.”
This Notice addresses instruments such as the Notes. According to the Notice, the IRS and Treasury are considering whether a holder
of an instrument such as the Notes should be required to accrue ordinary income on a current basis, regardless of whether any payments
are made prior to maturity. It is not possible to determine what guidance the IRS and Treasury will ultimately issue, if any. Any
such future guidance may affect the amount, timing and character of income, gain, or loss in respect of the Notes, possibly with
retroactive effect.
The IRS and Treasury are also considering
additional issues, including whether additional gain or loss from such instruments should be treated as ordinary or capital, whether
foreign holders of such instruments should be subject to withholding tax on any deemed income accruals, whether Section 1260 of
the Code, concerning certain “constructive ownership transactions,” generally applies or should generally apply to
such instruments, and whether any of these determinations depend on the nature of the underlying asset.
In addition, proposed Treasury regulations
require the accrual of income on a current basis for contingent payments made under certain notional principal contracts. The preamble
to the regulations states that the “wait and see” method of accounting does not properly reflect the economic accrual
of income on those contracts, and requires current accrual of income for some contracts already in existence. While the proposed
regulations do not apply to prepaid forward contracts, the preamble to the proposed regulations expresses the view that similar
timing issues exist in the case of prepaid forward contracts. If the IRS or Treasury publishes future guidance requiring current
economic accrual for contingent payments on prepaid forward contracts, it is possible that you could be required to accrue income
over the term of the Notes.
Because of the absence of authority regarding
the appropriate tax characterization of the Notes, it is also possible that the IRS could seek to characterize the Notes in a manner
that results in tax consequences that are different from those described above. For example, the IRS could possibly assert that
any gain or loss that a holder may recognize at maturity or upon the sale, exchange, or redemption of the Notes should be treated
as ordinary gain or loss.
Because each Underlying is an index that
periodically rebalances, it is possible that the Notes could be treated as a series of contingent income-bearing single financial
contracts, each of which matures on the next rebalancing date. If the Notes were properly characterized in such a manner, a U.S.
Holder would be treated as disposing of the Notes on each rebalancing date in return for new Notes that mature on the next rebalancing
date, and a U.S. Holder would accordingly likely recognize capital gain or loss on each rebalancing date equal to the difference
between the holder’s tax basis in the Notes (which would be adjusted to take into account any prior recognition of gain or
loss) and the fair market value of the Notes on such date.
Non-U.S. Holders
Because the U.S. federal income tax treatment
of the Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal income tax at a 30% rate (or
at a lower rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon Payment made unless such payments
are effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. (in which case, to avoid withholding,
the Non-U.S. Holder will be required to provide a Form W-8ECI). We will not pay any additional amounts in respect of such withholding.
To claim benefits under an income tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to
its eligibility under the appropriate treaty’s limitations on benefits article, if applicable. In addition, special rules
may apply to claims for treaty benefits made by Non-U.S. Holders that are entities rather than individuals. The availability of
a lower rate of withholding under an applicable income tax treaty will depend on whether such rate applies to the characterization
of the payments under U.S. federal income tax laws. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Except as discussed below, a Non-U.S.
Holder generally will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes (not including,
for the avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject to the rules discussed in
the previous paragraph) upon the sale, exchange, or redemption of the Notes or their settlement at maturity, provided that the
Non-U.S. Holder complies with applicable certification requirements and that the payment is not effectively connected with the
conduct by the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange, or redemption
of the Notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident
alien individual and is present in the U.S. for 183 days or
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-23
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
more during the taxable year of the sale, exchange, redemption, or settlement
and certain other conditions are satisfied.
If a Non-U.S. Holder of the Notes is
engaged in the conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized on the settlement
at maturity, or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of such trade or business
(and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.),
the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S. federal income tax on
such Contingent Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders
should read the material under the heading “—U.S. Holders,” for a description of the U.S. federal income tax
consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation, it
may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion
of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the
U.S., subject to certain adjustments.
A “dividend equivalent” payment
is treated as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding
tax if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked
instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified
ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation
for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However,
IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one
instruments and that are issued before January 1, 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 Underlyings or the Notes, and following such occurrence the Notes could be treated as subject to withholding
on dividend equivalent payments. Non-U.S. Holders that enter, or have entered, into other transactions in respect of the Underlyings
or the Notes should consult their tax advisors as to the application of the dividend equivalent withholding tax in the context
of the Notes and their other transactions. If any payments are treated as dividend equivalents subject to withholding, we (or the
applicable paying agent) would be entitled to withhold taxes without being required to pay any additional amounts with respect
to amounts so withheld.
As discussed above, alternative characterizations
of the Notes for U.S. federal income tax purposes are possible. Should an alternative characterization, by reason of change or
clarification of the law, by regulation or otherwise, cause payments as to the Notes to become subject to withholding tax in addition
to the withholding tax described above, tax will be withheld at the applicable statutory rate. Prospective Non-U.S. Holders should
consult their own tax advisors regarding the tax consequences of such alternative characterizations.
U.S. Federal Estate Tax. Under
current law, while the matter is not entirely clear, individual Non-U.S. Holders, and entities whose property is potentially includible
in those individuals’ gross estates for U.S. federal estate tax purposes (for example, a trust funded by such an individual
and with respect to which the individual has retained certain interests or powers), should note that, absent an applicable treaty
benefit, a Note is likely to be treated as U.S. situs property, subject to U.S. federal estate tax. These individuals and entities
should consult their own tax advisors regarding the U.S. federal estate tax consequences of investing in a Note.
Backup Withholding and Information Reporting
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.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-24
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Contingent Income Issuer Callable Yield Notes Linked to the Least Performing of the MSCI Emerging Markets Index, the S&P 500® Index and the Russell 2000® Index
Where You Can Find More Information
The terms and risks of the Notes
are contained in this pricing supplement and in the following related product supplement, prospectus supplement and prospectus,
which can be accessed at the following links:
These documents (together, the “Note
Prospectus”) have been filed as part of a registration statement with the SEC, which may, without cost, be accessed on the
SEC website at www.sec.gov or obtained from BofAS by calling 1-800-294-1322. Before you invest, you should read the Note Prospectus,
including this pricing supplement, for information about us, BAC and this offering. Any prior or contemporaneous oral statements
and any other written materials you may have received are superseded by the Note Prospectus. Capitalized terms used but not defined
in this pricing supplement have the meanings set forth in the accompanying product supplement or prospectus supplement. Unless
otherwise indicated or unless the context requires otherwise, all references in this document to “we,” “us,”
“our,” or similar references are to BofA Finance, and not to BAC.
As
a result of the completion of the reorganization of Bank of America’s U.S. broker-dealer business, references to 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.
The Notes are our senior debt
securities. Any payments on the Notes are fully and unconditionally guaranteed by BAC. The Notes and the related guarantee
are not insured by the Federal Deposit Insurance Corporation or secured by collateral. The Notes will rank equally in
right of payment with all of our other unsecured and unsubordinated obligations, and the related guarantee will rank equally in
right of payment with all of BAC’s other unsecured and unsubordinated obligations, except obligations that are subject to
any priorities or preferences by law. Any payments due on the Notes, including any repayment of the principal amount, will be subject
to the credit risk of BofA Finance, as Issuer, and BAC, as Guarantor.
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CONTINGENT INCOME ISSUER CALLABLE YIELD NOTES | PS-25
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