This
pricing supplement, which is not complete and may be changed, relates to an effective Registration Statement under the
Securities Act of 1933. This pricing supplement and the accompanying product supplement, prospectus supplement and prospectus
are not an offer to sell these Notes in any country or jurisdiction where such an offer would not be permitted.
Linked to the Least Performing
of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
|
|
•
|
Approximate
3 year term if not called prior to maturity.
|
|
|
•
|
Payments
on the Notes will depend on the individual performance of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology
ETF (each an “Underlying”).
|
|
|
•
|
Contingent
coupon rate of between [8.75% and 9.75%] per annum (between [2.1875% and 2.4375%] per quarter) payable quarterly if the Observation
Value of each Underlying on the applicable Observation Date is greater than or equal to 60% of its Starting Value. The actual
contingent coupon will be determined on the pricing date.
|
|
|
•
|
Beginning
in April 2020, automatically callable quarterly for an amount equal to the principal amount plus the relevant contingent coupon
if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation Date (other
than the final Observation Date).
|
|
|
•
|
Assuming
the Notes are not called prior to maturity, if either Underlying declines by more than 40% 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 Observation Value of
each Underlying on the final Observation Date is greater than or equal to 60% of its Starting Value.
|
|
|
•
|
All
payments on the Notes are subject to the credit risk of BofA Finance LLC (“BofA Finance”) and Bank of America Corporation
(“BAC” or the “Guarantor”).
|
|
|
•
|
The
Notes are expected to price on October 17, 2019, expected to issue on October 22, 2019 and expected to mature on October 20, 2022.
|
|
|
•
|
The
Notes will not be listed on any securities exchange.
|
The initial estimated value
of the Notes as of the pricing date is expected to be between $930 and $960 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-18
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-23) is truthful or complete. Any representation to
the contrary is a criminal offense.
|
|
Public offering price(1)
|
Underwriting discount(1)
|
Proceeds, before expenses, to BofA Finance
|
|
Per Note
|
$1,000.00
|
$25.00
|
$975.00
|
|
Total
|
|
|
|
|
|
(1)
|
Certain dealers who purchase
the Notes for sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions.
|
The
public offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low as $975.00 per Note.
The Notes and the related
guarantee:
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Terms of the Notes
The Contingent Income Auto-Callable
Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology
ETF (the “Notes”) provide a quarterly Contingent Coupon Payment of between [$21.875 and $24.375] 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. The actual Contingent Coupon Payment will be determined on the pricing date. Beginning in April
2020, if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation Date
(other than the final Observation Date), the Notes will be automatically called, in whole but not in part, at 100% of the principal
amount, together with the relevant Contingent Coupon Payment. No further amounts will be payable following an Automatic Call. If
the Notes are not automatically called prior to maturity and the Least Performing Underlying declines by more than 40% 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 3 years, unless previously automatically called.
|
|
Underlyings:
|
The SPDR® S&P® Biotech ETF (Bloomberg symbol: “XBI”) and the iShares® Nasdaq Biotechnology ETF (Bloomberg symbol: “IBB”)
|
|
Pricing Date*:
|
October 17, 2019
|
|
Issue Date*:
|
October 22, 2019
|
|
Valuation Date*:
|
October 17, 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*:
|
October 20, 2022
|
|
Starting Value:
|
With respect to each Underlying, its Closing Market Price on the pricing date.
|
|
Observation Value:
|
With respect to each Underlying, its Closing Market Price on the applicable Observation Date multiplied by its Price Multiplier, as determined by the calculation agent.
|
|
Ending Value:
|
With respect to each Underlying, its Observation Value on the Valuation Date.
|
|
Price Multiplier
|
With respect to each Underlying, 1, subject to adjustment for certain events as described in “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs” beginning on page PS-23 of the accompanying product supplement.
|
|
Coupon Barrier:
|
With respect to each Underlying, 60% of its Starting Value.
|
|
Threshold Value:
|
With respect to each Underlying, 60% of its Starting Value.
|
|
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 between [$21.875 and $24.375] per $1,000 in principal amount of Notes (equal to a rate of between [2.1875% and 2.4375%] per quarter or between [8.75% and 9.75%] per annum) on the applicable Contingent Payment Date (including the Maturity Date). The actual Contingent Coupon Payment will be determined on the pricing date.
|
|
Automatic Call:
|
Beginning in April 2020, all (but not less than all) of the Notes will be automatically called if the Observation Value of each Underlying is greater than or equal to its Starting Value on any Observation Date (other than the final Observation Date). If the Notes are automatically called, the Early Redemption Amount will be paid on the applicable Contingent Payment Date. No further amounts will be payable following an Automatic Call.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-2
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
|
Early Redemption Amount:
|
For each $1,000 in principal amount of Notes, $1,000 plus the applicable Contingent Coupon Payment.
|
|
Redemption Amount:
|
If the Notes have
not been automatically called prior to maturity, the Redemption Amount per $1,000 in principal amount of Notes will be:
a)
If the Ending Value of the Least Performing Underlying
is greater than or equal to its Threshold Value:
$1,000; or
b)
If the Ending Value of the Least Performing Underlying
is less than its Threshold Value:
$1,000 + ($1,000
x Underlying Return of the Least Performing Underlying). In this case, the Redemption Amount will be less than 60% of the principal
amount and could be zero.
The Redemption Amount
will also include the final Contingent Coupon Payment if the Ending Value of the Least Performing Underlying is greater than or
equal to its Coupon Barrier.
|
|
Observation Dates*:
|
As set forth on page PS-4.
|
|
Contingent Payment Dates*:
|
As set forth on page PS-4.
|
|
Calculation Agent:
|
BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
|
|
Selling Agent:
|
BofAS
|
|
CUSIP:
|
09709TWA5
|
|
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 prices of the Underlyings on the deemed Valuation Date; any such final Contingent Coupon Payment will be prorated by the calculation agent to reflect the length of the final contingent payment period. In case of a default in the payment of the Notes, whether at their maturity or upon acceleration, the Notes will not bear a default interest rate.
|
|
*Subject to change
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-3
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Observation Dates and Contingent Payment Dates
|
Observation Dates*
|
|
Contingent Payment Dates**
|
|
January 17, 2020
|
|
January 23, 2020
|
|
April 17, 2020
|
|
April 22, 2020
|
|
July 17, 2020
|
|
July 22, 2020
|
|
October 19, 2020
|
|
October 22, 2020
|
|
January 19, 2021
|
|
January 22, 2021
|
|
April 19, 2021
|
|
April 22, 2021
|
|
July 19, 2021
|
|
July 22, 2021
|
|
October 18, 2021
|
|
October 21, 2021
|
|
January 18, 2022
|
|
January 21, 2022
|
|
April 18, 2022
|
|
April 21, 2022
|
|
July 18, 2022
|
|
July 21, 2022
|
|
October 17, 2022 (the “Valuation Date”)
|
|
October 20, 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), will reduce the economic terms of the Notes to
you and the initial estimated value of the Notes. Due to these factors, the public offering price you pay to purchase the Notes
will be greater than the initial estimated value of the Notes as of the pricing date.
The initial estimated value range
of the Notes as of the date of this pricing supplement is set forth on the cover page of this pricing supplement. The final pricing
supplement will set forth the initial estimated value of the Notes as of the pricing date. For more information about the initial
estimated value and the structuring of the Notes, see “Risk Factors” beginning on page PS-8 and “Structuring
the Notes” on page PS-18.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-4
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Contingent Coupon Payment and Redemption
Amount Determination
On each
Contingent Payment Date, you may receive a Contingent Coupon Payment per $1,000 in principal amount of Notes determined as follows:
Assuming the
Notes have not been automatically called, on the Maturity Date, you will receive a cash payment per $1,000 in principal amount
of Notes determined as follows:
All payments described above
are subject to issuer and guarantor credit risk.
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-5
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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 $23.125 (the midpoint of the Contingent Coupon Payment range of between [$21.875
and $24.375]), depending on how many Contingent Coupon Payments are payable prior to an Automatic Call or maturity. Depending on
the performance of the Underlyings, you may not receive any Contingent Coupon Payments during the term of the Notes.
|
Number of Contingent Coupon Payments
|
Total Contingent Coupon Payments
|
|
0
|
$0.00
|
|
2
|
$46.25
|
|
4
|
$92.50
|
|
6
|
$138.75
|
|
8
|
$185.00
|
|
10
|
$231.25
|
|
12
|
$277.50
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-6
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Hypothetical Payout Profile and Examples
of Payments at Maturity
Contingent Income Auto-Callable
Yield Notes Table
The following table is for
purposes of illustration only. It assumes the Notes have not been automatically called prior to maturity and is based on hypothetical
values and shows hypothetical returns on the Notes. The table illustrates the calculation of the Redemption Amount and
the return on the Notes based on a hypothetical Starting Value of 100, a hypothetical Coupon Barrier of 60 for the Least Performing
Underlying, a hypothetical Threshold Value of 60 for the Least Performing Underlying, a Contingent Coupon Payment of $23.125 per
$1,000 in principal amount of Notes (the midpoint of the Contingent Coupon Payment range of between [$21.875 and $24.375]) and
a range of hypothetical Ending Values of the Least Performing Underlying. The actual amount you receive and the resulting return
will depend on the actual Starting Values, Coupon Barriers, Threshold Values, Observation Values and Ending Values of the Underlyings,
the actual Contingent Coupon Payment, whether the Notes are automatically called prior to maturity, and whether you hold the Notes
to maturity. The following examples do not take into account any tax consequences from investing in the Notes.
For recent actual prices of the
Underlyings, see “The Underlyings” section below. The Ending Value of each Underlying will not include any income generated
by dividends paid on the stocks represented by 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%
|
$1,023.125(2)
|
2.3125%
|
|
150.00
|
50.00%
|
$1,023.125
|
2.3125%
|
|
140.00
|
40.00%
|
$1,023.125
|
2.3125%
|
|
130.00
|
30.00%
|
$1,023.125
|
2.3125%
|
|
120.00
|
20.00%
|
$1,023.125
|
2.3125%
|
|
110.00
|
10.00%
|
$1,023.125
|
2.3125%
|
|
105.00
|
5.00%
|
$1,023.125
|
2.3125%
|
|
102.00
|
2.00%
|
$1,023.125
|
2.3125%
|
|
100.00(3)
|
0.00%
|
$1,023.125
|
2.3125%
|
|
90.00
|
-10.00%
|
$1,023.125
|
2.3125%
|
|
80.00
|
-20.00%
|
$1,023.125
|
2.3125%
|
|
70.00
|
-30.00%
|
$1,023.125
|
2.3125%
|
|
60.00(4)
|
-40.00%
|
$1,023.125
|
2.3125%
|
|
59.99
|
-40.01%
|
$599.900
|
-40.0100%
|
|
50.00
|
-50.00%
|
$500.000
|
-50.0000%
|
|
0.00
|
-100.00%
|
$0.000
|
-100.0000%
|
|
|
(1)
|
The “Return on the
Notes” is calculated based on the Redemption Amount and potential final Contingent Coupon Payment, not including any Contingent
Coupon Payments paid prior to maturity.
|
|
|
(2)
|
This amount represents
the sum of the principal amount and the final Contingent Coupon Payment.
|
|
|
(3)
|
The hypothetical
Starting Value of 100 used in the table above has been chosen for illustrative purposes only and does not represent a likely Starting
Value for any Underlying.
|
|
|
(4)
|
This is the hypothetical Coupon Barrier and
Threshold Value of the Least Performing Underlying.
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-7
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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-23 below.
|
|
•
|
Your investment may
result in a loss; there is no guaranteed return of principal. There is no fixed principal repayment amount on the Notes at
maturity. If the Notes are not automatically called prior to maturity and the Ending Value of any Underlying is less than
its Threshold Value, 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 an Automatic Call
will never exceed the sum of the principal amount and the applicable Contingent Coupon Payment, regardless of the extent to which
the Observation Value of any Underlying exceeds its Starting Value. In contrast, a direct investment in the securities included
in one or more of the Underlyings would allow you to receive the benefit of any appreciation in their 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 a potential Automatic Call, which would limit your ability to receive the Contingent Coupon Payments over the full term of the
Notes. The Notes are subject to a potential Automatic Call. Beginning in April 2020, the Notes will be automatically called
if, on any Observation Date (other than the final Observation Date), the Observation Value of each Underlying is greater than or
equal to its Starting Value. If the Notes are automatically called, you will be entitled to receive the principal amount and the
Contingent Coupon Payment with respect to the applicable Observation Date. In this case, you will lose the opportunity to continue
to receive Contingent Coupon Payments after the date of the Automatic Call. If the Notes are called prior to the Maturity Date,
you may be unable to invest in other securities with a similar level of risk that could provide a return that is similar to the
Notes.
|
|
|
•
|
You may not receive
any Contingent Coupon Payments. The Notes do not provide for any regular fixed coupon payments. Investors in the Notes will
not necessarily receive any Contingent Coupon Payments on the Notes. If the Observation Value of any Underlying is less
than its Coupon Barrier on an Observation Date, you will not receive the Contingent Coupon Payment applicable to that Observation
Date. If the Observation Value of any Underlying is less than its Coupon Barrier on all the Observation Dates during the
term of the Notes, you will not receive any Contingent Coupon 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.
|
|
|
CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-8
|
Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
|
|
•
|
The public offering
price you pay for the Notes will exceed their initial estimated value. The range of initial estimated values of the Notes that
is provided on the cover page of this preliminary pricing supplement, and the initial estimated value as of the pricing date that
will be provided in the final pricing supplement, are each estimates only, determined as of a particular point in time by reference
to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including
our credit spreads and those of the Guarantor, the Guarantor’s internal funding rate, mid-market terms on hedging transactions,
expectations on interest rates, dividends and volatility, price-sensitivity analysis, and the expected term of the Notes.
These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect. If you attempt to
sell the Notes prior to maturity, their market value may be lower than the price you paid for them and lower than their initial
estimated value. This is due to, among other things, changes in the prices 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.
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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.
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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.
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The Contingent Coupon
Payment, Early Redemption Amount or Redemption Amount, as applicable, will not reflect the prices of the Underlyings other than
on the Observation Dates. The prices 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 prices
of the Underlyings will be taken into account. As a result, if the Notes are not automatically called prior to maturity, you will
receive less than the principal amount at maturity even if the price of each Underlying has increased at certain times during the
term of the Notes before the Least Performing Underlying decreases to a price that is less than its Threshold Value as of the Valuation
Date.
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Because the Notes
are linked to the least performing (and not the average performance) of the Underlyings, you may not receive any return on the
Notes and may lose 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 price of one Underlying may not correlate with changes in the price of the other Underlying(s).
The Notes are not linked to a basket composed of the Underlyings, where the depreciation in the price of one Underlying could be
offset to some extent by the appreciation in the price 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 price of one Underlying would not be offset by any appreciation
in the price 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 stocks held by
each Underlying are concentrated in one sector. The Underlyings hold securities issued by companies in the biotechnology sector.
As a result, the stocks that will determine the performance of the Notes are concentrated in one sector. Although an investment
in the Notes will not give holders any ownership or other direct interests in the securities held by the Underlyings, the return
on an investment in the Notes will be subject to certain risks associated with a direct equity investment in the biotechnology
sector. Accordingly, by investing in the Notes, you will not benefit from the diversification which could result from an investment
linked to companies that operate in multiple sectors.
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Adverse conditions
in the biotechnology sector may reduce your return on the Notes. All of the stocks held by each of the Underlyings are issued
by companies whose primary lines of business are directly associated with the biotechnology sector. The profitability of these
companies is largely dependent on, among other things, demand for the companies’ products, regulatory influences on the biotechnology
market (including healthcare reform and receipt of regulatory approvals and compliance with complex regulatory requirements), pricing
and reimbursement from third party payors, continued innovation and successful development of new products, talent attraction and
retention, maintaining intellectual property rights and industry competition. Any adverse developments affecting the biotechnology
sector could adversely affect the price of the Underlyings and, in turn, the value of the Notes.
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The anti-dilution
adjustments will be limited. The calculation agent may adjust the Price Multiplier of the Underlyings and other terms of the
Notes to reflect certain corporate actions by the Underlyings, as described in the section “Description of the Notes—Anti-Dilution
and Discontinuance Adjustments Relating to ETFs” in the accompanying product supplement. The calculation agent will not be
required to make
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-9
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
an adjustment for every event that may affect the Underlyings
and will have broad discretion to determine whether and to what extent an adjustment is required.
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The sponsor or investment
advisor of an Underlying may adjust that Underlying in a way that affects its prices, and the sponsor or investment advisor has
no obligation to consider your interests. The sponsor or investment advisor of an Underlying can add, delete, or substitute
the components included in that Underlying or make other methodological changes that could change its price. Any of these actions
could adversely affect the value of your Notes.
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The performance of
an Underlying may not correlate with the performance of its underlying index as well as the net asset value per share of the Underlying,
especially during periods of market volatility. The performance of an Underlying and that of its underlying index generally
will vary due to, for example, transaction costs, management fees, certain corporate actions, and timing variances. Moreover, it
is also possible that the performance of an Underlying may not fully replicate or may, in certain circumstances, diverge significantly
from the performance of its underlying index. This could be due to, for example, the Underlying not holding all or substantially
all of the underlying assets included in its underlying index and/or holding assets that are not included in its underlying index,
the temporary unavailability of certain securities in the secondary market, the performance of any derivative instruments held
by the Underlying, differences in trading hours between the Underlying (or the underlying assets held by the Underlying) and its
underlying index, or other circumstances. This variation in performance is called the “tracking error,” and, at times,
the tracking error may be significant. In addition, because the shares of each Underlying are traded on a securities exchange and
are subject to market supply and investor demand, the market price of one share of the Underlying may differ from its net asset
value per share; shares of the Underlying may trade at, above, or below its net asset value per share. During periods of market
volatility, securities held by an Underlying may be unavailable in the secondary market, market participants may be unable to calculate
accurately the net asset value per share of the Underlying and the liquidity of the Underlying may be adversely affected. Market
volatility may also disrupt the ability of market participants to trade shares of the Underlying. Further, market volatility may
adversely affect, sometimes materially, the prices at which market participants are willing to buy and sell shares of the Underlying.
As a result, under these circumstances, the market value of shares of the Underlying may vary substantially from the net asset
value per share of the Underlying.
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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 shares of the Underlyings
or 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 the Underlyings or the 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 affect 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 engage in hedging activities that could affect 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 AUTO-CALLABLE YIELD NOTES | PS-10
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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 SSGA Funds Management, Inc. (“SSGA”), the advisor to the XBI, and BlackRock Fund Advisors (“BFA”),
the advisor to the IBB. We refer to SSGA and BFA as the “Investment Advisors.” Each of the Investment Advisors, which
license the copyright and all other rights to the Underlyings, has no obligation to continue to publish, and may discontinue publication
of, the Underlyings. The consequences of an Investment Advisor discontinuing publication of the applicable Underlying are discussed
in “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs—Discontinuance of
an ETF” 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 underlying. 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 SPDR® S&P® Biotech
ETF
The XBI seeks to provide investment
results that correspond generally to the price and yield performance, before fees and expenses, of the S&P®
Biotechnology Select Industry® Index (the “underlying index”). The underlying index represents the biotechnology
sub-industry portion of the Standard & Poor’s (“S&P”) Total Market Index (“S&P TMI”),
an index that measures the performance of the U.S. equity market. The XBI is composed of companies that are in the biotechnology
sector. The XBI trades on NYSE Arca under the ticker symbol “XBI.”
The XBI utilizes a “replication”
investment approach in attempting to track the performance of its underlying index. The XBI typically invests in substantially
all of the securities which comprise the underlying index in approximately the same proportions as the underlying index. The XBI
will normally invest at least 75% of its total assets in the common stocks that comprise the underlying index.
The S&P® Biotechnology Select
Industry® Index
This underlying index
is an equal-weighted index that is designed to measure the performance of the biotechnology sub-industry portion of the S&P
TMI. The S&P TMI includes all U.S. common equities listed on the New York Stock Exchange (the “NYSE”) (including
NYSE Arca), the NYSE MKT, the Nasdaq Global Select Market, and the Nasdaq Capital Market. Each of the component stocks in the underlying
index is a constituent company within the biotechnology sub-industry portion of the S&P TMI.
To be eligible for
inclusion in the underlying index, companies must be in the S&P TMI and must be included in the relevant Global Industry Classification
Standard (GICS) sub-industry. The GICS was developed to establish a global standard for categorizing companies into sectors and
industries. In addition to the above, companies must satisfy one of the two following combined size and liquidity criteria:
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float-adjusted market capitalization above US$500 million
and float-adjusted liquidity ratio above 90%; or
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float-adjusted market capitalization above US$400 million
and float-adjusted liquidity ratio above 150%.
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All U.S. companies
satisfying these requirements are included in the underlying index. The total number of companies in the underlying index should
be at least 35. If there are fewer than 35 stocks, stocks from a supplementary list of highly correlated sub-industries that meet
the market capitalization and liquidity thresholds above are included in order of their float-adjusted market capitalization to
reach 35 constituents. Minimum market capitalization requirements may be relaxed to ensure there are at least 22 companies in the
underlying index as of each rebalancing effective date.
Eligibility factors
include:
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Market Capitalization: Float-adjusted market capitalization should be at least US$400 million for
inclusion in the underlying index. Existing index components must have a float-adjusted market capitalization of US$300 million
to remain in the underlying index at each rebalancing.
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Liquidity: The liquidity measurement used is a liquidity ratio, defined as dollar value traded over
the previous 12-months divided by the float-adjusted market capitalization as of the underlying index rebalancing reference date.
Stocks having a float-adjusted market capitalization above US$500 million must have a liquidity ratio greater than 90% to be eligible
for addition to the underlying index. Stocks having a float-adjusted market capitalization between US$400 and US$500 million must
have a liquidity ratio greater than 150% to be eligible for addition to the underlying index. Existing index constituents must
have a liquidity ratio greater than 50% to remain in the underlying index at the quarterly rebalancing. The length of time to evaluate
liquidity is reduced to the available trading period for IPOs or spin-offs that do not have 12 months of trading history.
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Takeover Restrictions: At the discretion of S&P, constituents with shareholder ownership restrictions
defined in company bylaws may be deemed ineligible for inclusion in the underlying index. Ownership restrictions preventing entities
from replicating the index weight of a company may be excluded from the eligible universe or removed from the underlying index.
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Turnover: S&P believes turnover in index membership should be avoided when possible. At times,
a company may appear to temporarily violate one or more of the addition criteria. However, the addition criteria are for addition
to the underlying index, not for continued membership. As a result, an index constituent that appears to violate the criteria for
addition to the underlying index will not be deleted unless ongoing conditions warrant a change in the composition of the underlying
index.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-11
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Computation
of the Underlying Index
The
underlying index is calculated as the underlying index market value divided by the divisor. In an equal-weighted index like the
underlying index, the market capitalization of each stock used in the calculation of the index market value is redefined so that
each stock has an equal weight in the index on each rebalancing date. The adjusted market capitalization for each stock in the
index is calculated as the product of the stock price, the number of shares outstanding, the stock’s float factor and the
adjustment factor.
A
stock’s float factor refers to the number of shares outstanding that are available to investors. S&P indices exclude
shares closely held by control groups from the underlying index calculation because such shares are not available to investors.
For each stock, S&P calculates an Investable Weight Factor (IWF) which is the percentage of total shares outstanding that are
included in the underlying index calculation.
The
adjustment factor for each stock is assigned at each rebalancing date and is calculated by dividing a specific constant set for
the purpose of deriving the adjustment factor (often referred to as modified index shares) by the number of stocks in the underlying
index multiplied by the float adjusted market value of such stock on such rebalancing date.
Adjustments
are also made to ensure that no stock in the underlying index will have a weight that exceeds the value that can be traded in a
single day for a theoretical portfolio of $2 billion. Theoretical portfolio values are reviewed annually and any updates are made
at the discretion of the underlying index committee, as defined below. The maximum basket liquidity weight for each stock in the
underlying index will be calculated using the ratio of its three-month median daily value traded to the theoretical portfolio value
of $2 billion. Each stock’s weight in the underlying index is then compared to its maximum basket liquidity weight and is
set to the lesser of (1) its maximum basket liquidity weight or (2) its initial equal weight. All excess weight is redistributed
across the underlying index to the uncapped stocks. If necessary, a final adjustment is made to ensure that no stock in the underlying
index has a weight greater than 4.5%. No further adjustments are made if the latter step would force the weight of those stocks
limited to their maximum basket liquidity weight to exceed that weight. If the underlying index contains exactly 22 stocks as of
the rebalancing effective date, the underlying index will be equally weighted without basket liquidity constraints.
If
a company has more than one share class line in the S&P Total Market Index, such company will be represented once by the designated
listing (generally the share class with both (i) the highest one-year trading liquidity as defined by median daily value traded
and (ii) the largest float-adjusted market capitalization). S&P reviews designated listings on an annual basis and any changes
are implemented after the close of the third Friday in September. The last trading day in July is used as the reference date for
the liquidity and market capitalization data in such determination. Once a listed share class line is added to the underlying index,
it may be retained in the underlying index even though it may appear to violate certain constituent addition criteria. For companies
that issue a second publicly traded share class to underlying index share class holders, the newly issued share class line will
be considered for inclusion if the event is mandatory and the market capitalization of the distributed class is not considered
to be de minimis.
The
underlying index is calculated by using the divisor methodology used in all S&P equity indices. The initial divisor was set
to have a base value of 1,000 on June 20, 2003. The underlying index level is the underlying index market value divided by the
underlying index divisor. In order to maintain underlying index series continuity, it is also necessary to adjust the divisor at
each rebalancing. Therefore, the divisor (after rebalancing) equals the underlying index market value (after rebalancing) divided
by the underlying index value before rebalancing. The divisor keeps the underlying index comparable over time and is one manipulation
point for adjustments to the underlying index, which we refer to as maintenance of the underlying index.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-12
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Historical Performance of the XBI
The following graph sets forth
the daily historical performance of the XBI in the period from January 1, 2008 through October 2, 2019. 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 XBI’s hypothetical Coupon Barrier and Threshold Value of $45.10 (rounded
to two decimal places), which is 60% of the XBI’s hypothetical Starting Value of $75.16, which was its closing price on October
2, 2019. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical data on the XBI is
not necessarily indicative of the future performance of the XBI or what the value of the Notes may be. Any historical upward or
downward trend in the price of the XBI during any period set forth above is not an indication that the price of the XBI 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 prices and trading pattern of the XBI.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-13
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
The iShares® Nasdaq Biotechnology
ETF
The
IBB seeks to provide investment results that, before fees and expenses, correspond generally to the performance of the NASDAQ Biotechnology
Index® (the “underlying index”). The NASDAQ Biotechnology Index is designed to measure the performance
of NASDAQ Stock Market (“NASDAQ”)-listed companies that are classified according to the Industry Classification Benchmark
as either biotechnology or pharmaceuticals which also meet other eligibility criteria determined by NASDAQ OMX, the sponsor of
the NASDAQ Biotechnology Index. The IBB is composed of companies that are in the biotechnology or pharmaceutical sector. The IBB
trades on the NASDAQ under the ticker symbol “IBB.”
The
IBB utilizes a “representative sampling” investment approach in attempting to track the performance of its underlying
index. The IBB typically invests in at least 90% of the securities which comprise the underlying index in approximately the same
proportions as the underlying index.
The NASDAQ Biotechnology Index®
The
NASDAQ Biotechnology Index® is designed to measure the performance of NASDAQ-listed companies that are classified
according to the Industry Classification Benchmark as either biotechnology or pharmaceuticals which also meet other eligibility
criteria determined by NASDAQ OMX. The NASDAQ Biotechnology Index® is calculated under a modified capitalization-weighted
methodology. On November 1, 1993, the NASDAQ Biotechnology Index® began with a base of 200.00. To be eligible for
inclusion in the NASDAQ Biotechnology Index®, a security must be listed on The NASDAQ. Eligibility for the NASDAQ
Biotechnology Index® is limited to specific security types only. The security types eligible for the NASDAQ Biotechnology
Index® include common stocks, ordinary shares, American Depositary Receipts, and shares of beneficial interest or
limited partnership interests. Securities must meet the following criteria:
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the security’s U.S. listing must be exclusively
on the NASDAQ Global Select Market or the NASDAQ Global Market (unless the security was dually listed on another U.S. market prior
to January 1, 2004 and has continuously maintained such listing);
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the issuer of the security must be classified
according to the Industry Classification Benchmark as either Biotechnology or Pharmaceuticals;
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the security may not be issued by an issuer
currently in bankruptcy proceedings;
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the security must have a market capitalization
of at least $200 million;
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the security must have an average daily trading
volume of at least 100,000 shares;
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the issuer of the security may not have entered
into a definitive agreement or other arrangement which would likely result in the security no longer being eligible for inclusion
in the NASDAQ Biotechnology Index®;
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the issuer of the security may not have annual
financial statements with an audit opinion that is currently withdrawn; and
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the issuer of the security must have “seasoned”
on NASDAQ, the New York Stock Exchange or NYSE MKT (generally, a company is considered to be seasoned if it has been listed on
a market for at least three full months, excluding the first month of initial listing).
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Calculation
of the Total Return of the Underlying Index
The
IBB tracks the performance of the “total return” version of the NASDAQ Biotechnology Index®. The value
of the NASDAQ Biotechnology Index® equals the index market value divided by the index divisor. The overall
index market value is the aggregate of each index security’s market value, as may be adjusted for any corporate actions.
An index security’s market value is determined by multiplying the last sale price by its index share weight, also known as
“index shares”. In other words, the value of the index is equal to (i) the sum of the products of
(a) the index shares of each of the index securities multiplied by (b) each such security’s last sale price (adjusted
for corporate actions, if any), divided by (ii) the divisor of the index.
In
calculating the index, the divisor serves the purpose of scaling the aggregate value of each index share weight multiplied by such
stock’s last sale price to a lower order of magnitude which is more desirable for index reporting purposes. The index divisor
is calculated as the ratio of (i) the start of day market value of the index divided by (ii) the previous day index value.
The
total return index reinvests cash dividends on the ex-date. The total return index was synchronized to the value of the price return
index at the close on September 24, 2003.
The
index is calculated in U.S. dollars during the U.S. market trading day based on the last sale price and is disseminated once per
second from 09:30:01 until 17:16:00 ET. The closing value of the index may change up until 17:15:00 ET due to corrections to the
last sale price of the index stocks. The official closing value of the index is ordinarily disseminated at 17:16:00 ET.
Annual Evaluation
The
securities composing the NASDAQ Biotechnology Index® are evaluated annually in December. Securities currently within
the NASDAQ Biotechnology Index® must continue to meet the above eligibility criteria. The securities included in
the NASDAQ Biotechnology Index® not meeting the maintenance criteria are removed. Index-eligible securities not
currently in the NASDAQ Biotechnology Index® are added. Generally, the list of additions and deletions is publicly
announced with a press release in early December. If at any time during the year other than at the review a security in the NASDAQ
Biotechnology Index® no longer meets the criteria or is otherwise determined to have become ineligible, the security
is
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-14
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
removed from the NASDAQ Biotechnology Index®
and will not be replaced.
Index
Maintenance
In
addition to the annual evaluation, the securities in the NASDAQ Biotechnology Index® are monitored by NASDAQ OMX
with respect to changes in total shares outstanding arising from corporate events such as stock dividends, stock splits, certain
spin-offs and rights issuance, or other corporate actions. NASDAQ OMX has adopted the following weight adjustment procedures with
respect to such changes. Changes in total shares outstanding arising from stock splits, stock dividends, or spin-offs are generally
made to the NASDAQ Biotechnology Index® on the evening prior to the effective date of such corporate action. If
the change in total shares outstanding arising from other corporate actions is greater than or equal to 10%, the change will be
made as soon as practicable. Otherwise, if the change in total shares outstanding is less than 10%, then all such changes are accumulated
and made effective at one time on a quarterly basis after the close of trading on the third Friday in each of March, June, September,
and December. In either case, the index share weights for such securities are adjusted by the same percentage amount by which the
total shares outstanding have changed in such securities.
Index
Rebalancing
The
NASDAQ Biotechnology Index® employs a modified market capitalization weighting methodology. At each quarter, the
NASDAQ Biotechnology Index® is rebalanced such that the maximum weight of any security in the NASDAQ Biotechnology
Index® does not exceed 8% and no more than 5 securities are at that cap. The excess weight of any capped security
is distributed proportionally across the remaining securities. If after redistribution, any of the 5 highest ranked securities
are weighted below 8%, these securities are not capped. Next, any remaining securities in excess of 4% are capped at 4% and the
excess weight is redistributed proportionally across the remaining securities. The process is repeated, if necessary, to derive
the final weights.
The
modified market capitalization weighting methodology is applied to the capitalization of each security in the NASDAQ Biotechnology
Index®, using the last sale price of the security at the close of trading on the last trading day in February, May,
August and November and after applying quarterly changes to the total shares outstanding. The index share weights are then calculated
by multiplying the weight of the security derived above by the new market value of the NASDAQ Biotechnology Index®
and dividing the modified market capitalization for each security in the NASDAQ Biotechnology Index® by its corresponding
last sale price. The changes are effective after trading on the third Friday in March, June, September and December.
Historical Performance of the IBB
The following graph sets forth
the daily historical performance of the IBB in the period from January 1, 2008 through October 2, 2019. 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 IBB’s hypothetical Coupon Barrier and Threshold Value of $58.34 (rounded
to two decimal places), which is 60% of the IBB’s hypothetical Starting Value of $97.24, which was its closing price on October
2, 2019. The actual Starting Value, Coupon Barrier and Threshold Value will be determined on the pricing date.
This historical data on the IBB is not
necessarily indicative of the future performance of the IBB or what the value of the Notes may be. Any historical upward or downward
trend in the price of the IBB during any period set forth above is not an indication that the price of the IBB 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 prices and trading pattern of the IBB.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-15
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Supplement to the Plan of Distribution; Role
of BofAS and Conflicts of Interest
BofAS, a broker-dealer affiliate
of ours, is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and will participate as selling
agent in the distribution of the Notes. Accordingly, the offering of the Notes will conform to the requirements of FINRA Rule 5121.
BofAS may not make sales in this offering to any of its discretionary accounts without the prior written approval of the account
holder.
We expect to deliver the Notes
against payment therefor in New York, New York on a date that is greater than two business days following the pricing date. Under
Rule 15c6-1 of the Securities Exchange Act of 1934, trades in the secondary market generally are required to settle in two business
days, unless the parties to any such trade expressly agree otherwise. Accordingly, if the initial settlement of the Notes occurs
more than two business days from the pricing date, purchasers who wish to trade the Notes more than two business days prior to
the original issue date will be required to specify alternative settlement arrangements to prevent a failed settlement.
Under our distribution agreement
with BofAS, BofAS will purchase the Notes from us as principal at the public offering price indicated on the cover of this pricing
supplement, less the indicated underwriting discount. BofAS will sell the Notes to other broker-dealers that will participate in
the offering and that are not affiliated with us, at an agreed discount to the principal amount. Each of those broker-dealers may
sell the Notes to one or more additional broker-dealers. BofAS has informed us that these discounts may vary from dealer to dealer
and that not all dealers will purchase or repurchase the Notes at the same discount. Certain dealers who purchase the Notes for
sale to certain fee-based advisory accounts may forgo some or all of their selling concessions, fees or commissions. The public
offering price for investors purchasing the Notes in these fee-based advisory accounts may be as low as $975.00 per Note.
BofAS and any of our other broker-dealer
affiliates may use this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus’
for offers and sales in secondary market transactions and market-making transactions in the Notes. However, they are not obligated
to engage in such secondary market transactions and/or market-making transactions. 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 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
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-16
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Services and Markets Act 2000, as amended
(the “FSMA”). Accordingly, such documents and/or materials are not being distributed to, and must not be passed on
to, the general public in the United Kingdom. The communication of such documents and/or materials as a financial promotion is
only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and
who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a)
to (d) of the Financial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial
Promotion Order (all such persons together being referred to as “relevant persons”). In the United Kingdom, the Notes
offered hereby are only available to, and any investment or investment activity to which this pricing supplement, the accompanying
product supplement, the accompanying prospectus supplement and the accompanying prospectus relates will be engaged in only with,
relevant persons. Any person in the United Kingdom that is not a relevant person should not act or rely on this pricing supplement,
the accompanying product supplement, the accompanying prospectus supplement or the accompanying prospectus or any of their contents.
Any invitation or inducement to engage
in investment activity (within the meaning of Section 21 of the FSMA) in connection with the issue or sale of the Notes may only
be communicated or caused to be communicated in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or
the Guarantor.
All applicable provisions of the FSMA
must be complied with in respect to anything done by any person in relation to the Notes in, from or otherwise involving the United
Kingdom.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-17
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Structuring the Notes
The Notes
are our debt securities, the return on which is linked to the performance of the Underlyings. The related guarantee is BAC’s
obligation. As is the case for all of our and BAC’s respective debt securities, including our market-linked notes, the economic
terms of the Notes reflect our and BAC’s actual or perceived creditworthiness at the time of pricing. In addition, because
market-linked notes result in increased operational, funding and liability management costs to us and BAC, BAC typically borrows
the funds under these types of notes at a rate, which we refer to in this pricing supplement as BAC’s internal funding rate,
that is more favorable to BAC than the rate that it might pay for a conventional fixed or floating rate debt security. This generally
relatively lower internal funding rate, which is reflected in the economic terms of the Notes, along with the fees and charges
associated with market-linked notes, typically results in the initial estimated value of the Notes on the pricing date being less
than their public offering price.
In order to meet our payment
obligations on the Notes, at the time we issue the Notes, we may choose to enter into certain hedging arrangements (which may include
call options, put options or other derivatives) with BofAS or one of our other affiliates. The terms of these hedging arrangements
are determined based upon terms provided by BofAS and its affiliates, and take into account a number of factors, including our
and BAC’s creditworthiness, interest rate movements, the volatility of the Underlyings, the tenor of the Notes and the hedging
arrangements. The economic terms of the Notes and their initial estimated value depend in part on the terms of these hedging arrangements.
BofAS has
advised us that the hedging arrangements will include hedging related charges, reflecting the costs associated with, and our affiliates’
profit earned from, these hedging arrangements. Since hedging entails risk and may be influenced by unpredictable market forces,
actual profits or losses from these hedging transactions may be more or less than any expected amounts.
For further
information, see “Risk Factors” beginning on page PS-8 above and “Supplemental Use of Proceeds” on page
PS-16 of the accompanying product supplement.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-18
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
U.S. Federal Income Tax Summary
The following summary of the material U.S.
federal income tax considerations of the acquisition, ownership, and disposition of the Notes supplements, and to the extent inconsistent
supersedes, the discussions under “U.S. Federal Income Tax Considerations” in the accompanying prospectus and under
“U.S. Federal Income Tax Considerations” in the accompanying prospectus supplement and is not exhaustive of all possible
tax considerations. In addition, any reference to “Morrison & Foerster LLP” in the aforementioned tax discussions
in the accompanying prospectus and prospectus supplement should be read as a reference to “Sidley Austin LLP.” This
summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated under the
Code by the U.S. Treasury Department (“Treasury”) (including proposed and temporary regulations), rulings, current
administrative interpretations and official pronouncements of the IRS, and judicial decisions, all as currently in effect and all
of which are subject to differing interpretations or to change, possibly with retroactive effect. No assurance can be given that
the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.
This summary does not include any description of the tax laws of any state or local governments, or of any foreign government,
that may be applicable to a particular holder.
Although the Notes are issued by us, they
will be treated as if they were issued by Bank of America Corporation for U.S. federal income tax purposes. Accordingly throughout
this tax discussion, references to “we,” “our” or “us” are generally to Bank of America Corporation
unless the context requires otherwise.
This summary is directed solely to U.S.
Holders and Non-U.S. Holders that, except as otherwise specifically noted, will purchase the Notes upon original issuance and will
hold the Notes as capital assets within the meaning of Section 1221 of the Code, which generally means property held for investment,
and that are not excluded from the discussion under “U.S. Federal Income Tax Considerations” in the accompanying prospectus.
You should consult your own tax advisor
concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing of the Notes, as well as any tax
consequences arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes
in U.S. federal or other tax laws.
General
Although there is no statutory, judicial,
or administrative authority directly addressing the characterization of the Notes, we intend to treat the Notes for all tax purposes
as contingent income-bearing single financial contracts with respect to the Underlyings and under the terms of the Notes, we and
every investor in the Notes agree, in the absence of an administrative determination or judicial ruling to the contrary, to treat
the Notes in accordance with such characterization. In the opinion of our counsel, Sidley Austin LLP, it is reasonable to treat
the Notes as contingent income-bearing single financial contracts with respect to the Underlyings. However, Sidley Austin LLP has
advised us that it is unable to conclude that it is more likely than not that this treatment will be upheld. This discussion assumes
that the Notes constitute contingent income-bearing single financial contracts with respect to the Underlyings for U.S. federal
income tax purposes. If the Notes did not constitute contingent income-bearing single financial contracts, the tax consequences
described below would be materially different.
This characterization of the Notes is
not binding on the IRS or the courts. No statutory, judicial, or administrative authority directly addresses the characterization
of the Notes or any similar instruments for U.S. federal income tax purposes, and no ruling is being requested from the IRS with
respect to their proper characterization and treatment. Due to the absence of authorities on point, significant aspects of the
U.S. federal income tax consequences of an investment in the Notes are not certain, and no assurance can be given that the IRS
or any court will agree with the characterization and tax treatment described in this pricing supplement. Accordingly, you are
urged to consult your tax advisor regarding all aspects of the U.S. federal income tax consequences of an investment in the Notes,
including possible alternative characterizations.
Unless otherwise stated, the following
discussion is based on the characterization described above. The discussion in this section assumes that there is a significant
possibility of a significant loss of principal on an investment in the Notes.
We will not attempt to ascertain whether
the issuer of either 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 either 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 Underlyings and consult
your tax advisor regarding the possible consequences to you, if any, if the issuer of either Underlying 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
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-19
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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. Subject to the discussion below concerning the possible application of the “constructive ownership” rules
of Section 1260 of the Code, this capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder held
the Notes for more than one year. The deductibility of capital losses is subject to limitations.
Possible Application of Section 1260
of the Code. Since each Underlying is the type of financial asset described under Section 1260 of the Code (including, among
others, any equity interest in pass-through entities such as exchange traded funds, regulated investment companies, real estate
investment trusts, partnerships, and passive foreign investment companies, each a “Section 1260 Financial Asset”),
while the matter is not entirely clear, there may exist a risk that an investment in the Notes will be treated, in whole or in
part, as a “constructive ownership transaction” to which Section 1260 of the Code applies. If Section 1260 of the Code
applies, all or a portion of any long-term capital gain recognized by a U.S. Holder in respect of the Notes will be recharacterized
as ordinary income (the “Excess Gain”). In addition, an interest charge will also apply to any deemed underpayment
of tax in respect of any Excess Gain to the extent such gain would have resulted in gross income inclusion for the U.S. Holder
in taxable years prior to the taxable year of the sale, exchange, redemption, or settlement (assuming such income accrued at a
constant rate equal to the applicable federal rate as of the date of sale, exchange, redemption, or settlement).
If an investment in the Notes is treated
as a constructive ownership transaction, it is not clear to what extent any long-term capital gain of a U.S. Holder in respect
of the Notes will be recharacterized as ordinary income. It is possible, for example, that the amount of the Excess Gain (if any)
that would be recharacterized as ordinary income in respect of the Notes will equal the excess of (i) any long-term capital gain
recognized by the U.S. Holder in respect of the Notes and attributable to Section 1260 Financial Assets, over (ii) the “net
underlying long-term capital gain” (as defined in Section 1260 of the Code) such U.S. Holder would have had if such U.S.
Holder had acquired an amount of the corresponding Section 1260 Financial Assets at fair market value on the original issue date
for an amount equal to the portion of the issue price of the Notes attributable to the corresponding Section 1260 Financial Assets
and sold such amount of Section 1260 Financial Assets at maturity or upon sale, exchange, or redemption of the Notes at fair market
value. Unless otherwise established by clear and convincing evidence, the net underlying long-term capital gain is treated as zero
and therefore it is possible that all long-term capital gain recognized by a U.S. Holder in respect of the Notes will be recharacterized
as ordinary income if Section 1260 of the Code applies to an investment in the Notes. U.S. Holders should consult their tax advisors
regarding the potential application of Section 1260 of the Code to an investment in the Notes.
As described below, the IRS, as indicated
in Notice 2008-2 (the “Notice”), is considering whether Section 1260 of the Code generally applies or should apply
to the Notes, including in situations where the Underlyings are not the type of financial asset described under Section 1260 of
the Code.
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 Notice 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.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-20
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
Because of the absence of authority regarding
the appropriate tax characterization of the Notes, it is also possible that the IRS could seek to characterize the Notes in a manner
that results in tax consequences that are different from those described above. For example, the IRS could possibly assert that
any gain or loss that a holder may recognize at maturity or upon the sale, exchange, or redemption of the Notes should be treated
as ordinary gain or loss.
Non-U.S. Holders
Because the U.S. federal income tax treatment
of the Notes (including any Contingent Coupon Payment) is uncertain, we will withhold U.S. federal income tax at a 30% rate (or
at a lower rate under an applicable income tax treaty) on the entire amount of any Contingent Coupon Payment made unless such payments
are effectively connected with the conduct by the Non-U.S. Holder of a trade or business in the U.S. (in which case, to avoid withholding,
the Non-U.S. Holder will be required to provide a Form W-8ECI). We will not pay any additional amounts in respect of such withholding.
To claim benefits under an income tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to
its eligibility under the appropriate treaty’s limitations on benefits article, if applicable. In addition, special rules
may apply to claims for treaty benefits made by Non-U.S. Holders that are entities rather than individuals. The availability of
a lower rate of withholding under an applicable income tax treaty will depend on whether such rate applies to the characterization
of the payments under U.S. federal income tax laws. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
Except as discussed below, a Non-U.S. Holder
generally will not be subject to U.S. federal income or withholding tax for amounts paid in respect of the Notes (not including,
for the avoidance of doubt, amounts representing any Contingent Coupon Payment which would be subject to the rules discussed in
the previous paragraph) upon the sale, exchange or redemption of the Notes or their settlement at maturity, provided that the Non-U.S.
Holder complies with applicable certification requirements and that the payment is not effectively connected with the conduct by
the Non-U.S. Holder of a U.S. trade or business. Notwithstanding the foregoing, gain from the sale, exchange, or redemption of
the Notes or their settlement at maturity may be subject to U.S. federal income tax if that Non-U.S. Holder is a non-resident alien
individual and is present in the U.S. for 183 days or more during the taxable year of the sale, exchange, redemption, or settlement
and certain other conditions are satisfied.
If a Non-U.S. Holder of the Notes is engaged
in the conduct of a trade or business within the U.S. and if any Contingent Coupon Payment and gain realized on the settlement
at maturity, or upon sale, exchange, or redemption of the Notes, is effectively connected with the conduct of such trade or business
(and, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the U.S.),
the Non-U.S. Holder, although exempt from U.S. federal withholding tax, generally will be subject to U.S. federal income tax on
such Contingent Coupon Payment and gain on a net income basis in the same manner as if it were a U.S. Holder. Such Non-U.S. Holders
should read the material under the heading “—U.S. Holders,” for a description of the U.S. federal income tax
consequences of acquiring, owning, and disposing of the Notes. In addition, if such Non-U.S. Holder is a foreign corporation, it
may also be subject to a branch profits tax equal to 30% (or such lower rate provided by any applicable tax treaty) of a portion
of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the
U.S., subject to certain adjustments.
A “dividend equivalent” payment
is treated as a dividend from sources within the United States and such payments generally would be subject to a 30% U.S. withholding
tax if paid to a Non-U.S. Holder. Under Treasury regulations, payments (including deemed payments) with respect to equity-linked
instruments (“ELIs”) that are “specified ELIs” may be treated as dividend equivalents if such specified
ELIs reference an interest in an “underlying security,” which is generally any interest in an entity taxable as a corporation
for U.S. federal income tax purposes if a payment with respect to such interest could give rise to a U.S. source dividend. However,
IRS guidance provides that withholding on dividend equivalent payments will not apply to specified ELIs that are not delta-one
instruments and that are issued before January 1, 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.
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CONTINGENT INCOME AUTO-CALLABLE YIELD NOTES | PS-21
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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 AUTO-CALLABLE YIELD NOTES | PS-22
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Contingent Income Auto-Callable Yield Notes Linked to the Least Performing of the SPDR® S&P® Biotech ETF and the iShares® Nasdaq Biotechnology ETF
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:
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•
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Product
Supplement EQUITY-1 dated January 24, 2017:
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https://www.sec.gov/Archives/edgar/data/70858/000119312517016445/d331325d424b5.htm
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 Merrill Lynch, Pierce,
Fenner & Smith Incorporated (“MLPF&S”) in the accompanying product supplement, prospectus supplement and prospectus,
as such references relate to MLPF&S’s institutional services, should now be read as references to BofAS.
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 AUTO-CALLABLE YIELD NOTES | PS-23
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