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Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-268718 and 333-268718-01 (To Prospectus dated December 30, 2022, Prospectus Supplement dated December 30, 2022 and Product Supplement EQUITY SUN-1 dated February 3, 2023) |
1,390,442 Units
$10 principal amount per unit CUSIP No. 09710N507 ![]() |
Pricing Date
Settlement Date Maturity Date |
February 22, 2024
February 29, 2024
February 27, 2026
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BofA Finance LLC
Autocallable Market-Linked Step Up Notes Linked to the Nasdaq-100 Index®
Fully and Unconditionally Guaranteed by Bank of America Corporation
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Maturity of approximately two years, if not called prior to maturity
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Automatic call of the notes per unit at $10 plus the Call Premium ($1.25) on the Observation Date if the Index is flat or increases above 100% of the Starting Value on the Observation Date
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The Observation Date will occur approximately one year after the pricing date
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If the notes are not called, at maturity:
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a return of 20% if the Index is flat or increases up to the Step Up Value
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a return equal to the percentage increase in the Index if the Index increases above the Step Up Value
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1-to-1 downside exposure to decreases in the Index, with up to 100.00% of your principal at risk
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All payments are subject to the credit risk of BofA Finance LLC, as issuer of the notes, and the credit risk of Bank of America Corporation, as guarantor of the notes
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No periodic interest payments
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In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.05 per unit. See “Structuring the Notes”
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Limited secondary market liquidity, with no exchange listing
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Per Unit
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Total
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Public offering price…………………………….
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$10.00
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$13,904,420.00
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Underwriting discount
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$ 0.20
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$ 278,088.40
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Proceeds, before expenses, to BofA Finance
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$ 9.80
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$13,626,331.60
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Are Not FDIC Insured
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Are Not Bank Guaranteed
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May Lose Value
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Terms of the Notes
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Issuer:
Guarantor:
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BofA Finance LLC (“BofA Finance”)
Bank of America Corporation (“BAC”)
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Call Settlement Date:
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Approximately the fifth business day following the Observation Date, subject to postponement if the Observation Date is postponed, as described on page PS-26 of the accompanying product supplement.
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Principal Amount:
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$10.00 per unit
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Call Premiums:
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$1.25 per unit if called on the Observation Date (which represents a return of 12.50% over the principal amount).
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Term:
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Approximately two years, if not called
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Ending Value:
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The closing level of the Market Measure on the scheduled calculation day. The calculation day is subject to postponement in the event of Market Disruption Events, as described beginning on page PS-28 of the accompanying product supplement.
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Market Measure:
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The Nasdaq-100 Index® (Bloomberg symbol: “NDX”), a price return index
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Step Up Value:
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21,605.64 (which is 120% of the Starting Value).
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Starting Value:
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18,004.70
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Step Up Payment:
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$2.00 per unit, which represents a return of 20% over the principal amount.
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Observation Level:
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The closing level of the Market Measure on the Observation Date.
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Threshold Value:
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18,004.70 (which is 100% of the Starting Value).
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Observation Date:
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February 28, 2025, subject to postponement in the event of Market Disruption Events, as described beginning on page PS-26 of the accompanying product supplement.
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Calculation Day:
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February 20, 2026
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Call Level:
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18,004.70 (which is 100% of the Starting Value).
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Fees and Charges:
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The underwriting discount of $0.20 per unit listed on the cover page and the hedging-related charge of $0.05 per unit described in “Structuring the Notes” on page TS-15.
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Call Amount (per Unit):
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$11.25 if called on the Observation Date.
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Calculation Agent:
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BofA Securities, Inc. (“BofAS”).
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Autocallable Market-Linked Step Up Notes
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TS-2
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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TS-3
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Product supplement EQUITY SUN-1 dated February 3, 2023:
https://www.sec.gov/Archives/edgar/data/70858/000119312523023680/d432066d424b2.htm |
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Series A MTN prospectus supplement dated December 30, 2022 and prospectus dated December 30, 2022:
https://www.sec.gov/Archives/edgar/data/1682472/000119312522315195/d409418d424b3.htm |
You may wish to consider an investment in the notes if:
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The notes may not be an appropriate investment for you if:
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You are willing to receive a return on your investment capped at the return represented by the Call Premium if the Observation Level is equal to or greater than the Call Level.
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You anticipate that the notes will be automatically called or the Ending Value will not be less than the Starting Value.
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You are willing to risk a loss of principal and return if the notes are not automatically called and the Index decreases from the Starting Value to the Ending Value.
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You are willing to forgo the interest payments that are paid on conventional interest bearing debt securities.
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You are willing to forgo dividends or other benefits of owning the stocks included in the Index.
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You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our and BAC’s actual and perceived creditworthiness, BAC’s internal funding rate and fees and charges on the notes.
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You are willing to assume our credit risk, as issuer of the notes, and BAC’s credit risk, as guarantor of the notes, for all payments under the notes, including the Call Amount or the Redemption Amount, as applicable.
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You want to hold your notes for the full term.
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You believe that the notes will not be automatically called and the Index will decrease from the Starting Value to the Ending Value.
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You seek principal repayment or preservation of capital.
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You seek interest payments or other current income on your investment.
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You want to receive dividends or other distributions paid on the stocks included in the Index.
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You seek an investment for which there will be a liquid secondary market.
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You are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes or to take BAC's credit risk, as guarantor of the notes.
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Autocallable Market-Linked Step Up Notes
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TS-4
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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This graph reflects the returns on the notes, based on the Threshold Value of 100% of the Starting Value, the Step Up Payment of $2.00 per unit and the Step Up Value of 120% of the Starting Value. The green line reflects the returns on the notes, while the dotted gray line reflects the returns of a direct investment in the stocks included in the Index, excluding dividends.
This graph has been prepared for purposes of illustration only.
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Ending Value
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Percentage Change from the Starting Value to the Ending Value
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Redemption Amount per Unit
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Total Rate of Return on the Notes
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0.00
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-100.00%
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$0.00
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-100.00%
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50.00
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-50.00%
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$5.00
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-50.00%
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80.00
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-20.00%
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$8.00
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-20.00%
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90.00
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-10.00%
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$9.00
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-10.00%
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95.00
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-5.00%
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$9.50
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-5.00%
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97.00
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-3.00%
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$9.70
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-3.00%
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100.00(1)(2)
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0.00%
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$12.00(3)
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20.00%
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102.00
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2.00%
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$12.00
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20.00%
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105.00
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5.00%
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$12.00
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20.00%
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110.00
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10.00%
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$12.00
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20.00%
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120.00(4)
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20.00%
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$12.00
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20.00%
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130.00
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30.00%
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$13.00
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30.00%
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140.00
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40.00%
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$14.00
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40.00%
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145.00
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45.00%
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$14.50
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45.00%
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150.00
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50.00%
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$15.00
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50.00%
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160.00
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60.00%
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$16.00
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60.00%
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(1)
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The hypothetical Starting Value of 100 used in these examples has been chosen for illustrative purposes only. The actual Starting Value is 18,004.70, which was the closing level for the Market Measure on the pricing date.
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(2)
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This is the hypothetical Threshold Value.
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(3)
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This amount represents the sum of the principal amount and the Step Up Payment of $2.00.
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(4)
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This is the hypothetical Step Up Value.
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Autocallable Market-Linked Step Up Notes
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TS-5
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Example 1
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The Ending Value is 80.00, or 80.00% of the Starting Value:
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Starting Value: 100.00
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Threshold Value: 100.00
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Ending Value: 80.00
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= $8.00 Redemption Amount per unit
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Example 2
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The Ending Value is 110.00, or 110.00% of the Starting Value:
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Starting Value: 100.00
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Step Up Value: 120.00
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Ending Value: 110.00
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$10.00 + $2.00 = $12.00
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Redemption Amount per unit, the principal amount plus the Step Up Payment, since the Ending Value is equal to or greater than the Starting Value, but less than the Step Up Value.
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Example 3
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The Ending Value is 150.00, or 150.00% of the Starting Value:
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Starting Value: 100.00
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Step Up Value: 120.00
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Ending Value: 150.00
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= $15.00 Redemption Amount per unit
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Autocallable Market-Linked Step Up Notes
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TS-6
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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If the notes are not automatically called, depending on the performance of the Index as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.
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Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
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Payments on the notes are subject to our credit risk, and the credit risk of BAC, and any actual or perceived changes in our or BAC’s creditworthiness are expected to affect the value of the notes. If we and BAC become insolvent or are unable to pay our respective obligations, you may lose your entire investment.
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If the notes are called, your investment return is limited to the return represented by the Call Premium.
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Your investment return may be less than a comparable investment directly in the securities included in the Index.
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We are a finance subsidiary and, as such, have no independent assets, operations or revenues.
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BAC’s obligations under its guarantee of the notes will be structurally subordinated to liabilities of its subsidiaries.
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The notes issued by us will not have the benefit of any cross-default or cross-acceleration with other indebtedness of BofA Finance or BAC; events of bankruptcy or insolvency or resolution proceedings relating to BAC and covenant breach by BAC will not constitute an event of default with respect to the notes.
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The initial estimated value of the notes considers certain assumptions and variables and relies in part on certain forecasts about future events, which may prove to be incorrect. The initial estimated value of the notes is an estimate only, determined as of the pricing date by reference to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including our credit spreads and those of BAC, BAC’s internal funding rate on the pricing date, mid-market terms on hedging transactions, expectations on interest rates 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.
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The public offering price you are paying for the notes exceeds the initial estimated value. 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 the initial estimated value. This is due to, among other things, changes in the level of the Index, changes in BAC’s internal funding rate, and the inclusion in the public offering price of the underwriting discount and the hedging-related charge, all as further described in “Structuring the Notes” beginning on page TS-15. 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, MLPF&S, 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 Index, our and BAC’s creditworthiness and changes in market conditions.
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A trading market is not expected to develop for the notes. None of us, BAC, MLPF&S, or BofAS is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase your notes at any price in any secondary market.
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BAC and its affiliates’ hedging and trading activities (including trades in shares of companies included in the Index) and any hedging and trading activities BAC or its affiliates engage in that are not for your account or on your behalf, may affect the market value and return of the notes and may create conflicts of interest with you.
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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.
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The Index sponsor may adjust the Index in a way that affects its level, and has no obligation to consider your interests.
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You will have no rights of a holder of the securities represented by the Index, and you will not be entitled to receive securities or dividends or other distributions by the issuers of those securities.
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Autocallable Market-Linked Step Up Notes
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TS-7
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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While BAC and our other affiliates may from time to time own securities of companies included in the Index, we, BAC and our other affiliates do not control any company included in the Index, and have not verified any disclosure made by any other company.
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The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See “Summary Tax Consequences” below and “U.S. Federal Income Tax Summary” beginning on page PS-39 of the accompanying product supplement.
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Autocallable Market-Linked Step Up Notes
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TS-8
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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the issuer of 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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a security must be issued by a non-financial company;
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a security may not be issued by an issuer currently in bankruptcy proceedings;
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a security must have an average daily trading volume of at least 200,000 shares in the previous three months (measured annually during the ranking review process described below);
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if the issuer of the security is organized under the laws of a jurisdiction outside the United States, then such security must have listed options on a recognized options market in the United States or be eligible for listed-options trading on a recognized options market in the United States (measured during the ranking review process);
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the issuer of the security may not have entered into a definitive agreement or other arrangement where the transaction is determined to be highly probable and would likely result in the security no longer being Index eligible;
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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 security must have “seasoned” on the NASDAQ, the New York Stock Exchange or The Chicago Board Options Exchange. 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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the issuer of the security’s primary U.S. listing must be exclusively listed on the Nasdaq Global Select Market or the Nasdaq Global Market;
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the security must be issued by a non-financial company;
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the security may not be issued by an issuer currently in bankruptcy proceedings;
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the security must have an average daily trading volume of at least 200,000 shares in the previous three month trading period (measured during the ranking review process);
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if the issuer of the security is organized under the laws of a jurisdiction outside the United States, then such security must have listed options on a recognized options market in the United States or be eligible for listed-options trading on a recognized options market in the United States;
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the issuer must have an adjusted market capitalization equal to or exceeding 0.10% of the aggregate adjusted market capitalization of the Index at each month-end. In the event a company does not meet this criterion for two consecutive month-ends, it will be removed from the Index effective after the close of trading on the third Friday of the following month; and
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Autocallable Market-Linked Step Up Notes
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TS-9
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn.
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Autocallable Market-Linked Step Up Notes
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TS-10
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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TS-11
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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TS-12
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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TS-13
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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Autocallable Market-Linked Step Up Notes
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TS-14
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Autocallable Market-Linked Step Up Notes
Linked to the Nasdaq-100 Index®, due February 27, 2026 |
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There is no statutory, judicial, or administrative authority directly addressing the characterization of the notes.
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You agree with us (in the absence of an administrative determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as a callable single financial contract with respect to the Index.
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Under this characterization and tax treatment of the notes, a U.S. Holder (as defined on page 71 of the prospectus) generally will recognize capital gain or loss upon maturity or upon a sale, exchange, or redemption of the notes prior to maturity. This capital gain or loss generally will be long-term capital gain or loss if you held the notes for more than one year.
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No assurance can be given that the Internal Revenue Service (“IRS”) or any court will agree with this characterization and tax treatment.
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Under current IRS guidance, withholding on “dividend equivalent” payments (as discussed in the product supplement), if any, will not apply to notes that are issued as of the date of this term sheet unless such notes are “delta-one” instruments.
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Autocallable Market-Linked Step Up Notes
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TS-15
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