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Filed Pursuant to Rule 424(b)(2)
Registration Statement Nos. 333-268718
and 333-268718-01
(To Prospectus dated December 30, 2022,
Prospectus Supplement dated December 30, 2022 and
Product Supplement STOCK CYN-1 dated August 2, 2023) |
300,000 Units
$10 principal amount per unit CUSIP No. 09710R409 ![]() |
Pricing Date
Settlement Date Maturity Date |
May 29, 2024
June 5, 2024 June 5, 2026 |
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BofA Finance LLC
Autocallable Contingent Coupon (with Memory) Barrier Notes Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc.
Fully and Unconditionally Guaranteed by Bank of America Corporation
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Contingent Coupon Payments (with Memory) payable on the applicable Coupon Payment Date if the Observation Value of the Worst-Performing Market Measure, which will be one of the common stock of Intel Corporation, the common stock of Apple Inc. and the common stock of Tesla, Inc. (each an “Underlying Stock” and collectively the “Underlying Stocks”), on the applicable quarterly Coupon Observation Date is greater than or equal to 60% of its Starting Value.
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The Contingent Coupon Payment (with Memory) payable on any Coupon Payment Date will be calculated according to the following formula: (i) the product of the Contingent Coupon Payment (with Memory) applicable to a single Coupon Payment Date and the number of Coupon Payment Dates that have occurred up to the relevant Coupon Payment Date (inclusive of the relevant Coupon Payment Date) minus (ii) the sum of all Contingent Coupon Payments (with Memory) previously paid. The Contingent Coupon Payment (with Memory) applicable to a single Coupon Payment Date is $0.5525 per unit.
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Automatically callable if the Observation Value of the Worst-Performing Market Measure on any quarterly Call Observation Date, beginning approximately three months after the pricing date, is at or above its Starting Value. If the notes are called, on the applicable Call Payment Date you will receive the principal amount of your notes plus the Contingent Coupon Payment (with Memory) otherwise due. No further amounts will be payable following an automatic call.
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If not called, a maturity of approximately two years.
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If not called, at maturity, if the price of the Worst-Performing Market Measure has not decreased by more than 40%, a return of principal plus the final Contingent Coupon Payment (with Memory); otherwise, 1-to-1 downside exposure to decreases in the Worst-Performing Market Measure from its Starting Value, with up to 100.00% of the principal amount at risk.
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The notes are not linked to a basket composed of the Underlying Stocks. Any depreciation in the price of any Underlying Stock will not be offset by any appreciation in the price of any other Underlying Stock.
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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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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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$10.000
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$3,000,000.00
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Underwriting discount
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$ 0.075
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$ 22,500.00
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Proceeds, before expenses, to BofA Finance
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$ 9.925
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$2,977,500.00
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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 Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Terms of the Notes
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Issuer:
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BofA Finance LLC (“BofA Finance”)
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Guarantor:
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Bank of America Corporation (“BAC”)
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Principal Amount:
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$10.00 per unit
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Term:
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Approximately two years, if not previously called
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Market Measures:
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The common stock of Intel Corporation (Nasdaq Global Select Market symbol: “INTC”), the common stock of Apple Inc. (Nasdaq Global Select Market symbol: “AAPL”) and the common stock of Tesla, Inc. (Nasdaq Global Select Market symbol: “TSLA”)
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Worst-Performing Market Measure:
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The Underlying Stock with the lowest Observation Value or Ending Value, as applicable, as compared to its Starting Value, calculated as follows:
With respect to each Underlying Stock on any Coupon Observation Date or Call Observation Date:
With respect to each Underlying Stock on the Final Calculation Day:
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Call Feature:
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Autocallable Notes
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Coupon Feature:
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Contingent Coupon Payments (with Memory)
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Barrier:
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Applicable
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Coupon Barrier:
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INTC: $18.08 (60% of its Starting Value, rounded to two decimal places).
AAPL: $114.17 (60% of its Starting Value, rounded to two decimal places).
TSLA: $105.71 (60% of its Starting Value, rounded to two decimal places).
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Threshold Value:
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INTC: $18.08 (60% of its Starting Value, rounded to two decimal places).
AAPL: $114.17 (60% of its Starting Value, rounded to two decimal places).
TSLA: $105.71 (60% of its Starting Value, rounded to two decimal places).
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Call Value:
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INTC: $30.13 (100% of its Starting Value).
AAPL: $190.29 (100% of its Starting Value).
TSLA: $176.19 (100% of its Starting Value).
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Contingent Coupon Payments (with Memory):
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The notes will pay a Contingent Coupon Payment (with Memory) on the applicable Coupon Payment Date if the Observation Value of the Worst-Performing Market Measure on the applicable quarterly Coupon Observation Date is greater than or equal to its Coupon Barrier. The Contingent Coupon Payment (with Memory) payable on any Coupon Payment Date will be calculated according to the following formula: (i) the product of the Contingent Coupon Payment (with Memory) applicable to a single Coupon
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-2
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Payment Date and the number of Coupon Payment Dates that have occurred up to the relevant Coupon Payment Date (inclusive of the relevant Coupon Payment Date) minus (ii) the sum of all Contingent Coupon Payments (with Memory) previously paid. The Contingent Coupon Payment (with Memory) applicable to a single Coupon Payment Date is $0.5525 per unit.
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Call Payment:
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The principal amount plus the Contingent Coupon Payment (with Memory) otherwise due on the applicable Call Payment Date.
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Starting Value:
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INTC: $30.13
AAPL: $190.29
TSLA: $176.19
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Ending Value:
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With respect to each Underlying Stock, its Closing Market Price on the Final Calculation Day multiplied by its Price Multiplier on that day. The scheduled Final Calculation Day is subject to postponement in the event of Market Disruption Events, as described beginning on page PS-32 of the accompanying product supplement.
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Observation Value:
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With respect to each Underlying Stock, its Closing Market Price on the applicable Coupon Observation Date or Call Observation Date multiplied by its Price Multiplier on that day.
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Coupon Observation Dates:
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On or about August 29, 2024, November 29, 2024, February 28, 2025, May 29, 2025, August 29, 2025, November 28, 2025, February 27, 2026 and May 29, 2026 (the final Coupon Observation Date), which dates occur quarterly through the final Coupon Observation Date. The scheduled Coupon Observation Dates are subject to postponement in the event of Market Disruption Events, as described beginning on page PS-30 of the accompanying product supplement.
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Call Observation Dates:
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The Coupon Observation Dates beginning on August 29, 2024 and ending on February 27, 2026.
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Final Calculation Day/Maturity Valuation Period:
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May 29, 2026 (which also is the final Coupon Observation Date).
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Coupon Payment Dates:
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Approximately the fifth business day following the applicable Coupon Observation Date, subject to postponement as described beginning on page PS-30 of the accompanying product supplement; provided however, that the Coupon Payment Date related to the final Coupon Observation Date will be the maturity date.
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Call Payment Dates:
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The Coupon Payment Dates applicable to the relevant Call Observation Dates
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Price Multiplier:
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With respect to each Underlying Stock, 1, subject to adjustments for certain corporate events relating to such Underlying Stock described beginning on PS-33 of the accompanying product supplement.
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Fees and Charges:
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The underwriting discount of $0.075 per unit listed on the cover page.
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Calculation Agent:
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BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-3
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-4
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Product supplement STOCK CYN-1 dated August 2, 2023:
https://www.sec.gov/Archives/edgar/data/70858/000119312523201261/d518933d424b2.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 understand that any payment on the notes will be based solely on the performance of the Worst-Performing Market Measure.
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You anticipate that the Observation Value of the Worst-Performing Market Measure will be greater than or equal to its Coupon Barrier on most or all of the Coupon Observation Dates.
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You anticipate that the notes will be automatically called, in which case you accept an early exit from your investment, or if not automatically called that the Worst-Performing Market Measure will not decrease from its Starting Value to an Ending Value that is below its Threshold Value.
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You accept that the return on the notes will be limited to the return represented by the Contingent Coupon Payments (with Memory) even if the percentage change in the price of the Worst-Performing Market Measure is significantly greater than such return.
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You are willing to lose up to 100% of the principal amount if the notes are not called.
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You are willing to forgo dividends or other benefits of owning shares of the Underlying Stocks.
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You are willing to accept a limited or no market for sales for the notes 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 Redemption Amount.
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You are unwilling to accept that any payment on the notes will be based solely on the performance of the Worst-Performing Market Measure, regardless of the performance of the other Underlying Stocks.
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You anticipate that the Observation Value of the Worst-Performing Market Measure will be less than its Coupon Barrier on each Coupon Observation Date.
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You wish to make an investment that cannot be automatically called prior to maturity.
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You seek an uncapped return on your investment.
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You seek principal repayment or preservation of capital.
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You want to receive dividends or other distributions paid on the Underlying Stocks.
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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, 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 Contingent Coupon (with Memory) Barrier Notes
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TS-5
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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1)
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a Starting Value of 100.00 for the Worst-Performing Market Measure;
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2)
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a Coupon Barrier of 60.00 for the Worst-Performing Market Measure;
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a Threshold Value of 60.00 for the Worst-Performing Market Measure;
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4)
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a Call Value of 100.00 for the Worst-Performing Market Measure;
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5)
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an expected term of the notes of approximately two years if the notes are not called on any Call Observation Date;
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6)
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a Contingent Coupon Payment (with Memory) applicable to a single Coupon Payment Date of $0.5525 per unit;
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7)
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the Coupon Observation Dates occurring quarterly beginning approximately three months after the pricing date; and
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8)
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the Call Observation Dates occurring quarterly beginning approximately three months after the pricing date.
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-6
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-7
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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If the notes are not called and the Ending Value of the Worst-Performing Market Measure is less than its Threshold Value, you will lose up to 100% of the principal amount.
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Your investment return is limited to the return represented by the Contingent Coupon Payments (with Memory) and may be less than a comparable investment directly in the Underlying Stocks.
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Payments on the notes will not reflect changes in the values of the Underlying Stocks other than on the Coupon Observation Dates, the Call Observation Dates or the Final Calculation Day.
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You may not receive any Contingent Coupon Payments (with Memory).
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If the notes are called, you will be subject to reinvestment risk, and you will lose the opportunity to receive Contingent Coupon Payments (with Memory), if any, that otherwise might have been payable after the date of the call.
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The notes are subject to the risks of each Underlying Stock, not a basket composed of the Underlying Stocks, and will be negatively affected if the level of any Underlying Stock decreases below its Coupon Barrier as of any Coupon Observation Date or below its Threshold Value on the Final Calculation Day, even if the levels of the other Underlying Stocks are above their respective Coupon Barrier or Threshold Value as of those days.
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You will not benefit in any way from the performance of the better performing Underlying Stocks.
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Because the notes are linked to three underlying stocks, as opposed to only one, it is more likely that a Contingent Coupon Payment will not be payable on any given Coupon Payment Date or that the Ending Value of an Underlying Stock will be less than its Threshold Value on the Final Calculation Day, and consequently, you will not receive a positive return on the notes and will lose some or all of your investment.
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You will be subject to risks relating to the relationship between the Underlying Stocks. The less correlated the Underlying Stocks, the more likely it is that the Observation Value of one of the Underlying Stocks will be below its Coupon Barrier as of each Coupon Observation Date or below its Threshold Value on the Final Calculation Day.
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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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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 prices of the Underlying Stocks, changes in BAC’s internal funding rate, and the inclusion in the public offering price of the underwriting discount and costs associated with hedging the notes, all as further described in “Structuring the Notes” on page TS-14. 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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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-8
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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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 Underlying Stocks, 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 the Underlying Stocks) 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 Underlying Company will have no obligations relating to the notes, and none of us, BAC, MLPF&S or BofAS will perform any due diligence procedures with respect to the Underlying Company in connection with this offering.
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You will have no rights of a holder of the Underlying Stocks and you will not be entitled to receive shares of the Underlying Stocks or dividends or other distributions by the Underlying Companies.
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While BAC and our other affiliates may from time to time own securities of the Underlying Companies, we, BAC and our other affiliates do not control the Underlying Companies, and have not verified any disclosure made by any other company.
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Payments on the notes will not be adjusted for all corporate events that could affect the Underlying Stocks. See “Description of the Notes—Anti-Dilution Adjustments” beginning on page PS-33 of the accompanying product supplement.
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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-45 of the accompanying product supplement.
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-9
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-10
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-11
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-12
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-13
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 2026 |
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Autocallable Contingent Coupon (with Memory) Barrier Notes
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TS-14
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Autocallable Contingent Coupon (with Memory) Barrier Notes
Linked to the Worst-Performing of the Common Stock of Intel Corporation, the Common Stock of Apple Inc. and the Common Stock of Tesla, Inc., due June 5, 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 contingent income-bearing single financial contract with respect to the Underlying Stocks.
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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 this characterization and tax treatment of the notes, we intend to take the position that the Contingent Coupon Payments constitute taxable ordinary income to a U.S. Holder (as defined in the prospectus) at the time received or accrued in accordance with the U.S. Holder’s regular method of accounting. Upon receipt of a cash payment at maturity or upon a sale, exchange or redemption of the notes prior to maturity (other than amounts representing accrued Contingent Coupon Payments), a U.S. Holder generally will recognize capital gain or loss. This capital gain or loss generally will be long-term capital gain or loss if you hold the notes for more than one year.
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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 Contingent Coupon (with Memory) Barrier Notes
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TS-15
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