FREE WRITING PROSPECTUS
Filed Pursuant to Rule 433
Registration Statement Nos. 333-268718 and 333-268718-01
Dated October 20, 2023
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FREE WRITING PROSPECTUS Filed Pursuant to Rule 433 Registration Statement Nos. 333-268718 and 333-268718-01 Dated October 20, 2023 |
Callable Contingent Income Securities due October 30, 2025
Payments on the Securities Based on the Performance of the Invesco S&P 500® Equal Weight ETF
Fully and Unconditionally Guaranteed by Bank of America Corporation
Principal at Risk Securities
This document provides a summary of the terms of the securities. Investors must carefully review the accompanying amended and restated preliminary pricing supplement referenced below, product supplement, prospectus supplement and prospectus, and the “Risk Considerations” on the following page, prior to making an investment decision.
The securities do not guarantee the repayment of principal and do not provide for the regular payment of interest. Investors will not participate in any appreciation of the Invesco S&P 500® Equal Weight ETF. The securities are for investors who seek an opportunity to earn contingent quarterly coupon payments at a potentially above-market rate in exchange for the risk of losing their principal and the risk of receiving no contingent quarterly coupon when the Invesco S&P 500® Equal Weight ETF on the related observation date closes below the coupon barrier level, and the risk of an early redemption of the securities at our discretion. The securities are our senior debt securities. Any payments on the securities are fully and unconditionally guaranteed by Bank of America Corporation (“BAC”). The securities are issued as part of BofA Finance LLC’s (“BofA Finance”) “Medium-Term Notes, Series A” program.
| SUMMARY TERMS | ||
| Issuer: | BofA Finance | |
| Guarantor: | BAC | |
| Underlying shares: | The Invesco S&P 500® Equal Weight ETF (Bloomberg symbol: “RSP”) | |
| Stated principal amount: | $1,000.00 per security | |
| Issue price: | $1,000.00 per security | |
| Pricing date: | October 27, 2023 | |
| Original issue date: | November 1, 2023 (3 business days after the pricing date). | |
| Maturity date: | October 30, 2025 | |
| Call feature: | Beginning on February 1, 2024, on any quarterly redemption date, we have the right to redeem all (but not less than all) of the securities for a redemption payment equal to the stated principal amount plus any contingent quarterly coupon otherwise due with respect to the relevant observation date. We will give notice to the trustee at least five business days but not more than 60 calendar days before the applicable redemption date. No further payments will be made on the securities once they have been redeemed. | |
| Contingent quarterly coupon: |
If, on any observation date, the determination closing price of the underlying shares on such date is greater than or equal to the coupon barrier level, we will pay a contingent quarterly coupon of at least $20.00 per security (equal to a rate of at least 2.00% per quarter or at least 8.00% per annum) on the related coupon payment date. The actual contingent quarterly coupon will be determined on the pricing date. If, on any observation date, the determination closing price of the underlying shares on such date is less than the coupon barrier level, no contingent quarterly coupon will be paid with respect to that observation date | |
| Payment at maturity: | If the securities have not previously been redeemed, investors will receive on the maturity date a payment at maturity determined as follows: | |
| If the final share price is greater than or equal to the downside threshold level: | the stated principal amount and the contingent quarterly coupon with respect to the final observation date | |
| If the final share price is less than the downside threshold level: | (i) the stated principal amount multiplied by (ii) the share performance factor | |
| Initial share price: | The closing price of the underlying shares on the pricing date. | |
| Determination closing price: | The closing price of the underlying shares on any observation date times the adjustment factor on such observation date. | |
| Final share price: | The closing price of the underlying shares on the final observation date times the adjustment factor on such date. | |
| Share performance factor: | The final share price divided by the initial share price | |
| Adjustment factor: | 1.0, subject to adjustment in the event of certain events affecting such underlying shares as described in “Description of the Notes—Anti-Dilution and Discontinuance Adjustments Relating to ETFs” beginning on page PS-28 of the accompanying product supplement. | |
| Redemption dates: | Beginning on February 1, 2024, quarterly, as set forth under “Observation Dates, Coupon Payment Dates and Redemption Dates” below. | |
| Observation dates: | Quarterly, as set forth under "Observation Dates, Coupon Payment Dates and Redemption Dates" below, subject to postponement as set forth in "Description of the Notes—Events Relating to Observation Dates" in the accompanying product supplement. We also refer to the observation date immediately prior to the maturity date as the final observation date. | |
| Coupon payment dates: |
Quarterly, beginning February 1, 2024, as set forth under "Observation Dates, Coupon Payment Dates and Redemption Dates" below.
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| Coupon barrier level: | 75% of the initial share price. | |
| Downside threshold level: | 75% of the initial share price. | |
| CUSIP / ISIN: | 09711AXU7 / US09711AXU77 | |
| Listing: | The securities will not be listed on any securities exchange. | |
| Estimated value on the pricing date: | Expected to be between $920.00 and $970.00 per $1,000 in principal amount of securities. See “Structuring the securities” in the preliminary pricing supplement. | |
| Preliminary pricing supplement | https://www.sec.gov/Archives/edgar/data/70858/000148105723008581/form424b2.htm | |
| Observation Dates | Coupon Payment Dates / Redemption Dates |
| January 29, 2024 | February 1, 2024 |
| April 29, 2024 | May 2, 2024 |
| July 29, 2024 | August 1, 2024 |
| October 28, 2024 | October 31, 2024 |
| January 27, 2025 | January 30, 2025 |
| April 28, 2025 | May 1, 2025 |
| July 28, 2025 | July 31, 2025 |
| October 27, 2025 (final observation date) | October 30, 2025* (maturity date) |
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*Denotes that such date is not a “Redemption Date”
The pricing date, issue date and other dates set forth above are subject to change, and will be set forth in the final pricing supplement relating to the securities.
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| Hypothetical Payment at Maturity (if the securities have not been previously redeemed) | |
| Change in the Performance of the Underlying Shares | Payment at Maturity (excluding any contingent quarterly coupon payable at maturity) |
| +50.00% | $1,000.00 |
| +20.00% | $1,000.00 |
| +10.00% | $1,000.00 |
| 0.00% | $1,000.00 |
| -10.00% | $1,000.00 |
| -20.00% | $1,000.00 |
| -25.00% | $1,000.00 |
| -26.00% | $740.00 |
| -30.00% | $700.00 |
| -40.00% | $600.00 |
| -50.00% | $500.00 |
| -100.00% | $0.00 |
You will find a link to the accompanying preliminary pricing supplement for the securities above and links to the accompanying product supplement, prospectus supplement and prospectus for the securities under “Additional Information about the Securities” in the preliminary pricing supplement, which you should read and understand prior to investing in the securities.
This free writing prospectus is a summary of the terms of the securities and factors that you should consider before deciding to invest in the securities. BofA Finance has filed a registration statement (including preliminary pricing supplement, product supplement, prospectus supplement and prospectus) 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 this pricing supplement and the accompanying product supplement, prospectus supplement and prospectus for information about us, BAC and this offering.
Underlying Shares
For information about the underlying shares, including historical performance information, see the accompanying preliminary pricing supplement.
Risk Considerations
The risks set forth below are discussed in more detail in the “Risk Factors” section in the accompanying preliminary pricing supplement. Please review those risk factors carefully prior to making an investment decision.
Structure-related Risks
| ▪ | Your investment may result in a loss; there is no guaranteed return of principal. |
| ▪ | Your return on the securities is limited to the return represented by the contingent quarterly coupons, if any, over the term of the securities. |
| ▪ | The securities are subject to early redemption, which would limit your ability to receive the contingent quarterly coupons over the full term of the securities |
| ▪ | You may not receive any contingent quarterly coupons. |
| ▪ | Your return on the securities may be less than the yield on a conventional debt security of comparable maturity. |
| ▪ | The contingent quarterly coupon, redemption payment or payment at maturity, as applicable, will not reflect changes in the price of the underlying shares other than on the observation dates. |
| ▪ | Any payments on the securities are subject to our credit risk and the credit risk of the guarantor, and any actual or perceived changes in our or the guarantor’s creditworthiness are expected to affect the value of the securities. |
| ▪ | We are a finance subsidiary and, as such, have no independent assets, operations, or revenues. |
Valuation- and Market-related Risks
| ▪ | The price to public you pay for the securities will exceed their initial estimated value. |
| ▪ | 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 securities in any secondary market (if any exists) at any time. |
| ▪ | We cannot assure you that a trading market for your securities will ever develop or be maintained. |
Conflict-related Risks
| ▪ | Trading and hedging activities by us, the guarantor and any of our other affiliates, including BofAS, may create conflicts of interest with you and may affect your return on the securities and their market value. |
| ▪ | There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours. |
Underlying Shares-related Risks
| ▪ | The anti-dilution adjustments will be limited. |
| ▪ | The performance of the underlying shares may not correlate with the performance of the underlying index of the underlying shares (the “underlying index”) as well as the net asset value per share of the underlying shares, especially during periods of market volatility. |
| ▪ | The sponsor or investment advisor of the underlying shares may adjust the underlying shares in a way that affects its prices, and the sponsor or investment advisor has no obligation to consider your interests. |
Tax-related Risks
| ▪ | The U.S. federal income tax consequences of an investment in the securities are uncertain, and may be adverse to a holder of the securities. |
Tax Considerations
You should review carefully the discussion in the accompanying preliminary pricing supplement under the caption “Additional Information About the Securities—Tax considerations” concerning the U.S. federal income tax consequences of an investment in the securities, and you should consult your tax adviser.