•   

The Capped Buffered Enhanced Return Notes Linked to a Basket of Seven Indices, due August 17, 2026 (the “Notes”) priced on May 12, 2025 and will issue on May 15, 2025.

•   

Approximate 15 month term.

•   

Payment on the Notes will depend on the performance of an unequally weighted basket comprised of the STOXX^® Europe 600 Index, the S&P 500^® Index, the Nasdaq-100^® Index, the Dow Jones Industrial Average^®, the MSCI Emerging Markets^® Index, the TOPIX^® Index and the S&P^®/ASX 200 Index (the “Basket”). The STOXX^® Europe 600 Index was given an initial weight of 14.00%, the S&P 500^® Index was given an initial weight of 20.00%, the Nasdaq-100^® Index was given an initial weight of 20.00%, the Dow Jones Industrial Average^® was given an initial weight of 20.00%, the MSCI Emerging Markets^® Index was given an initial weight of 20.00%, the TOPIX^® Index was given an initial weight of 4.50% and the S&P^®/ASX 200 Index was given an initial weight of 1.50%.

•   

If the Ending Value of the Basket is greater than 100% of its Starting Value, at maturity, you will receive 300.00% upside exposure to increases in the value of the Basket, subject to the Max Return of 14.25%.

•   

If the Ending Value of the Basket is less than 90.00% of the Starting Value, your investment will be subject to 1:1 downside exposure to decreases in the value of the Basket beyond a 10% decline, with up to 90% of the principal at risk; otherwise, at maturity, you will receive the principal amount.

•   

Any payment on the Notes is subject to the credit risk of BofA Finance LLC (“BofA Finance” or the “Issuer”), as issuer of the Notes, and Bank of America Corporation (“BAC” or the “Guarantor”), as guarantor of the Notes.

•   

No periodic interest payments.

•   

The Basket Component Starting Values of the Basket Components were determined on May 9, 2025 (the “Strike Date”). The Basket Component Starting Value of each Basket Component was lower than its respective closing level on the pricing date.

•   

The Notes will not be listed on any securities exchange.

•   

CUSIP No. 09711HJ53.

Public offering price⁽¹⁾

Underwriting discount⁽¹⁾⁽²⁾

Proceeds, before expenses, to BofA Finance⁽²⁾

Per Note

$1,000.00

$2.70

$997.30

Total

$35,106,000.00

$94,786.20

$35,011,213.80

(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 $997.30 per $1,000.00 in principal amount of Notes.

(2)   

The underwriting discount per $1,000.00 in principal amount of Notes may be as high as $2.70, resulting in proceeds, before expenses, to BofA Finance of as low as $997.30 per $1,000.00 in principal amount of Notes. The total underwriting discount and proceeds, before expenses, to BofA Finance specified above reflect the aggregate of the underwriting discounts per $1,000.00 in principal amount of Notes.

Are Not FDIC Insured

Are Not Bank Guaranteed

May Lose Value

Selling Agent

Issuer:

BofA Finance

Guarantor:

BAC

Denominations:

The Notes will be issued in minimum denominations of $1,000.00 and whole multiples of $1,000.00 in excess thereof.

Term:

Approximately 15 months.

Basket:

The Notes are linked to an unequally weighted basket consisting of the following (each an “Underlying” or a “Basket Component”) and their respective weightings:

Strike Date:

May 9, 2025

Pricing Date:

May 12, 2025

Issue Date:

May 15, 2025

Valuation Date:

August 12, 2026, subject to postponement as described under “Description of the Notes—Certain Terms of the Notes—Events Relating to Calculation Days” in the accompanying product supplement.

Maturity Date:

August 17, 2026

Starting Value:

100.00

Ending Value:

100.00 × (1 + the sum of the Weighted Basket Component Returns on the Valuation Date), as determined by the calculation agent.

Basket Component Starting Value:

With respect to each Basket Component, its closing level on the Strike Date, as set forth in the table above. The Basket Component Starting Value of each Basket Component was lower than its respective closing level on the pricing date.

Basket Component Ending Value:

With respect to each Basket Component, its closing level on the Valuation Date.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-2

Upside Participation Rate:

300.00%

Max Return:

$1,142.50 per $1,000.00 in principal amount of Notes, which represents a return of 14.25% over the principal amount.

Threshold Value:

90, which is 90.00% of the Starting Value.

Redemption Amount:

The Redemption Amount per $1,000.00 in principal amount of Notes will be:

a) If the Ending Value of the Basket is greater than the Starting Value:

b) If the Ending Value of the Basket is equal to or less than the Starting Value but greater than or equal to the Threshold Value:

c) If the Ending Value of the Basket is less than the Threshold Value:

In this case, the Redemption Amount will be less than the principal amount and you could lose up to 90.00% of your investment in the Notes.

Calculation Agent:

BofA Securities, Inc. (“BofAS”), an affiliate of BofA Finance.

Selling Agent:

BofAS

CUSIP:

09711HJ53

Basket Return:

Basket Component Return:

For each Basket Component,

Weighted Basket Component Return:

For each Basket Component, its weighting multiplied by its Basket Component Return.

Events of Default and Acceleration:

If an Event of Default, as defined in the senior indenture relating to the Notes and in the section entitled “Description of Debt Securities of BofA Finance LLC—Events of Default and Rights of Acceleration; Covenant Breaches” on page 54 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. 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.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-3

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-4

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-5

Ending Value

Basket Return

Redemption Amount per Note⁽¹⁾

Return on the Notes

160.00

60.00%

$1,142.50

14.25%

150.00

50.00%

$1,142.50

14.25%

140.00

40.00%

$1,142.50

14.25%

130.00

30.00%

$1,142.50

14.25%

120.00

20.00%

$1,142.50

14.25%

110.00

10.00%

$1,142.50

14.25%

105.00

5.00%

$1,142.50

14.25%

104.75

4.75%

$1,142.50⁽¹⁾

14.25%

102.00

2.00%

$1,060.00

6.00%

100.00⁽²⁾

0.00%

$1,000.00

0.00%

90.00⁽³⁾

-10.00%

$1,000.00

0.00%

89.99

-10.01%

$999.90

-0.01%

80.00

-20.00%

$900.00

-10.00%

70.00

-30.00%

$800.00

-20.00%

60.00

-40.00%

$700.00

-30.00%

50.00

-50.00%

$600.00

-40.00%

0.00

-100.00%

$100.00

-90.00%

(1)

The Redemption Amount per Note cannot exceed the Max Return.

(2)

The Starting Value was set to 100 on the Strike Date.

(3)

This is the Threshold Value.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-6

•   

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 Ending Value of the Basket is less than the Threshold Value, at maturity, your investment will be subject to 1:1 downside exposure to decreases in the value of the Basket beyond a 10% decline and you will lose 1% of the principal amount for each 1% that the Ending Value of the Basket is less than the Threshold Value. In that case, you will lose some or a significant portion of your investment in the Notes.

•   

The return on the Notes will be limited to the Max Return. The return on the Notes will not exceed the Max Return, regardless of the performance of the Basket. In contrast, a direct investment in the Basket Components or the securities included in one or more of the Basket Components, as applicable, would allow you to receive the benefit of any appreciation in their value. 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 do not bear interest. Unlike a conventional debt security, no interest payments will be paid over the term of the Notes, regardless of the extent to which the Ending Value of the Basket exceeds its Starting Value or Threshold Value.

•   

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.

•   

The Redemption Amount will not reflect changes in the values of the Basket other than on the Valuation Date. The values of the Basket during the term of the Notes other than on the Valuation Date will not be reflected in the calculation of the Redemption Amount. Notwithstanding the foregoing, investors should generally be aware of the performance of the Basket while holding the Notes, as the performance of the Basket may influence the market value of the Notes. The calculation agent will calculate the Redemption Amount by comparing only the Starting Value or the Threshold Value, as applicable, to the Ending Value for the Basket. No other values of the Basket will be taken into account. As a result, if the Ending Value of the Basket is less than the Threshold Value, you will receive less than the principal amount at maturity even if the value of the Basket was always above the Threshold Value prior to the Valuation Date.

•   

Changes in the level of one of the Basket Components may be offset by changes in the levels of the other Basket Components. The Notes are linked to a Basket. Changes in the level of one or more of the Basket Components may not correlate with changes in the levels of one or more of the other Basket Components. The levels of one or more Basket Components may increase, while the levels of one or more of the other Basket Components may decrease or not increase as much. Therefore, in calculating the value of the Basket, increases in the level of one Basket Component may be moderated or wholly offset by decreases or lesser increases in the levels of one or more of the other Basket Components. Due to the different weightings of the Basket Components, adverse changes in the level of the Basket Components which are more heavily weighted will have a greater impact on the value of your Notes at any time or the Redemption Amount than changes in the level of lower weighted Basket Components.

•   

Any payments on the Notes 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 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 any payments on the Notes will be dependent upon our ability and the ability of the Guarantor to repay our respective obligations under the Notes on the applicable payment date, regardless of the performance of the Basket. No assurance can be given as to what our financial condition or the financial condition of the Guarantor will be at any time after the pricing date of the Notes. If we and the Guarantor become unable to meet our respective financial obligations as they become due, you may not receive the amount payable under the terms of the Notes.

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 Basket, 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, have no independent assets, operations, or revenues. We are a finance subsidiary of the Guarantor, have no operations other than those related to the issuance, administration and repayment of our debt securities that are guaranteed by the Guarantor, and are dependent upon the Guarantor and/or its other subsidiaries to meet our obligations under the Notes in the ordinary course. Therefore, our ability to make payments on the Notes may be limited.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-7

•   

The public offering price you are paying for the Notes exceeds their initial estimated value. The initial estimated value of the Notes that is provided on the cover page of this pricing supplement 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 the Guarantor, changes in 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 values of the Basket, changes in the Guarantor’s internal funding rate, and the inclusion in the public offering price of the underwriting discount, if any, and the hedging related charges, all as further described in “Structuring the Notes” below. These factors, together with various credit, market and economic factors over the term of the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways.

•   

The initial estimated value does not represent a minimum or maximum price at which we, BAC, BofAS or any of our other affiliates would be willing to purchase your Notes in any secondary market (if any exists) at any time. The value of your Notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the Basket, our and BAC’s creditworthiness and changes in market conditions.

•   

We cannot assure you that a trading market for your Notes will ever develop or be maintained. We will not list the Notes on any securities exchange. We cannot predict how the Notes will trade in any secondary market or whether that market will be liquid or illiquid.

•   

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 Notes and their market value. We, the Guarantor or one or more of our other affiliates, including BofAS, may buy or sell the securities held by or included in the Basket Components, or futures or options contracts or exchange traded instruments on the Basket Components or those securities, or other instruments whose value is derived from the Basket Components or those securities. While we, the Guarantor or one or more of our other affiliates, including BofAS, may from time to time own securities represented by the Basket Components, except to the extent that BAC’s common stock may be included in the Basket Components, we, the Guarantor and our other affiliates, including BofAS, do not control any company included in the Basket Components, 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 adversely affect the levels of the Basket Components (and thus the value of the Basket) in a manner that could be adverse to your investment in the Notes. On or before the Strike Date, any purchases or sales by us, the Guarantor or our other affiliates, including BofAS or others on our or their behalf (including those for the purpose of hedging some or all of our anticipated exposure in connection with the Notes), may have affected the levels of the Basket Components. Consequently, the levels of the Basket Components and, therefore, the Basket may change subsequent to the Strike Date, which may adversely affect the market value of the Notes.

We, the Guarantor or one or more of our other affiliates, including BofAS, also may have engaged in hedging activities that could have affected the levels of the Basket Components on the Strike Date. In addition, these hedging activities, including the unwinding of a hedge, 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 levels of the Basket Components, the market value of your Notes prior to maturity or the amounts payable on the Notes.

•   

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.

•   

The Notes are subject to foreign currency exchange rate risk. The SXXP, the MXEF, the TPX and the AS51 track securities traded outside of the United States. The levels of the SXXP, the MXEF, the TPX and the AS51 will depend upon the values of these securities, which will in turn depend in part upon changes in the value of the currencies in which the securities tracked by the SXXP, the MXEF, the TPX and the AS51 are traded. Accordingly, investors in the Notes will be exposed to currency exchange rate risk with respect to each of the currencies in which the securities tracked by the SXXP, the MXEF, the TPX and the AS51 are traded. An investor’s net exposure will depend on the extent to which these currencies strengthen or weaken against the U.S. dollar. If the dollar strengthens against these currencies, the levels of the SXXP, the MXEF, the TPX and the AS51 will be adversely affected and the value of the SXXP, the MXEF, the

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-8

     

TPX and the AS51 may decrease.

•   

The Notes are subject to risks associated with foreign securities markets. The SXXP, the NDX, the MXEF, the TPX and the AS51 include certain foreign equity securities. You should be aware that investments in securities linked to the value of foreign equity securities involve particular risks. The foreign securities markets comprising the SXXP, the NDX, the MXEF, the TPX and the AS51 may have less liquidity and may be more volatile than U.S. or other securities markets and market developments may affect foreign markets differently from U.S. or other securities markets. Direct or indirect government intervention to stabilize these foreign securities markets, as well as cross-shareholdings in foreign companies, may affect trading prices and volumes in these markets. Also, there is generally less publicly available information about foreign companies than about those U.S. companies that are subject to the reporting requirements of the SEC, and foreign companies are subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies.

•   

There are risks associated with emerging markets. An investment in the Notes will involve risks not generally associated with investments which have no emerging market component. In particular, many emerging nations are undergoing rapid change, involving the restructuring of economic, political, financial and legal systems. Regulatory and tax environments may be subject to change without review or appeal. Many emerging markets suffer from underdevelopment of capital markets and tax regulation. The risk of expropriation and nationalization remains a threat. Guarding against such risks is made more difficult by low levels of corporate disclosure and unreliability of economic and financial data.

•   

The publisher or the sponsor of a Basket Component may adjust that Basket Component in a way that affects its levels, and the publisher or the sponsor has no obligation to consider your interests. The publisher or the sponsor of a Basket Component can add, delete, or substitute the components included in that Basket Component or make other methodological changes that could change its level. Any of these actions could adversely affect the value of your Notes.

•   

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 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.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-9

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-10

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-11

•   

sponsor, endorse, sell or promote the Notes.

•   

recommend that any person invest in the Notes or any other securities.

•   

have any responsibility or liability for or make any decisions about the timing, amount or pricing of the Notes.

•   

have any responsibility or liability for the administration, management or marketing of the Notes.

•   

consider the needs of the Notes or the owners of the Notes in determining, composing or calculating the SXXP or have any obligation to do so.

•   

STOXX, Deutsche Börse Group and their licensors, research partners or data providers do not give any warranty, express or implied, and exclude any liability about:

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-12

•   

The results to be obtained by the Notes, the owner of the Notes or any other person in connection with the use of the SXXP and the data included in the SXXP;

•   

The accuracy, timeliness, and completeness of the SXXP and its data;

•   

The merchantability and the fitness for a particular purpose or use of the SXXP and its data;

•   

The performance of the Notes generally.

•   

STOXX, Deutsche Börse Group and their licensors, research partners or data providers give no warranty and exclude any liability, for any errors, omissions or interruptions in the SXXP or its data;

•   

Under no circumstances will STOXX, Deutsche Börse Group or their licensors, research partners or data providers be liable (whether in negligence or otherwise) for any lost profits or indirect, punitive, special or consequential damages or losses, arising as a result of such errors, omissions or interruptions in the SXXP or its data or generally in relation to the Notes, even in circumstances where STOXX, Deutsche Börse Group or their licensors, research partners or data providers are aware that such loss or damage may occur.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-13

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-14

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-15

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-16

•   

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);

•   

the security must be of a non-financial company;

•   

the security may not be issued by an issuer currently in bankruptcy proceedings;

•   

the security must have a minimum three-month average daily trading volume of at least 200,000 shares;

•   

if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S.;

•   

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 NDX;

•   

the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn; and

•   

the issuer of the security must have “seasoned” on NASDAQ, the New York Stock Exchange or NYSE Amex. 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).

•   

the security’s U.S. listing must be exclusively on the Nasdaq Global Select Market or the Nasdaq Global Market;

•   

the security must be of a non-financial company;

•   

the security may not be issued by an issuer currently in bankruptcy proceedings;

•   

the security must have a minimum three-month average daily trading volume of at least 200,000 shares;

•   

if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S. (measured annually during the ranking review process);

•   

the security must have an adjusted market capitalization equal to or exceeding 0.10% of the aggregate adjusted market capitalization of the NDX 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 NDX effective after the close of trading on the third Friday of the following month; and

•   

the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-17

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-18

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-19

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-20

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-21

•   

semi-annual reviews, which will occur each May and November and will involve a comprehensive reevaluation of the market, the universe of eligible securities and other factors involved in composing the indices;

•   

quarterly reviews, which will occur each February, May, August and November and will focus on significant changes in the market since the last semi-annual review and on including significant new eligible securities (such as IPOs, which were not eligible for earlier inclusion in the indices); and

•   

ongoing event-related changes, which will generally be reflected in the indices at the time of the event and will include changes resulting from mergers, acquisitions, spin-offs, bankruptcies, reorganizations and other similar corporate events.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-22

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-23

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-24

Index value =

Base index value of 100  ×

Current free-float-adjusted market value

Base market value

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-25

i.   

Designation of “phased weighting reduction constituents”

●   

Of the constituents as of April 1, 2022, those that fall under both the following (a) and (b) will be designated as “phased weighting reduction constituents”:

(a)   

First decision: The constituent’s tradable share market capitalization is less then JPY 10 billion as of the “Notice on Whether the Listed Company is Meeting the Continued Listing Criteria for New Market Segments”, which has a base date of June 30, 2021, and

(b)   

Second decision: The constituent’s tradeable share market capitalization is less than JPY 10 billion at the end of the reporting period following the reporting period used in decision (a).

●   

Any constituent applying for listing on the First Section through an initial listing (excluding technical listings) or section transfer after the “first set of revisions pertaining to cash equity market restructuring” were implemented on November 1, 2020 will not be subject to designation as a phased weighting reduction constituent based on tradable share market capitalization.

ii.   

Adjustment to the weighting of phased weighting reduction constituents

●   

The weighting of phased weighting reduction constituents will be reduced in 10 stages on the last business day of every quarter starting on the last business day of October 2022 (October 31, 2022), and these constituents will be removed from the index on the last business day of January 2025.

●   

Said adjustments to the weighting of phased weighting reduction constituents will be calculated by multiplying the free-float weight by the transition factor (which will decrease from 1.0 to 0 in increments of 0.1)

●   

In order to check whether there have been changes to the tradeable share market capitalization of each phased weighting reduction constituent, a re-evaluation will be conducted, using tradable share market capitalization as of the end of the reporting period following the reporting period used for the second decision in (i)(b). If the tradable share market capitalization of a constituent has reached JPY 10 billion or more but the annual traded value ratio of said constituent has not reached 0.2 at this point, the transition factor will no longer decrease as of the fifth stage (it will stay at 0.6, the same as the fourth stage). If the tradable share market capitalization and the annual traded value ratio of a constituent have reached JPY 10 billion or more and 0.2 or more respectively at this point, the transition factor shall be increased to 1 in increments of 0.1 from the fifth stage and said constituent will be removed from the list of phased weighting reduction constituents. The traded value ratio used for the re-evaluation in (ii) is calculated using the sum of monthly traded value ratios from September 2022 to August 2023. The monthly traded value ratio shall be calculated as follows: (Median of daily traded value in trading sessions at TSE multiplied by the number of business days in the month) divided by the free-float adjusted market capitalization as of the last business day of the month before the transition factor was applied.

Transition Stage

Index Revision Date

Transition Factor

1st

Last business day of October 2022

x0.9

2nd

Last business day of January 2023

x0.8

3rd

Last business day of April 2023

x0.7

4th

Last business day of July 2023

x0.6

Re-evaluation

5th

Last business day of October 2023

x0.5

6th

Last business day of January 2024

x0.4

7th

Last business day of April 2024

x0.3

8th

Last business day of July 2024

x0.2

9th

Last business day of October 2024

x0.1

10th (Removed from the TPX)

Last business day of January 2025

x0

•   

Constituents which are delisted (excluding cases where the stock lists on another TSE market immediately), designated as securities to be delisted or designated as securities on alert shall be removed.

•   

If a constituent is designated as a security on alert as of the day of transition to the new market structure (April 4, 2022), said constituent will be removed from the TPX on the last business day of April 2022.

•   

Stocks which carry out initial listings (excluding technical listings) on or transfer to the Prime Market will be included in the TPX on the last business day of the month following the month containing the listing date or transfer date.

•   

In the event a constituent of the TPX is delisted due to a stock transfer, stock swap, merger for creating a new company or demerger, and the newly created, surviving or succeeding company is listed without delay, JPXI will add the new company to the index.

•   

In the event a constituent of the TPX is delisted due to a stock swap or absorption-type merger, in which the surviving company or the parent company holding all shares of the constituent company is not a constituent of the TPX, then JPXI will add the surviving company or the parent company to the index.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-26

Event

Adjustment Date

Stock Price Used for Adjustment

Addition

A company is to be newly listed on the Prime Market

Last business day of the month after such listing

Stock price at the end of trading on the business day before adjustment date

Addition

New listing of a newly formed company resulting from a corporate consolidation, stock transfer, stock swap, merger for creating a new company or demerger that results in a TPX constituent being delisted and the new company being included in the TPX.

New listing date. If the initial listing date falls on a holiday, it will be the following business day

Base price

Addition

Delisting of a TPX constituent due to a stock swap or an absorption-type merger with a surviving stock that is not a TPX constituent, and the surviving stock is included in the TPX

Delisting date

Stock price at the end of trading on the business day before adjustment date

Addition

A company is to be transferred to the Prime Market

Last business day of the month after such change

Stock price at the end of trading on the business day before adjustment date

Deletion

New listing of a newly formed company resulting from a corporate consolidation, stock transfer, stock swap, merger for creating a new company or demerger that results in a TPX constituent being delisted and the new company being included in the TPX.

Listing date of the newly formed company (normally two business days following delisting date)

Stock price at the end of trading on the business day before the delisting date. The stock price at the end of trading on the business day before the delisting date is used to calculate the TPX for the period from the delisting date to the removal date.

Deletion

A constituent is to be delisted due to a reason other than as described in the preceding scenario

Delisting date

Stock price at the end of trading on the business day before adjustment date

Deletion

A constituent’s securities are designated to be delisted or designated as a security on alert

Four business days after designation. If the designation date falls on a holiday, it will be the next business day.

Stock price at the end of trading on the business day before adjustment date

Event

Adjustment Date

Stock Price Used for Adjustment

Change of free-float weight

Date of change

Stock price at the end of trading on the business day before adjustment date

Public offering

Additional listing date (day after payment date). If listing date falls on a holiday, it will be the next business day

Stock price at the end of trading on the business day before adjustment date

Allocation of new shares to a third party

Five business days after additional listing date (two business days after payment date)

Stock price at the end of trading on the business day before adjustment date

Capital increase through allotment to shareholders

Ex-rights date

Payment price per share

Exercise of subscription warrants

Last business day of the month following exercise

Stock price at the end of trading on the business day before adjustment date

Conversion of preferred shares

Last business day of the month following conversion

Stock price at the end of trading on the business day before adjustment date

Cancellation of treasury stock

Last business day of the month following cancellation

Stock price at the end of trading on the business day before adjustment date

Merger or stock swaps between a non-surviving constituent and another constituent

Delisting date of the non-surviving constituent

Stock price at the end of trading on the business day before adjustment date

Merger or stock swaps other than that described above

Listing change date (effective date)

Stock price at the end of trading on the business day before adjustment date

Rights offering (limited to case where the allotted subscription warrant securities are listed; the case where the allotted subscription warrant securities are not listed is treated as “Exercise of subscription warrants”)

Ex-rights date

Payment price per share

Offering for sale of shares held by the Japanese government (Nippon Telegraph, 

Date determined by JPXI (generally the delivery date)

Stock price at the end of trading on the business day before adjustment date

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-27

Telephone and Japan Tobacco and Japan Post Holdings only)

 

 

Demerger (absorption-type)

Listing change date (the effective date)

Stock price at the end of trading on the business day before adjustment date

Other adjustments

Last business day of the month in which the information appears in “Sho-ho” (TSE Notice) or the last business day of the following month

Stock price at the end of trading on the business day before adjustment date

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-28

(i)   

The TOPIX^® Index Value and the TOPIX^® Index Marks are subject to the rights owned by the TSE and the TSE owns all rights relating to the TPX, such as calculation, publication and use of the TOPIX^® Index Value and relating to the TOPIX^® Index Marks.

(ii)   

The TSE shall reserve the rights to change the methods of calculation or publication, to cease the calculation or publication of the TOPIX^® Index Value or to change the TOPIX^® Index Marks or cease the use thereof.

(iii)   

The TSE makes no warranty or representation whatsoever, either as to the results stemmed from the use of the TOPIX^® Index Value and the TOPIX^® Index Marks or as to the figure at which the TOPIX^® Index Value stands on any particular day.

(iv)   

The TSE gives no assurance regarding accuracy or completeness of the TOPIX^® Index Value and data contained therein. Further, the TSE shall not be liable for the miscalculation, incorrect publication, delayed or interrupted publication of the TOPIX^® Index Value.

(v)   

No Notes are in any way sponsored, endorsed or promoted by the TSE.

(vi)   

The TSE shall not bear any obligation to give an explanation of the Notes or an advice on investments to any purchaser of the Notes or to the public.

(vii)   

The TSE neither selects specific stocks or groups thereof nor takes into account any needs of the issuing company or any purchaser of the Notes for calculation of the TOPIX^® Index Value.

(viii)   

Including but not limited to the foregoing, the TSE shall not be responsible for any damage resulting from the issue and sale of the Notes.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-29

•   

was first launched in 1979 by the Australian Securities Exchange and was acquired and re-launched by S&P on April 3, 2000; and

•   

is sponsored, calculated, published and disseminated by S&P Dow Jones Indices LLC, a part of McGraw Hill Financial.

1.   

Government and government agencies;

2.   

Controlling and strategic shareholders/partners;

3.   

Any other entities or individuals which hold more than 5%, excluding insurance companies, securities companies and investment funds; and

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-30

•   

changes in a company’s float-adjusted shares of 5% or more due to market-wide shares issuance;

•   

rights issues, bonus issues and other major corporate actions; and

•   

share issues resulting from index companies merging and major off-market buy-backs.

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-31

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-32

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-33

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-34

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-35

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-36

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-37

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-38

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-39

•   

Product Supplement EQUITY-1 dated December 30, 2022: 
https://www.sec.gov/Archives/edgar/data/1682472/000119312522315473/d429684d424b2.htm

•   

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

CAPPED BUFFERED ENHANCED RETURN NOTES |  PS-40